One of the unique features of American democracy (compared to our European cousins) is the absence of a strong socialist influence on politics. Political ideologies appealing to the working class have been much stronger in Europe than in America. FDR's New Deal, attacked by those on the right as socialism, is a very moderate political ideology compared to the height of the old Labor Party in Britain or the Social Democrats in Germany. The American left has always operated under the disadvantage of a weaker union movement and less radical working class. Now, as we face the future, we may have to destroy the working class in order to save the American worker. Here's why and how.
I define working class in the more European sense, someone who provides manual labor in exchange for a wage that they live on. In America our sense of class is instead based on income, but I would argue that an individual's professional can have as much, if not more, influence on how they view politics than their income.
If you start off assuming some type of equilibrium in the economy, any increase in population decreases wages. If you add on economic growth, it's not guaranteed that the growth won't come in the form of better technology that enables labor to be replaced with capital. In order to maintain high wages for the workers you have to encourage economic growth that manages to create as many jobs as are destroyed or replaced by technology.
This entire trap is created by the need for people to work for a living. People go out and get jobs because they can't survive on their own. We've been cast out of the Garden of Eden and we must work for a living. No more hunting and gathering, or independent yeomen farmers. We are all either dependent on the economy for a job, or we end up being dependent on the welfare state for aid.
What are the two main options for reform?
1- Encourage development of skilled labor with the hope that technology can replace manual labor, but there's still room for human intelligence and creativity.
2- Avoid the trap entirely by providing everyone with the minimum means needed to survive through some other income source.
In short, the working class cannot survive as a way of life short of desperate attempts at protectionism. We must either shift from blue collars to white collars (option 2) or give everyone some form of capital or wealth that allows them to be free of the need to work just in order to survive (option 3). Or both.
The only way to save the people in the working class is to destroy the working class.
In a rather strange way, some conservative economists have already arrived at a very similar conclusion. The reasons given for an "Ownership Society" often focus on the goal of making everyone a capitalist or a member of the investor class. Under Dubya their economic agenda has focused on the permanent abolition of the estate tax, capital gains tax, and other taxes on savings and investment. They have also favored, unsuccessfully, the creation of individual savings accounts through their privatization of Social Security. The goal, we are told, is to encourage the widespread ownership of capital. As more people become capitalists and receive income through investments and savings they will be less dependent on wage labor. It is also hoped or expected that increased investments and savings will fuel strong economic growth that will increase standards of living. But here are the major problems facing these 'neoconomists.'
1- There is, on the whole, a lacking of policies designed to encourage increase to the quality of labor through education and job training.
2- The promised economic growth is heavily dependent on technological progress and there's no assurance that simply freeing capital from taxation will produce innovation.
3- One needs disposable income to invest and save in the first place. Increasing returns to capital without dealing with this problem will tend to widen the gap between those with capital and those without.
The first two points are faults of exclusion, the 'neoconomists' simply do not contain much in the way of policy designed to deal with them. There is no inherent reason why this is so, we may see future Republicans develop programs that they will latch on to the core economic approach already developed under President Bush. But the third point is a difficult problem, one that Republicans will not want to address. The initial gut reaction on the left would be to encourage some type of redistribution program that takes from the rich to give to the poor some initial amount to help with capital accumulation.
If point three could be dealt with, the creation of a universal capitalist class would be an extraordinarily desirable goal when faced with the difficulties of sustaining a working class.
I am weary of proposing redistribution as the key. What would be ideal is a shared asset that is held in commons by all Americans that could be used to provide the initial aid to capital accumulation. We need some modern day equivalent of the public lands that fueled the Homestead Act. I will get to this in a bit, but I wanted to also focus in on the other big trend destroying the working class: the rise of the salatariat or the service class.
We tend to believe that those working in the service sector are in low wage jobs, but educated professionals are both well paid and providing a service. In noting the contrast between the fast food worker and the business administrator we have the biggest observation about these new services class. Education is important.
In the old agrarian and working classes one's labor was of primary importance. Work was a relatively mundane task that could easily be learned by most individuals. The service jobs are different. One's education plays a strong role in determining just where someone ends up on the hierarchy of service jobs.
Bush and the Republicans have a vision for this new service economy. Give every worker a privatized Social Security account and an MSA. Slash taxes on savings and investment and let the economy trickle down its wealth to those at the bottom. However problems we've pointed out previously matter a lot to the salatariat.
1- One's level of education plays a large role in determining one's job and income. Educational opportunities are not equal to all when starting out in life. Without access to financial resources, someone born smart and poor may be doomed to a low wage service job.
2- Individualization of retirement and health care may be good for those with a good job and a disposable income, but it's dangerous for those at the bottom. Many individuals will be stuck at the bottom without the ability to do much to save for retirement or health care.
3- There is a strong economic incentive for corporations not to provide job training but to seek individuals with previous experience. The corporation would have to bear the burden of training an untrained individual and is not necessarily assured that it will be able to recoup that initial investment from the individual. The market will tend to leave job training up to the individual's initiative.
4- One will be unable to gain education and job training to advance in life unless they have access to financial resources. The misfortune of being born into a poor family could doom an individual to a low wage service job for life, because they'll never accumulate sufficient savings.
The only way out of a low wage service job is education and job training. The only way to get education is to have money. The only way to have money is to not have a low wage service job. And that gets us back to the beginning, the only way to not have a low wage service job is education.
We see now the importance of finding ways to give every American access to the wealth necessary to improve their life through job training and education. A shared common asset could be used to ensure that Americans have the equality of opportunity to make investments for retirement or to pay for job training when the economy and technology changes.
What are some shared assets that we could use to finance this program?
1- The Sky. In "Who Owns the Sky?", Peter Barnes advocates a system of carbon emissions that are auctioned off and the revenue used to fund a Citizen's Dividend that would give money to every American citizen.
2- The Electro-Magnetic Spectrum. Barnes lists several other common assets, including the electro-magnetic spectrum. Traditionally our government has auctioned off use of the spectrum without really trying to get a fair price. What if instead we charged 'rent' for the use of the spectrum, with the revenue going back to the American people?
3- Oil and Gas Royalties. Right now we fail to collect royalties from oil companies drilling in the Gulf of Mexico. Alaska has a program that collects oil royalties and distributes it to the citizens of the state. What if the national government had a similar program focusing on the collection of royalties from the use of our public lands?
4- Genes. The human genome is being patented at an alarming rate and other parts of biodiversity are now the property of big business. What if we were to declare the genome of life as a commons while charging fees for the use of it in genetic technology, instead of allowing big business to claim exclusive use?
These are just a few ideas, but I'm sure you get the point. A Citizen's Dividend would guarantee every America a base income that they could use to invest in their retirement, purchase health insurance, or pay for job training. In time, everyone would have the opportunity to move beyond the working class and build a better life.