In The Communist Manifesto, which they published in 1848, Karl Marx and Frederick Engels boldly asserted that “Society as a whole is more and more splitting up into two great hostile camps, into two great classes directly facing each other: Bourgeoisie and Proletariat.” Over the years, that notion generated a lot of controversy. But by the late twentieth century in North America, it had come to be regarded by many as archaic.
According to Michael Zweig — a professor of economics at SUNY’s Stony Brook University and author of The Working Class Majority — the common view is that America (and Canada too no doubt) is “a mostly middle-class society.” Americans tend to think that there is a small group of very rich people at the top and another group of poor people at the bottom, with the overwhelming majority of people in the middle.
Zweig challenges the common notion that class has to do with wealth. He says, instead, that class is really a matter of power and authority. At the top are those who “have great power to organize and direct production.” In the middle are professionals, small business owners, managers and supervisors who have middling authority over others. And then there is the working class, composed of people who “aren’t anybody’s boss.”
Zweig would have us believe that those at the top, the “capitalist class,” pretty much rules everything. My problem with that assertion is that there are lots of politicians, media people, performers and government officials who have considerable power but few would recognize them as capitalists. I know tha,t according to some theorists, these folks have been melded into the ruling capitalist class, but that assertion seems to me to be a big stretch. Nevertheless, Zweig has a point in his observation that there is a distinct class of people who “organize and direct production.” Lets call them the executive class.
This is a social class, in that the people in it tend to know each other, have many interests and values in common and generally agree on the way the economy ought to be managed. In the United States, they also have what might be regarded as their own steering committee. Founded in 1972, the Business Roundtable is composed of the CEOs of America’s top corporations. Its central function is to influence government policy. In the past two decades, it has pretty much had its way. The neo-liberal agenda was its game plan. Deregulation and privatization was largely a response to its demands. To a large extent, the American executive class has managed to get government off its back.
Executives succeeded long ago in stripping from most shareholders any control over operations and, more recently, they have fought efforts by activists to regain some influence in corporate policy making. The executive class’s strategy for dealing with organized labour has decimated the American labour movement. Less than 8 per cent of American private-sector workers have union representation, and it is estimated that the rate will eventually fall to a steady state of about 2 per cent.
The executive class has largely succeeded in excluding labour and environmental standards from international trade agreements. Pressure from the Business Roundtable was critical in Washington’s decision to turn its back on the Kyoto global-warming agreement.
In recent decades, American executives have enriched themselves greatly at the expense of the working class. Although lots of people are rich who are not high corporate officers, those who run industry tend to have high incomes.
According to the Washington-based Economic Policy Institute, between 1979 and 1999, the top 1 per cent of American income earners increased their share of family income from 15.3 to 20.3 per cent.
At the same time, the bottom 80 per cent of families all lost ground. Executive wealth also increased considerably. Between 1983 and 1998 the net worth of the top 1 per cent of households went from just over US$7-million to over US$10-million. At the same time, the lowest 40 per cent lost ground. The bottom 20 per cent had negative net worth. Between 1983 and 1998, their debt increased from US$3,200 to US$8,900.
The executive class is critical for our well-being. Its members are highly skilled at efficiently operating the large organizations to which we owe so much of our standard of living. We ought to honour them and give them the tools they need to get the job done, but unless we effectively control them, they are likely to abuse us. Their increasing power and the decline of countervailing constraints on their behaviour should be cause for considerable concern.
Although America is at the forefront, what is happening there is spreading around the globe. If current trends are allowed to continue, Marx and Engels may yet prove to be right in their prediction that revolution is capitalism’s end game.