Class Structure and Economic Growth

Class is a controversial issue in the United States, having many competing definitions, models, and even disagreements over its very existence.  It is something we simply do not want to address, preferring to limit the discussion to the myth of meritocracy and the American Dream.  But the truth is that it exists and with each passing year class structure becomes more entrenched.  With the Iowa straw poll yesterday and the reporting done by the far right, both yesterday and in the lead up over the last few months, class is becoming a central theme of the 2012 campaign, though we talk around rather than talk about, which is unfortunate.  The strategy is to allude to class warfare on the right and to simply ignore class on the left (or in the center) from fear of being labeled a socialist or hate monger.  And both positions will lead to stifled innovation, a lack of fair play and the slowed growth of the US economy. It is impossible to understand people’s behavior without the concept of social stratification, because class position has a pervasive influence on almost everything, from the clothes we wear to the television shows we watch to the clothes we buy and the names we give our pets. Our position in the social hierarchy affects our health, happiness, and even how long we will live.  And the more entrenched class structures become, the less likely we are to move up, or down, the socio-economic ladder.

Understand, I’m not suggesting a classless society or an economic policy governed by the state.  In fact, what I am suggesting is that the call for pulling yourself up by your bootstraps and the need to exercise of personal responsibility has been displaced by the far right, even as they use it as a rallying cry. The goal is to solidify a more rigid class structure because it produces less competition from people not born of wealth, status and power. Their claims that the current administration and the left are fostering “class warfare” amounts to fear mongering and is meant to manipulate people who have less.  How?

First, it ensures that the wealthy and the middle class look to the their own needs first and slowly but surely learn to fear any discussion or plan that can be construed as taking away what they already have.  Never mind that history and a great deal of economic theory indicate that the fear is misguided.  There is nothing to indicate that GE having to actually pay some taxes or Donald Trump having to pay an extra $32 for every $1000 he makes will stifle job creation.  The stage is set to make those who have something fear those who have less, even as the misguided approach to taxation plunges the nation further into debt and stagnation.  The idea is to create the illusion that the great unwashed masses are a threat to you and yours, thereby manipulating people into backing the fanatical positions of the far right.

Second, as to the poor and the working class folks, the strategy is more subtle and far more morally corrupt. The language used, “class warfare,” “division,” “socialism,” plays to the collective American cultural ideal of the lone cowboy working his way up from nothing to become the most important man in town.  It is riddled with the myth of the strong individual who overcomes hardship by bucking the system and the man.  Unfortunately, the system the far right would impose makes the possibility of living up to this cultural ideal nearly impossible.  Doing away with things like Pell Grants, collective bargaining and equitable taxes means that the barriers to moving across class lines become insurmountable.  Never mind that I have all the tools I need to climb the mountain, all you get are a pair of shoes and an ice pick.  Well, let’s make that a pair of shoes, shall we?   Add to that the notion that breaking down class walls will lead to further economic distress and, for many, the wrath of God and you now have a population so riddled with fear that it actually embraces the diatribe of the far right, even as they slowly but surely having every last thing they own and have fought for stripped from them.

Ultimately, this is damaging to business and economic growth.  Why?  Because when there is no longer a real opportunity to excel based on merit, people quit trying and innovation dies.  The experiences and inventiveness of those trying to pull themselves from one economic situation to another are stifled and the people in power, the increasingly small number of people, seek only to maintain their own position.

Has it happened yet?  Of course not.  We look at the growth of companies like FaceBook and we see that the good idea still has a chance (ignore for a moment the fact that Mr. Zuckerberg is from the privileged class).  But the plans that the likes of Rick Perry and Michelle Bachmann have would and will crush economic growth long-term by making class division stronger.  Even the supposed moderates like Mitt Romney are espousing a system designed to exploit people and entrench a more rigid class structure as he panders to the far right of his electoral base.  Are pundits, politicians and media houses right to talk about class division?  They absolutely are.  But those in the center and those on the left need to be willing to do so as well, rather than hiding from it.  Coming to terms with class will lead to a reexamining of what matters most to us as a society and spur innovation.  It will lead to economic growth.  Ignoring will lead to further economic decline and a permanent underclass.

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