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<title>B.7 What classes exist within modern society?</title>

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<h1>B.7 What classes exist within modern society?</h1>

For anarchists, class analysis is an important means of understanding the
world and what is going on in it. While recognition of the fact that classes
actually exist is less prevalent now than it once was, this does not mean
that classes have ceased to exist. Quite the contrary. As we'll see, it
means only that the ruling class has been more successful than before in
obscuring the existence of class.
<p>
Class can be objectively defined: the relationship between an individual
and the sources of power within society determines his or her class. We
live in a class society in which a few people possess far more political
and economic power than the majority, who usually work for the minority
that controls them and the decisions that affect them. This means that
class is based both on exploitation <b>and</b> oppression, with some controlling
the labour of others for their own gain. The means of oppression have
been indicated in earlier parts of <a href="secBcon.html">section B</a>, while section C (<a href="secCcon.html">What are the 
myths of capitalist economics?</a>) indicates exactly how exploitation occurs 
within a society apparently based on free and equal exchange. In addition,
it also highlights the effects on the economic system itself of this
exploitation. The social and political impact of the system and the classes 
and hierarchies it creates is discussed in depth in section D (<a href="secDcon.html">How does 
statism and capitalism affect society?</a>).
<p>
We must emphasise at the outset that the idea of the "working class" as
composed of nothing but industrial workers is simply false. It is <b>not</b> 
applicable today, if it ever was. Power, in terms of hire/fire and
investment decisions, is the important thing. Ownership of capital 
as a means of determining a person's class, while still important, 
does not tell the whole story. An obvious example is that of the
higher layers of management within corporations. They have massive 
power within the company, basically taking over the role held by the 
actual capitalist in smaller firms. While they may technically be 
"salary slaves" their power and position in the social hierarchy 
indicate that they are members of the ruling class in practice (and,
consequently, their income is best thought of as a share of profits
rather than a wage). Much the same can be said of politicians and
state bureaucrats whose power and influence does not derive from the
ownership of the means of production but rather then control over
the means of coercion. Moreover, many large companies are owned by 
other large companies, through pension funds, multinationals, etc. 
(in 1945, 93% of shares were owned by individuals; by 1997, this had
fallen to 43%). Needless to say, if working-class people own shares 
that does not make them capitalists as the dividends are <b>not</b> enough
to live on nor do they give them any say in how a company is run).
<p>
For most anarchists, there are two main classes: 
<p><ol>
(1) <i><b>Working class</b></i> -- those who have to work for a living but have no real
control over that work or other major decisions that affect them, i.e.
order-takers. This class also includes the unemployed, pensioners, etc.,
who have to survive on handouts from the state. They have little wealth
and little (official) power. This class includes the growing service worker
sector, most (if not the vast majority) of "white collar" workers as well as 
traditional "blue collar" workers. Most self-employed people would be 
included in this class, as would the bulk of peasants and artisans 
(where applicable). In a nutshell, the producing classes and those who
either were producers or will be producers. This group makes up the vast
majority of the population.
<p>
(2) <i><b>Ruling class</i></b> -- those who control investment decisions, determine 
high level policy, set the agenda for capital and state. This is 
the elite at the top, owners or top managers of large companies, 
multinationals and banks (i.e., the capitalists), owners of large 
amounts of land (i.e. landlords or the aristocracy, if applicable), 
top-level state officials, politicians, and so forth. They have real 
power within the economy and/or state, and so control society. In a
nutshell, the owners of power (whether political, social or economic)
or the master class. This group consists of around the top 5-15% of 
the population.
</ol><p>
Obviously there are "grey" areas in any society, individuals and 
groups who do not fit exactly into either the working or ruling class.
Such people include those who work but have some control over other
people, e.g. power of hire/fire. These are the people who make the minor,
day-to-day decisions concerning the running of capital or state. This
area includes lower to middle management, professionals, and small
capitalists. 
<p>
There is some argument within the anarchist movement whether this
"grey" area constitutes another ("middle") class or not. Most anarchists
say no, most of this "grey" area are working class, others (such
as the British <b>Class War Federation</b>) argue it is a different class. 
One thing is sure, all anarchists agree that most people in this "grey" 
area have an 
interest in getting rid of the current system just as much as the 
working class (we should point out here that what is usually called 
"middle class" in the USA and elsewhere is nothing of the kind, 
and usually refers to working class people with decent jobs, 
homes, etc. As class is considered a rude word in polite 
society in the USA, such mystification is to be expected).
<p>
So, there will be exceptions to this classification scheme. However, 
most of society share common interests, as they face the economic
uncertainties and hierarchical nature of capitalism.
<p>
We do not aim to fit all of reality into this class scheme, but only to 
develop it as reality indicates, based on our own experiences of the
changing patterns of modern society. Nor is this scheme intended to
suggest that all members of a class have identical interests or that
competition does not exist between members of the same class, as it does
between the classes. Capitalism, by its very nature, is a competitive
system. As Malatesta pointed out, <i>"one must bear in mind that on the one
hand the bourgeoisie (the property owners) are always at war amongst 
themselves. . . and that on the other hand the government, though springing
from the bourgeoisie and its servant and protector, tends, as every servant 
and every protector, to achieve its own emancipation and to dominate whoever
it protects. Thus the game of the swings, the manoeuvres, the concessions
and the withdrawals, the attempts to find allies among the people and 
against the conservatives, and among conservatives against the people, 
which is the science of the governors, and which blinds the ingenuous and
phlegmatic who always wait for salvation to come down to them from above."</i> 
[<b>Anarchy</b>, p. 25]
<p>
However, no matter how much inter-elite rivalry goes on, at the slightest
threat to the system from which they benefit, the ruling class will unite
to defend their common interests. Once the threat passes, they will return
to competing among themselves for power, market share and wealth.
Unfortunately, the working class rarely unites as a class, mainly due to
its chronic economic and social position. At best, certain sections unite
and experience the benefits and pleasure of co-operation. Anarchists, by
their ideas and action try to change this situation and encourage 
solidarity within the working class in order to resist, and ultimately
get rid of, capitalism. However, their activity is helped by the 
fact that those in struggle often realise that <i>"solidarity is strength"</i>
and so start to work together and unite their struggles against their
common enemy. Indeed, history is full of such developments.

<a name="secb71"><h2>B.7.1 But do classes actually exist?</h2>

So do classes actually exist, or are anarchists making them up? The fact
that we even need to consider this question points to the pervasive 
propaganda efforts by the ruling class to suppress class consciousness,
which will be discussed further on. First, however, let's examine some
statistics, taking the USA as an example. We have done so because the
state has the reputation of being a land of opportunity and capitalism.
Moreover, class is seldom talked about there (although its business 
class is <b>very</b> class conscious). Moreover, when countries have followed
the US model of freer capitalism (for example, the UK), a similar 
explosion of inequality develops along side increased poverty rates 
and concentration of wealth into fewer and fewer hands.
<p>
There are two ways of looking into class, by income and by wealth.
Of the two, the distribution of wealth is the most important to 
understanding the class structure as this represents your assets, 
what you own rather than what you earn in a year. Given that wealth 
is the source of income, this represents the impact and power of 
private property and the class system it represents. After all,
while all employed workers have an income (i.e. a wage), their 
actual wealth usually amounts to their personal items and their
house (if they are lucky). As such, their wealth generates little
or no income, unlike the owners of resources like companies, 
land and patents. Unsurprisingly, wealth insulates its holders 
from personal economic crises, like unemployment and sickness, as 
well as gives its holders social and political power. It, and its 
perks, can also be passed down the generations. Equally 
unsurprisingly, the distribution of wealth is much more unequal 
than the distribution of income.
<p>
At the start of the 1990s, the share of total US income was as 
follows: one third went to the top 10% of the population, the
next 30% gets another third and the bottom 60% gets the last
third. Dividing the wealth into thirds, we find that the top 
1% owns a third, the next 9% owns a third, and bottom 90% owns
the rest. [David Schweickart, <b>After Capitalism</b>, p. 92] Over 
the 1990s, the inequalities in US society have continued to 
increase. In 1980, the richest fifth of Americans had incomes
about ten times those of the poorest fifth. A decade later,
they has twelve times. By 2001, they had incomes over fourteen
times greater. [Doug Henwood, <b>After the New Economy</b>, 
p. 79] Looking at the figures for private family wealth, we 
find that in 1976 the wealthiest one percent of Americans owned
19% of it, the next 9% owned 30% and the bottom 90% of the 
population owned 51%. By 1995 the top 1% owned 40%, more than 
owned by the bottom 92% of the US population combined -- the 
next 9% had 31% while the bottom 90% had only 29% of total
(see Edward N. Wolff, <b>Top Heavy: A Study of Increasing 
Inequality in America</b> for details).
<p>
So in terms of wealth ownership, we see a system in which a very small
minority own the means of life. In 1992 the richest 1% of households -- 
about 2 million adults -- owned 39% of the stock owned by individuals. 
The top 10%, owned over 81%. In other words, the bottom 90% of the 
population had a smaller share (23%) of investable capital of all 
kinds than the richest 1/2% (29%). Stock ownership was even more 
densely concentrated, with the richest 5% holding 95% of all shares. 
[Doug Henwood, <b>Wall Street: Class racket</b>] Three years later, 
<i>"the richest 1% of households . . . owned 42% of the stock owned by 
individuals, and 56% of the bonds . . . the top 10% together owned 
nearly 90% of both."</i> Given that around 50% of all corporate stock is
owned by households, this means that 1% of the population <i>"owns a 
quarter of the productive capital and future profits of corporate 
America; the top 10% nearly half."</i> [Doug Henwood, <b>Wall Street</b>, 
pp. 66-7] Unsurprisingly, the Congressional Budget Office estimates 
that more than half of corporate profits ultimately accrue to the 
wealthiest 1 percent of taxpayers, while only about 8 percent go 
to the bottom 60 percent.
<p>
Henwood summarises the situation by noting that <i>"the richest tenth
of the population has a bit over three-quarters of all the wealth
in this society, and the bottom half has almost none -- but it
has lots of debt."</i> Most middle-income people have most of their
(limited) wealth in their homes and if we look at non-residential
wealth we find a <i>"very, very concentrated"</i> situation. The <i>"bottom 
half of the population claimed about 20% of all income in 2001 --
but only 2% of non-residential wealth. The richest 5% of the 
population claimed about 23% of income, a bit more than the entire
bottom half. But it owned almost two-thirds -- 65% -- of the
wealth."</i> [<b>After the New Economy</b>, p. 122]
<p>
In terms of income, the period since 1970 has also been marked by 
increasing inequalities and concentration: 
<p><blockquote><i>
"According to estimates by the economists Thomas Piketty and Emmanuel 
Saez -- confirmed by data from the Congressional Budget Office -- 
between 1973 and 2000 the average real income of the bottom 90 percent 
of American taxpayers actually fell by 7 percent. Meanwhile, the income 
of the top 1 percent rose by 148 percent, the income of the top 0.1 
percent rose by 343 percent and the income of the top 0.01 percent 
rose 599 percent."</i> [Paul Krugman, <i>"The Death of Horatio Alger"</i>, 
<b>The Nation</b>, January 5, 2004]
</blockquote><p>
Doug Henwood provides some more details on income [<b>Op. Cit.</b>, p. 90]:
<p>
<div align="center"><b>Changes in income, 1977-1999</b>
<table border=5>
<tr align = center valign=top>
<td> </td>
<th rowspan="2">real income growth <br> 1977-99</th> 
<th colspan="3">Share of total income</th>
<tr>
<th></th><th>1977</th> 	<th>1999</th> <th>Change</th>
</tr>
<tr align = center>
<td>poorest 20%</td><td>-9%</td><td>5.7%</td><td>4.2%</td>	<td>-1.5%</td>
</tr>
<tr align = center>
<td>second 20%</td> <td>+1</td><td>11.5</td><td>9.7</td><td>-1.8</td>
</tr>
<tr align = center>	
<td>middle 20%</td><td>+8</td><td>16.4</td><td>14.7</td><td>-1.7</td>
</tr>
<tr align = center>
<td>fourth 20%</td><td>+14</td><td>22.8</td><td>21.3</td><td>-1.5</td>
</tr>
<tr align = center >
<td>top 20%</td><td>+43</td><td>44.2</td><td>50.4</td><td>+6.2</td>
</tr>
<tr align = center >
<td>top 1%</td><td>+115</td><td>7.3</td><td>12.9</td><td>+5.6</td>
</table>
</div>
<p>
By far the biggest gainers from the wealth concentration since the 1980s
have been the super-rich. The closer you get to the top, the bigger the 
gains. In other words, it is not simply that the top 20 percent of families 
have had bigger percentage gains than the rest. Rather, the top 5 percent 
have done better than the next 15, the top 1 percent better than the next 
4 per cent, and so on.
<p>
As such, if someone argues that while the share of national income 
going to the top 10 percent of earners has increased that it does
not matter because anyone with an income over $81,000 is in that top 
10 percent they are missing the point. The lower end of the top
ten per cent were not the big winners over the last 30 years. Most
of the gains in the share in that top ten percent went to the top 
1 percent (who earn at least $230,000). Of these gains, 60 percent 
went to the top 0.1 percent (who earn more than $790,000). And of 
these gains, almost half went to the top 0.01 percent (a mere 
13,000 people who had an income of at least $3.6 million and an 
average income of $17 million). [Paul Krugman, <i>"For Richer"</i>,
<b>New York Times</b>, 20/10/02]
<p>
All this proves that classes do in fact exist, with wealth and power
concentrating at the top of society, in the hands of the few. 
<p>
To put this inequality of income into some perspective, the average 
full-time Wal-Mart employee was paid only about $17,000 a year in 
2004. Benefits are few, with less than half the company's workers 
covered by its health care plan. In the same year Wal-Mart's chief 
executive, Scott Lee Jr., was paid $17.5 million. In other words, 
every two weeks he was paid about as much as his average employee 
would earn after a lifetime working for him. 
<p>
Since the 1970s, most Americans have had only modest salary increases
(if that). The average annual salary in America, expressed in 1998 
dollars (i.e., adjusted for inflation) went from $32,522 in 1970 to 
$35,864 in 1999. That is a mere 10 percent increase over nearly 30 
years. Over the same period, however, according to Fortune magazine, 
the average real annual compensation of the top 100 C.E.O.'s went from 
$1.3 million -- 39 times the pay of an average worker -- to $37.5 
million, more than 1,000 times the pay of ordinary workers. 
<p>
Yet even here, we are likely to miss the real picture. The average
salary is misleading as this does not reflect the distribution of
wealth. For example, in the UK in the early 1990s, two-thirds of
workers earned the average wage or below and only a third above. 
To talk about the "average" income, therefore, is to disguise 
remarkable variation. In the US, adjusting for inflation, average 
family income -- total income divided by the number of families -- 
grew 28% between 1979 and 1997. The median family income -- the 
income of a family in the middle (i.e. the income where half of
families earn more and half less) grew by only 10%. The median
is a better indicator of how typical American families are doing
as the distribution of income is so top heavy in the USA (i.e.
the average income is considerably higher than the median). It
should also be noted that the incomes of the bottom fifth of 
families actually fell slightly. In other words, the benefits of 
economic growth over nearly two decades have <b>not</b> trickled down 
to ordinary families. Median family income has risen only about 
0.5% per year. Even worse, <i>"just about all of that increase was 
due to wives working longer hours, with little or no gain in real 
wages."</i> [Paul Krugman, <i>"For Richer"</i>, <b>Op. Cit.</b>]
<p>
So if America does have higher average or per capita income than 
other advanced countries, it is simply because the rich are richer.
This means that a high average income level can be misleading if
a large amount of national income is concentrated in relatively
few hands. This means that large numbers of Americans are worse 
off economically than their counterparts in other advanced countries.
Thus Europeans have, in general, shorter working weeks and longer
holidays than Americans. They may have a lower average income than 
the United States but they do not have the same inequalities. This
means that the median European family has a standard of living 
roughly comparable with that of the median U.S. family -- wages
may even be higher.
<p>
As Doug Henwood notes, <i>"[i]nternational measures put the
United States in a disgraceful light. . . The soundbite version of
the LIS [Luxembourg Income Study] data is this: for a country th[at]
rich, [it] ha[s] a lot of poor people."</i> Henwood looked at both
relative and absolute measures of income and poverty using the
cross-border comparisons of income distribution provided by the LIS
and discovered that <i>"[f]or a country that thinks itself universally
middle class [i.e. middle income], the United States has the 
second-smallest middle class of the nineteen countries for which
good LIS data exists."</i> Only Russia, a country in near-total collapse
was worse (40.9% of the population were middle income compared to
46.2% in the USA. Households were classed as poor if their incomes
were under 50 percent of the national medium; near-poor, between
50 and 62.5 percent; middle, between 62.5 and 150 percent; and
well-to-do, over 150 percent. The USA rates for poor (19.1%), 
near-poor (8.1%) and middle (46.2%) were worse than European 
countries like Germany (11.1%, 6.5% and 64%), France (13%, 7.2%
and 60.4%) and Belgium (5.5%, 8.0% and 72.4%) as well as Canada
(11.6%, 8.2% and 60%) and Australia (14.8%, 10% and 52.5%).
<p>
The reasons for this? Henwood states that the <i>"reasons are clear --
weak unions and a weak welfare state. The social-democratic states --
the ones that interfere most with market incomes -- have the largest
[middles classes]. The US poverty rate is nearly twice the average
of the other eighteen."</i> Needless to say, "middle class" as defined
by income is a very blunt term (as Henwood states). It says nothing
about property ownership or social power, for example, but income
is often taken in the capitalist press as the defining aspect of
"class" and so is useful to analyse in order to refute the claims
that the free-market promotes general well-being (i.e. a larger
"middle class"). That the most free-market nation has the worse
poverty rates <b>and</b> the smallest "middle class" indicates well the
anarchist claim that capitalism, left to its own devices, will
benefit the strong (the ruling class) over the weak (the working
class) via "free exchanges" on the "free" market (as we argue in
<a href="secC7.html">section C.7</a>, only during periods of 
full employment -- and/or wide
scale working class solidarity and militancy -- does the balance 
of forces change in favour of working class people. Little wonder, 
then, that periods of full employment also see falling inequality -- 
see James K. Galbraith's <b>Created Unequal</b> for more details on
the correlation of unemployment and inequality).
<p>
Of course, it could be objected that this relative measure of poverty
and income ignores the fact that US incomes are among the highest
in the world, meaning that the US poor may be pretty well off by
foreign standards. Henwood refutes this claim, noting that <i>"even on
absolute measures, the US performance is embarrassing. LIS researcher
Lane Kenworthy estimated poverty rates for fifteen countries using
the US poverty line as the benchmark. . . Though the United States
has the highest average income, it's far from having the lowest
poverty rate."</i> Only Italy, Britain and Australia had higher levels
of absolute poverty (and Australia exceeded the US value by 0.2%,
11.9% compared to 11.7%). Thus, in both absolute <b>and</b> relative
terms, the USA compares badly with European countries. [Doug Henwood,
<i>"Booming, Borrowing, and Consuming: The US Economy in 1999"</i>, pp.120-33,
<b>Monthly Review</b>, vol. 51, no. 3, pp. 129-31]
<p>
In summary, therefore, taking the USA as being the most capitalist
nation in the developed world, we discover a class system in which 
a very small minority own the bulk of the means of life and get 
most of the income. Compared to other Western countries, the 
class inequalities are greater and the society is more polarised.
Moreover, over the last 20-30 years those inequalities have increased
spectacularly. The ruling elite have become richer and wealth has
flooded upwards rather than trickled down. 
<p>
The cause of the increase in wealth and income polarisation is not hard
to find. It is due to the increased economic and political power of the 
capitalist class and the weakened position of working class people. As 
anarchists have long argued, any "free contract" between the powerful 
and the powerless will benefit the former far more than the latter. 
This means that if the working class's economic and social power is 
weakened then we will be in a bad position to retain a given share
of the wealth we produce but is owned by our bosses and accumulates 
in the hands of the few. 
<p>
Unsurprisingly, therefore, there has been an increase in the share of 
total income going to capital (i.e., interest, dividends, and rent) and a 
decrease in the amount going to labour (wages, salaries, and benefits). 
Moreover, an increasing part of the share to labour is accruing to 
high-level management (in electronics, for example, top executives 
used to paid themselves 42 times the average worker in 1991, a mere 
5 years later it was 220 times as much). 
<p>
Since the start of the 1980s, unemployment and globalisation has 
weakened the economic and social power of the working class. Due to
the decline in the unions and general labour militancy, wages at the
bottom have stagnated (real pay for most US workers is lower in 2005 
than it was in 1973!). This, combined with "trickle-down" economic 
policies of tax cuts for the wealthy, tax raises for the working 
classes, the maintaining of a "natural" law of unemployment (which 
weakens unions and workers power) and cutbacks in social programs, 
has seriously eroded living standards for all but the upper strata 
-- a process that is clearly leading toward social breakdown, with 
effects that will be discussed later (see 
<a href="secD9.html">section D.9</a>). 
<p>
Little wonder Proudhon argued that the law of supply and demand was 
a <i>"deceitful law . . . suitable only for assuring the victory of the 
strong over the weak, of those who own property over those who own 
nothing."</i> [quoted by Alan Ritter, <b>The Political Thought of 
Pierre-Joseph Proudhon</b>, p. 121]

<a name="secb72"><h2>B.7.2 Does social mobility make up for class inequality?</h2>

Faced with the massive differences between classes under capitalism
we highlighted in the <a href="secB7.html#secb71">last section</a>, many supporters of capitalism 
still deny the obvious. They do so by confusing a <b>caste</b> system with a <b>class</b> 
system. In a caste system, those born into it stay in it all their lives. In a 
class system, the membership of classes can and does change over time. 
<p>
Therefore, it is claimed, what is important is not the existence 
of classes but of social mobility (usually reflected in income
mobility). According to this argument, if there is a high level 
of social/income mobility then the degree of inequality in any 
given year is unimportant. This is because the redistribution of 
income over a person's life time would be very even. Thus the
inequalities of income and wealth of capitalism does not matter 
as capitalism has high social mobility. 
<p>
Milton Friedman puts the argument in this way:
<p><blockquote>
<i>"Consider two societies that have the same distribution of annual
income. In one there is a great mobility and change so that the 
position of particular families in the income hierarchy varies 
widely from year to year. In the other, there is great rigidity 
so that each family stays in the same position. Clearly, in any 
meaningful sense, the second would be the more unequal society.
The one kind of inequality is a sign of dynamic change, social
mobility, equality of opportunity; the other of a status society.
The confusion behind these two kinds of inequality is particularly
important, precisely because competitive free-enterprise capitalism
tends to substitute the one for the other."</i> [<b>Capitalism and 
Freedom</b>, p. 171]
</blockquote><p>
As with so many things, Friedman is wrong in his assertion (and
that is all it is, no evidence is provided). The more free market
capitalist regimes have <b>less</b> social mobility than those, like
Western Europe, which have extensive social intervention in the
economy. As an added irony, the facts suggest that implementing
Friedman's suggested policies in favour of his beloved "competitive 
free-enterprise capitalism" has made social mobility less, not
greater. In effect, as with so many things, Friedman ensured the
refutation of his own dogmas.
<p>
Taking the USA as an example (usually considered one of the most 
capitalist countries in the world) there is income mobility, but 
not enough to make income inequality irrelevant. Census data show 
that 81.6 percent of those families who were in the bottom quintile 
of the income distribution in 1985 were still there in the next 
year; for the top quintile, it was 76.3 percent.
<p>
Over longer time periods, there is more mixing but still not that much and 
those who do slip into different quintiles are typically at the borders of 
their category (e.g. those dropping out of the top quintile are typically 
at the bottom of that group). Only around 5% of families rise from bottom 
to top, or fall from top to bottom. In other words, the class structure of 
a modern capitalist society is pretty solid and <i>"much of the movement up 
and down represents fluctuations around a fairly fixed long term 
distribution."</i> [Paul Krugman, <b>Peddling Prosperity</b>, p. 143]
<p>
Perhaps under a "pure" capitalist system things would be different?
Ronald Reagan helped make capitalism more "free market" in the 1980s,
but there is no indication that income mobility increased significantly
during that time. In fact, according to one study by Greg Duncan of the 
University of Michigan, the middle class shrank during the 1980s, with 
fewer poor families moving up or rich families moving down. Duncan compared
two periods. During the first period (1975 to 1980) incomes were more 
equal than they are today. In the second (1981 to 1985) income inequality 
began soaring. In this period there was a reduction in income mobility
upward from low to medium incomes of over 10%.
<p>
Here are the exact figures [cited by Paul Krugman, <i>"The Rich, the Right, 
and the Facts,"</i> <b>The American Prospect</b> no. 11, Fall 1992, pp. 19-31]:
<p>

<div align="center">
<b>
	Percentages of families making transitions to and from
	middle class (5-year period before and after 1980)
</b>
<p>
<table border=5>
<tr align = center valign=top>
<th>Transition</th><th>Before 1980</th> <th>After 1980</th></tr>
<tr align = center valign=top>
<td>Middle income to low income</td><td>8.5</td> <td>9.8</td></tr>
<tr align = center valign=top>
<td>Middle income to high income</td> <td>5.8</td> <td>6.8</td></tr>
<tr align = center valign=top>
<td>Low income to middle income</td> <td>35.1</td> <td>24.6</td></tr>
<tr align = center valign=top>
<td>High income to middle income</td> <td>30.8</td> <td>27.6</td></tr>
</table>
</div>

<p>
Writing in 2004, Krugman returned to this subject. The intervening
twelve years had made things worse. America, he notes, is <i>"more of a 
caste society than we like to think. And the caste lines have lately 
become a lot more rigid."</i> Before the rise of neo-liberalism in the
1980s, America had more intergenerational mobility. <i>"A classic 1978 
survey found that among adult men whose fathers were in the bottom 
25 percent of the population as ranked by social and economic status, 
23 percent had made it into the top 25 percent. In other words, during 
the first thirty years or so after World War II, the American dream 
of upward mobility was a real experience for many people."</i> However,
a new survey of today's adult men <i>"finds that this number has dropped 
to only 10 percent. That is, over the past generation upward mobility 
has fallen drastically. Very few children of the lower class are making 
their way to even moderate affluence. This goes along with other 
studies indicating that rags-to-riches stories have become vanishingly 
rare, and that the correlation between fathers' and sons' incomes has 
risen in recent decades. In modern America, it seems, you're quite 
likely to stay in the social and economic class into which you were 
born."</i> [Paul Krugman, <i>"The Death of Horatio Alger"</i>, <b>The Nation</b>, 
January 5, 2004]
<p>
British Keynesian economist Will Hutton quotes US data from 2000-1
which <i>"compare[s] the mobility of workers in America with the four
biggest European economies and three Nordic economies."</i> The US <i>"has
the lowest share of workers moving from the bottom fifth of workers
into the second fifth, the lowest share moving into the top 60 
per cent and the highest share unable to sustain full-time employment."</i>
He cites an OECD study which <i>"confirms the poor rates of relative
upward mobility for very low-paid American workers; it also found
that full-time workers in Britain, Italy and Germany enjoy much more
rapid growth in their earnings than those in the US . . . However,
downward mobility was more marked in the US; American workers are
more likely to suffer a reduction in their real earnings than workers
in Europe."</i> Thus even the OECD (the <i>"high priest of deregulation"</i>)
was <i>"forced to conclude that countries with more deregulated labour
and product markets (pre-eminently the US) do not appear to have
higher relative mobility, nor do low-paid workers in these economies
experience more upward mobility. The OECD is pulling its punches.
The US experience is worse than Europe's."</i> Numerous studies have
shown that <i>"either there is no difference"</i> in income mobility 
between the USA and Europe <i>"or that there is less mobility in
the US."</i> [<b>The World We're In</b>,
pp. 166-7]
<p>
Little wonder, then, that Doug Henwood argues that <i>"the final appeal
of apologists of the American way is an appeal to our legendary
mobility"</i> fails. In fact, <i>"people generally don't move far from
the income class they are born into, and there is little difference
between US and European mobility patterns. In fact, the United
States has the largest share of what the OECD called 'low-wage'
workers, and the poorest performance on the emergence from the
wage cellar of any country it studied." </i>[<b>Op. Cit.</b>, p. 130]
<p>
Indeed, <i>"both the US and British poor were more likely to stay
poor for a long period of time: almost half of all people who
were poor for one year stayed poor for five or more years, 
compared with 30% in Canada and 36% in Germany. And, despite 
claims of great upward mobility in the US, 45% of the poor rose
out of poverty in a given year, compared with 45% in the UK,
53% in Germany, and 56% in Canada. And of those who did exit
poverty, 15% of Americans were likely to make a round trip back
under the poverty line, compared with 16% in Germany, 10% in
the UK, and 7% in Canada."</i> [Doug Henwood, <b>After the New 
Economy</b>, pp. 136-7]
<p>
A 2005 study of income mobility by researchers at the London School 
of Economics (on behalf of the educational charity the Sutton Trust) 
confirms that the more free market a country, the worse is its levels 
of social mobility. [Jo Blanden, Paul Gregg and Stephen Machin, 
<b>Intergenerational Mobility in Europe and North America</b>, April,
2005] They found that Britain has one of the worst records for 
social mobility in the developed world, beaten only by the USA 
out of eight European and North American countries. Norway was the 
best followed by Denmark, Sweden, Finland, Germany and Canada. 
<p>
This means that children born to poor families in Britain and the 
USA are less likely to fulfil their full potential than in other 
countries and are less likely to break free of their backgrounds 
than in the past. In other words, we find it harder to earn more 
money and get better jobs 
than our parents. Moreover, not only is social mobility in Britain 
much lower than in other advanced countries, it is actually declining 
and has fallen markedly over time. The findings were based on studies 
of two groups of children, one set born in the 1950s and the other in 
the 1970s. In the UK, while 17 per cent of the former made it from 
the bottom quarter income group to the top, only 11 per cent of the 
latter did so. Mobility in the Nordic countries was twice that of the 
UK. While only the US did worse than the UK in social mobility
<p> 
The puzzle of why, given that there is no evidence of American 
exceptionalism or higher social mobility, the myth persists 
has an easy solution. It has utility for the ruling class in 
maintaining the system. By promoting the myth that people can
find the path to the top easy then the institutions of power
will not be questioned, just the moral character of the many 
who do not.
<p>
Needless to say, income mobility does not tell the whole story.
Increases in income do not automatically reflect changes in 
class, far from it. A better paid worker is still working class
and, consequently, still subject to oppression and exploitation
during working hours. As such, income mobility, while important,
does not address inequalities in power. Similarly, income mobility 
does not make up for a class system and 
its resulting authoritarian social relationships and inequalities 
in terms of liberty, health and social influence. And the facts 
suggest that the capitalist dogma of "meritocracy" that attempts 
to justify this system has little basis in reality. Capitalism 
is a class ridden system and while there is some changes in the
make-up of each class they are remarkably fixed, particularly 
once you get to the top 5-10% of the population (i.e. the ruling 
class). 
<p>
Logically, this is not surprising. There is no reason to think 
that more unequal societies should be more mobile. The greater
the inequality, the more economic power those at the top will
have and, consequently, the harder it will be those at the bottom
to climb upwards. To suggest otherwise is to argue that it is
easier to climb a mountain than a hill! Unsurprisingly the facts
support the common sense analysis that the higher the inequality 
of incomes and wealth, the lower the equality of opportunity and,
consequently, the lower the social mobility.
<p>
Finally, we should point out even if income mobility was higher 
it does not cancel out the fact that a class system is marked by 
differences in <b>power</b> which accompany the differences in income. 
In other words, because it is possible (in theory) for everyone 
to become a boss this does not make the power and authority that 
bosses have over their workers (or the impact of their wealth on 
society) any more legitimate (just because everyone -- in theory 
-- can become a member of the government does not make government 
any less authoritarian). Because the membership of the boss class 
can change does not negate the fact that such a class exists.
<p>
Ultimately, using (usually highly inflated) notions of social
mobility to defend a class system is unconvincing. After all,
in most slave societies slaves could buy their freedom and free 
people could sell themselves into slavery (to pay off debts).
If someone tried to defend slavery with the reference to this
fact of social mobility they would be dismissed as mad. The 
evil of slavery is not mitigated by the fact that a few slaves 
could stop being slaves if they worked hard enough. 

<a name="secb73"><h2>B.7.3 Why is the existence of classes denied?</h2>

It is clear, then, that classes do exist, and equally clear that
individuals can rise and fall within the class structure -- though, of
course, it's easier to become rich if you're born in a rich family than a
poor one. Thus James W. Loewen reports that <i>"ninety-five percent of the
executives and financiers in America around the turn of the century came
from upper-class or upper-middle-class backgrounds.  Fewer than 3 percent
started as poor immigrants or farm children. Throughout the nineteenth
century, just 2 percent of American industrialists came from working-class
origins"</i> [in <i>"Lies My Teacher Told Me"</i> citing William Miller, <i>"American 
Historians and the Business Elite,"</i> in <b>Men in Business</b>, pp. 326-28; 
cf. David Montgomery, <b>Beyond Equality</b>, pg. 15] And this was 
at the height of USA "free market" capitalism. According to a survey done by
C. Wright Mills and reported  in his book <b>The Power Elite</b>, about 65% of
the highest-earning CEOs in American corporations come from wealthy
families. Meritocracy, after all, does not imply a "classless" society, 
only that some mobility exists between classes. Yet we continually hear 
that class is an outmoded concept; that classes don't exist any more, just 
atomised individuals who all enjoy "equal opportunity," "equality before the 
law," and so forth. So what's going on?
<p>
The fact that the capitalist media are the biggest promoters of the
"end-of-class" idea should make us wonder exactly <b>why</b> they do it. Whose
interest is being served by denying the existence of classes? Clearly it
is those who run the class system, who gain the most from it, who want
everyone to think we are all "equal." Those who control the major media
don't want the idea of class to spread because they themselves are members
of the ruling class, with all the privileges that implies. Hence they use
the media as propaganda organs to mould public opinion and distract the
middle and working classes from the crucial issue, i.e., their own
subordinate status. This is why the mainstream news sources give us
nothing but superficial analyses, biased and selective reporting, outright
lies, and an endless barrage of yellow journalism, titillation, and
"entertainment," rather than talking about the class nature of capitalist
society (see section D.3 -- <a href="secD3.html">"How does wealth influence the mass media?"</a>)
<p> 
The universities, think tanks, and private research foundations are also
important propaganda tools of the ruling class. This is why it is
virtually taboo in mainstream academic circles to suggest that anything
like a ruling class even exists in the United States. Students are
instead indoctrinated with the myth of a "pluralist" and "democratic"
society -- a Never-Never Land where all laws and public policies 
supposedly get determined only by the amount of "public support" they have
-- certainly not by any small faction wielding power in disproportion to
its size. 
<p>
To deny the existence of class is a powerful tool in the hands of the
powerful. As Alexander Berkman points out, <i>"[o]ur social institutions 
are founded on certain ideas; so long as the latter are generally 
believed, the institutions built on them are safe. Government remains 
strong because people think political authority and legal compulsion 
necessary. Capitalism will continue as long as such an economic system 
is considered adequate and just. The weakening of the ideas which 
support the evil and oppressive present day conditions means the 
ultimate breakdown of government and capitalism."</i> [<i>"Author's Foreword,"</i> 
<b>What is Anarchism?</b>, p. xii] 
<p>
Unsurprisingly, to deny the existence of classes is an important means 
of bolstering capitalism, to undercut social criticism of inequality 
and oppression. It presents a picture of a system in which only 
individuals exist, ignoring the differences between one set of people
(the ruling class) and the others (the working class) in terms of 
social position, power and interests. This obviously helps those in
power maintain it by focusing analysis away from that power and its
sources (wealth, hierarchy, etc.).
<p>
It also helps maintain the class system by undermining collective
struggle. To admit class exists means to admit that working people
share common interests due to their common position in the social
hierarchy. And common interests can lead to common action to change
that position. Isolated consumers, however, are in no position to 
act for themselves. One individual standing alone is easily defeated, 
whereas a <b><i>union</i></b> of individuals supporting each other is not. 
Throughout the history of capitalism there have been attempts by 
the ruling class -- often successful -- to destroy working class 
organisations. Why? Because in union there is power -- power which 
can destroy the class system as well as the state and create a new 
world. 
<p>
That's why the very existence of class is denied by the elite. It's part
of their strategy for winning the battle of ideas and ensuring that people
remain as atomised individuals. By <i>"manufacturing consent"</i> (to use Walter
Lipman's expression for the function of the media), force need not be
used. By limiting the public's sources of information to propaganda
organs controlled by state and corporate elites, all debate can be
confined within a narrow conceptual framework of capitalist terminology
and assumptions, and anything premised on a different conceptual framework
can be marginalised. Thus the average person is brought to accept
current society as "fair" and "just," or at least as "the best available,"
because no alternatives are ever allowed to be discussed. 

<a name="secb74"><h2>B.7.4 What do anarchists mean by <i>"class consciousness"</i>?</h2>

Given that the existence of classes is often ignored or considered 
unimportant ("boss and worker have common interests") in mainstream
culture, its important to continually point out the facts of the 
situation: that a wealthy elite run the world and the vast majority 
are subjected to hierarchy and work to enrich this elite. To be 
class conscious means that we are aware of the objective facts and 
act appropriately to change them. 
<p>
This is why anarchists stress the need for <i><b>"class consciousness,"</b></i> 
for recognising that classes exist and that their interests are in
<b>conflict.</b> The reason why this is the case is obvious enough. As
Alexander Berkman argues, <i>"the interests of capital and labour are
not the same. No greater lie was ever invented than the so-called
'identity of interests' [between capital and labour] . . . labour
produces all the wealth of the world . . . [and] capital is owned
by the masters is stolen property, stolen products of labour.
Capitalist industry is the process of continuing to appropriate
the products of labour for the benefit of the master class . . .
It is clear that your interests as a worker are <b>different</b> from
the interests of your capitalistic masters. More than different:
they are entirely opposite; in fact, contrary, antagonistic to
each other. The better wages the boss pays you, the less profit
he makes out of you. It does not require great philosophy to
understand that."</i> [<b>What is Anarchism?</b>, pp. 75-6]
<p>
That classes are in conflict can be seen from the post-war period
in most developed countries. Taking the example of the USA, the 
immediate post-war period (the 1950s to the 1970s) were marked by 
social conflict, strikes and so forth. From the 1980s onwards, there
was a period of relative social peace because the bosses managed to
inflict a series of defeats on the working class. Workers became less
militant, the trade unions went into a period of decline and the
success of capitalism proclaimed. If the interests of both classes
were the same we would expect that all sections of society would
have benefited more in the 1980s onwards than between the 1950s to
1970s. This is <b>not</b> the case. 
While income grew steadily across the board between 1950 and 1980s, 
since then wealth has flooded up to the top while those at the 
bottom found it harder to make ends meet. 
<p>
A similar process occurred in the 1920s when Alexander Berkman stated 
the obvious:
<p><blockquote><i>
"The masters have found a very effective way to paralyse the strength
of organised labour. They have persuaded the workers that they have 
the same interests as the employers . . . that what is good for the 
employer is good for his employees . . . [that] the workers will not
think of fighting their masters for better conditions, but they will
be patient and wait till the employer can 'share his prosperity' with
them. They will also consider the interests of 'their' country and
they will not 'disturb industry' and the 'orderly life of the community'
by strikes and stoppage of work. If you listen to your exploiters and
their mouthpieces you will be 'good' and consider only the interests
of your masters, of your city and country -- but no one cares about
<b>your</b> interests and those of your family, the interests of your union
and of your fellow workers of the labouring class. 'Don't be selfish,'
they admonish you, while the boss is getting rich by your being good
and unselfish. And they laugh in their sleeves and thank the Lord that
you are such an idiot."</i> [<b>Op. Cit.</b>, pp. 74-5]
</blockquote><p>
So, in a nutshell, class consciousness is to look after your own 
interest as a member of the working class. To be aware that there is
inequality in society and that you cannot expect the wealthy and
powerful to be concerned about anyone's interest except their own.
That only by struggle can you gain respect and an increased slice 
of the wealth you produce but do not own. And that there is <i>"an 
irreconcilable antagonism"</i> between the ruling class and working 
class <i>"which results inevitably from their respective stations 
in life."</i> The riches of the former are <i>"based on the exploitation 
and subjugation of the latter's labour"</i> which means <i>"war between"</i> 
the two <i>"is unavoidable."</i> For the working class desires <i>"only 
equality"</i> while the ruling elite <i>"exist[s] only through 
inequality."</i> For the latter, <i>"as a separate class, equality
is death"</i> while for the former <i>"the least inequality is slavery."</i>
[Bakunin, <b>The Basic Bakunin</b>, p. 97 and pp. 91-2]
<p>
Although class
analysis may at first appear to be a novel idea, the conflicting interests
of the classes is <b>well</b> recognised on the other side of the class
divide. For example, James Madison in the <b>Federalist Paper</b> #10 states
that <i>"those who hold and those who are without have ever formed distinct
interests in society."</i> For anarchists, class consciousness means to 
recognise what the bosses already know: the importance of solidarity
with others in the same class position as oneself and of acting together
as equals to attain common goals. The difference is that
the ruling class wants to keep the class system going while
anarchists seek to end it once and for all.
<p>
It could therefore be argued that anarchists actually want an <i><b>"anti-class"</b></i>
consciousness to develop -- that is, for people to recognise that classes
exist, to understand <b>why</b> they exist, and act to abolish the root causes
for their continued existence (<i>"class consciousness,"</i> argues Vernon 
Richards, <i>"but not in the sense of wanting to perpetuate classes, but
the consciousness of their existence, an understanding of why they
exist, and a determination, informed by knowledge and militancy, to
abolish them."</i> [<b>The Impossibilities of Social Democracy</b>, p. 133]). 
In short, anarchists want to eliminate classes, not universalise the 
class of "wage worker" (which would presuppose the continued existence of capitalism). 
<p>
More importantly, class consciousness does not involve "worker worship."
To the contrary, as Murray Bookchin points out, <i>"[t]he worker begins to
become a revolutionary when he undoes his [or her] 'workerness', when he
[or she] comes to detest his class status here and now, when he begins to
shed. . . his work ethic, his character-structure derived from industrial
discipline, his respect for hierarchy, his obedience to leaders, his
consumerism, his vestiges of puritanism."</i> [<b>Post-Scarcity Anarchism</b>,
p. 119] For, in the end, anarchists <i>"cannot build until the working 
class gets rid of its illusions, its acceptance of bosses and faith 
in leaders."</i> [Marie-Louise Berneri, <b>Neither East Nor West</b>, p. 19]
<p>
It may be objected that there are only individuals and anarchists are trying
to throw a lot of people in a box and put a label like "working class" on 
them. In reply, anarchists agree, yes, there are "only" individuals but some 
of them are bosses, most of them are working class. This is an objective 
division within society which the ruling class does its best to hide but
which comes out during social struggle. And such struggle is part of the 
process by which more and more oppressed people subjectivity recognise the 
objective facts. And by more and more people recognising the facts of
capitalist reality, more and more people will want to change them.
<p>
Currently there are working class people who want an anarchist society and 
there are others who just want to climb up the hierarchy to get to a position 
where they can impose their will to others. But that does not change the
fact that their current position is that they are subjected to the authority 
of hierarchy and so can come into conflict with it. And by so doing, they
must practise self-activity and this struggle can change their minds, what
they think, and so they become radicalised. This, the radicalising effects
of self-activity and social struggle, is a key factor in why anarchists
are involved in it. It is an important means of creating more anarchists
and getting more and more people aware of anarchism as a viable alternative
to capitalism.
<p>
Ultimately, it does not matter what class you are, it's what you <b>believe 
in</b> that matters. And what you <b>do.</b> Hence we see anarchists like Bakunin
and Kropotkin, former members of the Russian ruling class, or like Malatesta,
born into an Italian middle class family, rejecting their backgrounds and
its privileges and becoming supporters of working class self-liberation. 
But anarchists base their activity primarily on the working class (including 
peasants, self-employed artisans and so on) because the working class is 
subject to hierarchy and so have a real need to resist to exist. This process 
of resisting the powers that be can and does have a radicalising effect on 
those involved and so what they believe in and what they do <b>changes.</b>
Being subject to hierarchy, oppression and exploitation means that it
is in the working class people's <i>"own interest to abolish them. It has
been truly said that 'the emancipation of the workers must be accomplished
by the workers themselves,' for no social class will do it for them . . .
It is . . . <b>the interest</b> of the proletariat to emancipate itself from
bondage . . . It is only be growing to a true realisation of their 
present position, by visualising their possibilities and powers, by 
learning unity and co-operation, and practising them, that the masses
can attain freedom."</i> [Alexander Berkman, <b>Op. Cit.</b>, pp. 187-8]
<p>
We recognise, therefore, that only those at the bottom of society have a
<b>self</b>-interest in freeing themselves from the burden of those at the top,
and so we see the importance of class consciousness in the struggle of
oppressed people for self-liberation. Thus, <i>"[f]ar from believing in the 
messianic role of the working class, the anarchists' aim is to <b>abolish</b> 
the working class in so far as this term refers to the underprivileged 
majority in all existing societies. . . What we do say is that no 
revolution can succeed without the active participation of the working, 
producing, section of the population. . . The power of the State, the 
values of authoritarian society can only be challenged and destroyed 
by a greater power and new values."</i> [Vernon Richards, <b>The Raven</b>, 
no. 14, pp. 183-4] Anarchists also argue that one of the effects of 
direct action to resist oppression and exploitation of working class 
people would be the <b>creation</b> of such a power and new values, values 
based on respect for individual freedom and solidarity (see sections 
<a href="secJ2.html">J.2</a> and <a href="secJ4.html">J.4</a> on direct action and its liberating potential).
<p>
As such, class consciousness also means recognising that working 
class people not only have an interest in ending its oppression but that we 
also have the power to do so. <i>"This power, the people's power,"</i> notes
Berkman, <i>"is <b>actual</b>: it cannot be taken away, as the power of the
ruler, of the politician, or of the capitalist can be. It cannot be
taken away because it does not consist of possessions but in ability.
It is the ability to create, to produce; the power that feeds and
clothes the world, that gives us life, health and comfort, joy and
pleasure."</i> The power of government and capital <i>"disappear when the
people refuse to acknowledge them as masters, refuse to let them
lord it over them."</i> This is <i>"the all-important <b>economic power</b>"</i>
of the working class. [<b>Op. Cit.</b>, p. 87, p. 86 and p. 88] 
<p>
This potential power of the oppressed, anarchist argue, shows that 
not only are classes wasteful and harmful, but that they can be 
ended once those at the bottom seek to do so and reorganise society appropriately. This means that we have the power to transform the 
economic system into a non-exploitative and classless one as 
<i>"only a productive class may be libertarian in nature, because 
it does not need to exploit."</i> [Albert Meltzer, <b>Anarchism: 
Arguments For and Against</b>, p. 23]
<p>
Finally, it is important to stress that anarchists think that class
consciousness <b>must</b> also mean to be aware of <b>all</b> forms of hierarchical
power, not just economic oppression. As such, class consciousness and
class conflict is not simply about inequalities of wealth or income but
rather questioning all forms of domination, oppression and exploitation.
<p>
For anarchists, <i>"[t]he class
struggle does not centre around material exploitation alone but also
around spiritual exploitation, . . . [as well as] psychological and 
environmental oppression."</i> [Bookchin, <b>Op. Cit.</b>, p. 151] 
This means
that we do not consider economic oppression to be the only important
thing, ignoring struggles and forms of oppression outside the workplace. 
To the contrary, workers are human beings, not the economically driven
robots of capitalist and Leninist mythology. They are concerned about
everything that affects them -- their parents, their children, their
friends, their neighbours, their planet and, very often, total strangers.
<p>
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