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Sunday, June 12, 2011

Chris Dillow: The Importance of Class

What do you think of Chris Dillow's ideas on class, power, and ideology?

Class, power & ideology, Stumbling and Mumbling: “Nothing makes sense without class” says Owen Jones. He’s right, if we understand “class“ in its Marxist sense.

To Marx - though the idea was implicit in other classical economists such as Ricardo - class was not about lifestyle, but about one’s relationship to the economy. If your income comes from wages, you’re working class. If it comes from capital, you’re a capitalist.

You might reply that, by this criterion, we are almost all working class now. True. Even people who think of themselves as “middle class” are in many cases only a P45 away from poverty. They are objectively working class even if they are not subjectively so.

In this sense, Marx was right to predict that capitalism would produce an increase in the numbers of the working class. Remember, 200 years ago the yeoman farmer, the master craftsman, or the comfortably off idle wife were all significant social roles. They are, I suspect, less significant now.

What’s more, class in this sense is correlated with power: capitalists have it, workers don‘t*. This is because economic power flows to scarce resources and capital is scarcer than labor.

This perspective yields answers to three key questions which cannot be answered without the concepts of class and power:

  • why has inequality increased since the 1980s? It’s because a mix of technical change and the emergence of a mass supply of cheap labor from China and India have increased the power of capital relative to labor.
  • why is the pain of deficit reduction falling upon public sector workers and benefit claimants rather than the “rich”? It’s because the “rich” have power and workers and benefit claimants don’t.
  • why did the state bail out bankers but not ordinary workers who lost their jobs? It’s because bankers have power - though the precise source of this is another question.

This raises the question. If class is so central to an understanding of the economy, why is it so little discussed?

The answer lies in another of Marx’s insights - that false consciousness prevents people from seeing how capitalist power operates. In this sense, the cognitive biases research program throws up some new theories that vindicate Marx. For example:

  • the illusion of control causes people to over-estimate the chances of them escaping the working class through their own efforts, and so under-estimate the importance of collective class action .
  • the in-group heterogeneity bias (which is the flipside of the out-group homogeneity bias) causes people in similar economic positions to exaggerate the differences between themselves and so fail to see their common class position.
  • the just world effect causes people to think that victims are to blame for their fate - so, for example, the poor are thought to be stupid and feckless even if the cause of their poverty lies elsewhere.
  • the optimism bias leads people to think they will succeed if only they work hard enough, and so blinds them to the possibility that their class position will prevent them getting the full fruits of their labour.

And here, I part company with Owen. We cannot have a reasonable debate about class, because cognitive biases such as these are ubiquitous. Successful power structures persist in large part because the way in which power is exercised is hidden from us. The importance of class and the lack of discussion of it are two sides of the same fact.

* I’m simplifying horribly here. Many workers - most obviously the bosses who control firms owned by external shareholders - do have power. I’ll leave this for another time, as I don‘t think it much affects the main thrust of my point.

    Posted by on Sunday, June 12, 2011 at 11:07 AM in Economics, Politics | Permalink  Comments (59)

          


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