They Are Not the 99%
You may have seen the New York Times report describing the Democrats' 2012 election strategy. It seems they are giving up on blue-collar whites (which they call, in mainstream Marxist argot, the "white working class"). Instead, Democrats are betting that they can cobble together a coalition of college-educated white leftists-the Occupy Wall Street crowd-and reliably Democratic Black and Hispanic voters.
This has been widely reported as news about the political horse race, but it also says something very interesting about the nature of a capitalist economy and who really benefits from it.
To be sure, this story refutes the partisan claptrap you still hear about how Republicans only care about the rich, which is ridiculous on its face. Who do you think the Republican voter base is, particularly in the solid Republican districts in the South? Who do you think Nixon's "silent majority" was? Or the Reagan Democrats? Then, as now, the conservative base draws heavily from the working-class voters the Democratic Party is now formally abandoning.
As for the "malefactors of great wealth," who was the man President Obama once described as "our Wall Street guy"? It was Jon Corzine of MF Global, which apparently stole billions in investors' money while getting a free pass from regulators thanks to Corzine's political connections.
Or consider Obama's decisions to delay, and possibly kill, the Keystone XL pipeline that would carry Canadian oil to American refineries, a decision that appeases middle-class, college-educated "greens" at the expense of tens of thousands of blue-collar jobs on a major industrial project.
All of this implies some interesting conclusions about the nature of a capitalist society--and the nature of the society Obama has been moving us toward.
The most revealing line in the New York Times report is its description of who Obama is appealing to as a replacement for blue-collar workers: "voters who have gotten ahead on the basis of educational attainment-professors, artists, designers, editors, human resources managers, lawyers, librarians, social workers, teachers, and therapists." Aside from the relatively small size of this demographic, which indicates the folly of relying on them as an electoral strategy, note the emphasis on credentials and credentialism. In many of these professions, a college diploma is actually legally required as a condition of being allowed to practice.
The only thing America has ever had that approximates a "class" divide is the social barrier between those with a college education, and those without. The college graduates, Obama's target demographic, are forming themselves into a new quasi-aristocratic class who have grown to expect that their educational credentials will guarantee them a prosperous living. Jonah Goldberg points to "Joe the Puppeteer," one of the would-be occupiers of Wall Street, who is angry because he took on $35,000 in student loans to get a Master in Fine Arts degree in puppetry, only to be shocked when he couldn't find a job.
This is the hallmark of what the free-market firebrand Isabel Paterson used to call a "society of status," a system in which your success in life is determined by your social status. One kind of society of status is aristocracy, in which your status is determined by birth. But the current era has brought us a new system I call "democratized aristocracy," in which status is gained by going to right schools, getting a degree, and rising up through the most influential institutions. This trickles down to guys like Joe the Puppeteer in the notion that if they punch off the right items on their resumes-above all getting a college diploma, or better yet a graduate-level degree-they should be awarded an elevated social status that comes with the guaranteed of a middle- to upper-middle-class living.
As I have been warning, a lot of these people are in for a big surprise, and not just those with degrees in obviously non-economical fields like puppetry.
In contrast to a society of status, Paterson described a "society of contract," in which individuals succeed according to the actual productive value they add to the economy, regardless of their social status. This society of contract, also known as capitalism, doesn't care about credentials and barriers. This is the space in which most blue-collar workers operate, and also most entrepreneurs. Consider the story of Ben Milne, a 28-year-old entrepreneur in Des Moines, Iowa, who has been building a business that could take over from the big credit-card consortiums like Visa. Milne dropped out of college in his freshman year when his first start-up, a speaker manufacturer, took off. He then developed a totally new approach to money transfer and successfully promoted it to major Iowa banks, despite having no background or credentials in banking. He is already moving about $350 million per year in transactions, and he is about to take his system nationwide.
But this kind of achievement, which depends not on who you know or what your credentials are, but on what you can create, depends on a vibrant capitalist economy, one in which everything is not controlled by the rings of status-seekers who encrust themselves in concentric circles around Washington, DC.
One of the great principles of the rise of political freedom and capitalism (the two are inseparable) is the maxim that the law is "no respecter of persons." This means that all cases are to be decided on the basis of the facts and the law, without regard for any party's social status. Just as the law is no respecter of persons, neither is a capitalist economy. And precisely because it is no respecter of persons, it is the best hope for the working class to rise.
Historically, this is the root of the great disappointment of the Marxists. They had predicted that the oppressed workers of the world would rise up against their capitalist "oppressors." But the proletariat did not rise, because they were too busy becoming capitalists themselves.
Hence Lenin's distinctive contribution to Marxist theory, in case you ever wondered what the "Leninism" was in "Marxism-Leninism." Lenin observed that the masses weren't going to rise up on their own, so he concluded that they needed a self-appointed elite to rise up on their behalf: a "revolutionary vanguard" guided by middle-class coffee-house intellectuals like himself, who would manage the revolution on behalf of the ignorant, benighted workers. Lenin's influence trickled down to an American leftist agitator name Saul Alinsky, who came up with a new name for this idea. The "revolutionary vanguard" became the "community organizer"-which is how Barack Obama got his start. So it's no wonder he's returning to these roots: relying on a left-leaning, college-educated elite to steer the country toward his policies, regardless of whether the "working class" proletarians want it.
The reason the leftist agitators behind Occupy Wall Street make such loud protestations about how "we are the 99%" is precisely because they are not the 99%.
Take another great "progressive," Andy Stern, a White House favorite and the former head of the Service Employees International Union. Stern just published a cringe-inducing op-ed in the Wall Street Journal praising the five-year plans of China's wise and beneficent autocrats and urging America to adopt this Chinese model by embracing central planning. It really has to be read to be believed.
To begin with, file this one with all of those editorials urging us, in the late 1980s, to adopt Japan's "industrial policy" (the kind of "venture socialism" Obama has engaged in with failed government investments in solar panels and electric cars), just before the Japanese economy collapsed into an unrecoverable slump. Similarly, Stern touts China's five-year plan for annual growth of 7%, just as the Chinese real-estate bubble is collapsing and Chinese manufacturing is headed into a slump.
More disturbing is Stern's complaint that "while China is making five-year plans for the next generation, Americans are planning only for the next election." So what's the solution, to get rid of elections?
From the perspective of economics, though, what is interesting is how Stern glosses over China's actual system, in which the average worker really is exploited, while the corrupt and politically connected prosper. As a former labor leader, Stern is supposed to be a champion of working man. Instead, he goes on a junket to China and hangs out with the bigwigs ("high-ranking Chinese government officials"), no doubt over fancy dinners at some of Shanghai's half-empty five-star hotels, while out in the streets the workers are going on strike and staging angry protests.
For those who have long suspected that unions exist to boost their leaders' power and not to actually help the workers, take this as corroborating evidence. The reason Stern got on so well with his Chinese counterparts is that his trip was a status-seekers' summit, a meeting of the minds between those who have risen to power and wealth on the basis of their credentials and political connections.
I suspect that future historians will look back on blue-collar support for left as a historical anomaly of the mid-20th century-and as a relationship that was doomed by the laws of economics. The more enduring attitude of the American common man may turn out to be the one described by Alexis de Tocqueville when he visited America in the 1830s and described how the individualistic doctrine of "self-interest properly understood" was universally accepted, and "one hears it as much from the poor as from the rich." Today, you will probably hear it more from the poor, and particularly from the blue-collar middle class, while the upper-middle-class, pseudo-populist left is the faction trying replace this outlook with an aristocratic society of status.