Class Power

In recent posts I've claimed that certain actions and economic arrangements are indicative of the class power of certain groups. I'd like to be more specific about what I mean by class and the relevant forms power exercised in virtue of this feature of contemporary capitalist societies.

By class, I mean the technical sense of the term such as we find in Marx's writings on political economy. I say that its 'technical' because the way of using 'class' that I'm interested in deploying differs from how the word is often used. In common parlance, class often describes the income bracket of a particular person as well as all of the attendant social marks, tastes, consumer tendencies and dispositions commensurate with that income level. According to common usage, class can refer to the well-off, the extremely rich, 'old money', nouveau-riche, the (amorphous and often-invoked) 'middle class', the poor, etc.

I want to use class in a different way. According to the Marxist-inflected approach that I'd like to resuscitate, class refers to a person's relation to the way that economic production is organized. In capitalism, most economic production is organized in such a way that one group owns the productive machinery, property and raw materials while another group, who does not own any productive machinery or raw materials, is employed by the former group and paid a wage to work.

The first group, capitalists, are so designated based on their specific role within economic production. They own factories, they make the major decisions about where money will be invested, how it will be spent, they create jobs, etc. They also have exclusive rights to the profits generated from the products produced in factories that they own. They are further distinguished as capitalists because they purchase (employ) labor for a price (a wage) in order that their companies can operate. Capitalists are a rather small fraction of the population of contemporary societies.

Workers, in contrast, make up the majority of society. They do not own productive machinery or possess large amounts of capital that could be invested for a profit. The only thing workers have to sell is their ability to labor (what Marx called 'labor power'). Therefore, they are dependent on capitalists to employ them in order that they can earn income and subsist.

Stepping back now and looking broadly at the organization of economic production in capitalist societies, we can make a couple of generalizations.

First, from the perspective of capitalists labor is a cost of running a company which is best kept as low as possible. This is analogous to the way that capitalists also seek to acquire any raw materials they need as cheaply as possible. Thus we should hardly find it surprising that capitalists virulently oppose unionization, labor organizing, minimum wage ordinances, laws establishing the 8 hour workday/40hr work week, and so forth. All of these either increase the price capitalists have to pay for labor, or restrict their ability to most efficiently accumulate profit.

Second, we should note that when capitalists have their way, workers have no say in major economic decisions. Capitalists make virtually all of the major decisions about where to invest capital, what to produce, how to organize productive efforts, where to set up operations, etc.

Now the point I'm trying to make isn't that everyone in society is either a capitalist or a worker. Contemporary societies are far more economically complex than that. Rather, my aim is to redeploy class as a concept that relates an individual to the way that production in society is organized. The reason for the focus on workers and capitalists is that those two classes are products of modern industrial capitalism and represent the most antagonistic economic classes in society. The payoff of understanding class in this way is that it enables us to examine and highlight asymmetrical relationships of power in the economic and social field that aren't simply a matter of disparities income inequality. Certainly it is relevant to the pursuit of social justice to ensure that people's life chances and access to basic social goods (health care, education, housing, etc.) aren't circumscribed by the amount of money that they (or their family) earn. But focusing only income inequality (as many liberals often do) scrutinizes only the effects of a capitalist economy; it doesn't offer any analysis of how differential incomes come about, it doesn't offer any analysis of how employment works (i.e. who does the employing).

US left-liberals frequently focus on the State as means to redistribute goods and resources in order to attenuate the social ills of capitalism. But this focus often fails to account for the fact that the State is always already an institution located within capitalism, and therefore subject to the market and the class which wields the most economic power. I'm not referring to the way that those with big money can influence elected officials via lobbying and campaign contributions, although this phenomenon is widespread. I mean something broader and more fundamental to the way that capitalist societies function. While there many other ways that such an analysis could proceed (e.g. the way that capitalist production impacts culture, education, language, etc.), I want to focus only on the way that class power impacts how the State operates in capitalist societies.

To get a sense of what I'm talking about, consider any number of examples of progressive/center-Left politicians who've been elected because they pledged to push through certain reforms that the majority of the population wanted, but that threatened the profits and clout of capitalists in the economic realm (e.g. see Mandela and Lula's respective first terms). Even when these left-minded politicians have uncontested electoral majorities and the intent to push through social reforms, they still have to fight against the inertia of capitalists who have enormous economic power. But why should that be? According to the standard liberal way of thinking about politics, representative democracy means that all political power is concentrated in the hands of the State, which is under democratic control. But if that were true, why would democratically-elected majorities in control of the State have to fight against anyone to exercise their democratic mandate?

Just as workers can use their role in production to wield power if they are organized (i.e. they can strike), so can capitalists threaten to use their control over production as leverage since society is thoroughly dependent on capitalist production for most all basic necessities (and we should also note here that the government relies on tax revenue collected largely from profits generated by capitalists).

For example, capitalists can threaten to say: if you raise taxes on us, we will produce less and then everyone will be worse off because the economy will stumble.

They can also threaten to close up and move their businesses elsewhere (i.e. leave the US, or leave a particular state, or a particular city).

They can say: if you impose rent-controls or rent-freezes, we will stop renting out the properties we own so there will be a housing shortage.

They can say: if you try and raise the minimum wage, we will lay off workers creating unemployment since we don't want to give up our current profit margins.

What can the government do about these sorts of threats so long as it relies upon capitalist production to ensure that society functions? Well, according to neoliberal orthodoxy, what you do is systematically give in to the demands of the class making these threats. According to this logic, if you want economic growth you cut taxes, if you want employment you slash wages, if you want rentiers to provide lots of housing you make conditions conducive to them getting filthy rich. More often than not, these measures are prescribed as necessities, as though the laws of nature required that if wages rise then employment must decrease as a result.

But if it is true that increasing wages will lead capitalists to employ less people, this isn't because of "nature". This is because greedy capitalists (i.e. people in our societies who make conscious choices) do not want their profit margins to decrease. They, in effect, 'make it true' that increasing wages decreases employment in the cases where this actually happens. The fact that they get to decide (i.e. not workers, not democratic bodies) whether or not to employ people is an example of class power. When politicians have to make public policy decisions based on what capitalists will do in response, they are making decisions based on the class power of capitalists. When capitalists claim that 'unionization is bad for the economy', they are implicitly referring to their class power insofar as what they mean is that increased wages and benefits for workers is something they don't want to see. Capitalists could, of course, share power and profits with the workers, but instead of sharing a sliver of either capitalists typically opt for moving their operations elsewhere or for a head-on fight. In both cases they use their role within production to force others in less powerful positions to do their bidding.

I'ts crucial to note that the above example isn't really a matter of income levels. Often very well-paid 'white collar' individuals in large companies have little more actual power than wage-earning workers do. They have little more say in whether they have a job, and often they are just as expendable when the ownership's profits are on the line. Of course, these individuals may lead more luxurious lifestyles and have less unmet basic needs, but this is not the same as class power. In some cases, salaried managers find themselves in a no man's land between a unionzed workforce and powerful capitalists above them.

When the ownership of Fedex threatens to cancel orders that they've arranged with Boeing if the EFCA passes, the capitalists in charge of the company are utilizing class power to pressure society into giving in. They are, in effect, threatening to send a torpedo into an already weak economy by cancelling a major order. Succinctly put, they're saying "don't even try to think about making unionization possible or we'll fuck up the economy even more than it already is and we'll be just fine because we won't be the ones losing our jobs." This threat is serious because it could effect a lot of people's jobs both in and well beyond Boeing. And the capitalists in charge of Fedex are capable of making these threats because they hold a lot of economic bargaining chips, in short, because they wield class power. Remind me again what a 'free' market is supposed to be...?