Follow Your Dreams/Cancelled by Banksy (2010) on a wall in Boston's Chinatown. Image Source: Lifehack.
Do not ask if the middle class is dead and where the political blame lies. Ask how much time you have, now that they are dying or already dead. Ask what has happened in the past in other societies after a middle class has died. Most people in the middle classes are waiting for things to improve. If that does not happen, there are two modern roads out of extreme social inequality and economic disparity: revolution or a police state. This was the message, on 20 March 2016, when BBC World News broadcast a programme on the post-recession destruction of the middle classes, entitled The Super Rich and Us, hosted by Jacques Peretti.
For a time after the Second World War, the social contract became quid pro quo - meaning, 'this for that' or 'something for something.' In English-speaking countries, it is a contractual concept under the Common Law, "an item or service traded in return for something of value." The Latin expression is the source for the British slang 'quid' for the pound sterling. One would work for a certain amount of time and gain money and a livelihood in return. Now however, the social contract is increasingly just - quo.
The Super Rich and Us (Season 1, ep. 2; 2015) hosted by Jacques Peretti. Video Source: Youtube. Reproduced non-commercially under Fair Use. Also on Vimeo here.
The Super Rich and Us (2015) from Rabbit Productions on Vimeo. Reproduced non-commercially under Fair Use.
The Men Who Made Us Spend (Part 1; 2014). Video Source: BBC via Youtube. Reproduced non-commercially under Fair Use.
The Men Who Made Us Spend (Part 2; 2014). Video Source: BBC via Youtube. Reproduced non-commercially under Fair Use.
The Men Who Made Us Spend (Part 3; 2014). Video Source: BBC via Youtube. Reproduced non-commercially under Fair Use.
Politics and the Mass Media
The economic and social contract has been redefined by mass technology. Political systems are similarly disrupted. Peretti's argument is left-liberal. Over the past few years, analysts, reporters, politicians and citizens have pointed fingers over who was responsible for the economic meltdown. The links below on the middle class show this trend. The left liberals blame the neocons and the military industrial complex. Neocons blame the liberals. Keynesians blame the Hayekians, and vice versa. Employers blame their workers; workers blame the bosses. Gen X and Gen Y blame the Boomers. The old blame the young. The poor blame the rich. The rich blame the poor. Nationalists blame immigrants, foreigners and terrorists. The foreigners and terrorists blame the decadent west. Conspiracy theorists blame conspirators. The Internet blames the Illuminati. The libertarians blame big government. The socialists blame the capitalists. Everyone blames the financiers and bankers, and so on. The endless debate is fueled by mass media and news infotainment, posing as journalism.
Politics, hampered by its 18th-to-20th century ideologies, does not explain the underlying 21st century reality of technologically-driven change. Mass media developed from technological advances in satellites, communications, and home entertainment. Politics evolved alongside computer-enhanced advertising and popular culture. Everyone is part of one big painful process of globalization, made possible, and accelerated, by technological advances.
In The Men Who Made Us Spend, Jacques Peretti explains how materialism exploded due to a complex of factors, many of which were enabled by technological systems: credit cards; mass marketing and entertainment; planned obsolescence; and computerized design and minimal redesign of products, so the same items could be sold repeatedly to consumers when they did not need them. Future posts will consider the responsibility of the consumer in this irresponsible, materialist marketing landscape.
Time and Mass Technology
Our love affair with technology has a dark side. It is not that technology is inherently bad, but it brings out the best and worst in us. It enables primal tendencies and increases the negative impact of those tendencies. Everyone blames bankers and financiers for the recession. But the recession was made possible by computer-enhanced trading on shrinking timescales. Traders were part of the same burgeoning system and just as overwhelmed by, and immersed in, its growth. Pressured to compete with each other in the immediate moment, not all of them grasped the long-term consequences of their actions.
In 2002, I did historical research in Manhattan and talked to a Wall Street trader who had taken a year or so off due to family concerns and illness. When he returned to his desk, his work had changed beyond recognition because his firm had implemented new software, which exponentially shortened the time frame for trades. In this period, I had seen glitzy investment bank interiors in London which looked like the financial environments we see in the movies. But his Wall Street space reminded me of something evolved from a 1980s' telemarketing floor. It was not glamorous. He was doing short-selling, but he was not the post-recession monster labeled by films and the media. He was a nice guy with a tough and stressful job, who was trying to figure out how to get the computer system to work. In London at that time, I spoke to someone much higher up in the same industry, who was troubled by the financial culture and foresaw its problems. Speculators furnished the greed, competitiveness and ambition, but they could never have indulged these impulses to such a destructive degree without rapidly expanding computing power which they did not fully understand.
Therefore, while it is true that the housing and credit bubbles ruthlessly exploited and immorally destroyed the American Dream for poorer people and left the bankrupted public with a tab, paid to plutocrats, it is also true that the consequences of over-indulgence of technologically-enhanced behaviours were not generally considered until it was too late. Nor can they now be accurately predicted, because this human-tech nexus is unprecedented.
Jobs are increasingly defined by computerized timescales. In 2013, I wrote a post citing James Altucher (see his interview below) on how the recession gave employers an excuse to make structural changes in the workplace. These changes showed their confusion between productivity and an atomization of production, based on data-crunching. Technology artificially mechanized human work in the name of efficiency. This system rewards those who can best conform to algorithmic models of thought and action at work. Thus, rather than evil financiers, evil illegal immigrants, evil liberals, evil neocons, or evil bosses, we confront our own out-of-control enmeshment with technology, which drives this massive shift. Instead of a job lasting a human working lifetime of 40 years, the microjob lasts 40 minutes, with no support from an employer, government, or institution around the rest of the worker's existence. The new system of micro-contracts, the hyper-quantification of every last aspect of performance destroys the autonomy, individuality, and productivity of the worker. Having a job was once synonymous with security and stability. Today, employment is characterized by insecurity and instability.
Consider how Altucher commented on the Great Recession in a different way. He focussed on how it allowed employers to implement structural changes in workplaces and employment in response to technology. According to Altucher, people with jobs are like "the walking dead." (2013) Video Source: Youtube. Previously embedded in this post.
It is important to understand that the employers, human resources professionals, business consultants who enforce computerized employment systems in the 2010s are acting exactly like the financiers of the 2000s. This is the Great Recession, also known as the economic impact of the Technological Revolution, Phase 2. When managers implement mechanical models of productivity and gut the old job model, they blindly undermine human standards. Like the financiers, they have little or no grasp of what they are really doing in the grand scheme of things. In overhauling the system in the name of streamlined cost-cutting, they establish the preconditions for changes in politics, government and society. Democracy will evolve into tyranny, as predicted by Plato; or mass democracy will become the perverted form of constitutional government, as predicted by Aristotle.
It gets worse than that. Since 2008, unpaid internships have exploded. They targeted ambitious middle class youths and their families, and proved that we had already regressed to employment without compensation. There is no great distance between unpaid internships at one end of the spectrum and full-blown slavery on the other. You may have people working in exchange for staying barely alive in microjobs. Or you may bring in unpaid interns to replace your more senior, paid employees. This approach is unsustainable. You cannot infinitely eat out the meat and backbone of a democratic society. It will collapse upon itself. Where you have slaves and serfs, you will soon see the formal reappearance of slavery and serfdom.
For those who have remained securely employed in the old system throughout the past decade, this discussion will sound like a fantastical nightmare. It is not a distant fantasy. These changes affect all workers, managers, and employers, all the way up and down the ladder, because technology, wrongly mobilized, can out-mechanize anyone. We know it is already here, but no one can clearly foresee the trajectory of the technocratic-plutocracy. Budding technocrats, perverse and eager, feel compelled to ruin the old economic establishment, and cast aside what did work. Basic human behaviour is now seen as a 'problem' and technocratic 'solutions' masquerade as the new economic good because there is an unconsidered, automatic equation between technology and progress. As a result, it has never been so difficult to work within the old system. The message for workers inside the system as it goes through its death throes is: 'You have to hold tighter to the wheel, work harder, push harder and force it to function, even if it is not working. Ignore all the evidence around you that it is not working.' If we don't stop and think, the technocratic plutocracy will deliver nearly all of us into the microjob.
At present, analysts call the middle and working classes 'the precariat.' It does not have to be that way. The middle class does not have to disappear. Although the old system is evolving into a plutocracy, the middle and working classes are establishing new ways of organizing themselves and restructuring their social and economic lives. Future posts will discuss some of these efforts, particularly crowd-funding, and the back-to-the-land and maker movements - as well as new political systems, administration and governance currently being debated and developed. Some innovators in the tech sector are working to prevent the downfall of the precariat. Using technology, they are creating a new economy, a new employment system, and a new society.
At 1:01:11, Chris Ellis discusses the Permanent Web as a preventative measure to protect future generations against power hierarchies built on limited information access or on disinformation. World Crypto Network Livestream from Johannesburg (2 March 2016). Video Source: Youtube.
In this regard, I want to thank Chris Ellis, one of Bitcoin's best thinkers, for highlighting this blog's exploration of the alternatives. Ellis discussed my post on the Permanent Web on the World Crypto Network's webcast on 20 February 2016 and, above, in his WCN Johannesburg livestream on 2 March 2016. I also want to thank Ellis (whom I have previously mentioned here and here) for joining a discussion I am launching with Kate Sherrod, Amanda Sewell and others on how to rethink and rebuild education under Millennial conditions. In the video below, Chrystia Freedland, Canada's Liberal Minister for International Trade, describes the rising cost of higher education as a factor in the creation of the precariat.
Chrystia Freedland TED talk: The rise of the new global super-rich (September 2013). Video Source: Youtube.
It is imperative that we develop positive alternatives which use technology carefully, with compassion and respect for the human condition. The choices we make now matter. My favourite example of long-term consequences in the tech industry is the competition between Commodore and Apple in the late 1980s and early 1990s. If Commodore had prevailed over Apple at that time, our whole Millennial world would be different. No matter what path we follow now, it is impossible for the old system to return to 'normal,' that is, to a previous high point. Technology is not going away and it irreversibly transforms every sector it touches. As mentioned in this post: "You have to face the facts: it is too late. We are in the next thousand years already. There is no going back."
Links on the End of the Middle Class
- Michael Snyder, Business Insider (15 July 2010): 22 Statistics That Prove The Middle Class Is Being Systematically Wiped Out Of Existence In America
- Don Peck, The Atlantic (September 2011): Can the Middle Class Be Saved?
- Nathan Lewis, Forbes (24 June 2012): Economic Forensics: Who Actually Destroyed The Middle Class?
- Jim Tankersley, The Atlantic (5 October 2012): Who Destroyed the Economy? The Case Against the Baby Boomers
- Ed West and Fraser Nelson, The Spectator (24 August 2013): The strange death of the British middle class
- Karin Kamp, Moyers and Company (20 September 2013): By the Numbers: The Incredibly Shrinking American Middle Class
- Wayne Allyn Root, The Blaze (11 November 2013): What Obama and I Learned at Columbia: How to Destroy America From Within
- Michael Snyder, The Economic Collapse Blog (20 August 2014): 30 stats to show to anyone that does not believe the middle class is being destroyed
- Nick Hanauer, Moyers and Company (11 September 2014): A Wealthy Capitalist on Why Money Doesn’t Trickle Down
- Reihan Salam, Slate (30 January 2015): The Upper Middle Class Is Ruining America
- Thom Hartmann, Salon (10 March 2015): The conservative plot to destroy the middle class: Scott Walker, “right-to-work” and America’s new Gilded Age
- Rex Nutting, Market Watch (17 July 2015): Opinion: How the stock market destroyed the middle class
- Richard Reeves, Brookings Institution (3 September 2015): The dangerous separation of the American upper middle class
- Jim Hoft, Gateway Pundit (10 December 2015): MISSION ACCOMPLISHED: Barack Obama Has Destroyed the US Middle Class
- Rmuse, Politicus USA (17 December 2015): Half Of America is Now Impoverished Because the Koch-Republicans Destroyed the Middle Class
- Reddit (January 2016): IsItBullshit: Ronald Reagan's economic policies have destroyed the middle class
- Stéphanie Thomson, World Economic Forum (21 January 2016): The digital revolution could destroy the middle class, warns Joe Biden
- Sean McElwee, HuffPo (25 January 2016): How the One Percent Is Systematically Destroying the Middle Class
- Sam Becker, The Cheat Sheet (20 February 2016): 5 States Where the Middle Class Is Being Destroyed
- Brian Beutler, The New Republic (29 March 2016): Trump the Disrupter
- Naked Capitalism: Archives on the destruction of the middle class
Enabled by Technology: Microjobs, Microjob Speculation, and Freelancing Communities
- Martin Bryant, The Next Web (23 March 2016): Tara the chatbot hires freelancers so you don’t have to
- Tara Chatbot: Computer system autohires freelancers for small businesses
- People per Hour
- Beebom's list of freelancing Websites
- ListOF New Zealand's list of freelancing Websites
- Fourerr: Buy and sell Micro Jobs today, microjob speculation
- Chat forum discusses freelancers' Fiverr strategies
- Mechanical Turk: For employers, an "on-demand, scalable workforce," with workers selecting "from thousands of tasks and work whenever it's convenient"
- Citigroup (16 October 2005): The Plutonomy Report (the takeaway quote was, "We Worry Less"): Prior to the Great Recession, this strategic paper from Citigroup predicted the creation of the 1 per cent and 99 per cent. These would be the new social classes of the 21st century. The report advised investors on how they could profit from the decimation of the middle classes. Cited at Daily Kos in 2009: "[T]he world is dividing into two blocs - the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest. Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S. What are the common drivers of Plutonomy? Disruptive technology-driven productivity gains[;] creative financial innovation[;] capitalist-friendly cooperative governments[;] an international dimension of immigrants and overseas conquests invigorating wealth creation[;] the rule of law, and patenting inventions. Often these wealth waves involve great complexity, exploited best by the rich and educated of the time. We project that the plutonomies (the U.S., UK, and Canada) will likely see even more income inequality, disproportionately feeding off a further rise in the profit share in their economies, capitalist-friendly governments, more technology-driven productivity, and globalization. [...] In a plutonomy there is no such animal as 'the U.S. consumer' or 'the UK consumer', or indeed the 'Russian consumer'. There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take. There are the rest, the 'non-rich', the multitudinous many, but only accounting for surprisingly small bites of the national pie. [...] i.e., focus on the 'average' consumer are flawed from the start."
- Citigroup (5 March 2006): The Plutonomy Report, Part II: Predicted grassroots and democratic electoral, and political backlash against the development of a plutonomy system (cited at Daily Kos in 2009): "Our whole plutonomy thesis is based on the idea that the rich will keep getting richer. This thesis is not without its risks. For example, a policy error leading to asset deflation, would likely damage plutonomy. Furthermore, the rising wealth gap between the rich and poor will probably at some point lead to a political backlash. Whilst the rich are getting a greater share of the wealth, and the poor a lesser share, political enfrachisement remains as was -- one person, one vote (in the plutonomies). At some point it is likely that labor will fight back against the rising profit share of the rich and there will be a political backlash against the rising wealth of the rich. This could be felt through higher taxation on the rich (or indirectly through higher corporate taxes/regulation) or through trying to protect indigenous [home-grown] laborers, in a push-back on globalization -- either anti-mmigration, or protectionism. We don’t see this happening yet, though there are signs of rising political tensions. However we are keeping a close eye on developments."
- Thomas J. Peters and Robert H. Waterman Jr. (1st ed. 1982; 2006 ed.): In Search of Excellence: Lessons from America's Best-Run Companies
- UK Ministry of Defence (2007): The DCDC Global Strategic Trends Programme 2007-2036: Covered by The Guardian on the MOD's expectation of what would happen to society over the next thirty years. One expectation was that the former middle class would become revolutionary.
- Satoshi Nakamoto (31 October 2008): Bitcoin: A Peer-to-Peer Electronic Cash System
- Charles Morris (2009): The Two Trillion Dollar Meltdown: Easy Money, High Rollers, and the Great Credit Crash
- Michael Lewis (1st ed. 2010; paperback ed. 2011): The Big Short
- June Zaccone (2012): Has Globalization Destroyed the American Middle Class?
- Satyajit Das (Revised ed., 2012) Traders, Guns and Money: Knowns and Unknowns in the Dazzling World of Derivatives (Financial Times Series)
- Joseph E. Stiglitz (1st ed/. 1994; 2nd ed. 2013): The Price of Inequality: How Today's Divided Society Endangers Our Future
- Chrystia Freeland (2013): Plutocrats: The Rise of the New Global Super-Rich and the Fall of Everyone Else
- Thomas Piketty (2014): Capital in the Twenty-First Century
- Guy Standing (2014): The Precariat: The New Dangerous Class
- Nikil Saval (2015): Cubed: The Secret History of the Workplace
- Robert Putnam (2016): Our Kids: The American Dream in Crisis
- Paul Mason (2016): Postcapitalism: A Guide to Our Future: "Over the past two centuries or so, capitalism has undergone profound changes--economic cycles that veer from boom to bust--from which it has always emerged transformed and strengthened. Surveying this turbulent history, Paul Mason's Postcapitalism argues that we are on the brink of a change so big and so profound that this time capitalism itself, the immensely complex system within which entire societies function, will mutate into something wholly new. At the heart of this change is information technology, a revolution that is driven by capitalism but, with its tendency to push the value of much of what we make toward zero, has the potential to destroy an economy based on markets, wages, and private ownership. Almost unnoticed, in the niches and hollows of the market system, swaths of economic life are beginning to move to a different rhythm. Vast numbers of people are changing how they behave and live, in ways contrary to the current system of state-backed corporate capitalism. And as the terrain changes, new paths open. In this bold and prophetic book, Mason shows how, from the ashes of the crisis, we have the chance to create a more socially just and sustainable economy. Although the dangers ahead are profound, he argues that there is cause for hope."
- WikiLeaks Gives extensive results on search terms such as: 'Tax Evasion,' 'Workplace,' 'Jobs,' 'Employers,' 'Recession,' 'Middle Class,' etc.
- Cory Doctorow, Boing Boing (3 April 2016): Largest leak in history reveals world leaders and businesspeople hiding trillions in offshore havens
- The Panama Papers: The Power Players (3 April 2016): leaked, searchable information on tax havens
- Post-Apocalypse Rehab (6 October 2015)
- Quasi Morto (29 December 2015)
- Mysteries of Things to Come (30 December 2015)
- Stains on the Heartland (18 March 2016)
- Quid Pro Quo (3 April 2016)
BBC interview with Roberto Saviano (28 May 2016). Video Source: Youtube.
See all my posts on Time and Politics.