class struggle

China’s upcoming troubles: class or nation?

Brandon Christensen Culture, Current Events , , , , , ,

Hopefully you caught Joel Kotkin’s thoughtful essay on China’s looming class struggle (it was in a nightcap from a few days back). Kotkin is a geographer at the University of Chapman.

I think he’s wrong, of course. He’s not wrong about China’s continuing troubles (I agree with him that things will only get worse), but on how these troubles will really begin to flare up. I don’t see class as the major issue, I see nationalism as China’s biggest fault line (and have since at least 2013).

Here’s how I’ve laid it out in my head. Think of Hong Kong and Taiwan, two places that are Chinese but not part of the People’s Republic. Beijing has lots of problems with both polities. Is class or nation a better gauge to use here? Nation! Nobody in Beijing is harping on the riches accrued by democratic Chinese polities. The Communists are drumming up nationalistic furor instead. Nationalism is the better tool to use to understand contemporary China.

Here’s the kicker, though. In order to drum up nationalistic furor, you’ve got have a nation, correct? The problem for China is that it has several dozen nations within its borders (here’s that 2013 post again), and nationalism in China favors the Han ethnic group over the others. The harder Beijing leans on nationalism, then, the more it squeezes out non-Han ethnic groups from its coalition of the willing. And Beijing is leaning hard on nationalism. It’s going to have to lean harder, too, since liberty is apparently not on the table.

Nightcap

Brandon Christensen Links , , ,
  1. Argentine Nazi finds are fakes Glüsing & Wiegrefe, Spiegel
  2. China’s looming class struggle Joel Kotkin, Quillette
  3. The real costs of the war in Afghanistan Adam Wunische, New Republic
  4. Progressive purity tests and Supreme Court wish lists Damon Root, Reason

Nightcap

Brandon Christensen Links , , ,
  1. The need for class politics Chris Dillow, Stumbling & Mumbling
  2. “Do not dig a grave for someone else!”
  3. Has the Tervuren Central African museum been decolonized? Tyler Cowen, MR
  4. The nativists have won in Europe Krishnadev Calamur, the Atlantic

How the populists came to power

Bruno Gonçalves Rosi Culture, Politics , , , , , , , , ,

Jair Bolsonaro was elected president in Brazil. Donald Trump in the US. In other countries, similar politicians are gaining popular support. Some are calling these politicians “populists”. I don’t really know what they mean by this term. The populists that I know better are Getúlio Vargas, Brazil’s president for almost 20 years in the mid-20th century and Juan Peron, a leading political figure in Argentina in the same time period. What they had in common? Both fought the communist influence in Latin America, favored the labor movement and were anti-liberal. They were also extremely personalist, leading to something that could be understood as a cult of personality. I completely fail to see important similarities between Trump and Bolsonaro on the one hand and Vargas and Peron on the other. But I can see some similarities between Trump and Bolsonaro. The latter two both came to power against what the left became in the last few decades.

Once upon a time, there was a young German philosopher called Karl Marx. He was very well read but wasn’t very bright on economics. Anyway, he decided that he would correct the classical liberal economic theory of Adam Smith. The result was that Marx concluded that in the center of the economy, and actually in the center of history itself, was the class struggle between the workforce and the bourgeoisie. Of course, although appealing on the surface, Marx’s economic theory is pure nonsense. Maybe Marx himself knew it, for at the end of his life he was more interested in living a peaceful life in London than in leading a revolution. But this didn’t stop Marxists from starting Revolutions throughout the world, beginning in Russia.

Ludwig Von Mises brilliant pointed out that Marxism would never work as the economic foundation of a country, for it ignored private property. Without private property, there is no price formation and without prices economic calculation is impossible. In doing so, Mises founded the Austrian School of Economics. The economic debate between Austrians and Marxists ensued, but arguing with a Marxist is like playing chess with a pigeon. He will climb on the board, knock down the pieces and believe that he won. Regardless, facts don’t care about your feelings, and reality proved again and again that Mises was right.

However, at the same time, something else was happening. In Italy, a Marxist named Antonio Gramsci concluded that armed revolution was not the best way to power. He believed that a cultural approach would be better. Some German scholars in Frankfurt concluded pretty much the same. Their question was “why the proletariat will not follow us?”. The answer was that they were too alienated by capitalist culture.

Following Gramsci and the Frankfurt School, Marxists all over the world gave up studying economics and decided to study culture. They concluded that everyone can feel oppressed. The class struggle seized to be between factory workers and factory owners and turned into a fight between man and woman, black and white, gay and straight. Identity politics was born.

And that’s how the “populists” came to power. It is not so much that the common people (and especially conservatives and libertarians) are crazily in love with Bolsonaro or Trump. It is just that people eventually get tired of being called oppressors. The left, once legitimately concerned with the conditions of the poor, ignored that the best solution for poverty is the free market. Instead, they decided they would crush the common people they swore to protect, calling them homophobic, misogynists and so on. Common people answered by voting for whoever was on the other side of the political spectrum.

What is Wrong with Income Inequality? Five Reasons to be Concerned

Zachary Woodman Economics, Liberty, Politics , , , , , , , , ,

I sometimes part ways with many of my libertarian and classical liberal friends in that I do have some amount of tentative concern for income/wealth inequality (for the purposes of this article, the otherwise important economic distinction between the two is not particularly relevant since the two are strongly correlated with each other). Many libertarians argue that inequality ultimately doesn’t matter. There is good reason to think this drawing from the classic arguments of Nozick and Hayek about how free exchange in a market economy can often interrupt preferred distributions.

The argument goes like this: take whatever your preferred distribution of income is, be it purely egalitarian or some sort of Rawlsian distribution such that the distribution benefits only the worst off in society. Assume there is one individual in the economy who has some product or service everyone wants to buy (in Nozick’s example it was Wilt Chamberlain playing basketball), and let everyone pay a relatively small amount of income to that one individual. For example, assume you have a society with 10,000 people all who start off with an equal endowment of $5 and all of them decide to pay Wilt Chamberlain $1 to watch him play basketball. Very few people would object to those individual exchanges, yet at the end Wilt Chamberlain ends up with $10,005 dollars and everyone else has $4, and our preferred distribution of income has been grossly upset even though the individual actions that led to that distribution are not objectionable. In other words, allowing for free exchange precludes trying to construct an optimal result of that free exchange (a basic consequence of recognizing spontaneous order).

Further, these libertarians argue, it is more important to ensure that the poor are better off in absolute terms than to ensure they are better off relative to their wealthier peers. Therefore, if a given policy will increase the wealth of the wealthiest by 10% and the poorest by 5%, there is no reason to oppose this policy on the grounds that it increases inequality because the poor are still made richer. Therefore, it is claimed, we should focus on policies that improve economic growth and the incomes of the poor and be indifferent as to its impact on relative inequality, since those policies are strongly correlated with bettering the economic conditions of the poor. In fact, as Mises Argued in Liberalism and the Classical Tradition, a certain amount of inequality is necessary for markets to function: they create a market for luxury goods that can be experimented and developed into future mass-consumption goods everyone can consume. Not everyone could afford, for an example, an IPod when it first came out, however today MP3 players are cheap and plentiful because the very wealthy were able to demand it when it was very expensive.

I agree with my libertarians in thinking that this argument is largely correct, however I do not think it proves, as Hayek argued, that social justice (understood in this context as distributive justice) is a “mirage” or that we should be altogether unconcerned with wealth or income distributions. All this argument does is mean that there is no overall deontological theory for an ideal income distribution, but there still might be good consequentialist reasons to think that excessively unequal distributions can impact many of the things that classical liberals tell us to worry about, such as the earnings of the poor, more free political economic outcomes, or overall economic growth. Further, even on Nozick’s entitlement theory of justice, we might oppose income inequality if it arises through unjust means. Here are five reasons why libertarians and classical liberals should be concerned about income inequality (note that they are mostly empirical reasons, not claims about the nature of justice):

1) Income Inequality as a Result of Rent Seeking

Certain government policies result in uneven income distribution. For an example, a paper by Patrick MacLaughlin and Lauren Stanley at the Mercatus Center empirically analyze the regressive effects of regulatory policy. Specifically, Stanley and MacLaughlin find that high barriers to entry create barriers to entry which worsens income mobility. Poorer would-be entrepreneurs cannot enter the market if they must, for an example, pay thousands of dollars for a license, or spend a large amount of time getting costly education and certifications to please some regulatory bureaucracy. This was admitted even by the Obama Administration in a recent report advising reform of occupational licensing laws. As basic public choice theory teaches, regulators are subject to regulatory capture, in which established business interests lobby regulators to erect barriers to entry to harm would-be competitors. Insofar as inequality is a result of such rent-seeking, libertarians have an obvious reason to oppose it.

Many other policies can worsen inequality. When wealthy corporations receive artificial monopolies from policies such as excessive intellectual property laws, insulating them from competition or when they gain wealth at the expense of poorer taxpayers through improper subsidies. When the government uses violent policing tactics to unequally enforce drug laws against poorer communities, or when it uses civil asset forfeiture to take the property of the worst off. When the government uses eminent domain to take the property of disadvantaged individuals and communities in the name of public works projects, or when they implement minimum wage laws that displace low-skilled workers. Or, if the structure of welfare benefits discourages income mobility, which also worsens inequality. There are a myriad of bad government policies which benefit the rich and exploit the poor, some of which are a direct result of rent-seeking on behalf of the wealthy.

If the rich are getting richer, or if the poor are stopped from becoming wealthier, as a result of government coercion, even Nozick’s entitlement theory of justice calls for us to be skeptical of the resulting income distribution. As Matt Zwolinski argues, income distributions are not only a result of, pace Nozick, a result of the free exchanges of individuals, but they are also a result of the institutions in which those individuals exchange. Insofar as inequality is a result of unjust institutions, we have good reason to call that inequality unjust.

Of course, that principle is still very hard to empirically apply. It is hard to tell how much of an unequal distribution is a function of bad institutions and how much is a function of free exchange. However, this means we can provide very limited theories of distributive justice not as constructivist attempts to mold market outcomes to our moral desires, but as rough rules of thumb. If it is true that unequal distributions are a function of bad institutions, then unequal distributions should cause us to re-evaluate those institutions.

2) Income Inequality and Government Exploitation
Of course, many with more Marxist inclinations will argue that any amount of economic inequality will inherently result in class-based exploitation. There are very good, stand-by classical liberal (and neoclassical economic) reasons to reject this as Marxian class analysis as it depends on a highly flawed labor theory of value. However, that does not mean there is not some correlation between some notion of macro-level exploitation of the worst-off and high levels of inequality which libertarians have good reason to be concerned about, for reasons closely related to rent-seeking. Those with a high amount of economic power, particularly in western democracies, are very likely to also have a strong influence over the policies set by the government. There is reason to fear that this will create a class of wealthy people who, through political rent-seeking channels discuss earlier, will control state policies and institutions to protect their interests and wealth at the expense of the worst-off in society. Using state coercion to protect oneself at the expense of others is, under any understanding of the term, coercion. In this way, income inequality can beget rent-seeking and regressive policies which lead to more income inequality which leads to more rent-seeking, leading to a vicious political-economic cycle of exploitation and increasing inequality. In fact, even early radical classical liberal economists applied theories of class analysis to this type of problem.

3) Inequality’s Impacts on Economic Growth

There is a robust amount of empirical literature suggesting that excessive income inequality can harm economic growth. How? The Economist explains:

Inequality could impair growth if those with low incomes suffer poor health and low productivity as a result, or if, as evidence suggests, the poor struggle to finance investments in education. Inequality could also threaten public confidence in growth-boosting policies like free trade, says Dani Rodrik of the Institute for Advanced Study in Princeton.

Of course, this is of special concern to consequentialist classical liberals who claim we should worry mostly about the betterment of the poor in absolute terms, since economic growth is strongly correlated with bettering living standards. There is even some reason for these classical liberals, given their stated normative reasons, to (at least in the short-term given that we have unjust institutions) support some limited redistributive policies, but only those that are implemented well and don’t worsen inequality or growth (such as a Negative Income Tax), insofar as it boosts growth and helps limited the growth of rent-seeking culture described with reasons one and two.

4) Inequality and Political Stability

There is further some evidence that income inequality increases political instability. If the poor perceive that current distributions are unjust (however wrong they may or may not be), they might have social discontent. In moderate scenarios, (as the Alsenia paper I linked to argue) this can lead to reduced investment, which aggravates third problem discussed earlier. In some scenarios, this can lead to support for populist demagogues (such as Trump or Bernie Sanders) who will implement bad policies that not only might harm the poor but also limit individual liberty in other important ways. In the most extreme scenarios (however unlikely, but still plausible), it can lead to all-out violent revolutions and warfare. At any rate, libertarians and classical liberals concerned with ensuring tranquility and freedom should be concerned if inequality increases.

5) Inequality and Social Mobility

More meritocratic-leaning libertarians might say we should be concerned about equal opportunities rather than equal outcomes. There is some evidence that the two are greatly linked. In particular, the so-called “Great Gatsby Curve,” which shows a negative relationship between economic mobility and income inequality. In other words, unequal outcomes can undermine unequal opportunities. This can be because higher inequality means unequal access to certain services, eg. Education, that can enable social mobility, or that the poorer may have fewer connections to better-paying opportunities because of their socio-economic status. Of course, there is likely some reverse causality here; institutions that limit social mobility (such as those discussed in problem one and two) can be said to worsen income mobility intergenerationally, leading to higher inequality in the future. Though teasing out the direction of causality empirically can be challenging, there is reason for concern here if one is concerned about social mobility.

The main point I’m getting at is nothing new: one need not be a radical leftist social egalitarian who thinks equal economic outcomes are necessarily the only moral outcomes to be concerned on some level with inequality. How one responds to inequality is empirically dependent on the causes of the problems, and we have some good reasons to think that more limited government is a good solution to unequal outcomes.

This is not to say inequality poses no problem for libertarians’ ideal political order: if it is the case that markets inherently beget problematic levels of inequality, as for example Thomas Piketty claims, then we might need to re-evaluate how we integrate markets. However, there is good reason to be skeptical of such claims (Thomas Piketty’s in particular are suspect). Even if we grant that markets by themselves do lead to levels of inequality that cause problems 3-5, we must not commit the Nirvana fallacy. We need to compare government’s aptitude at managing income distribution, which for well-worn public choice reasons outlined in problems one and two as well as a mammoth epistemic problem inherent in figuring out how much inequality is likely to lead to those problems, and compare it to the extent to which markets do generate those problems. It is possible (very likely, even) that even if markets are not perfect in the sense of ensuring distribution that does not have problematic political economic outcomes, the state attempting to correct these outcomes would only make things worse.

But that is a complex empirical research project which obviously can’t be solved in this short blog post, suffice it to say now that though libertarians are right to be skeptical of overarching moralistic outrage about rising levels of inequality, there are other very good empirical reasons to be concerned.

Sex and Economics (And Karl Marx Too!)

Brandon Christensen Economics , , , , ,

The concept of economic reproduction is emphasized in the Marxian school of economic thought. In Marxist theory, the conditions for production are continuously re-created as a circular flow. The concept of the circular flow of both goods and of factor-inputs was first developed by the French economists of the 1700s, who called their theory of natural economic laws “Physiocracy.” The factors or categories of inputs are land, labor, and capital goods.

From co-editor Fred Foldvary. Do read the whole fascinating article. Many conservatives in the US (as well as libertarians) don’t give Karl Marx the time of day he deserves in order for thoughtful, polite discourse to take place. Many on the Right decry (and rightly so) the various strawmen that Leftists erect when attacking the proponents of private property, personal wealth and international trade, but are we any better when it comes to debunking Leftist arguments? Continue reading →

Class Warfare, Then and Now

Brandon Christensen Current Events, History, Politics , , , ,

These recent developments in labor relations show how changed market conditions offer welcome correctives to the New Deal approach. It is just these changes that are at risk under an Obama administration whose main agenda tracks Roosevelt’s early one: Vilify the rich as unproductive ciphers of society and work toward a progressive tax rate structure; be hostile toward the growth of international trade by denouncing firms that outsource jobs as the enemies of domestic labor; continue to work in favor of extensive agricultural subsidies for ethanol and other farm crops, no matter how great of a disruption these impose on domestic and foreign food markets; and insist upon a rich set of unsustainable healthcare benefits through Medicare and Medicaid.

This is from Richard Epstein. Okay, so Obama is a demagogue, a thief and a murderer. Is Mitt Romney really any better? Really?

I’m voting for Gary Johnson (if I vote at all).

Aging Hippies Aren’t So Hip

Brandon Christensen Current Events, Links , , , ,

This is not new to anyone under the age of 40, but this New York Times article is a nice nail in the coffin of the pernicious myth that hippies are somehow radical Leftists. It talks about how young people are becoming more fiscally conservative and socially liberal. That is to say, that most people are becoming more libertarian. The NYT doesn’t mention the “l” word, of course, but the libertarian streak is easy to see nonetheless.

Economist Steve Horwitz has a great take on this on his Facebook page. He wrote:

This is good thing. A more socially progressive GOP is a better GOP. Of course these kids are really libertarians and don’t know it. But if you really want some laughs, read the comments. See how old-fart, un-hip leftists are mystified that young people might think leftist ideas have failed and genuinely believe that there are better ways to improve the world. See the hate, see the befuddlement, see the frustration. Try some new ideas folks, maybe the young’uns will then think you’re hip again.

‘Nuff said.

The Champions of Los Angeles.

Socialism and Empire, Not Immigration, Are Destroying America.

Status Quo Biasing and Conformity Signaling.

The Curious Case of the Bourgeois Bubble Boy

Brandon Christensen Liberty, Politics , , , , , , ,

Since Ron Paul’s fantastic, spontaneous, incredible 2008 presidential campaign libertarianism has become a hot topic among the brightest people throughout the world. This is not a coincidence or an act of God, I think. The recent peak in interest of libertarian alternatives has to do with the sometimes sorry state that our world always seems to be in.  As somebody who came from the hard, anarchist, collectivist Left, I can assess that the libertarian alternative has been given a fair shake by a broad swathe of the American public.  However, on the hard Left, there has been bitter hostility towards anything remotely libertarian in American political discourse.  Most of this is envy, I think; a primitive form of envy that always forms when competition arises to challenge the orthodox opinions and mores of a society.

More on this is just a minute, but first: although there are indeed many problems facing the world today, we are living in a time of great abundance and peace. Furthermore, the periodic mass starvations in East Africa and the short, intense outbursts of small wars are both relatively simple to fix and uncommon (which is why they make the news). These are facts that we would do well to remember. Back to the hard, bitter Left.
Continue reading →

Occupy Wall Street; Don’t Attack Grandma: The New Class Struggle

Jacques Delacroix Current Events, Liberty , , , , , ,

Behind the verbal incoherence, behind the posturing, behind the bad children’s tantrum, behind the trash, behind the grotesque self-regard of those who would borrow $120,000 to earn a degree in “German Studies,” there may be legitimate resentment in the “Occupy” movement. It’s true that it’s difficult to get from the demonstrators an answer to a straight question that does not make you laugh or cry, or both. However, you may not have to await their answer to understand.

To the extent that you can trust television cameras at all, they seem to show largely demonstrators between their mid-twenties and their mid-thirties. That would be people born between 1975 and 1985. Those cohorts had only known ease and prosperity until 2008. They were brought up by easy-going parents who sent them, or allowed them to attend schools that nurtured self-indulgence more than intellectual curiosity. I have two children near the younger edge of these age groups. I am guilty too. When they were playing soccer, they never heard anything from coaches except “Good try.” I remember clearly one little kid ( not one of mine, God forbid!) garnering this very accolade after he had marked a goal against his own team. (Would I make this up?) These American cohorts were not in any way prepared for a world where jobs are difficult to get because companies are not hiring and where the jobs you get don’t pay well because companies don’t have to pay well since they won’t invest in you for the long-term because there is no long-term they can see. Continue reading →

Karl Marx Was Right (Pretty Much)

Jacques Delacroix History, Politics , , , , ,

Karl Marx spent a lifetime arguing that the motor of history, what caused social change, was the “class struggle.” (Marx said other, more complicated things in relation to the class struggle. I don’t care to talk about them right now because they are obscure and there is little agreement among Marxists about what they mean.) Marx also did not assign enough importance to technological progress, it’s true. That would happen largely as a result of ever greater densities of population, irrespective of any political system. Many people in close contact in cities are more likely to come up with better ways to get things done than few people who barely ever meet anyone outside their small group. Literacy also helped of course by helping preserve accumulated knowledge. With these major lacunas, I think Marx was mostly right.

Marx had an elaborated conceptualization of social class that he never really completed. First, what “class” is not, according to Marx (also according to Delacroix). Class explicitly does not refer to “the rich and the poor” as many think. That would have been of limited usefulness when Marx was writing and it would be utterly useless now. The fact is that the distribution of wealth in modern, capitalist societies (the ones Marx had in mind) is continuous, that is, there is not break-up point. Next to the person, or family who owns $1,000, 000 there is one that owns $999,000, and next to that one, there is another that owns $998,999. Likewise, next to the person or family who owns $50, there is one that has $51 in wealth. And so forth. Moreover, who owns what is not fixed except at the lowest end. I was poor when I was thirty, I am not anymore. People who own vast wealth are liable to lose large portions of it in a day or two, thanks to the normal operation of the stock market, for example. Thus, there is frequent re-shuffling and rich and poor are pseudo-categories and therefore, useless.

Marx explained at length that what social class one belongs to is determined by one’s “relation to the means of production.” This is a bad translation of the bad German that prevailed at the time Marx was writing. Generations of Marxists everywhere have striven to conserve this opaque language because it made them sound profound, not least in their own eyes, and because it made them look like possessors of higher, “scientific” knowledge. Let me dispose of the scientific claim right away. It’s pure propaganda, deliberate bullshit, one of Marx’s public relations achievements. He made his claims seem more serious than they otherwise would have seemed by calling them “scientific” at a time when the word conveyed much intellectual prestige. Again, it’s bullshit. What makes anything scientific is that it can be refuted by comparison with reality. Another way to say nearly the same thing is to say that scientific claims can be tested. (Don’t worry about the “nearly” in the previous sentence; the statement is good enough for our purpose.) Marx’s claims cannot be tested in a rigorous, logical manner. All Marxists can do is to cry, “See, Marx said so,” after the fact, whenever something develops more or less according to one of Marx’s many unclear predictions. One issue about which Marx was clear was the class struggle. More on this below.

The world in which Marx lived was different from ours in important respects two of which are crucial for understanding the idea of social class in the 21st century.

1 When Marx was observing and writing, in the second half of the 19th century, land was losing much of its age-old importance as a source of income, in comparison with manufacturing and mining, and later, railroads. While agricultural productivity was making steady gains in the richest countries, manufacturing and, in its wake, mining, were growing explosively thanks to the Industrial Revolution. (Note what I am not saying: Income from agriculture was not shrinking in absolute terms, it was expanding.) It was clear to most observers then that the quick way to riches was to capture the fast rising income generated by those industries. The best spigot was thus the material industries of manufacturing, mining and later, railroads.

The claimants to this income were uncommonly well-defined. On the one side were a small number of mostly family-based companies like the Krupp in Germany, the Schneider in France, the Rockefeller in America, and so on. These highly visible companies owned the manufacturing plants, the mines, and later the railroads. Here is a useful digression: Marx seemed not to have understood the importance of publicly owned companies in which small people and other groups could invest their small savings. He probably thought big corporations would remain in a tiny number of hands forever. Correspondingly, he did not understand well the role of stock exchanges either. He was wrong on this, wrong by large omission.

The other claimants to manufacturing, mining and railroad income were also highly visible. They were the masses of workers flocking to the cities and mining centers from the countryside. Those people were visible because of where they lived, near the centers of cities. Originally, they were also poorly paid and overworked. Marx observed that they were in a favorable situation to organize along labor union lines and also politically to an extend unimaginable by their peasant forebears. This, because of their geographic concentration and because of their ability to realize that they shared a certain type of misery.

From these accurate observations, it was fairly natural to predict that there would eventually be a clash between the super-rich owners of the means of production, manufacturing plants, mines and railroads, and those who toiled for them. It looked like there was at any time, a zero-plus sum game being played: Whatever the owner took, the workers did not get, and vice-versa: capitalists (owners) vs proletariat (industrial workers, broadly defined).

But everyone who was not a worker was not a capitalist in that sense, and everyone who was not a capitalist was not necessarily an industrial worker. The lawyers who serviced the capitalists could be expected to join with them. The tavern owners whose own income came from workers’ drinking would side with the workers, and so forth. This scheme makes it clear that a starving lawyer could be in the capitalist camp and a prosperous pub owner in that of the workers. Hence the idea that people would line up politically according to their “relationship to the mean of production.” This is a more sophisticated idea and also one much more applicable than the “rich vs poor” of the popular imagery of social class.

2. The second big difference between Marx’s time and ours is the size of government. Throughout the 19th century, governments everywhere were small and poor. There was no income tax; they derived revenue largely from customs (border taxes) and from excise taxes. Governments then were a fiscal burden on everyone if not equally, then commonly, but a fairly light burden most of the time.

Today, governments in the developed world are large to huge. They consume anywhere between 40% approximately and 70% of Gross Domestic Product. They are also everywhere by far the largest accessible source of income.

Superficially, the amorphous, ill-defined “service sector” seems even larger since it accounts regularly for more than 70% of GDP (in rich countries including the US). However, it’s fragmented, heterogeneous, controlled (to the extent that is is controlled) by a myriad of owners. Much of it is not very profitable, as opposed to 19th century manufacturing, for example. The services workforce is also extremely fragmented and it tends to be transient. It would be difficult for that workforce, or for anyone else to get together to capture anything of value. There is not much to take from the service sector and it would be hard to get.

By contrast, the large to very large chunk of money that is in governments’ hands at any one time is easy to capture. It does not take much more than a well-engineered vote to get one’s own hands on it. Furthermore, unlike the private sector’s funds that depend on the vagaries of the market and on management’s competence, government grants in various forms tend to have a long shelf life. The WWII subsidy to chinchilla farmers was only repealed about ten years ago, fifty years late! Civil service pension funds are another case in point. Obtaining money from government entities is well worth the effort. The government is both a big spigot and an easy one to turn on.

I know I promised to tell you that Marx was almost right. Well, what we see in America today is a classical Marxian class struggle. The classes in conflict are not those Marx described because he was writing almost 150 years ago and he had not foreseen the monstrous growth of government. (No one else had.) The Obamanian/Obamist faction of the Democratic Party has engineered and is engineering an alliance between the main social class of today, government workers, on the one hand and a few other, opportunistically selected groups, on the other hand.

First among the government workers class allies are the small minority of workers in labor unions (maybe 7 or 8% of all employed and unemployed people). Labor unions have always used government to grab what their own muscle failed to achieve. Second, are the majorities of racial minorities. Many – but not most – are poor for reasons that ceased a long time ago to be related to racism. The largest racial minority, so-called “Latinos,” is heterogeneous and many of its members are immigrants or one generation removed from immigration. The Obamists are trying to grab them before they meld into the traditional American dream.

The second largest minority is “blacks.” Only about half of so-called “African-Americans” are descendants of slaves with a historical grievance that is supposed to be addressed by affirmative action. Many in that half, of southern church background, are addicted to resounding speeches about injustice and to the idea that the remedy to their ills can only come from government. They will vote for the best “injustice speech” giver irrespective of what they gain afterwards. (Usually nothing. The Democratic Party had been using and abusing blacks for thirty years.) The other half of Americans with African blood are immigrants and their children. Like Obama himself, in my book, they have no historical claim on the nation. That second half of the second minority might surprise us soon, politically. They are experiencing normal American social mobility, like general Colin Powell for example, the son of Jamaican immigrants. They are at best temporary members of the Obamian recruits, I think. He, and his Left-Democrat conspirators cannot count on them for the long haul.

A flat and slow-growing economy is always especially hard on immigrants. That’s the main reason western Europe has always – until now – had worse immigrant problems than we have. Immigrants in America open a small business and their kids go to college and they become the doctors and lawyers and engineers our normally expanding economy requires. Immigrants in France, for example, go to college and then remain underemployed forever because the French escalator is hardly moving at all.

There are no other racial minorities in America today that want to be considered minorities. They are all doing well without recourse to government favor. Many may have voted for Obama without understanding what they were doing. If I were an American communist trying to take over by legal means, I would not count on them further. In the same breath, I would refer to the scarce but disproportionately influential American Jews. I think more than 75% voted for Obama. That was a downright perverse and obstinate vote. I don’t think many are communists. I suspect many more are coming to their senses right now. (I may be placing too much confidence in an unsystematic sample here. All the Jews I know are conservatives. Ten years ago, I did not even know of Jewish conservatives.)

Finally, the Obamists exercise control over a large under-class that they are trying to enlarge yet: All those who are not working but who exist temporarily or permanently thanks to government payments. Marx had described something like this when he spoke of the politically unstable lumpenproletariat, the sub-working class “dressed in rags.”

So, here we are: On the one side, the large and growing class of government employees and the small allied class of union members. Both classes earn considerably more in wages and benefits than the employed in the private sector, nearly twice as much on the average. One bus driver in my small town belongs to both classes, as a government employee and as a union member. Last year, he earned $160,000 (that’s with overtime, let’s be frank). The job requires a high-school education. (I hope he is the one bus driver in this town who is not habitually gruff.) This is the same town where coffee shop baristas with a college degree earn $9/ hour if they are lucky, with no benefits. (I am speaking of Liberal Arts and Environmental Studies majors. Again, let’s be frank!)

To summarize: Government employees and union members owe their superior earnings to their relationship to the means of re-distributing income forcibly, government. They seek to extend and consolidate their hold on government with the help of precariously allied ethnic minorities and of unstable recipients of welfare under various names. On the other side is everyone else, everyone who does not work for government and who pays the taxes that feed the others. They too are defined by their relationship not to the “mode of production,” (see above) but to the spigot of government.

Here is a key figure: Almost 50% of Americans paid no federal income tax last year. That’s a lot of people who are not against the government confiscating legitimate income though legal means.

Once you start looking at the events and policies of the past 18 months as elements of a normal class-struggle, you gain much clarity. And, incidentally, this thesis does not contradict my repeated statements that the Obama administration and the President himself, are not very bright. They are relying on an old play-book that tells them pretty much what to do and that does not require much inventiveness.

I am astounded – if I say so myself – by the predictive power of my historical explanation. We even have the third highest elected official in the land ( third in order of succession to the President) engaging overtly in fascist intimidation: Speaker Pelosi threatened around August 16th “to investigate” those who oppose a mosque near Ground Zero! (See my column on this: “The ‘Ground Zero’ Mosque Issue Clarified”)

And, by the way, for those of you who got Cs in public school, or Bs in private school because the school needed the tuition, no, I am not confused. The Obamians are a species of communists and, communism is just one brand of fascism. See my two essays on the topic on this blog:“Fascism Explained,” and “How About Communism?”