Some people insist that there is still a working class. For example,
Capitalists are those who obtain a majority of their incomes from capital (interest, dividends, capital gains, profits).
Workers are those who can reasonably expect to get a majority of their income in their lifetimes from wages, salaries, piece-work, or contract labor (1099 workers).
I am not convinced. This amounts to saying that class is determined by IRS regulations and arbitrary accounting conventions. It has very little relationship to how an economist would think about the source of income. For example, think of a doctor. To an economist, the designation of the doctor as “capitalist” or “worker” depends primarily on whether you count the doctor’s investment in medical school as an acquisition of (human) capital. Instead, if we follow the commenter’s approach, it depends on whether the doctor’s medical practice pays compensation in the form of salary or profits.
Moreover, it has very little relationship to how sociologists think of class. The “working class” will include workers with high autonomy as well as low autonomy. It will include workers with high social status and low social status. It becomes worthless as a way of predicting anything else about the person’s outlook, tastes, or norms of behavior.
On mental transaction costs, someone wrote,
There are plenty of counterpoints to this mental transaction costs model. Places where the number of choices and costs have proliferated. Fast food, and restaurants, for example. Most places offer a far larger selection with different prices than they used to. Upsize your fries or not, etc.?
I should have defined mental transaction costs more precisely. They are the costs that you incur when price is introduced as a consideration that otherwise could have been avoided. It is not a proliferation of choices, per se. Speaking of fast food restaurants, why don’t they charge for ketchup, or napkins? Why do they have three drink sizes, instead of charging by the ounce? I assume that mental transaction costs are a factor.
Like pornography, “you know working class when you see it.”
Nobody would call a doctor working class, so this is a disingenuous example.
How about an accounts payable clerk that gets payed $20/hour. They are “white collar” and work in an office, but I think the commentator is getting at something when he refers to them as working class. The accounts payable clerk has more in common with a factory worker making hourly wages then they do with a doctor. A lot of the people that used to be in factories moved on to working service sector jobs that we would still consider working class.
I think by definition working class implies mid/low autonomy and mid/low status. You take orders from somebody. Probably the highest status that people sometimes call working class are independent tradesmen, but even there we are starting to get away from the definition (they are their own boss) and higher wage rates (though nowhere near professional labor like a doctor). One of the defining features of better earning members of the working class is a status mismatch between earnings and social standing.
There was always a distinction for the professional classes.
But the autonomy piece – there are always high and low autonomy working class. Those in factories, those who are self-employed (trades outside the unions, especially).
I would define mental transaction costs as being objective, not subjective. Deciding if you are hungry enough to want larger fries, or if you want a Big Mac instead of quarter pounder requires no extra thought other than what you want. Deciding between 2 medical procedures requires knowledge that most people don’t have. That is not to say they could not acquire it, but that would require effort. I personally like this explanation, it makes sense and can be applied to other big purchases (e.g. Consumer Reports for cars).
I think the definition is workable. It has nothing to do with arbitrary IRS definitions or accounting conventions.
The typical accounts payable clerk has little hope of ever deriving significant income from capital investments: the bulk of the clerk’s income will always be from labor. The rich have the bulk – not necessarily all – of their income from capital investments. But, in between, there is a “middle class”, who derive a significant amount of income from capital investments, but who need to work to sustain their lifestyle. The doctor, lawyer, and many small business owners fall in this category – as may the enterprising tradesperson.
This corresponds nicely with the intuitive idea of a “working class” (needs to work), a “rich class” (does not need to work), and a “professional class” (lives like someone of wealth, but needs to work to do it).
On “working class,” the American Sociology Association last year formed a “Task Force on First Generation and Working Class People in Sociology” among whose charges included developing a working definition of “working class.” Nevertheless, a search of the term on their site turns up numerous usages. http://www.asanet.org/search/working%20class
From what I can tell, in sociology, traditionally a standard social hierarchy consists of three main classes – upper, middle, and lower – each of which has subdivision. The “lower class” is divided into a “working class” and an “underclass.” Not sure why this would no longer be considered useful set of classifications.
But apparently the resistance to its use implies some need for a different arrangement.
Bryan Caplan, for example, uses the term “low-skilled,” as in:
“Are low-skilled Americans the master race? . . . Economists are used to rolling their eyes when people object to better policies on the grounds that some special interest will suffer from the change. It’s time to cross the final frontier, and start rolling our eyes when the special interest is low-skilled Americans.”
Not sure how “low-skilled” would be defined or if it would overlap with most people’s conceptions of “working class” but it does strip away some of the dignity associated
“working” which apparently is a plus in some people’s minds. Not sure whether “low-skilled” is more or less condescending and mean than simply “deplorable” but at least it lacks the racial connotations of the latter.
And perhaps the upper classes feel threatened or denigrated by the use of “working” to designate a class other than themselves? I imagine reactionaries like Caplan probably feel hurt inside that someone suggests that his heavy teaching and writing schedule might not be considered “work” as well. “Low-skilled” makes him feel better because that implies he is high-skilled and high is better than low.
The question then is what would a useful term be to denote employed individuals of less than average income and conversely those of above average income?
In general, aggregating tends to blur more than it illuminates, so it might be best to adopt something like the Vedic social hierarchy which provides for thousands of distinctions. At the grossest level of aggregation there are the Varna and non-Varna. Varna are Brahmins (priests), Kshatriyas (government), Vaishya (artisans, traders, merchants, and farmers) and Shudra (laborers) and the non-Varna are the tribal people and untouchables. Then there Jati designations, thousands of complex social groups in which assortative mating occurs. This would be particularly useful in the US especially if educational affiliations were incorporated.
Bryan Caplan a reactionary? Seriously, dude?
The only way I can see that is a mental process that goes something like
1) Libertarians are extreme;
2) Libertarians are on the right;
3) Reactionaries are extreme right-wingers;
4) Caplan is a libertarian;
5) Therefore, Caplan is a reactionary.
Using similar logic, I could call Stalin an anarchist. That would be equally ridiculous.
Speaking of fast food restaurants, why don’t they charge for ketchup, or napkins? Why do they have three drink sizes, instead of charging by the ounce?
The restaurants need queue stability so they can order the standard set of cups and napkins. Limit consumer choices and they are forced into one of three congested cup size queues. The restaurant manager can observe queues sizes, buy early and never gets stuck with an unused stack of cups in the fourth size. The restaurant may simply not have enough cup flow to support four sizes and easily notices the extra inventory costs of doing so.
What all those political commentators and analysts and social scientists using “white working class” are really trying to say is “low class whites ” or “white proles”, but they can’t say that, because it’s derogatory and rude. So they need a more polite, if inaccurate, alternative.
The “working” in “working class” was always a euphemistic and dignity-providing way to describe that lower social class that was at the low end of middle class in terms of education, income, social status, manners, preferences, and habits, in what were typically “union labor” type occupations, but to distinguish them from the genuinely low class of lumpenprole which was once called poor trash but now more politely referred to as “underclass”. The “working” tier held down regular jobs and kept to more disciplined behaviors and routines, e.g., raising stable nuclear families.
“Working” was perceived as dignified enough that it had a good overlap with regular “middle class”, which is a famously broad category in terms of the way Americans identify themselves, as opposed to the more fine-grained class distinctions of traditional British society.
But the terms haven’t kept up with the times and changing culture, economy, and distribution of tasks and class markers in the contemporary labor force. Now men between, say, the 10-25th SES percentiles are less likely to hold down stay work and raise stable nuclear families. Still, we call them “working” to avoid calling them nastier things.
1. Peter Drucker’s old article “Rise and fall of the blue collar worker” comes to mind as I read these comments. He especially was addressing well paid low-skill union jobs in heavy industry, as opposed to jobs in the skilled trades.
2. Also Paul Fussell’s book _Class_, which is still worth reading.
As I recall, Fussell suggested 9 classes (based on status):
Top out of Sight
Upper
Upper Middle
Lower Middle
High Prole
Mid Prole
Low Prole
Destitute
Bottom out of Sight
I’m hoping some of Arnold’s delightful readers are familiar with the late Paul Fussell. His Wikipedia entry is pretty good.
Does anyone seriously believe that an accounts payable clerk making $20.00 an hour is in the same class as someone working an “unskilled” job on the floor of a beef processing plant on the high plains? Because of Marxian analysis on the worker’s relationship to the means of production?
When we’re talking about clerk being a native English speaker, phenotypically white, maybe with a college education, and the person in the meatpacking plant just got here from Burma or Somalia or Oaxaca Mexico and is living in Garden City, Kansas? The notion of “danger” and “dirtiness” have to come up at some point. As well as isolation and other options.
3. This article is still available, fortunately. The author’s tone and attitude are hard to characterize–part pride, part gratitude, part something.
https://www.lewrockwell.com/2009/01/karen-de-coster/i-escaped-life-in-an-auto-plant/
By this definition, most investment bankers would be “workers”, since they get most of their money through salaries. Since their daily work involves deploying capital, and they can be well into the 1%, I think they have to be considered capitalists.
Here’s a better argument against this definition:
If you make much more money than you need to survive, then the distinction between whether you make most of your income from capital, or from salary, is actually just a question of how much money you save. An investment banker who makes a $1 million salary but spends it all every year and never saves anything will never make anything from capital, and end up making all of their income from salary. That same investment banker who invests 90% of their paycheck, by the midpoint of their career they will probably be making more from capital. But it doesn’t really make sense to call someone a “capitalist” versus a “worker” based on their tendency to save versus invest.
Since this is a kind of ‘miscellaneous comments’ post, I’d like to reply to Fielding on the Health Care Prices and Quantities post.
Fielding said:
Well, yes, that’s part of the problem. You know what other industry in infamous for fake “headline” prices that usually don’t come close to reflecting the average reality of what the customers actually pay, and with information about individual deals and discounts being treated with more protection than top national security secrets? Higher Education.
Journalists and other commentators like to take the “full tuition” rates published on the college websites and on US News seriously, but at most top institutions those figures often represent a maximum that is only rarely paid and only in special circumstances.
Nevertheless, the quoted prices do seem to be proportional to the average amount paid by students, and, like healthcare, have been rising faster than usual inflation measures (CPI or median wages) for decades (though with some hopeful indication of stabilization and “bending of the cost curve” in the last few years.)
Now, here’s my question: Are crazy high American tuition rates more of a Papanicolas et al “higher input and administrative prices” problem, or a Lorenzoni et al “higher wealth leading to greater utilization / intensity” issue (though one might ask why prices / utilization would increase faster than wealth consistently over many years.)
“Human capital ” differs from real capital in that revenue and profit only accrue from human capital through direct effort, whereas the relationship between effort and profits for real capital is limited or non-existent.
To put it another way, either you’re trading time for money (human capital) or you make money while you sleep (real capital). We need human capital so that people put productive assets to use, generating returns to real capital. But there’s a big difference between being a feudal lord (capitalist) and being a feudal serf (labor). If economics doesn’t wish to recognize this difference, then the problem lies with economists. The biggest difference between feudal times and now is that it is easier to become a “lord,” in part because there are now multiple paths to lordship.
” The “working class” will include workers with high autonomy as well as low autonomy. It will include workers with high social status and low social status. It becomes worthless as a way of predicting anything else about the person’s outlook, tastes, or norms of behavior.”
You say it’s worthless as predictor, but I’m sure you’re wrong, tho doubly wrong. First, you claim it includes high social status folk, which is NOT the usual definition in people’s minds. If you accept that “high and low status” definition, then it does become worthless.
Which is why we’re discussing it. “Working class” is used because it does mean workers, who are getting wage income instead of gov’t benefits, AND because members of such a group DO have behaviors different than high status workers and those different behaviors do have higher probabilities. These wages come more from manual labor, including crafts, rather than mental labor. So plumbers are working class, while book store owners are not, and whether the book store clerk is depends more on whether the clerk has a college degree (not) or is just a high school grad (is working class). And the book store working class clerk might well be less like plumbers and construction workers — no class is 100%, not even Sili Valli tech folk.
Most importantly, working class whites DID vote more for Trump, and it can be (and is being) predicted that they’ll vote more for Reps in 2018.
The working class (also labouring class and proletariat) are the people employed for wages, especially in manual-labour occupations and industrial work. Working-class occupations include blue-collar jobs, some white-collar jobs, and most pink-collar jobs
This is reasonably clear, and relevant, and useful. What classification is better?
And, Arnold, if you don’t have a more useful / better classification, why are you complaining about users who use working class for explanation? Just a shortcut to disagree with their argument to avoid coming to grips with it? Really, I don’t understand why you don’t like it being used.