Magazine | August 12, 2019, Issue

The Return to Serfdom

A steel worker returns to work at U.S. Steel Granite City Works in Granite City, Ill. (Lawrence Bryant/Reuters)

I’m not a free-market fundamentalist. To me, the beauty of liberal capitalism lies in its performance: More people live well, and live longer, than ever before. Millions of working-class people have moved from poverty to become homeowners and have seen their offspring rise into the middle class or higher.

Today this egalitarian capitalist progress is showing signs of fading, not only in the United States but also in Europe, Australia, and increasingly East Asia. This marks a drastic reversal from the conditions that prevailed after World War II, when the incomes of those in the lower quintile surged by roughly 40 percent, while the gains in those in the top quintile grew a modest 8 percent, and the top 5 percent saw their incomes drop slightly. Social mobility since the 1990s has declined dramatically, not only in the United States but also throughout Europe, including Sweden. Despite the European Union’s vaunted welfare state, the middle class has shrunk in more than two-thirds of the countries there. 

Less recognized in the media have been the fortunes of China’s working class. Overall, 500 million Chinese, close to 40 percent of the population, remain poor, living on less than $5.50 a day; in 2010 the Organisation for Economic Co-operation and Development reported that the Chinese middle class constituted only 12 percent of the population. Rather than replicating the middle-class growth of post–World War II America and Europe, notes researcher Nan Chen, “China appears to have skipped that stage altogether and headed straight for a model of extraordinary productivity but disproportionately distributed wealth like the contemporary United States.”

The working-class future may be further clouded by the loss of what were once respectable, upwardly mobile jobs — postal workers, switchboard operators, manufacturing laborers, computer operators, bank tellers, and travel agents. For the 90 million Americans who work in these kinds of jobs, and their equivalents elsewhere, the future could be bleak. 

Even if they find jobs, the decline of private trade unions has weakened the political clout that workers once enjoyed. In virtually all advanced countries, rates of unionization have dropped; since 1985, the portion of unionized workers among all the higher-income countries dropped from 30 to below 20 percent. There are unions in China, but membership is essentially worthless, because they have little power and must conform to the party’s priorities. 

Many working-class people have descended into what has been described as the “precariat,” a group of workers who have limited control over the length of their workday and often live on barely subsistence wages. Research reveals that 20 to 30 percent of the working-age population in the United States and the EU-15 (the 15 member states of the EU as of April 2004), or up to 162 million individuals, does such work. 

Conditions for these workers represent a throwback to earlier times. In ultra-expensive places such as Silicon Valley, many conditional workers live in their cars. The typical Uber driver is not the one seen in ads, the middle-class driver picking up extra cash for a family vacation or to pay for a fancy date; most depend on their “gigs” for their livelihood. Nearly half of gig workers in California live under the poverty line. These workers often face a dismal future as they age; only one-third of independent contractors in the U.K., for example, have any sort of pension savings for their retirement. 

Critically, the traditional bulwarks of working-class community — religious institutions, neighborhood and social groups, unions, and extended family — are all weakening. Marriages among the upper classes may be getting more stable and less likely to dissolve but take place later, as sociologist Stephanie Coontz has noted. But the situation is different among the middle and working classes; overall, as many as one-third of the births in the U.S.  take place outside matrimony. 

In some heavily minority urban areas, the rate of children born to unmarried mothers reaches an astronomical 80 percent, but this is becoming commonplace in once-traditional working-class-white areas as well. The rate of single parenting is the most significant predictor of social immobility, according to a study led by the Stanford economist Raj Chetty. Princeton sociologist Sara McLanahan has found a similar pattern in Europe. 

Economic collapse is a clear contributor to this phenomenon. A detailed 2017 study by economists David Autor, David Dorn, and Gordon Hanson shows that towns and counties that lose manufacturing jobs also see marriage rates decline, while the share of children living in single-parent homes and the rate of births to unmarried parents rise. As in the 19th century, working-class people face mounting health problems and issues of substance abuse, particularly in old industrial areas such as Scotland. In the United States among low-educated, middle-aged whites, mortality rates are increasing, mostly as a result of what the Princeton economists Anne Case and Angus Deaton call “deaths of despair.”

Even in Asia, there are signs of social collapse. According to a recent survey by the Korea Institute for Health and Social Affairs, half of all Korean households have experienced some form of family crisis, many involving debt, job loss, or issues relating to child or elder care. Similar strains can be seen in Japan, with a rising “misery index” of divorces, single mothers, and spousal and child abuse — all of which exacerbate the country’s disastrous demographic decline and growing class division. 

In “classless” China, a massive class of migrant workers — over 280 million — inhabit a netherworld of substandard housing, unsteady work, and miserable environmental conditions, all after leaving their offspring behind in villages. These new serfs vastly outnumber the Westernized, highly educated Chinese whom most Westerners encounter. 

Researcher Li Sun at the University of Leeds estimates that there are 60 million “left-behind children” and another 58 million “left-behind elderly” in China. Cut off from their families and the company of women, migrant workers suffer rates of venereal disease far higher than the national norms. Scott Rozelle, a professor at Stanford, found that most kids left behind in the rural villages are sick or malnourished and that up to two-thirds struggle with combinations of anemia, worms, and uncorrected myopia, which set them back at school. More than half the toddlers, he predicts, are so cognitively delayed that their IQs will never exceed 90 — portending a future akin to that of gammas and epsilons in Aldous Huxley’s Brave New World. 

In the West, the deterioration of working-class conditions has already sparked what could be described as “peasant rebellions.” Reacting to the arrogance and disdain of the globalized urban upper crust, these voters drove the election of Donald Trump, the support for Brexit, and the rise of populist parties across Europe. 

In France, a clear majority regards globalization as a threat, but most executives, many trained at elite schools, see it as an “opportunity.” Protests of the so-called gilets jaunes (yellow vests) against higher gas taxes in the winter of 2018–19 demonstrated the depth of this anger; the movement may have started in small towns and industrial cities, but it also won over the Paris suburbs, home to roughly 80 percent of the capital region’s population. 

Like the revolutionaries of 1789, those in the contemporary French third estate (the commoners) have been stirred by the hypocrisy of their betters. In pre-revolutionary times, French aristocrats and top clerics preached Christian modesty while indulging in gluttony, sexual adventurism, and lavish spending. Today they call for working- and middle-class abstemiousness  while they live large and exempt themselves by paying their modern version of “green” indulgences through carbon credits and other virtue-signaling devices.

We may be, as Tocqueville wrote in the 1840s, “sleeping on a volcano” destined to explode. The imposition of the Green New Deal proposed by Representative Alexandria Ocasio-Cortez — which would effectively mandate the end of many industries, from fossil fuels to aerospace to cattle ranching — would likely spark a mass rebellion in middle America. The “green” policies so appealing to a Silicon Valley billionaire, an investment banker, or a grant-seeking scientific researcher seem more like class warfare to residents of Youngstown, Ohio, the Ruhr in Germany, or, increasingly, China’s blue-collar cities.

China, with a history replete with violent peasant rebellions, could be the most important flash point. Workers increasingly stage strikes and protests. Communist officials have been put in the awkward position of cracking down at universities on Marxist study groups whose working-class advocacy conflicts with the policies imposed by the nominally socialist government. 

In China, a rebellion would probably replace one form of authoritarian rule for another. In the West, it could undermine stable democracies. We may be seeing a reprise of what historian Eric Weitz describes as the “proletarianization” of the German middle class, which set the stage for the rise of National Socialism.

The rise of right-wing, even neo-fascist movements in Europe parallels the historic tragedies of the Fascist era, but, equally important, the liberal order is also threatened by an increasingly militant, radical leftist upsurge. In France the former Trotskyite Jean-Luc Mélenchon won the under-24 vote, beating the “youthful” Emmanuel Macron by almost two to one among this age group. Similarly, in the United Kingdom, the birthplace of modern capitalism, Labour, under the neo-Marxist Jeremy Corbyn, won more than 60 percent of voters under 40, compared with just 23 percent for the Conservatives. Similar trends are evident in Germany and the rest of Western Europe, where the Green parties, with a program of draconian social engineering, enjoy wide youth support.

Socialism is on the rise even in the United States. A 2016 poll by the Victims of Communism Memorial Foundation found that 44 percent of American Millennials favored socialism, while another 14 percent chose fascism or Communism. By 2024, these Millennials will be by far the biggest voting bloc. 

Ultimately societies, notably democratic ones, need to instill hope among the majority for a brighter future. But our dominant classes increasingly see little need for the masses. As one Silicon Valley venture capitalist told me at a California environmental conference, the future won’t have much need for people; we’ll have robots and an elite class, which naturally will include his children. 

Yet people are not fungible or easily replaced. The “great question” that “hovers” over society, suggests Kentucky-based poet and novelist Wendell Berry, lies fundamentally in “the question of what are people for.” In embracing the “absolute premium of labor-saving measures” and loyally serving the needs of the least needful, we are undermining the social basis of both democracy and capitalism, creating an expanding market for ever more dependence on the state while undermining the dignity of large parts of our populations. 

Joel Kotkin teaches as a presidential fellow in urban futures at Chapman University (Orange, CA) and is the executive editor of the widely-read website NewGeography.com. He is the author of seven previous books, and a regular contributor to The Daily Beast and Forbes.com.

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