In his latest New York Times column David Brooks confronts Bernie Sanders’s talk of class war head on:
The G.O.P. has been swallowed by Trump’s culture war, and many Democrats seem to be rushing to join Sanders’s class war.
These Democrats are doing this even though it’s political suicide. Class-war progressivism always loses to culture-war conservatism because swing voters in the Midwest care more about their values — guns, patriotism, ending abortion, masculinity, whatever — than they do about proletarian class consciousness.
Democrats are doing this even though the Sanders class-war story is wrong.
Sanders starts with a truth: Workers need more bargaining power as they negotiate wages with their employers. But then he blows this up into an all-explaining ideology: Capitalism is a system of exploitation in which capitalist power completely dominates worker power. This ideology crashes against the facts.
In the first place, over the past few years wages for workers toward the bottom of the income stream have been rising faster than wages for those toward the top. If the bosses have the workers by the throat, how can this be happening?
Second, wages are still generally determined by skills and productivity. For example, Edward Lazear of Stanford University finds that between 1989 and 2017, productivity in mostly high-skill industries rose by roughly 34 percent and wages in those industries rose by 26 percent. Productivity in industries with mostly less-skilled workers rose by 20 percent while wages grew by 24 percent.
As Michael Strain of the American Enterprise Institute puts it, capitalism is doing what it’s supposed to do. It’s rewarding productivity with pay, and some people and companies are more productive. If you improve worker bargaining power, that may help a bit, but over the long run people can’t earn what they don’t produce.
Third, and most important, most of the increase in earnings inequality has happened between companies, not within them. As John Van Reenen of M.I.T. has found, all over the world superstar businesses are racing ahead of their competitors. As those companies grow more productive, they earn more profit per employee and pay their workers more. Companies that can’t match that productivity don’t, and their workers lag behind.
A recent Brookings Institution/Chumir Foundation report also notes that there is a growing productivity gap between superstar companies and everybody else. Whether it is in tech, retail, manufacturing, utilities or services, productivity growth at the leading companies in each industry has remained very strong. Those productive businesses are capturing larger and larger market shares. But productivity is not growing fast among the lagging companies. Workers in those businesses suffer.
His prescription is pretty standard:
The real solution, therefore, is not class war to hammer successful businesses. It’s to boost and expand productivity for everybody else. That’s done the old-fashioned way — by having better schools and better vocational training, by having more open competitive markets, by creating incentives to expand investment, by making sure superstar businesses don’t use lobbyists to lock in their advantages.
I hate it when people talk about social class in the United States because we have next to no class system here. What we have are enormous differences in income which isn’t the same thing. All of the richest people in the U. S. come from obviously middle class backgrounds.
My favorite definition of “upper class” is that you’re upper class if no matter how badly you screw up you won’t be allowed to fail. Examples: Kennedys and Bushes are upper class. The converse of that defines the lower class: no matter how hard you try you won’t be allowed to succeed. If there are any people who fit that definition from birth it would be blacks and Native Americans and it’s darned hard to disaggregate the effects or race from those of behavior.
I think the risk today is that those big differences in income will become a real class system.
The one question I would ask Mr. Brooks is how have businesses been able to offload the costs of increasing productivity onto workers? That should be the point of attack.