why the left doesn't care about the poor. Why that's a good thing.

In the TLS, Paul Collier has penned a review of some left leaning economics books that contains an exemplary rightwing view of what left wing economics is all about. The key sentence is here:

“In thinking coherently about capitalism, a helpful starting place is to ask yourself: why are poor people poor?”

Brandishing this question, Collier proceeds to find the left wing answer inadequate, and offers his own critique of financialized capitalism.

However, for a left winger, this is certainly not a helpful starting place to plunge into an analysis of capitalism. It hasn’t been a helpful starting place since Karl Marx, in 1842, starting reading the French radicals and discovered the economic and sociological category of “class”. Such is the amnesia that has befallen contemporary liberal and lefty-leaning groups, who’ve inherited all the shit of the Third way movement of the 80s and 90s, that they have forgotten their own history, and might well fight Collier over the best way to ‘help’ the ‘poor’. For the better two thirds of the twentieth century, however, leftists would have laughed at this starting point. These thinkers, activists and politicians knew full well that Marx was right, at least about this point. In fact, they asked a much different question, at least outside of the Soviet bloc. That question went: can a system based on the exploitation of the worker be so modified that the level of exploitation goes down, even as the system becomes global?

From this vantage point, we can derive another question: why are the middle class people middle class? A question tentatively answered by Karl Polanyi when he pointed out that the classical liberal consensus broke down in the twentieth century as the state became a very large actor in the creation of the economy. In the US, with the New Deal and the Great Society; in France, with the dirigiste regime; in the UK, with the welfare system; in Scandinavia, with a combination of strong unions and the socialist parties. During this time, state intervention, which included massive public employment, enlarged the middle class beyond all recognition. What had once been a class mainly of professionals, administrators and other actors in the sphere of distribution (workers who, as Marx put it, performed non-productive labor) was now flooded with new members, not all of whom shared the same middle class values, but all of whom shared the aspiration for a middle class life style.

Who paid for this? Capital. The state, by its regulations, its taxation, and its support of labor’s bargaining power, hoisted the middle class on the neck of the capitalists.

There are many reasons this period did not last. Suffice it to say that the middle class era is ending, with the middle class life style now an uncertain matter, and the financialization of households a new phenomenon. It is not a phenomenon that Marx foresaw, but it is fascinating. Marx did believe that under pure capitalism, the level of exploitation would go up until the worker owned nothing. This hasn’t exactly happened. Rather, the level of exploitation and the level of financialization have worked in tandem to this goal. In 2004, the OECD published a report on the indebtedness of American households, divided by income. Those households that made below 64,000 dollars – in other words, the middle class – owed, at that point, approximately 238 percent more than they earned. St. Paul is right: in this world, we must see as though in a glass, darkly. Thus, the period of the “ownership” society under Bush was the period of peak non-ownership. As the crash showed in 2008 up until now, these figures aren’t abstract. Many millions of middle class people literally own nothing. If you sell their main asset, the house, they will only get what they paid for it or less.

Are these the “poor”? By no means. But the left is concerned with classes – the poor are not a class, but a description that doesn’t place their members in the real, capitalist economy. As Marx discovered in 1842, the poor is not the correct description of the working class. It turns a sociological category into an object of charity. The disappearance of the working class as a category, and the substitution of the term “poor”, is an example of Third way and right wing trolling.

Don’t fall for it.