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<title>B.7 What classes exist within modern society? | Anarchist Writers</title>
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<h1>B.7 What classes exist within modern society?</h1>
<p>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>
<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 do statism and capitalism affect society?</a>).</p>
<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>
<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</b></i> -- 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.</p>
</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>
<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>
<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>
<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>
<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.</p>
<p><a name="secb71"></a></p>
<h2>B.7.1 But do classes actually exist?</h2>
<p>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>
<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>
<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>
<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>
<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>
<p>In terms of income, the period since 1970 has also been marked by increasing inequalities and concentration:</p>
<blockquote><p><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]
</p></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">
<tbody>
<tr valign="top" align="center">
<td> </td>
<th rowspan="2">real income growth <br>
1977-99</th>
<th colspan="3">Share of total income</th>
</tr>
<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>
</tr>
</tbody>
</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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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]</p>
<p><a name="secb72"></a></p>
<h2>B.7.2 Does social mobility make up for class inequality?</h2>
<p>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>
<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>
<p>Milton Friedman puts the argument in this way:</p>
<blockquote><p> <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]
</p></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>
<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>
<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>
<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>
<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></p><table border="5">
<tbody>
<tr valign="top" align="center">
<th>Transition</th>
<th>Before 1980</th>
<th>After 1980</th>
</tr>
<tr valign="top" align="center">
<td>Middle income to low income</td>
<td>8.5</td>
<td>9.8</td>
</tr>
<tr valign="top" align="center">
<td>Middle income to high income</td>
<td>5.8</td>
<td>6.8</td>
</tr>
<tr valign="top" align="center">
<td>Low income to middle income</td>
<td>35.1</td>
<td>24.6</td>
</tr>
<tr valign="top" align="center">
<td>High income to middle income</td>
<td>30.8</td>
<td>27.6</td>
</tr>
</tbody>
</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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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.</p>
<p> </p>
<h2><a name="secb73">B.7.3 Why is the existence of classes denied?</a></h2>
<p>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>
<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>
<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>
<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>
<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>
<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>
<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.</p>
<p><a name="secb74"></a></p>
<h2>B.7.4 What do anarchists mean by <i>"class consciousness"</i>?</h2>
<p>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>
<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>
<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>
<p>A similar process occurred in the 1920s when Alexander Berkman stated the obvious:</p>
<blockquote><p><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]
</p></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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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>
<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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