Last week I posted my responses to three questions asked by the editor of a business magazine put out by the American Chamber of Commerce in Georgia (the country). Here is my response to her final question.
(4) Is there such a thing as the mentality of the middle class? There is the idea that the middle class promotes democracy and diminishes the chance for war and violence since it is committed to (a) maintaining what it has and (b) improving itself. Do you agree?
I believe the middle class mentality, like the middle class, depends on how society functions. Let me draw upon a metaphor I have seen used repeatedly to explain comparative advantages. The theory of comparative advantage holds that the overall global economy benefits when countries that can produce goods of both high and low value well stick with producing goods of high value, while other countries produce goods of low value yet needed to compliment the goods of higher value. The oft-cited metaphor involves a manager and a secretary of a company. If the manager can both manage and type better than the secretary, the company benefits if he/she just sticks to managing and the secretary to typing.
This is a metaphor for what “ought to be” from the viewpoint of the company, but what about the secretary? Throwing all societal/company expectations of how things work aside, the secretary best pursues his/her economic interest by enrolling in a management training program offered by the company. However, if “once a secretary always a secretary” is the expectation a training program is neither provided nor sought after. Companies develop an alternative incentive, called the Christmas bonus, for keeping secretaries happy.
The middle class of a society can have a “training” mentality where through entrepreneurial skills or other available opportunities they pursue options they choose for themselves. Decentralization helps to foster this “training” mentality. Without centralization concentrating resources for you, you adapt on your own initiative. On the other hand, the middle class can have a “Christmas bonus” mentality where they accept things as they are, spiced up with bonuses. How things are depend on what centralized decision-makers want them to be.
I was amazed when, leading up to the 2008 election, a blue-collar worker interviewed by the Hartford Courant stated: “Why tax the wealthy, they give us jobs?” Whether the wealthy needs to be taxed more or less is beside the point of what was wrong with that quote. Rather than entertain the notion of starting his own business, or even working for some other entrepreneur, he wanted the pursuit of jobs made easy through centralized corporations. A country that trends towards paternalism and centralization, as the United States has been doing, will foster a “Christmas bonus” mentality among the middle class of dependency on the existing centralized structure.
I would love to agree with your premise that the middle class promotes democracy and diminishes the chance for war and violence, but I believe the relationship is spurious. Decentralization fosters all of these desired conditions. At the heart of all wars is some type of dogma, whether cultural, political or economic. World War I was described by the historian David Stevenson as a tragic case of “right versus right.” The more centralized a society the more likely they are to be caught up in a collective dogma, rather than collective wisdom. This has been the curse of centralized nation states that developed along with the advent of western colonialism.
Tags: Corporate Capitalism, Middle Class Culture, Middle Class Economics
