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Can America's Middle Class Be Saved? (IV) The Five Fates

Aug 25, 2009
Assuming that concentration of enterprise and specialization of labor continue to degrade the middle class, what does the future hold?

The first three of five fates:(1)

(1) A quiet, despotic state takes over the role of class reconciliation performed by the middle class. Other than working as bureaucrats, a meaningful middle class does not exist.

(2) A new era begins of international armed conflict over scarce natural resources. Huge outlays for higher levels of education and training -- the bases of the middle class -- are made to meet the demands of warfare.

(3) The commingling of public and private sectors, unproductive and productive labor, and surplus and non-surplus-financed sectors, obscures the decline of the middle class, thereby blunting the potentially revolutionary consequences of that decline.

The last two of the five fates:

(4) Modernism with its unbridled faith in science and progress could reassert itself.

Past scientific and technological innovations, notably automobiles and trains, gave an unforeseen impetus to entire economies at critical moments, perhaps saving not only the middle class but also capitalism itself. In the future, other scientific/technological inventions could have a profound impact on the middle class decline.

The amazing, transforming power of science/technology on economics is poignantly illustrated by what Adam Smith in 1776 deigned to be a classic example of "unproductive labour" -- unproductive because it "adds to the value of nothing": the "tune of the musician."(2)

Today, over two centuries later, as a result of science and technology, the unproductive tune has changed tunes:

"The music industry is one of the largest in the United States, employing hundreds of thousands of people. Album sales alone bring in $30 billion a year, and this figure doesn't even account for concert ticket sales, the thousands of bands playing Friday nights at saloons all over North America . . . Americans spend more money on music than on sex or prescription drugs."(3)

The transformation of unproductive into productive work is accountable to no one. We may be to tomorrow's scientific/technological inventions what our shadows on the ground are to us today. Discoveries in stem cell research, in nanotechnology, of life unlike our own on another planet, of nuclear fusion: all could be sources of presently-imponderable economic developments which could help the middle class.

To begin to imagine what future scientific/technological developments could have in store: show Adam Smith a laptop computer or a portable telephone. Ask him what he thinks . . .

(5) A fate already alluded to: taxation and revenue policies, as well as other reforms and adjustments, could create important changes in capitalist societies. Such changes in, not of, those societies could delay the decline of the middle class.

Those are the five fates. In addition, there is a destiny:

The difference between "fate" and "destiny": fate is what happens to you. Destiny is what you make happen to fate.

Given our prevailing values, the following destiny is presently implausible:

That destiny is a fundamental change in the nature of economic or "exchange" value.

Adam Smith observed a crucial difference between "use" and "exchange" value:

"The things which have the greatest value in use have frequently little or no value in exchange and, on the contrary, those which have the greatest value in exchange have frequently little or no value in use. Nothing is more useful than water: but it will purchase scarce anything; scarce anything can be had in exchange for it. A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it."(4)

Use value and exchange value in certain vital areas are becoming less separate and distinct. Smith's observation of water as having no exchange value is rapidly becoming as obsolete as his notion of the musician's tune. In 2007, the United Nations released its fourth Global Environment Outlook. Among its conclusions: "Available freshwater resources are declining; by 2024, 1.8 billion people will live in countries with absolute water scarcity . . ."(5) To those who think water problems cannot happen in America, all I can say is, think again:

"ATLANTA. For more than five months, the lake that provides drinking water to almost five million people here has been draining away in a withering drought . . .

Scientists have warned of impending disaster.

And life, for the most part, has gone on just as before.

By September, with Lake Lanier forecast to dip into the dregs of its storage capacity in less than four months, the state imposed a ban on outdoor water use . . .

Between 1990 and 2000, water use in Georgia increased 30 percent. But the state has not yet come up with an estimate of how much water is available during periods of normal rainfall, much less a plan to handle the worst-case scenario: dry faucets."(6)

Safe, plentiful drinking water is not the only water problem. The emerging scarcity is already creating surreptitious, mounting economic costs:

"Oswego, New York. Water levels in the Great Lakes are falling: Lake Ontario, for example, is about 7 inches . . . below where it was a year ago. And for every inch of water the lakes lose, the ships that ferry bulk materials across them must lighten their loads by 270 tons or risk running aground . . .

As a result, more ships are needed, adding millions of dollars to shipping companies' operating costs . . .

On average, 240 million tons of cargo travel across the Great Lakes every year. The U.S. fleet circulating in the Great Lakes has 63 ships, which have lost a total of 8,000 tons of cargo capacity for every inch of water the lakes have fallen below normal this year, said James Weakley, president of the carriers' association. Those 8,000 tons, he said, correspond to enough iron ore to produce 6,000 cars or enough coal to provide electricity to the Detroit area for three hours, or enough stone to build 24 houses . . .

'If the low levels in the Great Lakes are a result of global warming, I don't know,' said [Jonathan Daniels, director of the Oswego Port Authority]. 'What I know is that we can't control nature. All we do is hope for rain.'"(7)

Values underlying "exchange value" or economics have proven to be impervious to moral or rational command. Otherwise stated: we all know money talks -- but does it have anything to say? You may think that high school teachers should be paid more, that football players should be paid less. You also know that "it" does not work that way.

Will "it" ever change?


(1) For a fuller discussion, see Part III of this series.
(2) Adam Smith, "The Wealth of Nations," Penguin Books, London, England, 1997, pp. 430, 431.
(3) Daniel Levitin, "This Is Your Brain On Music," Dutton, London, England, 2006, p. 7.
(4) Adam Smith, op.cit., pp. 131-2.
(5) The report is available at unep.org/geo/geo4.
(6) Shaila Dewan and Brend Goodman, "A slow-motion response to drought in U.S. South," International Herald Tribune, October 24, 2007.
(7) Fernanda Santos, "As Great Lakes shrink, a high price to pay," International Herald Tribune, October 24, 2007.
About the Author
Thomas Belvedere is the pseudonym of a political consultant to senators, representatives, governors, and the media. He worked for all levels of government, and for all three branches. An accredited expert witness in federal court, he has a Ph.D. in political science.

He authored "The Source of Terrorism: Middle Class Rebellion."

For his website, go to Thomas Belvedere.
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