Bringing back shared prosperity is a big ask

The left-behind are likely to remain left behind, even in the neopopulist era

Photo by Natilyn Photography on Unsplash

Video summary

"If there is hope, it lies in the proles."
George Orwell, via Winston Smith

The industrial age did famously have the proletarian class — urban factory workers. But in America, that broad grouping has been disappearing… In the modern day, Americans’ jobs have simply fragmented too much to form a cohesive class. Service occupations are all over the place — cashiers and baristas, sales assistants and servers, customer service reps and personal trainers, sommeliers and receptionists, medical assistants and warehouse workers, etc. Their jobs don’t necessarily have much in common — probably not enough to form a class-conscious proletariat like in the industrial age.
Noah Smith, 19/11/24

Trump won the Republican base, but all the attention has been on him hoovering up erstwhile Democrat voters. Many of these Trump Democrats are people who haven’t fared well during four decades of devil-take-the-hindmost Neoliberalism. They are presumably hoping the Donald can return the US to the halcyon days of post-WWII, widely shared prosperity.

But as

Brink Lindsey

has argued, those hoping that Trump (or other populist leaders) can improve the lives of the ‘common people’ are overlooking the fact that the commoners’ leverage over their societies appears to be in irreversible decline.

From pre-industrial to post-industrial societies 
The industrial revolution allowed the ordinary people to go from being peasants to proles. Working in a dark Satanic mill 18 hours a day, six days a week, wasn’t much fun, but it did allow the commoners to start improving their material circumstances. Sure, it took well over a century, but by the 1950s the average wage earner enjoyed relative affluence, often including home ownership.  

After 30-40 years of good times, Joe Sixpack was once again thrust into precarious penury by the triumph of Neoliberalism, with the balance of power shifting decisively from Labour to Capital, with entirely predictable results.

But in Lindsey’s telling, the triumph of Neoliberalism between circa 1980-2016 was more a symptom than a cause of the commoners' loss of leverage and status.

The long rise and abrupt fall of the hoi polloi   
Lindsey agrees that “specific policy shifts like tax cutting, hostility to unions, and financial deregulation” have hammered the lower orders but notes:

The fundamental reason for the inegalitarian turn — not just in the United States, but throughout the advanced economies — was a qualitative downward shift in the leverage and status of ordinary people…

Back in the industrial era, technological and economic progress required the mass mobilization of huge inputs of physical and routine clerical labor… The need for strong men to work the machines, stoke the furnaces, dig the coal, and load and unload the cargo created unprecedented opportunity: an escape from age-old rural poverty and a slow but steady climb toward material plenty… the successes of the labor movement and social democracy in the most advanced economies contributed further uplift… As the 20th century unfolded, capitalism in the Global North offered something entirely unprecedented: mass inclusion of ordinary people in the promise of a better life.

To summarise, 20^th-century industrial capitalism depended on the workers, which meant those workers could insist on being treated with a base level of respect:

Everyone knew that the magnificent machines of industrial capitalism would not deliver their bounty all on their own; they needed workers to tend and maintain them…

The risk of a strike was always hanging in the air; the risk of revolution could not be dismissed. The landmark 1950 contract between General Motors and the United Auto Workers, which guaranteed cost-of-living adjustments and productivity-based wage hikes, was referred to (by a young Daniel Bell, then writing for Fortune magazine) as the “Treaty of Detroit” — a turn of phrase that recognized the clout that the working class now possessed.

Lindsey quotes Yuval Noah Harari to illustrate how workers used to be respected – hero-worshipped, even – no matter what their nation’s political arrangements:

In 1938 the common man’s condition in the Soviet Union, Germany, or the United States may have been grim, but he was constantly told that he was the most important thing in the world… He looked at the propaganda posters—which typically depicted coal miners and steelworkers in heroic poses—and saw himself there: “I am in that poster! I am the hero of the future!”

So where did it all go wrong for the horny-handed sons of toil? Here’s Lindsey's explanation:

Through an ongoing combination of automation and globalization, productivity growth outstripped growth in demand for heavy industries even as supply began to move abroad to take advantage of cheap foreign labor. Employment shifted from manufacturing to services… technological progress weaned itself from dependence on large cohorts of ordinary workers in the home markets of the frontier economies.

The roots of Trumpism
Lindsey doesn’t view the past through rose-coloured glasses. He notes that work was far more physically taxing and dangerous back in the ‘good old days’. But as unpleasant as their work could be, coal miners and steelworkers could and usually did take pride in the vital societal contribution they were making. In contrast, as Lindsey observes:

No current-day Diego Rivera is painting boldly colored murals of fast food workers, Walmart greeters, and delivery drivers striking heroic poses… Because of the changing nature of work, ordinary workers lost their cohesive identity and sense of solidarity, and thus much of their capacity for collective action to exert power.

For generations now, individuals who once would have gotten a secure, respectable blue-collar union job have had to make do with low-wage, low-status, pink-collar one. As Lindsey observes, this means workers are now:

Scattered among service occupations in relatively small-scale establishments without a great deal of heavy, expensive, specialized equipment: think wait staff, cleaners, retail attendants, and drivers.   

The life trajectory, and hence political outlook, of someone with a stable, middle-income job that allows them to enter the property market and start a family is very different to that of a precariously employed, minimum-wage-earning service-sector worker, as Lindsey points out:

Members of the [Keynesian-era] working class were thus buoyed by the possibility of advancement and “making it”… Nothing comparable existed in the new information economy. Working life no longer seemed to hold the possibility of building toward anything; aspirations for arriving on easy street gave way to a never-ending struggle to keep one’s head above water.

If all that wasn’t a grim enough fate, the workers have also had to deal with the growing power of the tone-deaf, self-righteous professional-managerial class:

 As technological progress outgrew its dependence on mass labor, it came to depend on a new mass elite of managers and professionals. Such occupations only constituted about 10 percent of the U.S. work force back in 1900; they account for 35 percent today. When the elite was tiny, those outside of it took comfort in their numbers; there was no shame in being an ordinary working stiff, and plenty of basis for pride. But as the industrial working class dissolved and the new elite bulked up, being outside the “meritocracy” started to feel more and more like failure.

Can the populists turn back time?
Trump will push back against the cultural dominance the “mass elite of managers and professionals” have come to wield so unyieldingly. Far fewer American wait staff, cleaners and retail attendants will have to list their pronouns when filling in job applications or attend DEI struggle sessions once Orange Hitler is back in the White House.

Trump also appears serious about curtailing the global labour arbitrage that’s allowed corporations to offshore well-paid manufacturing jobs while importing vast quantities of new workers to keep a lid on wages. (In the US, real average wages haven’t increased for four decades.)

Plenty of low-income earners will be delighted if Trump merely manages to drive a stake through the heart of wokeness and stop millions of ‘undocumented’ immigrants walking across the southern border each year. But it’s not clear that will do much to improve their leverage, status or incomes.

Automation is the new immigration  
In theory, cutting immigration will result in tighter labour markets and higher wages. But if you own a restaurant, will you simply switch from paying illegal immigrants/backpackers/foreign ‘students’ an under-the-table pittance to paying citizens a decent wage? Or will you eliminate your waitstaff and have customers place their orders via a tablet or QR code, then lift their meals off a Dalek-like robo-waiter?

It’s the same story with onshoring manufacturing facilities to first-world nations. These facilities are already often highly automated in places where labour is dirt cheap. They are likely to be entirely automated, or close to it, in higher-wage nations.

Indeed, the available evidence suggests technological breakthroughs, notably generative AI, will turbocharge automation between now and 2030.

Soon, you may be relying on a self-driving taxi, rather than an Uber driver, to get from Point A to Point B, and having a drone rather than a human deliver your pizza order.   

In short, if you think the average worker doesn’t have much pull in late 2024, wait and see just how little relevance they’ll have by 2030.

If there’s hope, it lies in the professional-managerial class
There is one cause for optimism. The automation that’s proved so deleterious to the average worker in recent decades is now coming for the professional-managerial class. 

If four decades of Neoliberalism have taught us anything, it’s surely that the “new mass elite of managers and professionals” won’t give up their considerable influence, much-cherished status and high incomes until they’re prised from their cold dead hands.

With a looming tsunami of digital transformation threatening their positions, it’s just possible nervous elites will be willing to countenance more egalitarian arrangements to stop 80:20 societies from turning into 99:1 ones.