No. 58, Sept. 2014
| A Middle-Class India?
I. Behind the Sudden Interest in India’s Middle Class
There has been a flood of studies in the last decade or so attempting to estimate the size of the middle class in India and other ‘emerging economies’; some venture to project its growth over the next few decades. Having ploughed our way through a number of these studies,17 we can make a few points about these studies and their agenda.
The virtues of the middle class
Directly to the contrary, though, other enthusiasts of the rising middle class note that “new consumerism”, not thrift, defines the present middle class: a constant “upscaling of lifestyle norms; the pervasiveness of conspicuous, status goods and of competition for acquiring them; and the growing disconnect between consumer desires and incomes”, which is bridged by consumer credit.23 This spendthrift, instant-gratification, attitude is nevertheless also considered a virtue: the “willingness of the middle class consumer to pay a little extra for quality” is “a force that encourages product differentiation and thereby feeds investment in production and marketing of new goods”.24
One economist even connects the growth of the middle class in India to the range of consumer durables available. In the pre-liberalization era, he complains, there was nothing to “aspire” for:
Evidently, it was only when liberalization dawned, and one could choose from a range of quality refrigerators, that it was worth the effort to raise oneself from semi-poverty to the middle class.
Undisguised class viewpoint
Indeed, the theme of the middle class seems to encourage writers to drop all their inhibitions and flaunt quite naked class prejudice. The Economist approvingly quotes Brazilian economist Eduardo Giannetti da Fonseca describing the middle class as “people who are not resigned to a life of poverty, who are prepared to make sacrifices to create a better life for themselves...” Ashok Lahiri, a former chief economic advisor to the Government of India, adds his own weight to this apathy theory of poverty: “While there is a sense of hopelessness and resignation among the extremely poor, the middle class is a more determined lot, ready to better themselves on their own through struggle as well as by educating their children...”
By and large, these sweeping historical and socio-psychological claims are merely asserted, and little effort is made to support them. True, a few writers passingly cite references to other works. The Asian Development Bank (ADB), for example, tells us that “Economic historians such as Adelman and Morris (1967) and Landes (1998), among others, have argued that the middle class was a driving force in the faster pace of economic development in the United Kingdom and continental Europe in the 19th century.” But they do not attempt any serious historical examination of the question.
Nor do the observed political activities and sympathies of vocal sections of the middle class in India, Ukraine, Venezuela, and elsewhere suggest that they necessarily “lean towards” democracy.In truth, when Goldman Sachs and the Economist use the term ‘democracy’, they do not mean representation of, and accountability to, the common people; they merely mean adherence to economic neoliberalism and US foreign policy. Any departure from these tenets is deemed anti-democratic. Thus the Economist obituary for Hugo Chávez, while grudgingly conceding his electoral success (“Chavismo turned out to be a remarkably successful formula: Mr Chávez won four elections by margins ranging from sweeping to comfortable and lost only one of his six referendums”), nevertheless terms his rule “populist autocracy”.29
Chávez’s “autocracy” consisted in the fact that he ignored the resistance of the propertied classes, as well as those under their influence, and attempted to redistribute some of the income from the country’s natural wealth to the working masses.30 The ADB study warns that, where the middle class is relatively small, demands for redistribution may arise: “... societies with a small middle class are generally extremely polarized, and find it difficult to reach consensus on economic issues; they are overly focused on the redistribution of resources between the elite and the impoverished masses...” (emphasis added)That ‘danger’ has been averted in India, argues E. Sridharan. He claims that the emergence of a middle class of 100-250 million during the 1980s and 1990s “changed India’s class structure from one characterized by a sharp contrast between a small elite and and a large impoverished mass, to one with a substantial intermediate class. The elite-mass cleavage tended to support a broadly socialistic ideology, while the elite-middle-mass differentiation has created a broader base for capitalism – hence the increased support for economic liberalization.”31
Whether or not the elite-mass cleavage has vanished, as these writers claim, they clearly wish that talk of the cleavage would vanish. Such talk impedes ‘economic liberalization,’ and may incite the impoverished masses to nurture dark designs of redistributing resources. Lahiri says the growth of the middle classes in India could have been stronger if it were not for the “urge to remove poverty here and now”, and the “obsession with inequality”. He admits that “there is undeniable force in the argument that the focus should be on the poorest of the poor.” But, he explains, the total sum required to be transferred in a country like India to raise the poor over the poverty line “may be too high to allow the government to maintain fiscal sustainability and macroeconomic balance.” Instead, “The meaningful transformation of India’s economic woes must focus more attention on the problems of the middle class.... This focus on policy impacts on the middle class offers a strategy that takes us away from an economy split between the poor and the rich....”
Class polarization and the middle class
Our epoch, the epoch of the bourgeoisie, possesses, however, this distinct feature: it has
Small tradespeople, shopkeepers, handicraftsmen and peasants made up the petty bourgeoisie. The petty bourgeoisie had some meagre means of production of their own, and relied mainly on their own labour power, including that of their families, with at most a few hired hands. No doubt these strata in the capitalist countries did shrink, as the Manifesto said, but new middle strata emerged, and grew. In the unfinished last chapter of Capital, vol. III, Marx observed that even in the most developed capitalist country of the time, England, “the stratification of classes does not appear in its pure form. Middle and intermediate strata even here obliterate lines of demarcation everywhere.”32 (Nor was the proletariat a homogenous mass: “infinite fragmentation of interest and rank into which the division of social labour splits labourers.”) Elsewhere Marx described how the further development of capitalism gave rise to the growth of a managerial class in industry, workers in the credit and banking system, and commercial wage workers for the “calculation of prices, bookkeeping, managing funds.”33 These sections lived by wage labour, but their labour embodied a higher level of education and training than that of the industrial working class. These were the ranks of what would later be called a “new middle class”.And yet Marx viewed these new phenomena as only further confirming his thesis of the principal social contradiction of capitalist society, between Capital and Labour. White collar workers too were merely skilled workers, whose labour-power would be depreciated with the progress of capitalist development (with the division of labour in offices, and as public education increased the supply of such labourers). Moreover, the fact that the “labour of superintendence” was being performed, not by the individual capitalist, but by a hired managerial class, laid bare the irrelevance of the capitalist to socialized production.34
Systematic ideological agenda
As James Petras points out, Bell’s theories were rapidly disproved by events: “the relative decline of manufacturing and the rise of the service industry did not lead to the growth of better paid white collar work for the children of the displaced industrial workers: the vast majority of the new service workers were poorly paid (averaging less than 60 per cent of the unionized factory workers income) and engaged in menial manual labor.” Moreover, the 1960s and early 1970s witnessed sharp class struggle from below in the US, and the 1980s witnessed sharp class struggle from above (as the ruling classes smashed the trade union movement).36 As for the US becoming a “middle-class society”, Thomas Piketty’s new book Capital in the Twenty-First Century has documented what the public instinctively felt from its own experience37: the extraordinary levels of inequality that prevail in the US and other developed countries, which have been steadily rising over the decades and hark back to the levels of the 1920s. Indeed, political commentators in the US now express the fear that the ‘middle class’ there is disappearing.38
The fact that the predictions made by Bell and others of his ilk proved false never became an impediment to the currency of those predictions. Instead these theories, repeated ad nauseam by television pundits and politicians, helped shape, and warp, working people’s conception of their own place in society. Thus in 2008 a Pew survey found that 91 per cent of people in the US considered themselves ‘middle class.’ Paul Krugman observes that
The terms used matter. Fred Magdoff and John Bellamy Foster point out that
The effort to portray ‘emerging market economies’ like India as increasingly middle class, then, is not merely wishful thinking on the part of neoliberal thinkers, but part of a systematic ideological agenda of long standing, an attempt to mould the thinking of the people. We shall return to this theme later in this article.
The middle class in the colonies and semi-colonies
Included in this category are the owner-peasants [middle peasants], the master handicraftsmen, the lower levels of the intellectuals – students, primary and secondary school teachers, lower government functionaries, office clerks, small lawyers – and the small traders. Both because of its size and class character, this class deserves very close attention.
In this definition, Mao combined those labouring sections who owned their own means of production and those whose labour power embodied some higher level of education. Further, he divided the petty bourgeoisie into three wings, depending on their economic status: the “right wing” was able to retain more than it consumed, and dreamt of becoming rich; a numerous middle section stayed afloat by working ever longer and harder; and a “left wing” saw its standard of living sliding despite its efforts. When the revolutionary tide ran high, he declared, the middle section might join the left wing in revolutionary struggle, and even the right wing would have to go along.
The role of the peasantry in the Chinese revolution is well known; in the context of the present discussion, we need to note the role of other sections of the petty bourgeoisie. Notably, the May 4th Movement of 1919, initiated by students, awakened a nationwide anti-imperialist upsurge and marked a new stage in China’s revolution. Some of the future founders of the Communist Party of China (CPC) emerged as leaders during this movement.
Chinese society, then, was not polarized into “two great classes” of Bourgeoisie and Proletariat; rather, it comprised several classes, including what would be called “middle classes.” But the middle classes of China failed to act as a bulwark against revolution. China did indeed split into “two great hostile camps,” but a sizeable section of the middle classes joined the revolutionary camp, and contributed to its victory. Apart from the difference in the quality of political leadership of the two camps, the deteriorating objective conditions of the middle classes in China of the time must have played a role in this outcome.
Against this background, let us return to the studies on the middle class of India, its growth and implications.
17. A list of studies reviewed is given at end of the article. (back)
18. A century ago, Max Weber argued that Protestantism played a crucial role in the early development of capitalism in northern Europe: he claimed it motivated its followers to work hard, to delay the gratification of their wants and thereby (in the case of capitalists) to reinvest profits in expanding their businesses. Present-day writers echo some of Weber’s terms but reverse the causal order of his theory: now simply enjoying a higher income makes the middle class the motor of progress and a boon to society. (back)
19. Economist, “Burgeoning bourgeoisie”. (back)
20. Economist, “Two billion more bourgeois”. (back)
21. Kharas, “The Emerging Middle Class.” (back)
22. Bhalla, Second among Equals, p. 94. He explains: “given the [middle class’s] belief in meritocracy, as well as ways of getting ahead the old fashioned way, the middle class should help engineer growth by being at the forefront of innovation, and adoption of advances in technology, regardless of whether this technology was foreign owned or domestic. Middle class should be associated with increased openness, increased foreign trade etc.... if anything defines the middle class, it is its higher propensity to save and invest. This higher savings leads to higher investment, and the middle class tries to ensure that the growth is efficient. The virtuous cycle continues, savings increase further, as does investment and GDP growth.” (pp. 106-7) (back)
23. Juliet Schor, “The New Politics of Consumption”, Boston Review, 1999, cited in Kharas, op. cit. (back)
24. K.M. Murphy, A. Shleifer and R. Vishny, “Income Distribution, Market Size, and Industrialization.” The Quarterly Journal of Economics, 1989, cited in Kharas, op. cit.. (back)
25. Lahiri, op. cit. (back)
26. Sanjaya Baru, Strategic Consequences of India’s Economic Performance, 2006. (back)
27. Bhalla, op. cit., p. 97. (back)
28. Indeed, certain American sociologists promoted the theory that fascism is a middle class phenomenon. This theory, however, shifted the responsibility for fascism from the capitalists, who had backed Hitler and Mussolini as a method of crushing the communists and the labour movement. See Val Burris, “The Discovery of the New Middle Classes”, http://darkwing.uoregon.edu/~vburris/discovery.pdf. (back)
29. http://www.economist.com/news/leaders/21573106-appeal-populist-autocracy-has-been-weakened-not-extinguished-hugo-ch%C3%A1vezs-rotten. The Economist depicts Chávez’s bonds with the Venezuelan masses as sinister: “Born in provincial obscurity, he proved to be a natural performer and communicator, with an unmatched ability to empathise with ordinary Venezuelans, combined with plenty of cunning.” (back)
30. The World Bank acknowledges that “Today the median voter in most developing countries is unlikely to be a member of the middle class, which may help explain why some studies find a negative relationship between pro-market policies of the incumbent party and its performance at the ballot-box.” (World Bank, Global Economic Prospects: Managing the Next Wave of Globalization, 2007, p. 105.) In plain English: since most people in developing countries are poor, they tend to vote out of office those who pursue neo-liberal policies. (back)
31. At the same time, in Sridharan’s view, two sections of what he calls the middle class, namely, public sector employees and the better-off agrarian classes, “have interests that militate against fiscal stabilization. They tend to oppose measures such as downsizing, public sector wage restraint, and central and state-level desubsidization [fertilizer, electricity, water and credit], as well as structural changes like privatization.... [T]he sheer weight of public employees and publicly subsidized agriculturists in this economic category have served to constrain the progress of certain types of economic reforms.” (back)
32. Capital, vol. III, Chapter 52. Similarly, Engels pointed out that even in England it was not true that “capitalist production has been everywhere completely established, society reduced to the modern classes of landowners, capitalists (industrialists and merchants) and workers – all intermediate stages, however, having been got rid of.” Engels, letter to Conrad Schmidt, 1895, https://www.marxists.org/archive/marx/works/1895/letters/95_03_12.htm. Engels had also used the term “middle-class” in a different sense in his earlier work, The Condition of the Working Class in England (1844): there he used the term to mean the capitalists, who were by then in fact the ruling class. (For the petty bourgeoisie, he used the term “lower middle-class” or “petty middle-class”.) Here we are not concerned with this usage. (back)
33. Capital, vol. III, Chapter 23, Chapter 17. (back)
34. While Marx did not complete his definition of ‘class’, Lenin distilled the essence of Marx’s usage thus: “Classes are large groups of people differing from each other by the place they occupy in a historically determined system of social production, by their relation in most cases fixed and formulated in law to the means of production, by their role in the social organization of labour, and, consequently, by the dimensions of the share of social wealth of which they dispose and the mode of acquiring it. Classes are groups of people, one of which can appropriate the labour of another owing to the different places they occupy in a definite system of social economy.” “A Great Beginning”, 1919. https://www.marxists.org/archive/lenin/works/1919/jun/19.htm (back)
35. Cited in Val Burris, op. cit. (back)
37. Note that the popular slogan of Occupy Wall Street, attacking the “one per cent” that ruled society, preceded the publication of Piketty’s book. (back)
38. For example: Karin Kamp, “By the numbers: The incredibly shrinking American middle class”, Moyers and Company, 20/9/13, http://billmoyers.com/2013/09/20/by-the-numbers-the-incredibly-shrinking-american-middle-class/; Joel Kotkin, “In the future we’ll all be renters: America’s disappearing middle class”, The Daily Beast, 10/8/14, http://www.thedailybeast.com/articles/2014/08/10/in-the-future-we-ll-all-be-renters-america-s-disappearing-middle-class.html; Tami Luhby, “America’s disappearing middle class”, January 28, 2014, CNN Money, http://economy.money.cnn.com/2014/01/28/middle-class/; Nelson D. Schwartz, “The middle class is steadily eroding. Just ask the business world”, New York Times, February 2, 2014. (back)
39. Paul Krugman, “Redefining the Middle Class”, New York Times, February 14, 2014, http://truth-out.org/opinion/item/21841-paul-krugman-redefining-the-middle-class (back)
40. Fred Magdoff and John Bellamy Foster, “Class War and Labor’s Declining Share”, Monthly Review, March 2013, http://monthlyreview.org/2013/03/01/class-war-and-labors-declining-share. (back)
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