In the Wealth of Nations, Adam Smith bases the amount that workers must be paid on both the cost of their living and the requirement that they must be able to afford to have children, to breed the next generation of workers. He assumes that workers breed workers, and aristocrats breed aristocrats and so forth. This attitude is somewhat reminiscent of the caste system in India, where your social position was entirely decided by the circumstances of your birth. At the time and place Smith was writing, Scotland in1776, social mobility was rare, at least in an upward direction. Today in the US we pride ourselves on being a classless society, where anyone, no matter where they are born, can succeed and grow rich. Yet the truth is that we have a class structure almost as rigid as that of Smith’s time.
It has been observed that Americans do not see themselves as being economically oppressed, but rather as temporarily embarrassed millionaires. Yet in truth there is almost no chance of a regular person becoming even moderately wealthy. This fact is obscured by the wide public attention given to a few prominent and rare exceptions. There was a brief glorious period between the end of World War II and the end of the Fifties when a blue collar American worker could live a dignified life, own a house, take regular vacations, have a non-working wife, send his children to college and retire in comfort. Since that time the plight of the American worker has grown steadily grimmer. Now it takes the combined earnings of husband and wife to barely stay afloat, and forget the pension plan, that disappeared in the last restructuring.
A useful way to look at the US class system is to divide it into five main classes: the owners, the corporate executive class, the professional and small business class, the wage slaves and the indigent. This is of course only one way of dividing the classes, and I do not mean to imply that they are separate and distinct; they are more like general categories that meld seamlessly into one another.
The owners are what is sometimes referred to as the one percent, though it is more accurately more like one tenth of one percent. These are the families whose fortunes are based on the inherited ownership of the vast majority of the resources of the world which they charge everyone else for access to. Unlike the rulers of old, who lived in castles and had followers to enforce their authority, most of these people are anonymous. They use their wealth to isolate themselves and to avoid having to come into contact with the lower classes.
Below this level is the corporate executive class. These are the hirelings of the ownership class who actually run the businesses from which the owners derive their income. This class is very well rewarded; they are the visible wealthy. They are the CEOs and directors of major public companies and the bankers and hedge fund managers and the like.
Next come what remains of the middle classes; professionals, small business owners. This class is still relatively free and independent. It also includes people who have made money in sports or entertainment. It is important to note, though, that this freedom is only enjoyed by those who resisted the temptation to leverage their success. During the 1980’s middle class America went on a spending orgy financed by the increasing value of their assets, notably real estate. When the inevitable crash came, or actually series of crashes in various asset categories, those who were not actually wiped out ended up hanging on by their fingernails, completely at the mercy of the bankers they owe money to.
Next comes the class of the wage slaves, which encompasses everyone below the previous levels. People in this category have little or no accumulated capital. Yet they have the constant unremitting burden of the monthly nut; all of the expenses that they must meet in order even to survive. No matter if there are no jobs for them, if they are sick or have dependents that need their time and attention, they still have to pay on time every month. They are therefore utterly dependent upon their sources of income, and therefore upon their employers.
Failure to meet this challenge, which can easily happen through some random and unavoidable setback, results in being cast into the lowest class of all, the indigent. These are the people who truly have nothing. They are commonly called the homeless, but this focuses on only one aspect of their plight. They are the outcasts who are shunned by our society. This is not the case in all cultures. In India, for instance, especially in the more rural areas, beggars have a place in the community, and are accorded a place at the table and a corner to sleep in. In the US, on the other hand, homeless people are pariahs. I recently attended a public meeting on the topic of a proposed homeless services center, and the level of vitriol towards these unfortunates was truly shocking. People who spoke in favor of the project were literally shouted down. This kind of social treatment is severely demoralizing.
Once a person falls into this last category, it is very hard indeed to climb back out. The strictures of living this way cause a cascade of self reinforcing effects. You cannot keep yourself and your clothes clean. You start to look emaciated. Your self esteem is eroded. The less you have, the harder it becomes to acquire anything. You have no place to keep tools so you have almost no way to make money except the most menial jobs. You have no transportation and the busses are so poorly scheduled that it takes all day to get to town and back. There are few public bathrooms. And all the time you have the constant necessity to be in some physical location twenty four hours a day when there is no place to are welcome to be, and someone is always moving you along. It is impossible to convey in words the full impact of homelessness on a person. They are caught in a vicious spiral. They longer they are homeless the worse they look and feel, and the harder it is to function at all, let alone have any chance of improving their circumstances.
This is the social structure in the US today. But simply listing the social classes tells only part of the story. To gain a full picture we need to delve into the relative amount of power wielded by each class, who controls whom, how the wealth is shared between the classes and which classes are growing and which shrinking.