Tuesday, July 20, 2004
Given what I've talked about the last couple of days, it should be clear that I have some serious worries about the future. The modern, unionized middle class was deliberately fostered by the national government in order to replace the declining small farmer as the base of the democracy. But now we have abandoned that effort- we have left the employees of large corporations to fend for themselves, and further have placed them in competition with 3rd world labor. As Ruy Texiera has pointed out, even high-skill professionals are becoming "proletarianized." And the small proprietors who the Republicans once represented, and who could also serve as the foundation of a popular government, are now similarly under siege by large multinational corporations.
Which means that we are facing a future in which there might be no middle class, something that certainly looks possible given the increasing concentration of wealth in the U.S. And without that middle class, we simply won't have a democracy. Instead we would have a disguised oligarchy or a populist dictator.
Championing the middle class has always been good politics. But it is also good policy. We have known this for years with regards to macroeconomics - the way to boost the economy is to increase consumer spending, which means you need to increase middle incomes so that they can stimulate aggregate demand. Supporting small proprietors, professionals, and blue collar workers is about a lot more than just keeping growth going, however. It is also about keeping democracy going.
My favorite story about Ben Franklin takes place just as the Constitutional Convention was wrapping up. Someone asked Franklin what sort of government had been established. Franklin replied: "A Republic, if you can keep it."