Monday, March 26, 2012

John Gray: Who Killed the Middle-Class? (Engllish)

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An interview with philosopher and writer John Gray

Illustrations by Sohrab Golsorkhi

Philosopher and writer John Gray is the author of "Straw Dogs". He has been a critic of unbridled and globalised capitalism for over a decade. Not that he has had many good words for the socialist alternatives. Here, in an exclusive interview with Tank, he talked with Masoud Golsorkhi about the conclusive end to the theory of the End of History and the beginning of some very uncertain and potentially very hard times.

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MG - I really wanted to speak with you after listening to one of your talks recently. The thing that struck me most was your statement about the end of the middle class, and how it's being destroyed by capitalism itself.

JG - Well, I think the main point is that since the Second World War, it's been a given by most economists and by the political elite that the tendency of capitalism, if left alone, is to create so much insecurity that middle-class life is made impossible. Their solution has been to try and contain or discipline it. And so we have from the Second World War onwards, even in America, emerging from Roosevelt, had a whole range of policies. Not just the welfare state, but a whole wide range of policies which, so to speak, solidified the position of the middle class and protected the bourgeois form of life from the more anarchic forces of capitalism. So for years there seemed to be a kind of equilibrium between the political forces of the middle class on the one hand and the forces of the market on the other. What has happened recently is that, for all kinds of complicated reasons, that equilibrium, which was not in any way stable, has broken down, due to globalisation and specific policies adopted in various countries. Most countries deregulated, to some degree, their financial markets and their banking systems and in effect banks became more like hedge funds and even governments became like hedge funds. And that process has undone the protection which middle-class life had from capitalism. Assets and wealth are so mercurial and so globally mobile, especially now that there are things like the instantaneous movement of capital and high-frequency trading where, according to some accounts, the average holding period for stock on Wall Street is about six seconds. Because, of course, these
trades are done not by humans but by computers using algorithms that no one really understands and that produces an extraordinary instability, because the computer trades can interact with each other in ways that are not fully understood.

MG - With unforeseen consequences.

JG - Yes. Of course, the other factors are connected with changes in patterns of employment. I mean, the notion of a lifelong career has gone completely now. Partly through technological change, it's true, but market-driven systems accelerate these changes and so the notion of committing one's self early in life to a particular profession, which was a cornerstone of middle-class life, is gone. If you go back to the 19th century and read Trollope or Flaubert or the great European novelists and so on, it's just taken for granted that that's what it meant to be bourgeois - to have a lifelong career. That's almost open to no one now. So rather than a process of the bourgeoisification of the whole of society, which is what most observers, thinkers and analysts thought was happening since the Second World War, the opposite is now true. Rather than us all becoming middle class, it looks like all we will be left with is an enlarged atomised class.

MG - So Reaganomics and Mrs Thatcher's faith in the 'trickle down' effect didn't exactly work.

JG - The opposite has happened. Things might be manageable if, say, 20 per cent of the population were an atomised under-class and the rest were secure and stable. But that hasn't happened. Certainly, the poor and the working class have become much weaker, and it's much harder for them to express any kind of collective solidarity. But at the same time large swathes of the middle class, while retaining higher incomes and some kind of capital, mostly in the value of their houses, are as insecure as the working class. Most middle-class people now don't have pensions and savings. They have debts rather than assets. It's been said that most American families are three pay cheques from being on the street.

MG - What about the emerging middle classes in places such as China, India and Turkey?

JG - And Africa too. Despite what many people thought, actually there's been quite rapid economical development there in the last few years. To the extent that the instability we're experiencing now is genuinely global, I don't think these emerging middle classes will be exempt from insecurity and turbulence. China never yielded to the demand that it integrates itself wholesale into world markets. While it is a hyper-capitalist economy, it's also a command economy and there is little movement of capital in and out. Its system does have some of the problems that we have but it has yet to experience a comparable crash. One of the key questions now is whether the Chinese system can reproduce itself intact or change itself in ways which enable it to emerge intact from the present crisis, making it comparatively much stronger. The traditional middle class might survive better in this form of dirigiste capitalism, or highly managed capitalism, than in the west. An alternative scenario could be that there is a crash of some sort. But the idea that the end of the boom in China might bring regime change is just wishful thinking. I don't think that is going to happen. For one thing, they have so many more leavers for the control of their economy and, on top of that, there is the astronomical scale of their sovereign fund.

MG - What I was going to say at the beginning of our conversation was that the emergence of the middle class, as exemplified in the boom of post-war America, was partly a way of capitalism protecting itself against communism. It had a part in an ideological struggle.

JG - Yes, which is gone now.

MG - Yes, so maybe that's one of the reasons why that support system for the bourgeois way of life is withdrawn - because capitalism no longer needs middle-class support. It doesn't have an ideological rival.

JG - There is a paradox there though. In some senses the communist system, in terms of its pattern of education and employment, was typically middle class. While it repressed bourgeois freedom, it was more conservative than much that had existed in the west. But there wasn't an enormous amount of labour mobility. And when the Soviet Union crash occurred, it was an overnight liquidation of the economic position middle classes had achieved. Professors becoming…

MG - Cab drivers…

JG - Yes, and research scientists ending up on the scrap heap or having to move to North Korea. That was a tremendous debourgeoisification - especially in Russia. So you're quite right - the collapse of communism was one of the factors that shook up bourgeois life. That went with a period of triumphalism and deregulation in America and the idea that what was being built was a global free market. The Chinese and others were being incorporated in a global system. In other words, they misunderstood the meaning of globalisation, because what globalisation does, I think, is not spread any one type of capitalism anywhere. The Chinese never talk like that. They don't imagine that Chinese practices can be exported into America or Europe or Africa; they see them as fitted to their own historical circumstances. But what was believed in the period from 1990 till 2007 was that one model, the Fukuyama and Friedman model, could work everywhere. I thought it was completely absurd, because what globalisation does is fertilise new types of capitalism which have some things in common but essentially compete. The type of capitalism that's suffering particularly badly is the variant of the western capitalist model, which has done the most to undermine bourgeois life.

MG - The Islamic form of banking, which is the last solid form of banking left standing, was viewed by the mainstream as a joke until recently.

JG - Yes, very interesting point.

MG - I'm interested in your ideas about cross-contamination and fertilisation. What do you think are the different scenarios that this process might go on to deliver?

JG - Immigration is a major factor, because when people move here from India or Islamic countries or elsewhere, they bring their own form of banking, their own forms of business organisation, which are often family-related rather than individualist. Part of the western narrative was that as capitalism spreads, it reproduces a certain type of individualism everywhere. And I think that's completely false. I mean, first, the type of individualism that existed in the west actually had many different routes which weren't economic but were in fact connected with types of religious practice. So other cultures, in other parts of the world, were tilting back to something that was historically normal about 300-400 years ago. Which is all that's happened. I shouldn't say all because it's a huge change, but it's not abnormal in any longer period that economic activity and energy be distributed more evenly throughout the world. That was normal up until, in the case of India and China, western intervention in the form of colonialism set back their development. They were more economically advanced in a number of respects than any western country. By the way, even western capitalism is more diverse than we tend to think because, for example, Italian capitalism has been historically more family-based than Anglo-Saxon capitalism. And historically, German capitalism has been different again because of its close relations with German institutions like crafts and trade unions. So this idea that there was a kind of triumphant march of a particular set of capitalism, which would bring with it a particularly moral culture, is a complete delusion. Because it could turn out to be a radically individualist moral culture it would be quite unstable if, in addition to virulent individualism, the props of economic security were kicked away. Because if it's associated with an inability to plan and an inability to save, you end up with huge problems of unsustainable credit and levels of debt that can become quite unstable. I have no doubt that, for example in China, the model will have to change in some respects because it's been too dependent on exports. But change needn't be about convergence. They aren't going to change to become more like us. And I don't think we will be convergent. Even the idea that there is a single form of bourgeois life that everybody wants to lead… I think that's an illusion too. Just imagine. Supposing China could replicate what exists in Singapore on a much faster scale. Would there then be within China this strong push for bourgeois political freedoms? I am strongly critical of many aspects of Marxism but at least it provides a kind of model and a sense of history. A longer sense of history. Not just the last five, ten or 15 years, but the last 150, 200 years or so. And a lot of the neo-liberals repeat what is a Marxist view, which is to say capitalism everywhere produces a bourgeoisie which wants liberal democracy. Now there are different examples. In other words, people may want freedom in their personal lives. If they're gay, they may want the freedom to be gay. If they're religious, they might want the freedom to be religious, etc. They may be universal human aspirations, but there is no rule saying that capitalist development would lead to western liberal democracy, particularly when Western liberal democracy is struggling to cope with intractable problems.

MG - Reform or revolution?

JG - It'll probably be something in between because on the one hand the Greek political classes are alienated
from the majority of the population. Let's put it like this. The idea that better management, better coordination of policy would resolve the issues of the eurozone is a fantasy - the problems are too fundamental. But you're not going to have 19th century/early 20th century revolutions either because, for one thing, there aren't many mass political parties left. Maybe in a sense it has something in common with the collapse of the Soviet Union. The Soviet Union collapse wasn't a revolution. There was very little violence. A little bit in the Baltic states here and there but not on the scale one would have feared.

MG - Yes, like Chechnya.

JG - Chechnya, yes - terrible violence there. But it wasn't traditional revolution, it was quite different. And what you have in Greece is not so much again the build-up of masses, it's the fragmentation of the whole society. And you could say well, it'll ease and develop in such a way that nothing will happen. I don't think that that's the case. I think when life becomes unbearable for the sections of the population that have nothing to look forward to, then something will happen. There's something in between a large shift within the system and a revolutionary upheaval. And I think that is bound to happen now. It won't be a long way off because, actually, the limits of managerial solutions have been reached, particularly when they have such a dramatic effect on people. Managerial solutions won't now resolve this set of problems, which are as deeply rooted and as severe. The other day, Trichet (president of the European Central Bank) said that America is a current currency union just like we are and comparatively we're not doing as badly.The worrying thing that this sort of statement shows is an incredible alienation from history. America is different because America has 150 years of being a nation state. A nation state that came about after a bloody civil war. Before that, you had two countries - one essentially pre-modern slave economy, the other an industrial manufacturing economy. The US has been through two world wars and the cold war and Vietnam, and so on. There is a common history and culture - for the past 100 years immigrants have been forcibly Americanised, their children forced to be educated in English. For example, in schools in California, Chinese students were forbidden to speak Chinese; that's why some of the private Chinese high schools were created. So America is a nation state.

MG - Every morning children swear allegiance to the flag. That's something that European kids don't do - at least not yet.

JG - Very important point. But unfortunately, it's radically divided at the political level. There is policy gridlock and profound, absolutely profound, polarisation of at least two Americas animated by mutual hatred. I'm amazed by it, by the mutual hatred that is a feature of political life in America and of movements like the Tea Party.

MG - Of course there is also Occupy Wall Street.

JG - But now a new movement, which is getting quite strong, I think, although it's neglected, is becoming quite significant. It's spreading everywhere in America.

MG - Which brings me to my next question, which is about technology. On one hand, every facet of technological innovation in the communication field leads to an atomised individual (everything about MP3 players and Facebook/Twitter focuses on the individual) and yet technology connects the world more than ever.

JG - Well, I think there's a paradox, that a number of recent books have explored, which is that this kind of interlinking technology was supposed to produce the new communication technology. In fact, it's produced a number of filter bubbles and forms of narcissism. So what you're linked into are predetermined spaces that have been created in response to your earlier searches. And so there may be communities that you take part in but the ones, which are…

MG - Prescribed in a way?

JG - Right. Prescribed to you by the programming of the machine. I mean, one of my basic themes is that technologies are never inherently or systematically emancipatory. But what happens with any technology that's developed is that it's used in all kind of ways that nobody, including the people who invented it, really anticipated. The internet was a [military] space to start. Then it gets involved in human conflicts. I mean, I'm old enough to remember when the photocopier was supposed to bring down tyranny. Then it was going to be the video and then there was the idea that the spread of video cameras would mean that there wouldn't be any more massacres. But what about Tiananmen Square? What about Syria or Bahrain? It's all nonsense really. I'm not anti-technology. In fact, I criticise some of the Greens because I actually think that some of the ecological problems are so acute that only high-tech solutions will work. The idea of going back to simpler ideas, if you have a population as large as it is and joined for the first time... There's no possibility of going back - of either going back to simpler technologies or just having light inter-mediate technology. The internet can be emancipatory and, in some ways, it already has been. But it's still open to individualist groups to use it for other purposes. But it hasn't been shut down or controlled or colonised by other interests. It would be unusable. So I'm not too pessimistic about it - it's a major human advance - but there's a darker possibility still. Which is that what many people like about the internet is that it is narcissistic. In other words, it's not like they are being deprived of autonomy; rather we are talking about consumer choice.

MG - Is technology infected by what we as humans bring to it with all our historical baggage?

JG - Well, it's infected by our culture and history. But the idea that it could be a realm of transparency is absurd. How could it be a realm of transparency when power is always in the realm of opacity and when wars are a realm of opacity? It's just not possible.

MG - But I think it's undeniable that things like eBay and Etsy have had an emancipatory economic impact. They may be marginal but they're influential nevertheless.

JG - There are new kinds of banking that are emerging. Micro-lending can short circuit the banking institutions and that could be useful. And eBay enables people to barter things and interact with each other and charges much less than in the past, so that if people want to circumvent major forms of retail or distribution
they can.

MG - How do you think Egyptian, Chinese or Brazilian versions of middle-class life will characterise international institutions?

JG - Well, it's very hard to say, isn't it? The Americans are no longer hegemonic. Their written word doesn't carry in China or Europe; it's just laughed at or ignored. That's a fundamental change. But they're still in a sense the lynchpin of the inter-national system. I don't think it's going to last very long. When it does change,
we don't know what the next sets of configurations are going to be. But one thing we can be sure of is that
the United States won't be replaced by another single power.

MG - No. And I guess that's a good thing.

JG - It's an important point that, isn't it? Because India and China have too many conflicts of interest.

MG - And too much baggage, yes.

JG - Far too much baggage - even Russia and China, although they collaborate in many respects. What will occur and develop will be more like the end of the 19th century, but with the crucial difference that many of the countries that will be major players were then colonies or subjugated, such as India and China. And the energy has fled from Europe and America. I think you can see that by the way the demolition of the middle class is most extreme in the US.

MG - Right. Yes, absolutely.

JG - And the social system is completely dysfunctional. Historically, an empire never lasts very long after it's become internally insolvent. Britain started becoming insolvent in the First World War. The empire ended probably with the invasion of Singapore, and that was it.

MG - Just 20 years later.

JG - It never lasts very long and that will also be the case in America. So we can imagine in 10/15 years a complete change in the international landscape. But the form that it will take is really hard to tell because we don't know. Going back to the start of our conversation, we just don't know how successful we will be in riding out this market storm. We might be very successful, or we might be mildly successful, and we might have really serious problems. We don't know. Partly because we don't know how bad it will be in Europe. Will there be a controlled default? Because that would be extremely disruptive. The one thing I'm certain of is that middle-class life will be much more of a hybrid than before and the real differences might be between societies or economies and whether
the middle classes have a place. Like in America, they've almost moved to a form of plantation economy for the majority. Look at how many people didn't have medical care, even after Obama, while around one in six Americans are now on food stamps. But the real economy is in the garage sales, drugs, petty crime, sex work. It's almost like a caricature of emerging economies 20 years ago. And if you look at the pattern of what US exports - things like soya, not complex manufactured goods - it is a very, very hollowed-out economy with a very, very hollowed-out middle class. All we can be sure of is that the passivity that seems to exist in the American population is coming to an end. There is certainly a widening of the gap in political discourse between, on the one hand, Occupy Wall Street movement and on the other, the Tea Party. Then you have somebody like Mitt Romney, a bizarre mixture of pre-market capitalist and an assertion of American nationalism and militarism at a time when they can't afford the military machine. There could be a really bizarre, unpleasant and dangerous period. You just don't know.

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