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New Internationalist Issue281


Class out of the shadows

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We have an 'underclass', a 'middle class' and even an 'overclass', but apparently no class system. David Ransom wonders where it went.

On any Sunday in Mexico City you can take a stroll in Chapultepec Park and find it crowded with life: clowns, stalls selling gaudy trinkets, bandstands and dancers by the lakes, multi-coloured balloons, thousands of people taking it easy and enjoying each other's company. All of them are mestizo, from the 'mixed' ancestry that accounts for a large proportion of the Mexican people. Switch on the television or leaf through the newspapers, however, and the faces of the rich and famous you see there are noticeably different: criollo, the descendants of Europeans.

'Sometimes I wonder why we bothered with the Revolution at all,' said a Mexican friend despairingly. 'We're still ruled by the conquistadores.'

In Mexico, throughout most of Latin America and indeed across the countries of the Majority World, it is impossible to ignore the visible evidence of a class system at work, separating small and immensely powerful élites from the great majority of the people.

In the Minority World - the rich industrial countries of the North - on the other hand we have lived for a couple of generations at least with the general idea that class is a thing of the past. Among the chattering classes it hardly gets a reference, unless someone happens to mention it in passing or by mistake. Our images of it are antique, sepia-tinted: male, downtrodden masses toiling away with hot metal in gigantic factories and a cloud of smog; bloated capitalists counting their cash in stately piles. The class system has simply evaporated, according to this theory. Life for the majority has changed beyond recognition, improved beyond measure. We are all middle class now.

But hang on a minute. It is worth remembering that class divisions are created at the top, where there is a vested interest in keeping as quiet as possible about them, at least in public. And consider the implications of the following story - it comes from the United States, but could equally have come from almost anywhere in the world:

'On 25 February 1991 the compensation committee of the board of directors of General Dynamics met to consider revising the compensation package of its chief executive officer, William Anders, and 24 other top executives. Under the plan they approved, the executives would receive a bonus equal to their yearly salary if General Dynamics stock rose ten points, from $25.56 per share to $35.56 per share, and stayed there for ten days. If the stock went up another ten points to $45.56 per share and stayed there for ten days, they would receive a bonus equal to twice their yearly salary, and so on until the plan expired in 1994...

'So what do you suppose that Mr Anders and those other executives did? They announced a massive layoff of more than 12,000 of the company's 86,000 employees, cut spending in other areas and froze the salaries of anyone below their ranks. By the end of the year, they had amassed $600 million in cash, which they promised to spread among the shareholders, and earned themselves $18 million in bonuses as the stock price held to the $45.56 mark for the tenth day. Anders personally received more than $9 million in salary and bonuses.'1

Mr Anders and his kind have congealed into what has come to be called in North America an 'overclass': immensely wealthy corporate executives and the 'interests' of capital they represent. Twenty years ago, the chief executive officers of large companies in the US were paid about 35 times more than the average worker they employed; today the ratio is 187 times as much.2 By 1989 the top ten per cent of Americans controlled 80 per cent of the country's financial assets; the wealthiest 0.5 per cent of families (some 400,000 people) could have paid off the entire US national debt and still have been worth ten per cent more than they were in 1983.3

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During the post-war Golden Era in the US, real incomes rose at the same rate for everyone. But from 1973 to 1993 the gap betwween the classes grew enormously


This - the rich getting richer - is familiar fare. But the statistics tell a story that is about more than money. In effect, each of the 24 board members of General Dynamics pocketed the wages, the self-respect and the aspirations of 500 employees. Their ability to do this, and to get away with it, presupposes the existence of a whole structure which empowers one small group of people to do this to another much larger group of people - and eventually to cast out upwards of 30 million people into an 'underclass' beyond the outer parameters of the American Dream.

Class is about this kind of power over people. It is about ownership, control and exclusion, and about the way in which human aspiration is wasted and belittled.

The evidence for the persistence of class divisions in the North is, in fact, quite compelling. International research conducted over a long period has now demonstrated beyond dispute that the patterns of mobility up and down the social scale (and no-one denies the existence of a scale of some sort) in these countries have remained basically the same throughout most of this century. The patterns are remarkably similar, too, from one country to the next, including the US, Japan and Germany, which - unlike 'class-ridden' Britain - are often thought of as 'open' societies. In Germany, for example, you are 5.39 times more likely to stay in the top-earning 'salariat' - and avoid moving down into the working class - if you are born into it, compared with the reverse for someone born into the working class. In Britain the figure is 5.48 times; in the US it is 3.72 times.4

One consequence of this is that the much-hyped 'equality of opportunity' in rich countries, the idea that all of us are free to 'succeed' regardless of our class origin, is illusory. The inequity of birth, inheritance and class still prevail.

All the same, what has happened to the working class in the North? Traditionally employed in manufacturing industries which have now largely disappeared from our shores, the working class has been displaced into the service sector. But somebody must be making things, somewhere.

Indeed they are: 80 per cent of the world's manufacturing workforce is now to be found in the South, particularly in a belt around the tropics that was once best known for its rainforests.5 Millions of people - most of them women - in Latin America, Asia and the Indian sub-continent, work in factories that make the electrical goods we buy, the clothes we wear, the shoes we walk in, the toys we play with. The conditions in which they work, and the rewards they receive for doing so, are little different from those in the industrial countries of the North one hundred years ago.

When you endure or witness these conditions at first hand - as I have witnessed them in Mexico - there is only one word that can accurately describe the experience: exploitation. Such conditions could only have been devised for people who have no choice in the matter, and by people who have lost any sense of common humanity, though they exercise great power over others nonetheless.


The existence of this kind of exploitation completes the picture of a fully-fledged class system at work. To see this picture clearly all we have to do is to think of the earth as one place and take an international view.

Why should we take any other? We know well enough that capitalism went global some time ago, but perhaps we have still to catch up with the full implications, the dramatic impact this has had on all our lives. There is not so much a 'growing divide' or 'deeper gulf' between rich and poor countries, as a higher wall between classes in all countries everywhere. Dramatic changes in appearance do not alter the nature of a chameleon: capitalism and class go together like profit and loss.

Class hasn't ceased to matter simply because communism failed. Quite the reverse. In formerly communist countries a class system persisted beneath a veneer of equality, so that commissars have transformed themselves into entrepreneurs and scarcely noticed the difference. In Hungary a destitute underclass has its ancestry in exclusion under the communist regime prior to 1989.6 The legal minimum wage in Hungary now provides for no more than 64 per cent of basic subsistence needs - in Russia for just 20 per cent. In Bulgaria the value of the real minimum wage was halved in 1991; by mid-1992 three-quarters of Bulgarian households had incomes below the social minimum.7

In the brand-new industrializing 'tigers' of Asia, too, an old-fashioned class system is duly emerging. In China, 50,000 people a day visit McDonald's in Beijing and spend the equivalent of two weeks' wages for an average Chinese worker on a single burger. In South Korea an immensely wealthy management élite hacks its way around the fairways of privilege at exclusive golf clubs that can cost upwards of $200,000 to join. In Malaysia a class of NQTs - 'Not Quite Theres' - has been characterized as 'halfway up the ladder of success... introverted, spending-oriented, neurotic, unadventurous, traditional and lacking in confidence'.8

The idea that 'we are all middle class now' (a middle with no top or bottom) is plainly ridiculous. All the arguments advanced to promote it eventually turn to nothing. For example, because half the shares on the London Stock Exchange are now owned by pension funds and insurance companies 9 it is suggested that there is a form of 'popular capitalism' in Britain. But who owns the insurance companies? And which pensioners have the right to tell their pension funds what to do with the money? The middle class may search for a location somewhere between servant of the system and lord of the universe, but like any pig in the middle it tends to get dizzy.

The 'hidden hand' of market forces has reached into the farthest corners of the earth and touched every one of us, marking us with our class, our part in the performance. To be honest, I could sit for ever in the depths of the Amazon rainforest watching a rubber-tapper in a long green robe singing plaintive songs and performing rituals with hallucinogenic hayauasca, without my getting any clearer idea of what on earth he was up to. Set us talking about rubber, however, and before long - even without mentioning glamour - we'd share a pretty good notion of our general drift.

Big-shot barons

Chances are that at the same time as this conversation, somewhere in the skies above our heads, big-shot rubber barons and their multinational chums would be winging their way between Sheraton Hotels talking with just as much facility across cultural boundaries about the very same thing.

Our two conversations would, however, be entirely different: the one about how to strengthen the hand of the rubber-tappers against the grip of the barons; the other about how to grab their rubber for as little as possible and turn the rainforest into real estate.

There's no middle ground here, and no way for one side to ignore the other. These are the active ingredients that decide, day by day, whether the rainforest will survive; whether the environment, genders, races and indigenous peoples will prosper or live in subjection. All too often it is still the barons, and subjection, that win. There are sides and sooner or later we all have to decide which one we are on.

Confronted with the class system we have a limited number of options open to us. We can continue to deny that it exists. We can ignore it. We can think of it as a natural feature of the human landscape. We can try to scale it. We can denounce it. Or we can look to each other in solidarity and decide to do something about it. We may be up against a dictatorship more subtle, impersonal and absolute than anything previously conceived, but once we have decided to act it is wonderfully liberating to discover what might then be created.

As consumers we can discover the people who produce what we consume; we can refuse to embrace the process of exploitation; we can seek out and promote those products that challenge it best and restrain the craving for blind consumption.

As producers and workers we can look to each other in a spirit of co-operation and solidarity, in place of competition, fear and hatred - competition is for games, co-operation is for real on a lonely planet. We can push forward the long, slow process of building links across international boundaries between labour unions and activist organizations. We can transform the function of work from the systematic destruction of human talent into the celebration of human dignity and ingenuity.

As citizens we can construct forms of government that express these needs rather than enforce the rule of free-market capitalism - it doesn't need democracy, but we do. We are many; they are few.

The seed of dissent holds the bloom of a new season.



Jeremy is 23. His parents migrated from Britain 20 years ago. He is a social researcher, with strong interests in politics and history.

MAINTAINING THE MYTH THAT AUSTRALIA IS EGALITARIAN is probably the least helpful thing we do for our society. When people think that everything's fair and evenly distributed, then nobody's willing to do anything to correct the imbalances.

There's a large degree of social mobility in Australia and this means, for example, that many poorer migrants can earn reasonable money and eventually buy their own homes. But this social mobility shouldn't be confused with a lack of class divisions.

I think the concept of class helps to focus our attention on a form of discrimination that, unlike sexism and racism, isn't blatantly obvious. This is especially so in Australia, where people's class can't really be identified. People don't have class-based accents. Yet there is more obvious class discrimination in the area of education, with employers giving preferences to those benefiting from selective schooling. And also when people who live in poorer suburbs find that a hindrance to getting work. But generally, most people here are unaware of it. They all see themselves as being middle class.

The problem is that it's fed into people's brains that if they can't get a job it's their own fault. That's the dominant ideology. Whatever you have now, you've earned it. A lot of people who proudly say they've built up their own businesses from scratch have done so with capital they've been lent or given by their family. People who aren't in that position look at these people and think: 'I must be hopeless, lazy or have no talent.'

Also, in Australia, class and race are closely linked, especially for Aborigines. The way they are treated shows fairly clearly the existence of an underclass here.

But the problem with concepts like class is that society's more complex than the traditional divisions of ruling, middle and working class. Some of the lowest-paid people in society are in the service industries, those in childcare, shop assistants. Most are women, the worse-off being single mothers. They're part-time workers, and are often the most exploited people.

Interview by George Fisher



Elsa Pang is 19 and was born in Canada to working-class parents who emigrated from Hong Kong to Vancouver. Right now she's working as a carpenter, building a pavilion for a community garden in Vancouver. She's just got a scholarship to study media arts at Capilano College.

IN A LOT OF WAYS YOUR EDUCATION BACKGROUND REFLECTS YOUR CLASS. Obvioulsy if someone's parents can't afford to send them to private school, then they're not considered to be as 'educated' as someone who has money.

Generally, upper-class people have better educations. It's reflected in high-school life. There are differences even in the school system in Vancouver. On the west side the schools have all the equipment, all the facillites, and they focus more on academic subjects. On the east side they focus on trades, on hairdressing and things like that, on getting you ready for the working world. On the west side, it's to prep you for university.

When I think of 'middle class' I think of consumers, of the consumerist attitude. They're people who have things. Young middle-class people have the privilege of going to university - maybe they don't want to go, but they have the financial ability to do it. There are other people I know who have the intellect, but they don't have the financial support.

I'm not living with my family. I'm making money and I'm living on my own. I don't feel like I'm poor, but I don't feel like I'm rich either.

I play classical piano. One thing about playing piano is that you have to go to recitals. I was very uncomfortable at this functions, partly because I don't like to dress up. I can't play properly dressed up. And the people, I could tell they thought that I wasn't worthy of their attention. They were a mixture of people, but you have to have enough money just to be able to play classical piano, to pay for your lessons. My mom worked really hard to pay for my lessons.

One time I had a piano competition and my mom couldn't come because she had to work. So I went to the competition alone and I was dressed in pants and a shirt, and they told me I had to go home to change. I had to take a taxi. Otherwise, the judges would have automatically deducted marks because of the way I was dressed, which doesn't reflect on my playing at all. I felt most aware of these kinds of class differences when I was playing classical piano. It was for people who wanted to be upper-class, even when they weren't.

Jazz wasn't for those people at all.

Interview by Ross Crockford.

  1. Alan Downs, Corporate executions, American Management Association, New York, 1995.
  2. The Nation, 8 April 1996.
  3. Democratic Policy Committee Staff Report, Who is downsizing the American Dream?, Washington, 1 March 1996.
  4. Gordon Marshall and Alan Swift, 'Social mobility - plus ça change' in Prospect, November 1995.
  5. World Development Report 1995, The World Bank, Washington.
  6. Julia Szalai, 'Why the poor are poor in post-1989 Hungary', paper prepared for the NI, Budapest, May 1996.
  7. International Confederation of Free Trade Unions, The global market - trade unionism's greatest challenge, Brussels, 1996.
  8. Richard Robinson and David SG Goodman (eds), The new rich in Asia, Routledge, London, 1996.
  9. Share Ownership, HMSO, London, 1995.

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