January 19, 2021

Class Warfare or Class Welfare?

Posted on 19. Sep, 2011 by Stephan Helgesen in Economy

Class warfare is nothing new.  Over the centuries it has exacted a high price from many countries with disastrous consequences for their economies and societies.

In France, in 1789, the bourgeoisie and the peasantry (21 million of them) were fed up with old King Louis and their rotten standard of living. Collectively, they owned 30-40% of all the land, made up of small, semi-feudal plots though most was rented from the nobility (millionaires and billionaires of their time). They suffered from heavy taxation, necessary to pay for the costs of Louis’ wars. Coupled with that, they were paying high indirect taxes on wine, salt, and bread. Then prices soared at a quicker rate than wages (sound familiar?). The urban French underclass also lived in poverty, a poverty that was intensified by 1789 when wages increased by 22% while the cost of living increased 62%. We know what happened next, the French Revolution.

Our American experience was somewhat different, but preceded the French timeline as we all know, and what happened next was revolution. Both were bloody, and it took a few centuries before the economic systems were in synch with the social systems. It took other European countries’ with monarchs (like the Scandinavian and Benelux countries) considerably more time to move to class welfare without bloody class warfare, thus avoiding wholesale bloodshed. Their objectives were achieved using soft revolutions. The first sweeping social compacts of Scandinavia came about in the 1930s and set them on a course of accelerated social welfare thanks to aggressive and comprehensive legislation supported by a willing monarchy. Over 80 years of experience tinkering with the socialist model has seen an ebb and flow of ideas (and governments).

The most capitalist of the Scandinavian countries (Denmark) and the most capitalist of the Benelux countries (The Netherlands) have seen the ideological pendulum swing back and forth with socialist-leaning governments exchanging places with more pro-capitalist ones (Denmark has just elected a very left-of-center government this week). France, too, has experimented with more capitalist-leaning governments since the end of WWII but has seen significant push-back from its labor unions (more so than with the above mentioned countries).

Rise and fall and rise of trade unionism

There is no doubt that European labor unions have become the tail that wags the class welfare dog and continue to influence the process to a greater degree than in the U.S.. The U.S. experience is different but similar. While private sector union membership is low in the U.S., the real power behind the class welfare war in our country is the public sector unions. The ‘Wisconsin Experience’ is just the latest example in that power struggle being waged for the hearts and minds of American voters and will become a dominant theme in the upcoming U.S. presidential election.

To focus squarely on the labor unions is a mistake if one is trying to understand what’s happening in America at this moment in time. Instead, the focus should be directed to our current government and its wishes, in my opinion, to create a European-style welfare state, where wealth is ‘fairly’ distributed and the ‘rich’ should pay their ‘fair share.’

Fighting for (and against) taxes

Our tax code has traditionally been one of the U.S.’ biggest weapons in the fight for ideological purity and ideological equity. Along with our civil rights legislation, it has been the gatekeeper of America’s pursuit of ‘life, liberty and the pursuit of happiness’ and our capitalist way of life. The right to levy taxes, however, is not more important than defining what ‘fair taxation’ is in our modern world. We should not embark on a reconstruction of our tax code before we answer three important questions:

1. Do we still believe that we have the right to keep the lion’s share of what we earn as individuals?;                                                                                                                                                                              2. What do we perceive our obligations to the less fortunate in our society to be?; and                                                                                                                                                                                                        3. Should our tax code be an instrument of social engineering or should other legislation be used to achieve our objectives?

The Tea Party Debate

It’s no surprise to me that the Tea Party movement has gained so much support. We have seen special interest groups rise and fall in popularity in America for generations. What is surprising is the restraint showed by this group (and others) given the acceleration of our country’s polarization and rapid race to the bottom of the economic ladder. When we look overseas to France and elsewhere around the globe, we see disaffected special interest groups not only take to the barricades but attack them, violently. So far, we have not seen that model of class warfare erupt on our streets, though I fear it may be coming, especially if we are unable to turn our economy around.

With 11-14 million people unemployed and no jobs for the newer, younger workers in our society, there is a real danger of creating a permanent and angry underclass, the new American bourgeoisie. Add to that our obscene indebtedness and the unlikely prospect of achieving a bi-partisan agreement on which direction we need to take, and the stars seem to be aligning themselves for civil disobedience or worse.

America is a nation of laws that are designed to protect us while we pursue the opportunity to achieve wealth and greatness. No law can – or should – guarantee the outcomes nor reward us for our unwillingness to be part of the solution.

- Editor

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