The Failure of Revolution

1. The wages of the proletariat workers did decline relative to the wages of capitalists.
1. For the hundred years between roughly 1873 and 1973, the wages of all workers, including unskilled blue-collar workers, rose dramatically in all Western capitalist countries.
1. Since 1973, the condition of unskilled blue collar and white collar workers has deteriorated, however.
1. Wages of these workers have declined by 15 to 20% in the United States.
2. These workers suffer from high unemployment (of around 15%) in most European countries.
2. Marx’s economics was fundamentally mistaken.
1. While there are differences among contemporary economists about how wages are set, almost no one continues to believe the labor theory of value.
2. Instead, most economists believe that wages are determined, at least in part, by the supply and demand for workers. This leads the wage of any group of workers to be roughly tied to the marginal productivity of these workers. (The marginal productivity of workers is the additional contribution to the revenues of a business made by the last worker hired in a certain category.)
3. As productivity of workers increase, their wages increase as well.
1. Thus wages are tied to the productivity of workers.
2. The productivity of workers is increased when they work with larger amount of capital, in the form of more, and more technically advanced, equipment.
3. Thus workers do get (some of) the economic benefits of working with the capital owned by capitalists
4. The wages of workers increase even in those sectors of the economy where productivity does not increase, because the prices that can be charged in these sectors increase.
1. For example, there has been little or no productivity increases among members of string quartets. (Contemporary string quartets obviously do not play any faster than string quartets in the past.)
2. But the wages of musicians has gone up, along with the relative prices charged by music businesses.
1. The prices of goods produced in high productivity growth areas of the economy, such as cars or computers, have—relatively speaking—declined while the prices in low productivity growth areas of the economy have—relatively speaking—increased.
1. We don’t always notice the relative decline in price of some goods, because while the prices of many goods stay the same or even increase, the quality of these goods dramatically increase. For example, the quality of cars or televisions is much higher than twenty years ago while the inflation-adjusted price is about the same.
3. Businesses in low productivity growth industries can charge relatively higher prices for their goods (and workers can receive higher wages) because:
1. Those who work in high productivity growth industries can afford and thus demand more of these goods.
2. The declining prices in high productivity growth industries leaves people with more money to buy goods in low productivity growth industries.
4. The larger the share of high productivity growth industries in a country, the greater the incomes of everyone in both high and low productivity growth industries
2. Marx was also wrong about the changes in the class structure. Marx’s vision of the future of capitalism was mistaken. He expected that practically everyone would become a proletarian and do wage-labor under the direction of the few capitalists. (That, by the way, is why he expected a communist revolution to be a relatively easy thing to accomplish. For the proletarians would vastly outnumber of the capitalists.) The reality has been very different.
1. For one thing, the old middle class of self-employed people has not disappeared but, to some extent, has grown larger.
2. And what contemporary Marxist-influenced sociologists call a new middle class has come into being.
1. That new middle class consists of people who are not wholly proletarians even though they are not capitalists either.
2. The new middle class includes:
1. The middle managers of large private and public organizations, including large businesses.
2. Highly skilled technical workers such as engineers and research scientists.
3. Other professionals, such as lawyers, and physicians and others who formerly were part of the old middle class. (While many physicians and lawyers once worked for themselves, many of them now work for large organizations.)
3. One Marxist-inspired way of understanding the social class of these people is this:
1. Two of the most important means of production today are human technical skills and the organizations that coordinate the activities of all those who work in large enterprises.
2. Land, natural resources, machinery and money remain important means of production as well. But, without technically skilled workers and large organizations to coordinate them, these other means of production cannot be efficiently used.
3. Thus the people who have technical skills (and the education needed to attain them), and who have an important place in large organizations, can be thought of as owners of at least some of the means of production.
4. On the other hand, they do not own all of the means of production they need to produce. So, at the same time that they own some of the means of production, they do work for a capitalists who own the other means of production and receive a wage in turn. They are, in part proletarians and in part capitalists.
3. So, a contemporary capitalist society would seem to have the following social classes:
1. Large Capitalists: owners and top manager of large business enterprises. (The top managers generally own a great deal of stock in their companies.
2. Small capitalists, who own smaller business enterprises that employ many people.
3. Old middle class: self-employed professionals, artisans and shop keepers.
4. New middle class: middle managers and technical experts
5. Workers, including blue collar factory workers and white collar office and sales workers (such as store clerks).
6. The underclass of persistently unemployed people.
4. Changes in the class structure have undermined the revolutionary potential of the working class in three ways.
1. The wages and living standards of the old and new middle class is far higher than that of the members of the working class. So they have little immediate reason to join in a movement to create a revolution.
2. Members of the working class can hope that they or their children will get a good education and join the middle class.
1. Thus workers can expect to raise their standard of living through individual as well as collective efforts.
1. Although, in many cases, these individual efforts require collective support, in the form of public support for education.
2. This undermines the class feeling among workers and supports the individualism found in liberal democratic countries.
3. The living standards of workers have also increased due to their efforts to organized unions.
   
4. Governments in the liberal democratic capitalist countries have played a major role in raising the living standards of the working class. This occurs in a number of different ways:
1. Governments have moderated the business cycle.
1. Recessions and depressions are less frequent and less damaging due to government fiscal (taxing and spending) policy and monetary policy.
2. When recessions do occur, working people do not suffer as much due to such policies as unemployment insurance.
2. Governments public policies have enabled many members of the working class, or their children to get a good elementary, secondary or higher education and thus rise into other classes.
1. To some extent, however, these policies benefit members of the middle and capitalist class more than members of the working class.
1. Schools are worse in working class areas than in middle and capitalist class areas.
2. A much smaller proportion of the children of workers go on to college than children of members of the middle classes.
2. The largest proportion of state and local government spending goes to support education.
3. Government programs directly raise the living standards of workers.
1. Some of these programs are universal and benefit everyone. But, because they need the benefits more, workers are especially advantaged by them
1. The largest proportion of federal government spending on domestic affairs goes to these programs.
2. E.g.
1. Social Security
2. Medicare
2. Some government programs mainly benefit members of the working class
1. Governments have, at times, supported labor unions by regulating the organizing process.
2. Occupational health and safety regulations.
3. Some government programs benefit the lowest paid workers.
1. Minimum wage
1. This benefits all workers to some extent as since many companies want to pay some of their workers above the minimum wage rate so as to attract better workers.
2. Earned income tax credit, which reduces the amount of income tax paid by the lowest paid workers.
4. Still other government programs benefit the poorest members of the political community, many of whom do not work or do not work full time.
1. A relatively small percentage amount of federal spending goes to these programs—about 6% a large portion of which goes to Medicaid.
2. E.g.
1. Welfare
2. Food Stamps
3. Medicaid
3. Many people who receive benefits from these programs do work part-time or work off the books in order to continue to receive some government benefits, such as medicaid.
4. These program benefit lower paid workers/
1. Many workers rely on these programs when they are laid-off from work.
2. By reducing the number of unemployed workers looking for work, these programs can sometimes raise the wages of workers.
4. Government programs of these sort are enacted because of political pressure from different sources:
1. Some of them receive political support from everyone
1. Government management of the business cycle.
2. Most of these programs could not have been enacted without the political support from the working class and, in particular, from the labor movement.
3. Some of them receive political support from capitalists
1. Education, especially higher education, which increases the supply of skilled workers, who are especially needed by big businesses
2. Some, but not all, big businesses, have supported other social welfare programs designed to benefit the working class and poor as a way of reducing the threat of radical political movements.
1. This was more common in Europe than the United States, where social welfare programs were often supported by right wing political movements that adopted aristocratic ideals expressing concern for the whole nation.
1. Social welfare legislation in Prussia was originated by Bismarck.
2. Much social welfare legislation in Britain was initiated when the Conservative party under Benjamin Disraeli held power.
2. It was also more common earlier in the century then today, perhaps because the threat of radical political movements have declined.
3. Big businesses are much more likely to support these programs than small businesses because they have higher profits and thus can afford them.
5. Other, non-social class based factors have also hindered the development of, not only revolutionary political movements, but of left-wing political movements in general. Two have been particularly important in the United States.
1. Ethnic and racial conflicts have undermined the unity of the working class.
2. The two-party system in the United States prevented members of left-wing parties from getting into office, which, in turn, made it harder for people to recognize and respect left-wing political ideas.