By James Wallace Harris, Friday, December 5, 2014
I just finished The Glass Cage by Nicholas Carr, about automation. I had an insight in the middle of the night. We are political polarized by defining everything in terms of Republican and Democrat, or conservative and liberal, but the real division is still between capital and labor. Capital is the population that make their money my manipulating wealth. Labor is the population that make their money by working. There is a gray area, the portion of the population that labor by managing capital’s wealth. Even though we claim to live in a democracy, we actually live in a plutocracy. Most everything in our society is determined by money.
Sometimes I think people pick their political parties like they pick their football teams – emotionally. They stick by them thick on thin, right or wrong, always the loyal fan. However, politics is more than just one team against another. Politics defines how we live, and it seems strange to me that so many Americans are Republicans even though that party’s goals don’t line up with their economic lifestyles.
We essentially have a strict two party system, even though independent parties show up from time to time. We divide ourselves into conservatives and liberals, but those really aren’t apt descriptions. It’s really capital versus labor. Economics is the driving force of our society. There are societies that are shaped by other forces, like religion, but in the 21st century, most societies are shaped by money.
Even before the Industrial Revolution, we had the wealthy, usually the aristocratic, governing the poor, usually peasants. With the coming of machines, we had the rise of the middle class – merchants, skilled trades, academics, clergy, etc. As industry transformed society it broke down into essentially two driving forces: capital and labor. Some people had the money to do things, and other people had the skills to do things. People with money always assumed they were in charge because they financed the doing of things, but without the skills and labor of workers, nothing would have gotten done.
Because of automation, capital is now in the position of undermining the inherent leverage of labor. Capital is no longer dependent on hiring people to work, they can buy machines instead. Because of this, we’ve been seeing the erosion of labor power. Politically though, why are we seeing so many millions of people who should be siding with labor siding with capital? I find this psychological conundrum very interesting.
Capital is those who invest. Labor is those who work. Except for their 401k savings, most people in America have little capital to invest. So why do they side with capital politically? Right now capital is on a role to crush labor by lowering wages in every sector it can, and to reduce the size of the government. This adds to capital’s total wealth on two fronts. It’s understandable why they want to do this, except it’s destroying the middle class, which is the main generator of their capital.
So why are the laborers of America backing capital in their own self destruction? The plutocracy of America actually works through both parties, Republicans and Democrats, but they favor the Republican party as their main tool. However, there’s not enough true capitalists in America to give the Republican party the numbers to survive in the democratic process, so capital started working on coalitions. Divide and conquer. They have broken labor up into different social groups and pitted them against each other.
By backing hot button emotional issues like fundamental religion, race, xenophobia, and hatred of freeloading, they have gained millions fans for their team. What makes me wonder is why those people side with capital when it’s obvious they should side with labor. Is it a kind of denial of reality? Or is it a kind of wish, that they hope one day to be rich too, so they side with the rich now?
Capital is working extremely hard to squeeze every last penny from the system. They want workers to earn the bare minimum, and they want to pay the least possible in benefits. Conversely, they don’t want to pay taxes that help labor survive the shortfall. If people can’t make a living from capitalism, and they can’t make a living from socialism, where does capital expect labor to earn its bread?
We have over 330 million people in this country, and the number of jobs is shrinking. Capital is embracing automation with a passion, which means even fewer jobs for the future. Capital is close to destroying all unions and collective bargaining by labor. But they are also working hard to undermine professional workers too. K-12 teachers are on a rout, but capital, through state legislatures are now finding ways to attack higher education. Capital is also trying to find ways to pay professionals in medicine and law less too. And once glamorous high paying jobs like airline pilots are seeing their average salaries in decline because of automation. If capital could replace all the fast food workers with robots, they would. And if the service economy goes, where will labor be?
Capital is so greedy they ignore the fact that a fat middle class generates the most capital for them, yet their goal is to kill the golden goose. Nor will they allow socialism to take up the slack. Were will that leave labor?
Thomas Piketty, who wrote Capitalism in the Twenty-First Century suggests there will be social revolution. That’s a nasty fix to the problem. There is a growing underground economy, but I don’t know if a capital-free economy can ever become large enough to sustain the growing unemployment of labor. The system is self-correcting. If capital gets all the marbles, things will fall apart, and our society will reset like a video game. But who wants that?
I think the solution is limitations on capital, supplemented with limited socialism. That’s what we’ve been doing since the 1930s, but capital has been fighting tooth and claw to undo it. Capital should allow a higher minimum wage, and support universal health care. In other words, if capital bought off labor to a degree they could avoid a revolution. I don’t think they will. Capital is too single minded. That’s why they are against immigration reform, Obamacare, social security, Medicare, education, and any other pile of money they can’t control. Capital wants every last penny.
The people behind capital make their living by piling up money – that’s why they resent government handouts and welfare – why should anyone live without capital or laboring? Yet, they are rigging the system so socialism is the only humane solution. If the 1% get all the pennies, the system will collapse. I don’t know why they don’t see that, in the same way I wonder why labor votes with capital.
The 99% need to survive somehow. They have to divvy up a portion of the pie. How small that portion gets before the next American revolution begins is yet to be determined. The last recession got us close enough to see the whites of their eyes. Nations all over the world are coming apart. Capital needs to take notice. Just because you can replace labor with machines doesn’t mean those people go away.
JWH
Auxiliary Memory 
Great questions. I have wondered why people don’t vote in their own economic self interest. Maybe because the hot button issues are made to seem so frightening. Or maybe focusing on those issues means you don’t have to notice that you are steadily losing ground. Emotions trump facts and reality every time.