THE DECLINE OF THE MIDDLE CLASS

Robert Kurz

For almost two decades, starting in the mid 1980s, Postmodern Discourse has been the dominant theoretical force, first and foremost among the left. The critique of political economy was replaced by linguistic criticism, the analysis of objective, material conditions by arbitrary, subjective interpretation. In place of traditional leftist economic determinism came a likewise truncated culturalism, and medial simulation took the place of social conflict. Since then, however, the situation has changed in fundamental ways. The economic crisis has now gripped those social segments in the West that had heretofore been spared. As a consequence the “social question” has returned to intellectual discourse.

But these interpretations remain remarkably bland and seem downright anachronistic. The polarization between rich and poor, which continues unabated, has yet to be defined. The fact that the traditional marxist term “class” suddenly has new currency is more a sign of helplessness than anything else. In traditional conceptions the “working class,” which produces surplus value, is exploited by the “capitalist class,” which “controls the means of production.” Not a single one of these terms can accurately describe today’s problems.

Today’s poverty is not a product of exploitation within production, but rather an exclusion from production. Anyone who is still employed in regular capitalist production counts among the relatively privileged. The problematic and “dangerous” bulk of society is no longer defined by its “position in the productive process” but by its position in secondary, derivative areas of circulation and distribution. This social segment is comprised of the permanently unemployed, recipients of social assistance or cheaply outsourced service-sector workers, which extends to “poverty contractors”, street-merchants and junk collectors. These forms of reproduction are, in view of legal standards, increasingly irregular; incomes in these sectors hover at a level that barely covers the minimums for survival or even fall below this border.

Likewise, there is no identifiable “capitalist class” in the old sense, according to the classic standards of “control of the means of production.” Whether in the form of the state apparatus and infrastructure or large transnational corporations, capital appears in certain respects to be anonymous and socialized; it has revealed itself as an abstract, non-personalized social form. “Capital” is not a group of judicial property-holders, but the common principle that determines the life and actions of all members of society, both in their outward expression and in their own subjectivity.

In this crisis, and through this crisis, a structural shift in capitalist society is taking place that dissolves the old, seemingly clear social layers. The root of this crisis is the productive power of microelectronics, which has undermined labor, and thereby the substance of capital. The continuous reduction of the industrial working class means that ever smaller amounts of real surplus value are produced. Monetary capital floods into speculative financial markets because new factories have become unprofitable. While growing segments of society are impoverished through exclusion from production, only simulated capital accumulation continues via financial bubbles.

This logic is nothing new—this development has shaped global capitalism for the last two decades. What is new, however, is that now the western middle class finds itself on the chopping block. In 1989 the American essayist Barbara Ehrenreich published a book about the “middle class’ fear of falling.” But then the problem was deferred for a full decade because the bubble-economy of the 90s, along with the rise of information technology and the commercialization of the internet, awakened new hopes for a rosy future. The collapse of the New Economy, the burst of the Asian, European and, to a lesser degree, American bubbles has signaled the brutal realization of the feared fall of the middle class.

But who is this middle class and what roll does it play in society? In the 19^th century the social classes were still simple and transparent. Between the capitalist class, the owners of the social means of production, and the wage workers, who own nothing outside of their labor, stood the so-called petite bourgeoisie. This old middle class was distinguished by the ownership of small productive means (work-shops, stores, etc.), in which they themselves sold their products in the marketplace. Orthodox marxists expected this petite bourgeoisie to gradually disappear in the face of the large, corporate competition and sink into the working class, a process of polarization that would produce a society made up exclusively of the bourgeoisie and proletariat.

But at the start of the 20^th century there was already debate in Germany’s social-democratic movement, lead by Bernstein and Kautsky, about the “new middle class.” This referred to certain technical, economic and intellectual functions that emerged from the process of capitalist social mediation. The increasing rationalization of production and corresponding expansion of infrastructures (administration, engineering, education, health care, communication and journalism, research institutes, etc.) led to the rise of a new social category, which according to the old schematic was “neither fish nor fowl.” They did not represent significant amounts of monetary capital and so were not capitalists; they did not possess their own productive means, were wage-dependent or only formally independent, and thus did not belong to the petit bourgeoisie; but they were not “direct producers,” as such, and filled the role of functionaries in the development of productive capacities in all spheres.

There were, of course, teachers and other state officials in the 19^th century, as well as those business functionaries that Marx referred to as “the officer and enlisted ranks of capital.” But these social categories were so small, numerically speaking, that they could hardly be labelled a “class.” When this group did grow large enough to constitute a new middle class, it was only in response to the new demands of 20^th century capitalism. In the [theoretical debates among German social democrats] at the beginning of this development, Karl Kautsky tried to press this new middle strata into the old schematic and thereby lump them into the same category as the proletariat; Bernstein, in contrast, saw this social phenomena as evidence of capitalism’s stabilization, which would make possible a policy of moderate reform, rather than revolution.

At first Bernstein’s analysis seemed to be correct. The new middle class manifested itself as an increasingly distinct social entity from the traditional working class, not only in the content and location of its performed functions but also in economic aspects. Barbara Ehrenreich notes that for the members of this class “social status is based on education rather than possession of capital or other forms of wealth.” The higher qualification of this education, which required considerable time, extending sometimes beyond age thirty, and devoured considerable resources, increased the value of their labor to a level far beyond the normal fluctuations.

It was in this context that the socially-significant term “Human Capital” was born. Salaried engineers, marketing or human-resources personnel, private physicians, therapists or lawyers, and teachers, scientists and social-workers recruited by the state “are,” in one respect, capital doubled. On one hand, by right of their qualifications, they take on strategic, leadership and organizational roles in the realization of capital. At the same their behaviour in relation to themselves and their qualifications, especially among leading associates and the self-employed, is that of a capitalist who aims at economic “self-valorization”. The new middle class does not represent capital on the level of the concrete, material means of production or finance, but rather as an organizing agent for the process of valorization via the application of science and technology.

The 20^th century saw the expansion of numerous new functions of this type and the size of the middle class grew accordingly. Development following the Second World War, together with the new forms of Fordist Production and the “leisure industries,” brought about an additional surge in this direction. This is evidenced by the fact that the proportion of students from generation to generation in most countries rose. The global student movement of 1968 revealed the matured significance of this social sector; it was also the first sign of crisis. While the development of the middle class had stabilized capitalism up to this point, as Bernstein had predicted, and become connected with progressive reform, a process of destabilization had now begun.

While the structural mass-unemployment that followed the Third Industrial Revolution and the globalization of capital at first only affected industrial producers, it soon became clear that the new middle class would not be left untouched. The rise of this class had in many respects accompanied the expansion of government infrastructures, educational institutions and welfare-state bureaucracies. The crisis of real industrial capital accumulation, however, lead to an ever deepening financial crisis of the state. Many segments of the state, which had heretofore been held high as proud achievements, suddenly seemed to be nothing more than unnecessary luxury and ballast.

The “slim state” became the byword of the times: funds for education and culture, for healthcare and numerous other public institutions were cut, the dismantlement of the welfare-state had begun. Entire sectors of qualified occupations fell victim to rationalization in large companies as well. As a result of the New Economy’s crash even the qualifications of high-tech specialists became worthless. Today one can no longer ignore the fact that the rise of the new middle class had no independent, capitalist basis, but was dependent on the social redistribution of industrial surplus. As the real, social production of surplus value plunges into crisis as a result of the Third Industrial Revolution, so too will the sources of sustenance for secondary sectors of the new middle class be removed, measure by measure.

The result is not just a growing number of unemployed academics. Through privatization and outsourcing the “human capital” that such qualifications represent is being devalued within the professions themselves and are declining in status. Intellectual wage-workers, day-laborers and impoverished “freelancers” in media, private universities, courtrooms or private clinics are no longer the exception, but the rule. Still, in the end Kautsky’s views are not confirmed. The new middle class is indeed falling, but not into the industrial proletariat of direct producers, which has become a slowly disappearing minority. Paradoxically, the “proletarianization” of the educated classes is bound together with the “deproletarianization” of production.

Thus the devaluation of middle class qualifications accompanies an objective widening of the concept of “human capital.” As counter-current to the decline of the new middle class, a new process of ”petty-bourgeoisification” is taking place in society, a process that intensifies as industrial and infrastructural resources transform into anonymous Mega-Structures. The “independent means of production” shrink in scope to the individual’s skin: everyone becomes their own “human capital,” even if this is nothing more than their own naked body. A direct relationship arises between the atomized individuals and the economy of value, which only reproduces itself in a simulative manner through deficits and stock-market bubbles.

The greater the difference between rich and poor in this economic context of speculative bubbles, the more the structural differences between the classes within capitalist reproduction disappear. It is therefore senseless when some ideologues of the once “new” middle class attempt to reclaim the now-extinguished “class struggle of the proletariat” for themselves. Social emancipation today demands the overcoming of the universally common social form. Within the system of commodity production there is only the quantitative difference of abstract wealth, which is of central importance in the individual struggle for survival but remains sterile of all emancipatory possibilities. A Bill Gates is just as petty bourgeois as an impoverished “freelancer,” they both have the same attitude to the world and use the same phrases. With these phrases of the universal market and “self-realization” on their lips, they step side-by-side through the gate towards barbarism.

Translation from German by John Carroll