The New Global Class War

In The Communist Manifesto, Marx and Engels warned that the ‘spectre’ of class war loomed over a rapidly industrialising capitalist world. Today, the neoliberal world is increasingly haunted by a similar spectre, this time of a global class conflict.

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The Democrats’ False Victory

For all their cautious optimism earlier this week, a mild Midterms victory may prove the last thing the Democrats need. If they had performed as predicted, the Democrats and their media adjuncts would now be busily dissecting their defeat. But what has to be considered a lost Republican opportunity — gaining little in a country where lifespans are now dropping — also means that the Democrats will be slower to address their weaknesses, and may be forced to accept the unpopular Joe Biden as their leader in 2024.

With no sign of a Republican resurgence, the Democrats will likely be lulled into thinking that Biden’s polarising agenda is a vote-winner, in the same way the conspiracy-minded MAGA wing of the GOP refuses to move on from 2020. Until it’s resoundingly disproved in the ballot box, stridency tends to whip up your base: Trump’s supporters have become, as the President suggested, “semi-fascist”, while his political mentor, South Carolina’s James Clyburn, goes further, decrying the GOP as the architects of a Nazi state.

When Democrats performed poorly in the past, they were forced to rethink their politics. After Walter Mondale suffered a landslide defeat to Reagan in 1984, the Democratic Leadership Council was set up to steer the ship towards the centre — and ultimately supported both a young Bill Clinton and, to an extent, Biden himself. In turn, the DLC was inspired by the moderate Coalition for a Democratic Majority, founded after Nixon’s trouncing of McGovern in 1972. Today, however, it’s hard to say that now is the time for a new political vision when virtually all the high-profile blue state Democrats won, sometimes by wider than expected margins.

So, rather than using the next two years to regroup and craft a political programme that could win the next election, the Democrats now appear stuck with a weak leader who appears unfit to deal with the global challenges that will define America in the coming decade. Internally, too, the Democrats look increasingly unstable. A stronger-than-expected Midterms performance doesn’t mask the fact that the progressives remain a dominant faction in the party — with an associated agenda that, outside of deep blue-college towns and core cities, commands remarkably low levels of support, as Barack Obama and others have warned.

Sticking to such a programme threatens the party’s already weakening hold on working-class voters, in particular those threatened by climate policies. Over time, the economic implications of Biden’s green agenda may be obvious, but for now they are hidden amid massive deficits and increased transfer payments. However, as Democratic strategist Ruy Teixeira has noted, in the longer run, the party’s emphasis on “de-growth” and austerity is unlikely to attract middle and particularly working-class voters. Already, the political implications of climate policy have ruined the Democrats’ best chance to take the GOP seat in Ohio. Their candidate Tim Ryan may have claimed to support fracking, but his backing of the Pelosi Congressional agenda proved disastrous in a state whose economy is fueled by natural gas production and hopes to attract new investment, including a possible $20 billion new Intel chip plant in the Columbus suburbs. In Florida, meanwhile, Ron DeSantis won heavily in Latino, historically Democratic regions.

Read the rest of this piece at UnHerd.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo credit: Gage Skidmore via Flickr under CC 2.0 License.

West Coast Blues

Few regions have been more consistently Democratic than the West Coast. Even compared with the Northeast, where Republicans occasionally win governors’ offices, the appropriately named “left coast” has been adamantine in its progressivism. Republicans haven’t won statewide office in California in years; in Oregon, it’s decades. Washington has elected a Republican secretary of state, but she now serves in the Biden administration. And the region’s major cities are overwhelmingly blue.

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Is America Entering a New Age of Democratic Capitalism?

Most everyone outside the Biden administration knows that a recession is now more than likely. We could be entering what economist Noriel Roubini describes as the “Great Stagflation: an era of high inflation, low growth, high debt and the potential for severe recessions.” Certainly, weak growth numbers, declining rates of labor participation and productivity rates falling at the fastest rate in a half century are not harbingers of happy times.

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Our Mad Aristos

In the past, ruling classes sought to protect the system that secured their coveted positions. But sometimes, as in the era before the French or Russian Revolutions, some in the ruling circles stopped believing in their religion, their traditions, and their state, only to be exiled, executed, or turned into what the Soviets called “former persons.”

Like our current elites, many French aristocrats lived dissolute lives but also supported revolutionary ideas which threatened “their own rights and even their existence,” as Alexis de Tocqueville noted. Today a large, even dominant portion of the wealthiest and most privileged parts of our society—including the heirs of nasty capitalist titans such as Henry Ford or John D. Rockefeller—are key funders of an increasingly anti-capitalist left. Others are still young tech billionaires and—increasingly—their discarded or former spouses.

This elite has arisen at a time when, as in France before 1789, inheritance is becoming ever more important as a vehicle for upward mobility, which is otherwise increasingly remote for most of the population. Home ownership among middle income Americans, for example, the primary means for asset accumulation for the non-rich, has dropped by over 8 percent in the past decade, while the wealthy have garnered the greatest gain from increased housing prices. American millennials are three times as likely as boomers to count on inheritance for their retirement. Among the youngest cohort, those ages 18 to 22, over 60 percent see inheritance as their primary source of sustenance as they age.

To be sure there will be a lot of wealth channeled to the offspring of the affluent. The consulting firm Accenture projects that the Silent Generation and baby boomers will gift their heirs up to $30 trillion by 2030, and up to $75 trillion by 2060. But this will benefit only a relatively small group, given the intense concentration of assets in ever fewer hands, with the top 1 percent in the U.S. increasing their share by roughly 50 percent since 2002. The class implications of this process are profound. There are over 70 million millennials in the U.S., and fewer than 1 percent of them are millionaires, while the median millennial household earns around $40,500, 20 percent less than boomers at the same stage of life.

The Great Disconnect

Given this vast wealth, we might expect a ruling class with a strong desire to protect capitalist accumulation. But instead, we have one that almost invariably, and perhaps suicidally, adopts progressive positions. Figuring out the psychological personal motivations of this impulse is way above my pay grade, but the economic underpinnings are fairly clear. The elites on Wall Street, and even more so in Silicon Valley, emerged from a highly competitive economy that impressed even leftists. At the Occupy Wall Street protests in 2011, anti-capitalist demonstrators held moments of silence and prayer for the memory of Steve Jobs, a particularly aggressive capitalist. One progressive writer, David Callahan, portrays the tech oligarchs, along with their allies in the financial sector, as a kind of “benign plutocracy” in contrast to those who built their fortunes on resource extraction, manufacturing, and material consumption.

Yet the tech elite today, as well as their Wall Street allies, no longer resemble the entrepreneurs of the past. The masters of our increasingly “woke” corporate elites are, for the most part, now second-generation bureaucrats presiding over the wealthiest, most pervasive monopolies on the plant. Controlling 90 percent of a market like search (Google), operating system software (Microsoft), dominating the cloud and on-line retail (Amazon) or 90 percent of phones (Google and Apple) does not turn executives into-risk takers but acquirers. Three tech firms now account as well for two-thirds of all on-line advertising revenues, which now represent the vast majority of all ad sales. Once paragons of entrepreneurial vigor, these firms, as Mike Lind has noted, have morphed into exemplars of “tollbooth capitalism,” which receive revenues on transactions that far exceed anything they lose in failed ventures and acquisitions.

Read the rest of this piece at American Mind.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: America’s New Aristocracy by Alan, via Flickr under CC 2.0 License.

There’s Nothing Progressive About a Universal Basic Income

‘Capitalists will sell us the rope with which we will hang them.’ This colourful quote, sometimes attributed to Lenin, could well apply to the many free-market ideologues and tech oligarchs in the US, who are now pushing for increased welfare payouts and even a universal basic income (UBI). Through the expansion of welfarism at the expense of work, these capitalists could well be hastening the decline of the very economic system they profess to support.

Even devoted free-market advocates, like former senator Phil Gramm and economist John Early, now argue that increased welfare payouts, or ‘income transfer payments’, should be championed to reduce inequality in the US.

The welfarist solution may reduce income inequality on paper. But it does nothing to address the far more pernicious problems caused by the rapid concentration of assets in ever fewer hands. The top one per cent in the US has increased its share of assets by roughly 26 per cent since 2002.

There are further consequences to the expansion of welfare and the devaluation of work. It changes people’s character. The income you earn is empowering, whereas the dole nurtures dependence. Increasingly, the aspirational side of capitalism is being squelched by the rollout of ever more benefits.

Supporters of welfarism can point to the experience of Covid-19, when emergency pandemic aid cut poverty substantially in the US. But the Covid subsidy regime has not been a rollicking success for most. Indeed, for the past year, wages have grown, but not nearly as much as inflation.

One widely cited reason for the recent labour shortages relates to a post-pandemic reluctance to take low wages, or jobs in the ‘gig’ economy, where pay and hours are often uncertain. Indeed, according to one UK account, self-employment and gig work do not provide sustenance for anything like a middle-class lifestyle. Many jobs that could support families have disappeared, and so too has the motivation to work.

Under such conditions, what Karl Marx called the ‘reserve army of the unemployed’ is simply disengaging from the economy. Male labour-participation rates have fallen from over 80 per cent in 1950 to 68 per cent today. Almost one-third of American working-age males are not in the labour force, and are suffering from high rates of incarceration, drug, alcohol and other health issues.

This withdrawal from the labour force is happening amid a demographic downturn in the high-income world. The proportion of the US population aged between 16 and 64 grew by 21 per cent during the 1980s. During the 2010s, it grew by less than five per cent. The EU and East Asia are suffering even stronger declines in their working-age populations.

Read the rest of this piece at Spiked.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: Chart developed using data from ACS poverty statistics, via Wikimedia under CC by SA 4.0 License.

Three Paths to Despotism

“Democracy is at stake,” US President Biden told a gathering of Democratic Party governors on September 28th. His warning about the global spread of illiberalism followed the stunning gains made by populist parties in Sweden and Italy, the latter of which he mentioned directly. “We can’t be sanguine about what’s happening here either,” he added. Biden has already called much of his own domestic opposition “semi-fascist,” and fears of anti-democratic violence remain following the storming of the US Capitol on January 6th, 2020, by rioters attempting to overturn his own election.

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The Revenge of the Material Economy

America’s narrow escape last week from a major rail-worker strike brought home an important truth: people who make and ship real things – let’s call them material workers – now hold the whip hand over our supposedly ‘post-industrial’ economy. Firms trading non-tangibles – currency, bits and bots – may still hoard the most cash. But when it comes to eating, staying warm and, for many, making a living, the material economy is what matters most.

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The Fall of Los Angeles

For much of the 20th century, Los Angeles symbolised the future. Over the course of the century, the population grew 40-fold to nearly four million people.

But now, for the first time in its history, the population of Los Angeles is in decline, falling by 204,000 between July 2020 and July 2021. LA was once a magnet for investors. But recently many of the area’s corporate linchpins – including aerospace giant Northrop Grumman, Occidental Petroleum and Hilton Hotels – have left, taking with them high-paying jobs and philanthropic resources.

Worse still, conditions in LA today are bordering on the medieval. Anyone visiting some of the most famous districts of urban Los Angeles – notably downtown, Hollywood and Venice Beach – sees clear signs of destitution, including sprawling homeless encampments, vast numbers of people living in vehicles and rampant crime. Last year, a UN official compared conditions on LA’s Skid Row, a poor downtown neighbourhood, to those of Syrian refugee camps. Smash-and-grab thefts at local 7-Elevens and the persistent theft of goods from railyards suggest this is a city that has lost control to the modern version of lawless highwaymen.

So-called progressives have long dreamed of transforming the famously sprawled Los Angeles into a dense, transit-oriented, sun-kissed version of New York. But despite massive corporate and government investment, attempts to do this have failed. Rather than a vibrant hipster paradise, LA’s urban core is dominated by the homeless, the poor, government workers and a few creative types – making for an odd juxtaposition of homeless camps and low-rent hotels alongside high-end restaurants and artists’ lofts. Meanwhile, newly built luxury apartments have suffered vacancy rates as high as 14 per cent – remarkable in a city so short of housing.

Unsurprisingly, some Angelenos have sought to reverse this disastrous course. Earlier this year, disgruntled residents united around property developer Rick Caruso in his insurgent campaign to become mayor of Los Angeles. Caruso spent over $24million of his own money on the first round of the election in June.

Caruso is the grandson of Italian immigrants, whose father founded the successful LA business, Dollar Rent a Car. And he has himself been a big player in California for years. His real-estate business, founded in 1987, is now worth more than $4 billion. Caruso has built shopping centres all over the metropolitan area, from the iconic Farmer’s Market and middle-class San Fernando Valley to the swanky Pacific Palisades. Yet Caruso’s mayoral bid appears to have stalled against the well-organised might of the city’s public-employee-driven political machine.

This is a powerful machine. Last month, a grassroots movement opposing progressive criminal-justice reform lost its attempt to recall district attorney George Gascón, who has been widely blamed for LA’s lax approach to crime. Recall proponents needed 566,857 signatures, but despite collecting 715,000, only about 520,000 turned out to be valid. Thanks to the machine’s backing, Gascón’s recall bid failed, even though the city last year experienced 397 murders – up 11.8 per cent from the 355 the previous year, and a 53.9 per cent increase from the 258 in the pre-pandemic year of 2019.

Read the rest of this piece at Spiked.


Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and Executive Director for Urban Reform Institute. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: Basil D Soufi via Wikimedia under CC 3.0 License.

Class Homicide

There’s much talk today, from left and right, about threats to democracy, yet little focus on the social dynamic critical to its survival. In this respect, we may see the current, and troubling, escalation of violent political rhetoric, and even political violence, not so much as the cause of polarization but the result of changing class dynamics, most notably the increasingly perilous state of the yeoman middle class.

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