America Doesn't Have 'Class'
Jim Blair

Now that everyone is talking about a middle class tax cut and a middle class Bill of Rights, and many on the net have asked if the middle class has any future, I will ask the question: Is there a "middle class"? I think not.

Support for my view comes from the recent Roper Research Organization poll which found that 93% of Americans surveyed identify themselves as "middle class". I have a friend with a house in the Chicago area and a second house and 30 foot sailboat on Geneva Lake, WI. He sees himself as just an average "middle class" guy. His house and boat aren't any bigger than the average ones there! When a category includes everyone it has lost meaning.

The Census Bureau divides all US households into 5 income categories, and calls all but the top and bottom ones "middle". This is purely arbitrary. And it has the effect of causing some people to think that this stratification is "real". But the same family does not stay in the same category. For example, of the families that were in the bottom fifth in 1979, more of them had moved to the top fifth by 1988 than were still in the bottom fifth. And 86% of that original bottom fifth had moved to a higher fifth by 1988. Almost any one who sells their home or business will be in the top fifth in the year they sell. With this kind of income mobility, does it make sense to think of "classes"? No. They are just income levels for a particular year.

According to Marx

The concept of Class as used by Karl Marx had a different meaning. To Marx there were two classes as determined, not by income level but by income source. If your income if from labor (you work for it) you are working class (Proletariat), and if your income is from investment/rent/ownership of the means of production, then you are capitalist class (Bourgeoisie). Middle Class had no meaning to Marx.

In the last century, most people were in one class or the other all of their life, and the Capitalist were richer. Today things are much more muddled. The million-dollar-a-year ball player or CEO is a worker while the immigrant owner of the local store is a capitalist. While there are certainly exceptions, the more normal pattern today is that most people are a little of both. People usually start out as workers. But as they get older, they are saving for retirement. Money in the bank/IRA/stocks/bonds is ownership of the means of production. If the income from your bank/retirement funds are 20% of your salary, then by this analysis you are 80% worker, 20% capitalist. By the time you retire you are 100% capitalist.

Does all of this really mean anything? Well it could if the political discussion moves past "who is the middle class?" and deals with this question: How can the tax code be changed to provide everyone at any income level an incentive to do better without being penalized, and still collect enough money for the various levels of government to provide the essential services (and what are those anyway?)

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