Friday, April 29, 2016

where on the Titanic would you like your deck chair ma'am?




thearchdruidreport |  The conflict between the wage class and the investment class—determines the distribution of wealth and privilege in society. In the former, by contrast, it makes more economic sense to offshore the production of goods and services to other countries, and to use the profits of global exploitation rather than domestic savings to provide capital for industry; thus the wage class and the investment class both suffer, while the salary class—the class of managers, marketers, bankers, bureaucrats, and corporate flunkies, all those professions that make their livings by manipulating the wealth produced by others—prospers as never before.

The transition from an economy focused on domestic production to an economy focused on global exploitation takes plenty of time.  In the case of the United States, it took a hundred years, from the first wave of American imperial expansion in 1898 to the temporary triumph of globalization in the 1980s.  The transition the other way, though, happens a good deal more quickly, as a faltering hegemon generally gets shoved aside by rising powers rather than being allowed to decay slowly in peace. The aftermath of the Soviet Union’s collapse is a good working model here: once the Soviet system imploded, Russia suddenly had to do without the large subsidies it received from the rest of the Eastern bloc, and most of a decade of raw economic chaos followed as the Russian economy struggled to adapt to the task of meeting its own needs domestically. Soviet Russia, it bears noting, was much less dependent on overseas imports for goods and services than today’s America, so the post-Soviet experience should be considered a lower bound for what we’re in for.

The other pillar has similar implications. An economy based on the breakneck consumption of natural resources tends to concentrate influence in the hands of those who control resource flows directly or indirectly, and in today’s America, once again, these tend to be disproportionately members of the salary class. An economy based on the conservation of natural resources tends to concentrate influence instead in the hands of those who own sustainable resources such as land, or those who work directly with those resources; again, the conflict between owners and laborers determines the distribution of wealth and privilege in such societies. Transitioning from a conserver economy to a consumer economy takes plenty of time—in the case of the United States, the better part of two hundred years—while the transition the other way tends, once more, to be much more rapid once the resources run short.

It’s in this context, finally, that we can understand the unexpected revolt of the wage class that’s having so dramatic a role in shaping this years US presidential race. Hillary Clinton, like her already-forgotten Republican equivalents, is a perfect salary class candidate; she speaks for the privileged, and her entire campaign consists of waving around sound bites that signal to the privileged that they don’t need to worry about significant change if she moves into 1600 Pennsylvania Avenue. Donald Trump, and to a lesser extent Bernie Sanders, are appealing instead to the wage class. I doubt either one expected to get anything like as far as he has, but both seem perfectly willing to ride the wave of popular discontent just as far as it will take them—and in Trump’s case, it seems likely to take him straight to the White House this autumn.

That is to say, what was supposed to be an ordinary contest among the champions of the affluent has suddenly taken on a very different shape. To shift metaphors a bit, the affluent are beginning to notice that their jockeying for position resembles nothing so much as bickering over the arrangement of deck chairs aboard the Titanic. The revolt of the wage class shows that the structure of power and privilege in today’s America is already beginning to shift, and two weeks from now we’ll take a hard look at some of the ways that shift is unfolding and some of the factors that are driving it.