The Re-Proletarianization of the Workforce

15 December 2012


Was the rise of the middle class

Proletarians walter crane

a temporary aberration of industrial capitalism?

In several posts I have argued that the view that Marx may be dismissed because the end of the Cold War “proved” that capitalism has defeated communism (a thesis that might also be identified with Fukuyama’s “end of history” thesis) is mistaken. I am not a Marxist sentimentalist, who, like many on the left today, needs to believe in Marx, including that which has been shown to be manifestly false or inadequate, but the point I want to make has nothing to do with a sentimental connection to Marxist thought. To twist the world around so that it either agrees perfectly with Marx or utterly overthrows Marx is to completely miss the point. What is the point? The point is to find that which is of perennial value in any first rate thinker.

Here are some of the posts in which I have addressed this question:

Globalization and Marxism

The Continuing Relevance of Marx

The Extinction of the External Proletariat

Marxist Easchatology

My argument in these posts has been that, since the industrial revolution is still unfolding, it is not yet the case, nor has it yet been the case in global history, that the economy of the entire world has been industrialized — a condition that I have called industrialization at totality. Therefore the predictions of Marx that, once industrialization had run its course, consolidations within industry would concentrate wealth at the top and gradually tend to immiserate the proletariat until the proletariat was better off overthrowing the few at the top and taking over industry for themselves, still remain as predictions that could be proved to be true by subsequent historical events.

We are now witnessing the extension of the industrial revolution to those parts of the world that were called the “Third World” during the latter part of the twentieth century. China and India are rapidly industrializing, and it is changing the overall structure of the world economy. It was just reported in the past week that, by 2030, China’s economy will be the largest on the planet (though not by a per capita measure). In the later twenty-first century, Asia will consolidate its industrialization while Africa will be well on its way to industrialization. Sometime in the twenty-second century we may see the entire world consisting of industrialized nation-states in which subsistence farming simply no longer exists.

In this scenario of global industrialization as I have outlined it above, it is likely that the living standards of peoples all over the world will have been greatly improved, and this flies in the face of the Marxist prediction of immiserization. If this is the case, there will be no incentive for worldwide proletarian revolution, and then at that time Marx will have been proved wrong. But the convergence of the world entire upon industrialization is only the beginning of the story.

We are now seeing in the advanced industrialized economies what industrialized capitalism looks like in its senescence, and what it looks like, unfortunately, is macro-parasitism in the form of crony capitalism. Those who are in a position of influence with respect to the privileged elites of industrialized nation-states shamelessly use their influence to obtain favorable circumstances for themselves and their cronies in industry. Thus while the initial stage of global industrialization will likely bring significantly higher living standards to the masses, if this system is allowed to develop globally as it has developed in North America and Western Europe — and I see no reason why it should not do so — what we will see one or two hundred years after the consolidation of global industrialization is a global regime of crony capitalism every bit as egregious as Marx predicted.

This is a development that we should all find worrying. We are in danger of creating a society as backward and as retrograde as feudalism at its worst, only feudalism with the instruments of industrialized technology at its command — something that Winston Churchill might well have called, “the abyss of a new dark age made more sinister, and perhaps more protracted, by the lights of perverted science.”

While part of this development is due to blind forces acting within the economy, part of it is a policy choice that has been knowingly pursued by those in a position of political power. Of course, policy choices can, in turn, be the result of blind political forces, in contradistinction to the blind economic forces that act directly upon the economy, but the result is the same. When political organization careens thoughtlessly from one crisis to the next, never acting but only reacting to the forces to which it is subject, this is an abject dereliction of political responsibility by those placed in a position that gives them the opportunity to do something other than merely react to pressure.

In previous posts such as Celebrating the American Laborer and The Genealogy of Labor I have pointed out how the so-called “middle class” has been fetishized in American political thought, but even as it is fetishized it is being reduced to insignificance by the economic and political forces mentioned above. And because of the ability of large sections of the population to engage in economic self-deception (of the kind I described in Progress, Stagnation, and Retrogression), we might continue to frame ourselves as a “middle class society” for decades even while the middle class is disappearing.

So I, too, risk appearing as just another commentator bemoaning the loss of the middle class in the US, so that what I say is very likely to be drowned in the background noise of economic complaint. But the problem is real, and it is worse than we suppose. It is bad enough that in the advanced industrialized nation-states we could be said to be witnessing the re-proletarianization of the workforce. What is a proletariat? The word “proletariat” comes from the Latin prōlētārius, the lowest class of Roman citizens. The Oxford English Dictionary defines a proletariat as, “Wage earners collectively, esp. those who have no capital and who depend for subsistence on their daily labour” and “The lowest class in society; the poor, the masses.”

I have observed that absolutely no one today wants to be called a proletariat, and because of the economic self-deception that I described in Progress, Stagnation, and Retrogression it is entirely possible to be a proletariat for all intents and purposes while denying that one is such a thing — or even that there is such a thing. This is the opposite of class-consciousness: it is class unconsciousness. So if it is part of orthodox Marxist doctrine that class consciousness will emerge with the growth of the proletariat, then in this I think Marx was dead wrong. But if this sad scenario comes to pass, class unconsciousness will be sufficient, because we know from Freud that the unconscious can manifest itself in inconvenient forms, such as neuroses. We should expect to see, then, social neuroses — the sort of thing one would expect from neurotically miserable civilizations.

The proletariat is an industrial serf — the peasant of the factory system — and a serf or a peasant feels little or no connection to the social order of which we forms the lowest tier. This is a problem. If those whose work makes industrial-technological civilization function come to realize that they have no stake in this civilization, they will do nothing to sustain it, nothing to maintain it, nothing to preserve it if it is in danger. Thus the re-proletarianization of the workforce is potentially a profound source of existential risk — the risk of flawed realization.

It has been argued that a society must get its system of rewards more or less right if it is going to incentivize productive and innovative behaviors, and this is the argument that is used to defend stock options with an up side and no down side, to defend disproportionately large executive pay packages, and in general to defend every method that the privileged employ to milk the system for their own exclusive benefit. That these are spectacularly self-serving arguments made by the shills of the privileged class has not stopped them from being made — repeatedly.

But there are two sides to the incentive system: capital and labor, and labor requires its incentives no less than does capital. Some interesting results in experimental economics in scenarios designed by game theorists give us the precise counter-argument to the incentive system argument as used to defend the absence of upper bounds to elite compensation. One such game involves giving a certain amount of money to player A with the instruction that Player A must share the money with Player B. If player B accepts the proposed allocations of shares, both players get to keep the money; if player B rejects the allocation of shares, neither player gets anything. When such experiments are run, most offers made by player A are for a 50/50 split, and these offers are almost always accepted. When player A offers an allocation that disproportionately advantages player A, like a 90/10 split favoring player A, such allocations are almost always rejected. In other words, player B would usually rather get nothing than see player A get almost everything.

This is an ominous result for contemporary economics in the advanced industrialized nation-states, because the gradual convergence upon a “winner take all” incentive system is pushing the rewards system in the direction of giving the privileged classes almost everything while giving the unprivileged masses very little of what is available over all. Now we know from game theory and experimental economics that players almost always refuse such a deal when it confronts them in an explicit form.

It is no leap from this result to get to the point that the less privileged working classes who make the economies of advanced industrialized nation-states operate, when they fully realize that the deal they are getting is so disproportionately small, that they would prefer nothing at all to allowing the other player in the game to get almost everything. Of course, the masses are slow to realize this, and the elite classes who also operate the mass media are in no hurry to explain this to the masses. But we cannot count on a system of radically disproportionate rewards to last indefinitely.

If real, substantive, systematic, and effective measures are not taken to approach a more equal distribution of the rewards of industrial-technological civilization, Marx will be proved right in the long term. If those who are the primary producers of this wealth do not share in the wealth, they will see no reason to continue to cooperate in the production of wealth in which they do not share.

Of course, a lot can happen in the two to three hundred years it could take for global industrialization to consolidate its position and then to reach the sad state of crony capitalism now seen primarily in only the most mature industrialized nation-states. Unprecedented and unpredictable historical developments of many different forms could hold off global industrialization or direct it into unexpected channels. In such cases, the proof or disproof of Marx may have to wait even longer.

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Grand Strategy Annex

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