Part 10. The Ultimate Taboo Question
“Source, where are you?
Remedy, where are you?
Economics, are you finally
going to change?”
-- René Char, Feuillets d’Hypnos[i] --
The goal of The Second American Revolution is to resurrect the political system the Founding Fathers created and which governed America for over 200 years, but on a new, better basis.
That basis: greater democracy.
Contrary to popular belief spread around the world, the American political system was not a democracy but a политей -- a polity. A polity is a hybrid of oligarchy and democracy that tends toward more democracy. The polity died in 2008-2009, replaced by an oligarchy with democratic accessories, illusions.
A polity is moderated by a large middle class. And there’s the rub...
The American middle class has been declining economically since the 1970s. For official economic data, see below.
Economics, are you finally going to change? That is the issue. If economics do not change, the American middle class is doomed.
If the middle class is destroyed, a polity is impossible.
If a polity is impossible, The Second American Revolution is impossible.
Source, where are you? What is ruining economically the middle class? This post examines the calamity of our times. It could engulf the Western world in chaos.
You cannot create a constructive change of -- not in -- economics without knowing the source of the middle class decline. And you will never arrive at the source without asking the ultimate taboo question.
The American middle class is caught in a double play. No, they won’t show it at Harvard or Yale. Forget CNN or PBS; forget Fox or Democracy Now. Teacher or student, please don’t bring it up in any class at any school. If you work for the government, do what you always do: keep silent; confound and confuse; collect paychecks. If you are granted an interview and mention the double play, George Soros and Bill Gates will politely, firmly, look at their watches. To show it’s nothing personal, their bodyguards will gently close your car door for you with sweet Southern hospitality. Ya’ll come back now, ya hear?
Why the national silence?
Because of a national fear.
Nobody in government, academia, the media, or any other cultural maximizer[ii] can seriously pose vital forbidden questions. That is not their job. Maximizers create and maintain the culture as it is, propagate it and integrate it -- including the national fear and the silence feeding it.
To the contrary, The Second American Revolution asks straightaway the ultimate taboo question:
Is the middle class being destroyed by processes intrinsic to capitalism?
That question takes us directly to Karl Marx, the pioneering author on middle class decline. Karl Marx: talk about an American taboo. All cultural maximizers reading these words: I do not wish to create problems for you. I don’t want your university president to take a call from his off-campus bosses, telling him… So, for your wife’s and kids’ sake, stop reading this post. Go fishing with other Lake People, walk the dog. Have fun -- good-bye.
On the middle class, Marx was right/wrong.
For him, the economic foundation of the middle class is inexorably destroyed as capitalism matures:
“…the small tradespeople, shopkeepers and retired tradesmen generally, the handicraftsmen and peasants -- all these sink gradually into the proletariat, partly because their diminutive capital does not suffice for the scale on which Modern Industry is carried on and is swamped in the competition with the large capitalists, partly because their specialized skill is rendered worthless by new methods of production...”[iii]
For over a century, two indisputable socio-economic tendencies have held sway: (i) the enlargement of the scale of enterprise, notably via mergers,[iv] and (ii) the disappearance of small producers, of which the most publicized example is the decline in small farms.[v] Joseph Schumpeter, no Marxist, summed up: “[T]he capitalist process unavoidably attacks the economic standing ground of the small producer and trader...Here of course Marx scores.”[vi]
Also beyond dispute: the middle class in the United States and other developed Western nations was not destroyed. Why?
A revolution occurred in the twentieth century -- a revolution so monumental on an everyday level that it took place virtually unnoticed. For the first time in recorded history, increased productivity allowed for more people to live off the maintenance and distribution of wealth -- soldiers, priests, doctors, lawyers, teachers, bureaucrats, stockbrokers, real estate agents, accountants -- than from the creation of that wealth.
In the United States the service sector furnished 80% of all jobs in 2002, versus only 60% in 1960.[vii]
America isn’t alone.[viii] In the 13 developed Western nations comprising the OECD, in 2005 over 70% of all employment and value added was contributed by the service sector, as well as nearly all employment growth.[ix]
Marx didn’t foresee that explosive expansion. In fact, he missed it entirely.
The undeclared revolution -- the spectacular growth of the service sector -- saved the middle class. That extraordinary salvation is why those who discount the evidence of an economic erosion of the middle class in the latter part of the twentieth century, are not to be discounted. Their premises and conclusions have a solid ground that continues to impress.
But is that salvation permanent or merely a pause?
The core of the service sector middle class consists of craftsmen, tradesmen, and professionals. The foundation of their economic existence is higher levels of training and education necessary to perform tasks that are more complex.
How secure are those higher levels and greater complexity?
Writing in 1776, Adam Smith identified a fundamental characteristic of capitalism: the division of labor.
“The quantity of materials which the same number of people can work up, increases in a great proportion as labour comes to be more and more subdivided; and as the operations of each workman are gradually reduced to a greater degree of simplicity, a variety of new machines come to be invented for facilitating and abridging those operations.”[x]
Thus, the division of labor begets simplification which in turn begets routinization/standardization of work. Concomitantly, the levels of training and education needed to perform tasks are lowered.
Overall, work tends toward machine-tending. Although Adam Smith no doubt overstated his case, his essential point remains valid:
“Long apprenticeships are altogether unnecessary. The arts, which are much superior to common trades, such as those of making clocks and watches, contain no such mystery as to require a long course of instruction. The first invention of such beautiful machines, indeed, and even that of some of the instruments employed in making them, must, no doubt, have been the work of deep thought and long time, and may justly be considered as among the happiest efforts of human ingenuity. But when both have been fairly invented and are well understood, to explain to any young man, in the completest manner, how to apply the instruments and how to construct the machines cannot well require more than the lessons of a few weeks; perhaps those of a few days might be sufficient.”[xi]
A few days . It was Karl Marx who first made the connection between the corrosive impact of the specialization of labor on what today is the core of the middle class, i.e., those with specialized skills. Marx emphasized that not only production but also education and training are sapped. He wrote of the “commercial worker [who] belongs to the better-paid class of wage workers -- to those whose labour is classed as skilled and stand above average labour,” that his wage
“tends to fall, even in relation to average labour, with the advance of the capitalist mode of production. This is due [first] to the division of labour...Secondly, because the necessary training, knowledge of commercial practices, languages, etc., is more and more rapidly, easily, universally and cheaply reproduced with the progress of science and public education…The universality of public education enables capitalists to recruit such labourers from classes that formerly had no access to such trades and were accustomed to a lower standard of living. Moreover, this increases supply, and hence competition. With few exceptions, the labour-power of these people is therefore devaluated with the progress of capitalist production. Their wage falls, while their labour capacity increases.”[xii]
The erosion Marx observed has not disappeared. 60 years ago, when a polity existed and one could say such things and not be fired, the sociologist C. Wright Mills wrote:
“[T]he rationalization and down-grading of the work operations themselves and hence the lessening importance of education and experience in acquiring white-collar skills, the levelling down of white-collar and the raising of wage-worker incomes, so that the differences between them are decidedly less than they once were; the increased size of the white-collar labor market, as more people from lower ranks receive high-school educations, so that any monopoly of formal training adequate to these jobs is no longer possible;…the increased participation of white-collar people, along with wage-workers, in unemployment...All the factors of their status position, which have enabled white-collar workers to set themselves apart from wage-workers, are now subject to definite decline. Increased rationalization is lowering the skill levels and making their work more and more factory-like.”[xiii]
A highly visible sign of the simplification of work and the tendency of skill and wage levels to fall is the general para-lyzation occurring today throughout developed economies -- the emergence of paramedics for doctors, paralegals for lawyers, etc.
More factory-like . You would think that institutions of higher learning would be leading the charge against the downgrading of education. Guess again. Their turf was sapped years ago. Downgrading in universities is observable every time an instructor is replaced by a graduate student teaching assistant or adjunct.[xiv] Beware: the downsizing movement has only just begun.
In point of fact, professors don’t understand the basic economic process Smith identified as well as does the first unemployed guy you meet living under a bridge or the most illiterate Mexican fruit picker or assembly line worker pulling double shifts in a border town bluejeans maquiladora. It is not that the professors are stupid; rather, as cultural maximizers, they are paid to study certain things -- which means they are paid NOT to study others.
As did the middle class in the production sector, will the middle class in the service sector decline? The service sector revolution is too recent a phenomenon to be adequately understood. An answer can be drawn inferentially, however, and it is frightening.
In 1996, the economist Edward N. Wolff sounded the alarm:
“Between 1983 and 1992, real incomes have fallen for all households except the top 20 percent of the income distribution. Median net worth has also fallen. Median financial wealth was the same in 1992 as in 1983 -- still only $10,000. The average indebtedness of American families relative to their assets continued to rise between 1983 and 1992…There has been almost no trickle down of economic growth to the average family: almost all the growth in household income and wealth has accrued to the richest 20 percent. The finances of the average American family are more fragile in the 1990s than in the early 1980s. It is not surprising that there is a growing sense of economic insecurity in the country.”[xv]
The picture has deteriorated since Wolff’s warning. A prior post to this blog (“No We Can’t,” August 15, 2011) presented the harrowing realities of the new America:
“No, we can’t ignore them and escape chaos.
To see them in naked black and white, go to www.census.gov/hhes/www/income/data/historical/families/index.html. Table F-2.
What you will see:
Our census bureau periodically takes the U.S.A. population and divides it into five parts. The bureau then reports the size of the slice of the national income pie going to each fifth of the population. Thus, in 1947, the poorest one/fifth of the population received 5.0% of our nation’s income. In 2009, that same fifth received only 3.9%.
Undoubtedly, a poor German or American today is well off compared to a poor Chinaman in the 1600s. Poor, middle, and rich are phenomena that exist not in absolute terms but rather relative to the total wealth of the society in question.
Once that nonabsolute definition is accepted, the figures cited above for the lowest fifth of the American population speak for themselves. No, we can’t and won’t ignore them.
So, how are American families doing?
(1) The richest, top fifth of all families received 43.0% of the national income in 1947. In 2009, their share had grown to 48.2%. First conclusion: the rich are getting richer. Two facts worth noting: (i) the super rich benefited the most. The slice of the pie going to the top 5% of all families grew from 17.5% in 1947 to 20.7% in 2009. (ii) The rise of the rich is relatively recent. The share going to the top 5% actually declined after 1947 until 1989, the first year of the Bush Sr. administration, when it reached 17.9%. Thereafter, the climb continued, consolidated.
(2) The rich and their spokesmen like to say a rising tide raises all boats. Sorry, not in this case. The rise of the rich took place at the expense of those least able to afford it. The share of national income going to the lowest two fifths of the population fell from 16.9% in 1947 to 13.3% in 2009. Second conclusion: the poor are getting poorer.
(3) 1947? Old stuff, you sniff. O.K., let’s run the clock back only to 1995, Bill Clinton’s third year as president. As of 2009, (i) the lowest, poorest fifth of the population’s share of the income pie fell from 4.4% to 3.9%; the share of the second lowest fifth, from 10.1% to 9.4%; of the third fifth (the middle) from 15.8% to 15.3%. The slice going to the fourth fifth stayed at 23.2%. The share going to the remaining fifth, the richest, rose from 46.5% to 48.2%. (ii) If middle class is defined as the second, third, and fourth fifths of the population, then the share of the national income going to the middle class in 1995-2009 shrank from 49.1% to 47.9%. Third conclusion: the middle class is declining.
(4) The fall of the middle class, like the rise of the rich, is a relatively recent phenomenon. In 1981, Ronald Reagan’s first year as president, the middle class (second, third, and fourth fifths) received 53.5% of America’s income. In 2009, the middle class’s share slipped to 47.9%. (During the same period, the slice going to the richest 5% of the population ballooned from 14.4% to 20.7%).
(5) In 1992, the middle class’s share of the income pie was 51.0%. In 1993, its share slipped to 48.9%, and never again rose above 50%. Poor poorer; rich richer; middle class smaller. The triple play is as disastrous as it is undeniable.”
Unfortunately, analyzing the service sector is extremely difficult because that sector is in the contentious and litigious category of subjects on which billions of dollars and immense political power are riding on definitions. Organic, national security, pornography, sanity: the category is huge. The definition of poverty serves as an instructive example. In 1999, the United States Census Bureau began
"to revise its definition of what constitutes poverty in the United States…
The bureau’s new approach would in effect raise the income threshold for living above poverty to $19,500 for a family of four, from the $16,600 now considered sufficient. Suddenly, 46 million Americans, or 17 percent of the population, would be recognized as officially below the line, not the 12.7 percent announced last month, the lowest level in nearly a decade…
Sociologists and economists who study what people must earn to escape poverty in the United States place the line even higher... [T]hey put the threshold for a family of four somewhere between $21,000 and $28,000…
In opinion polls, Americans draw the poverty line above $20,000…
But a higher threshold means government spending would have to rise to pay for benefits that are tied to the poverty level, like food stamps and Head Start programs. That would require an incursion into the budget surplus that neither Republicans nor Democrats seek."[xvi]
Further complicating any analysis, a transition is taking place in services (see below), and transitions are inherently difficult to define. The ongoing dispute over defining service sector illustrates the problem:
"Is cooking a hamburger patty and inserting the meat, lettuce and ketchup inside a bun a manufacturing job, like assembling automobiles?
That question is posed in the new Economic Report of the President, a thick annual compendium of observations and statistics on the health of the U.S. economy.
Putting jobs at McDonald’s, Burger King and other fast-food enterprises in the same category as those at industrial companies like General Motors and Eastman Kodak might seem like a stretch…
But the presidential report points out that the current system for classifying jobs ‘is not straightforward.… When a fast-food restaurant sells a hamburger, for example, is it providing a "service" or is it combining inputs to "manufacture" a product?’ the report asks. Sometimes, seeming subtle differences can determine whether an industry is classified as manufacturing. For example, mixing water and concentrate to produce soft drinks is classified as manufacturing. However, if that activity is performed at a snack bar, it is considered a service.
The report notes that the Census Bureau’s North American Industry Classification System defines manufacturing as covering enterprises that are ‘engaged in the mechanical, physical or chemical transformation of materials, substances or components into new products.’
Classifications matter, the report says, because among other things, they can affect which businesses receive tax relief [sic]…
David Huether, chief economist for the National Association of Manufacturers, said that he had heard for several years that some economists wanted to count hamburger flipping as a manufacturing job, which he noted would result in statistical reports showing many more jobs in what has been a declining sector of the economy."[xvii]
Given such complications and lack of clarity, we are compelled to proceed neither inductively nor deductively but abductively from hard economic data to the following axiom:
Our era is characterized by the conversion of services into commodities. In the process, services are being subjected to the same standardization/routinization characterizing commodity production in general. As in the production sector in the past, in the service sector today those two processes are eroding the complexity of tasks and the higher levels of education and training needed to fulfill them.
What took capitalism so long to enter the service sector?
Professions, tradesmen, craftsmen: the heritage of those middle class service sector groups comes from the feudal guilds, not from the working class. The two are decidedly different. In fact, an essential role of the guilds in the Middle Ages was to lock out the emerging urban proletariat. Adam Smith portrayed in stark terms the fierce, anti-capitalism nature of the feudal guilds in his discussion of how, if a trade were too easily learned, the apprentice
“would have more competitors, and his wages, when he came to be a complete workman, would be much less than at present. The same increase in competition would reduce the profits of the masters as well as the wages of the workmen. The trades, the crafts, the mysteries, would all be losers. But the public would be a gainer, the work of all artificers coming in this way much cheaper to market.
It is to prevent this reduction of price, and consequently of wages and profit, by restraining that free competition which would most certainly occasion it, that all corporations [i.e., guilds], and the greater part of corporation laws, have been established…
The inhabitants of a town, being collected into one place, can easily combine together. The most insignificant trades carried on in towns have accordingly, in some place or other, been incorporated, and even where they have never been incorporated, yet the corporation spirit, the jealousy of strangers, the aversion to take apprentices, or to communicate the secret of their trade, generally prevail in them, and often teach them, by voluntary associations and agreements, to prevent that free competition which they cannot prohibit by bye-laws.”
Secret books, secret machines, secret networks -- in brief, the education and training necessary to perform higher level tasks: those were the economic bases of the feudal guilds. Today, those same bases provide for the economic survival of the service sector middle class.
With time, capitalism degrades and weakens those bases because higher rates of profit are found in commodities, not in the corporation spirit and other feudal residues. The constant search for more profits is why the division of labor and its impersonal routinization and standardization of work characterize capitalist production, as opposed to personalized feudal mercantilism. [xviii] Against the desperate quest for higher profits, the service sector, insulated for centuries by feudal guild principles and practices -- the mysteries -- could not hold out indefinitely.[xix]
Because socio-economic forces are causing the decline of the middle class, it is reasonable to suppose that decline will take place in conjunction with those forces, i.e., move cyclically and over the very long term, as a result of economic cycles inherent to capitalism. That basic assumption -- and only The Second American Revolution has it -- is opposed not only to the perennial Marxist prediction of an imminent middle class crash but also to the conservative, often fanatical faith of status quo defenders who see the middle class as immortal.
What does long term mean?
Again, the service sector revolution is so recent we have little or no historical precedent for guidance. Furthermore, and perhaps more importantly, wars and other unforeseeable catastrophes have a tremendous impact on economic inequality trends. Nevertheless, as a probative point of departure, one economic study found that income inequality in the United States in 2002 reached levels last seen some eighty years ago.[xx] If experience bears out that time frame, the decline of the middle class could take place over centuries.
So, how long is long? Nobody knows.
For the meantime, two conclusions of The Second American Revolution are reasonable:
(i) In the course of its economic decline that started in the latter part of the 1900s, the American middle class slipped below the critical 50% threshold of all households (see “No We Can’t” and Part 9 of this series). The middle class simply no longer has the economic strength to moderate the other classes. That weakness is why the polity was replaced by an oligarchy.
(ii) The polity and a large middle class are hallmarks of Western civilization. Without them, that civilization ceases to exist as we know it.
Overall decline, cyclical swings: the most poignant expression of the middle class’s present and future trajectory is not found in economics. Edgar Allan Poe expressed it in five words, The Pit and The Pendulum, his 1842 novel.
The terrors of the Spanish Inquisition that Poe feared, however, are microscopic indeed compared to those which would result from the collapse of the Western world.
Source, where are you? The Second American Revolution found it -- the ultimate taboo answer, capitalism’s double play against the middle class.
Two outs, nobody on base. Home team losing.
Next post: Remedy, Where Are You?
[i] « Où êtes-vous source? Où êtes-vous remède? Économie vas-tu enfin changer ? » René Char, Feuillets d’Hypnos, Gallimard, Paris, 2007, p. 18. (Fragment 37).
[ii] The anthropologist Jules Henry :
“All great cultures, and those moving in the direction of greatness, have an elite which might be called the cultural maximizers whose function is to maintain or push further the culture’s greatness and integration…The functions of a cultural maximizer include organization (i.e., maintaining the level of integration of the culture as it is) and contributing certain qualitative features necessary to the continuance of the cultural life. His function is never to alter the culture radically. He may help to give more intense expression to features that already exist, but he never wants to bring about a fundamental change. Thus, those who have the capacity to maximize culture in this sense are among the elite in all highly developed civilizations.”
Jules Henry, Culture Against Man, Random House, 1963, p. 31. Cited in The Source of Terrorism: Middle Class Rebellion, p. 65. Truth in lending: Jules Henry was a close family friend.
[iii] Karl Marx and Frederic Engels, The Communist Manifesto, in Dirk J. Struik, Editor, Birth of The Communist Manifesto, translated by Samuel Moore, International Publishers, New York, 1971, p. 97.
[iv] In politics, appearance and reality seldom coincide. You think Republicans are more pro-big business than Democrats?
“ ‘We’re in the greatest merger wave in history …,’ said John Shepard Wiley Jr., a professor of antitrust law at the University of California at Los Angeles. ‘There has been a sea change in attitudes toward large mergers. It’s a much different philosophy from the 1960s when the polestar was the protection of small business.’
During the 12 years of the Reagan and Bush administrations, which are widely viewed as among the most permissive antitrust periods of the century, there were 85,064 corporate mergers valued at more the $3.5 trillion, according to Securities Data Co. Under nearly seven years of the Clinton administration, there have so far been 166,310 deals valued at more than $9.8 trillion."
Stephen Labaton, “Clinton Legacy Still Remains Merger Friendly,” International Herald Tribune, November 9, 1999.
[v] Agriculture is the economic base of Iowa. A native Iowan provided this case study:
"The percentage of the population over 80 is larger in Iowa than in any other U.S. state. Iowa is the only one besides Florida with more people over 75 than under five.
The population problem in Iowa is not merely that its residents are getting old and its young people are leaving. The problem is tied directly to the character of agriculture in the state. In 1960 there were 174,707 farms in Iowa, down from a peak of around 215,000 in 1930. Last year there were about 96,000 farms, though the amount farmland in cultivation had barely changed. There are 15 million hogs in Iowa, but they are raised on fewer than half as many farms as just a decade ago.
It can be hard to grasp the implications of a shift that large.
Think of a farm, for a moment, not as a tract of land or so many acres of corn and soybeans. Think of a farm instead as a constellation of people, each of whom has ties to a local community, to churches and schools, to banks and farm implement dealers, to co-ops and Lions Clubs.
In 1960, small towns were thriving not on the prosperity of town residents alone but on the prosperity and the population of farms in the adjoining countryside.
Now half of those farms are gone, their groves cut down, their houses bulldozed, their constellations of people dispersed. Year by year, the size of farms increases and their work force diminishes. School districts have consolidated, and small town business is just a ghost of itself. It is not uncommon to come across a sense of disinheritance among Iowans, especially those in small towns.
The bond that tied them to the farmland around them, a bond that was social as well as economic, has to a striking degree been severed.
There is no one on the farms, and the towns have no one to serve except their aging residents.
All of this has come about because of a faith, an unproved faith, that the only way for agriculture to prosper is for farms to become bigger and bigger.
There is no question that Iowa raises vastly more corn and soybeans than it did in 1960. But at what cost? Farm prices are as low as they have ever been, and farmers now pray for emergency funding from Congress the way they pray for rain..."
Verlyn Klinkenborg, “Bigger Farms Don’t Make For a Contented Iowa,” International Herald Tribune, September 5, 2000.
It is necessary to dynamite a popular urban illusion:
"The idea that the United States is a nation of entrepreneurs and self-starters has become almost accepted wisdom.
‘Welcome to the free-agent nation,’ declares Tom Peters, one of the world’s best-known management gurus. Thirty million Americans -- and counting -- are now some form of freelancer, recent articles in business magazines have proclaimed. This is the era of the ´e-lance economy,´ experts say, with the Internet allowing millions of people to bid goodbye to corporate life and become their own bosses.
There is a problem, however, with this futuristic, seemingly sensible vision: It does not appear to jibe with reality…
Since 1994, the number of self-employed Americans outside agriculture has fallen by 146,000, to 12.9 million, according to the Bureau of Labor Statistics. The period from 1994 to 1999, hailed as a golden age for entrepreneurs, is actually the first five-year span since the 1960s in which the number of self-employed fell…
‘We have this idea that everyone’s out there working for themselves,’ said Robert Fairlie, an assistant professor at the University of California at Santa Cruz who has studied the history of self-employment. Instead, he said, millions of Americans have joined the working economy during the decade-long boom and almost all of them were employed by existing businesses.
And, contrary to an earlier trend, most of them have taken jobs with big companies. Those with a least 1,000 employees have grown the fastest since 1994, while the percentage of people working for companies with fewer than 25 workers has slipped to 29 percent from 30.1 percent.
In fact, running a small business or acting as an independent consultant has in many ways become more difficult than it once was, analysts say…
The decline in self-employment has accelerated since 1997, and it has occurred in most industries, including construction, finance, retail and services in general. The drop has also taken place in every region…"
David Leonhardt, “Shattering The Myth of ‘E-Lancers,’” International Herald Tribune, December 2/3, 2000.
[vi] Joseph A. Schumpeter, Capitalism, Socialism and Democracy, Harper Collins, 1975, p. 140.
[vii] David Leonhardt, “History Points to a Relatively Small U.S. Economic Rebound for 2002,” International Herald Tribune, January 3, 2002.
[viii] France provides another case study: Professor François Chatagner wrote that the most spectacular development of the past 50 years has been the explosion in the number of white-collar workers. The French service sector contained only 15% of the working population in 1936, versus over 50% in 1997. As for small producers, after World War II, farms in France became more concentrated; and non-agricultural independent producers -- artisans, small commercial and industrial enterprises -- were reduced from l7.5% of the working population to 7.5%. François Chatagner, Les Classes sociales: pertinence et permanence, Le Monde Éditions, Paris, 1997, pp. 53, 54, 55, 58.
[ix] OECD, resume of “Enhancing The Performance of The Service Sector,” 2005.
[x] Adam Smith, The Wealth of Nations, Penguin Books, London, England, 1997, p. 372.
[xi] Ibid., p. 226.
[xii] Karl Marx, Das Kapital, translator unknown, Volume III, International Publishers, New York, 1970, pp. 300-1.
[xiii] C. Wright Mills, White Collar: The American Middle Classes, Oxford University Press, New York, 1956, pp. 249, 297.
"WASHINGTON. Compared to other industries, universities’ product -- knowledge -- may be more abstruse, and their function more complex than turning out widgets. The way they have reshaped their work force, however, is taken right from the pages of Corporate America’s handbook.
The ‘casualization’ of labor -- allowing the attrition of full-time staff, then replace them with cheaper part-timers -- has become commonplace in business, and just as much so in higher education…
Part-time professors make up nearly half of the faculty in America’s institutes of higher education, compared to one-fifth 30 years ago, according to the U.S. Department of Education.
The hardscrabble existence of part-timers who piece together a living course by course (usually getting between $1,500 and $2,000 for each) generally includes no health insurance, or phone number, or cost-of-living raises. They often commute between several colleges. Their schools don’t pay their way to conferences, or their journal subscriptions. In some cases, they don’t even get a library card…
An adjunct typically teaches twice as many classes and three times as many students as a full-time, tenure-track professor. Only 59 percent hold office hours, compared to 91 percent of full-timers, according to the American Association of University Professors…
With less time to spend, adjuncts give fewer assignments and essay exams, and they are less likely to be able to nurture a long-term mentoring relationship with students, write recommendations or serve as an adviser.
Adjuncts rarely get to do the research that would keep them on top of their profession. Part-timers complain, too, that they lack what is the bedrock of the concept of university: intellectual and creative freedom.
And, many part-timers say, they can’t afford to truly challenge their students. Unlike tenure-track professors, whose performance is measured against detailed criteria, adjuncts are generally judged solely by students’ evaluations. Woe to the professor who gets on the wrong side of the 18-year-olds."
Linda Perlstein, “Can Adjuncts Do the Job?,” International Herald Tribune, February 15, 1999.
Today, the most controversial form of downgrading of tasks is outsourcing. The legal profession is a case in point:
"NEW YORK: Bruce Masterson, the chief operating officer of Socrates Media, asked his outside counsel to customize a residential lease for all 50 U.S. states in 2003. About $400,000 was the firm’s estimate. He rejected that cost and hired QuisLex, a firm in Hyderabad, India, that did the work for $45,000.
‘It was good quality,’ said Masterson, whose company, which is based in Chicago, publishes legal forms on the Internet. ‘We’ve been working together ever since.’
Clients are pushing law firms like Jones Day and Kirkland & Ellis to send basic legal tasks to India, where lawyers tag documents and investigate takeover targets for as little as $20 an hour. The firms are part of a trend that will move about 50,000 U.S. legal jobs overseas by 2015, said Forrester Research in Boston."
Cynthia Cotts and Liane Kufchock, “U.S. legal work is moving overseas, and India wins a big part,” International Herald Tribune, August 22, 2007.
[xv] Edward N. Wolff, Top Heavy: The Increasing Inequality of Wealth in America and What Can be Done about it, The New Press, New York, 1996, pp. 73-4.
Wolff’s disturbing picture was still relevant over a decade later:
"WASHINGTON: On Capitol hill and on the presidential campaign trail, Democrats are increasingly moving toward a full-throated populist critique of the economy under President George W. Bush…
Senator Hillary Rodham Clinton of New York calls it ‘trickle-down economics without the trickle.’…
[T]he latest resurgence of populism is deeply rooted in the current economic realities of stagnated wages and fears about losing jobs, analysts say, and it is framing debates over tax policy, education, trade, energy and health care…
[There is] a striking contrast with the approach taken by Democrats during much of the 1990s, when President Bill Clinton asserted that trade would create American jobs and that paying attention to the concerns of Wall Street would help the economy by lowering interest rates…
Democrats say they are responding to economic trends that the statistics in the headlines do not capture, including middle-class insecurity about job loss, the affordability of health insurance and the costs of education. The times have changed, those Democrats argue, and six years of Republican tax and economic policies have heightened the inequities…
[A]ll the major Democratic candidates for president are promising to use government to ease the insecurity of the middle class, on issues from education to health care."
Robin Toner, “Democrats lean left on economy,” International Herald Tribune, July 17, 2007.
For the record, the Census Bureau’s historical income tables show that between 1992 and 2000, the Clinton presidency years, the poorest fifth of the American population’s share of the national income fell from 3.8% to 3.6%; the richest fifth’s share rose from 46.9% to 49.8% (the top 5%’s share rose from 18.6% to 22.1%); and the share of the middle class -- the middle 60% of the population -- fell from 49.4% to 46.7%.
[xvi] Louis Uchitelle, “More Cash in Hand, but Poorer,” International Herald Tribune, October 19, 1999.
[xvii] David Cay Johnston, “Should burger-flipping be a heavy industry?,” International Herald Tribune, February 21/22, 2004.
[xviii] Michel Foucault identified
"the defining characteristics of guild apprenticeship: a relationship of dependence simultaneously individual and total vis-à-vis the master; a fixed duration of training that is completed by a qualifying proof, but that cannot be broken down into a precise program; a wide exchange between the master who should give his knowledge and the apprentice who should give his services, his aid, and often a remittance. A form of domesticity is mixed with a transfer of knowledge. "
[les caractères propres à l’apprentissage corporatif : rapport de dépendance à la fois individuelle et totale à l’égard du maître ; durée statuaire de la formation qui est conclue par une épreuve qualificatrice ; mais qui ne se décompose pas selon un programme précis ; échange global entre le maître qui doit donner son savoir et l’apprenti qui doit apporter ses services, son aide et souvent une rétribution. La forme de la domesticité se mêle à un transfert de connaissance.]
Michel Foucault, Surveiller et punir, Gallimard, Paris, 2000, pp. 183-4.
"Paris. Thomson is a French electronics company that was close to bankruptcy in the 1990s when it was state-owned, no longer able to make money manufacturing televisions, video players and other consumer gizmos in the face of fierce competition. Then, it made an unusual move…
‘We’ve completely changed the nature of our activities,’[Frank Dangeard, Thomson’s chief executive] said… ‘Our business today has nothing to do with consumer electronics.’...
Manufacturing also still accounts for a sizable -- though dwindling -- portion [i.e., about 30%] of European employment…
But providing global services, like managing vast amounts of information and technology, has become as important as the act of manufacturing a product in the developed West. In fact, often ‘it’s more lucrative to provide those services than to continue making things,’ said Peter Daniels, director of the Service Sector Research Unit at the University of Birmingham in England.
‘Ten years ago, you invested in the local Coca-Cola bottler when a country liberalized,’ said Charles Elliott, an analyst with Goldman Sachs in London. ‘Now you invest in services providing digital entertainment services.’…
‘There is a big question mark over whether services and solutions are a viable long-term escape route,’ said Yves Doz, a professor of global technology and innovation at the business school Insead."
James Kanter, “European firms bloom by shifting to services,” International Herald Tribune, June 7, 2005.
[xx] Thomas Piketty and Emmanuel Saez, “Income inequality in the United States, 1902-2002.”