There Is No Class War

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.

9 comments… add one
  • bob sykes Link

    I agree that American Indians and the black underclass constitute a lower class, but I do not agree that they are kept their by outside forces. Clearly, they are the lower class because of IQ, a propensity to violence, and a culture of failure. Blacks suffer from all three, but American Indians are mainly held back by their culture. The reservation system is a disaster.

  • TarsTarkas Link

    Bob Sykes: Disagree. American Indians, blacks, and other impoverished minorities ARE being kept down by outside forces, nowadays mostly government-based: The BIA, the Welfareocracy, and the Educracy, among others. When they’re allowed off the reservation, politically, economically, and educationally, they do just fine. And they know it. Why would black parents be the ones at the forefront of the charter school movement that DeBlasio & Co want to shut down? They know getting a good education (and not just a degree) is needed to have a chance at getting out of hell.

    And it just happens to be based on darker skin color on this side of the water. Anthony Daniels and others in Britain have documented how it is the poor white underclass who has been kept down by government ‘help’ in that country.

    BTW: IQ doesn’t measure intelligence at all. IQ measures the ability to take tests. If knowledge needed to take and pass tests isn’t being provided in schools, how can the victims of such miseducation possibly score high in tests upon which IQ rankings are based?

    Much of this IQ BS goes back to the Great War army intelligence tests devised by racist eugenicists that ‘proved’ uneducated illiterate non-english speaking immigrants were mentally defective and sparked the immigration restriction laws that ended up killing millions who couldn’t escape the tender attentions of Mr. H.

  • jan Link

    More often than not I find Tars posts refreshingly clear and spot on. I totally agree with his points on IQ, adding there are all kinds of learning modes and excellence that intelligence tests just can’t measure. How a governmental society stamps and then corals it’s citizens into blocks of “can’t succeed on their own,” often serves more to negatively typecast whole classes of people – minorities, the poor, people with disabilities – tamping down, even stymieing their spirit and will to succeed. Every once in while, though, someone identified as “disadvantaged” breaks free from such societal labeling, defies all expectations, and excels at whatever they want to do in life.

  • steve Link

    “Why would black parents be the ones at the forefront of the charter school movement that DeBlasio & Co want to shut down? ”

    Black parents are just as uninformed about charter schools as white parents. Performances of charter schools vary a lot, but on average students perform the same as in conventional schools. The one difference is that students are more likely to go to college, which kind of makes sense since it shows the parents are more interested in education. (Of course conservatives think college is just signaling or over rated anyway.)

    Bob- You forgot lazy. Everyone knows black people are lazy so remember to add that to your list.


  • TarsTarkas Link

    Jan: Thanks for the compliment. When I post I always try to avoid jargon, big or obscure words, and BS whenever I can (although I don’t always succeed).

    Steve: Agree that the protests for charter schools indicate an interest by parents for their children’s future. Agree too that charter schools performance can be very uneven, but unlike public schools, there’s more consequences for failure. As to college, it all depends on what major the students take. I would suspect black parents are less likely to allow their kids to take out student loans to take Grievance Studies courses.

  • steve Link

    “I would suspect black parents are less likely to allow their kids to take out student loans to take Grievance Studies courses.”

    I suspect that black parents have the same problems getting their kids to do sensible things just like everyone else.


  • Grey Shambler Link

    We can thank the Obamacare employer rules for opening the door to the 30 hour work week, and the contractor/employee arrangement. Lowering pay and putting workers at arms length from employers. Look how easy it is to sever employment of a Lyft driver. Good intentions.
    I don’t know how to explain our Socialist media’s penchant for giving worker’s unions a bad reputation unless they are public sector, in which case they become selfless “public servants”, but they do, and in the absence of unions, the best advice I could offer comes from Dave Ramsey. Rice and beans on even days, beans and rice on odd.

  • steve Link

    “We can thank the Obamacare employer rules for opening the door to the 30 hour work week, and the contractor/employee arrangement. Lowering pay and putting workers at arms length from employers.”

    All of this was way ahead of anything that Obama did. The 30 hour limit was chosen in recognition that many employers already used reduced work weeks to avoid paying benefits.


  • Greyshambler Link

    Clearly, an employer can avoid offering health insurance benefits by reducing hours to part time. You can lionize Obama if you want, Good with me as long as he stays gone.

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