The New Class War: Saving Democracy from the Managerial Elite

by Michael Lind

The startling adoption by the American center-left since the 1990s of support for high levels of unskilled immigration, a position historically associated with right-wing libertarians and business lobbies, is partly opportunistic, based on the hope that immigrant voters and their descendants can make possible permanent one-party Democratic control of the US government. And it is partly a reaction to nativism by conservatives who mischaracterize Latino immigrants as criminals and “invaders.” But the center-left reversal on immigration policy also reflects the historic shift in the Democratic Party’s white voters from working-class whites to affluent, university-educated members of the white overclass and business and finance. At the turn of the twenty-first century, the severely shrunken private labor movement, while maintaining its skepticism about free trade, gave up its historic public opposition to high levels of legal and illegal immigration as the price of continuing membership in the transformed, more employer-friendly Democratic coalition.

In the culture, populist politicians deliberately flout the elaborate etiquette of overclass corporations and universities by using crude and belligerent language. They mock “political correctness,” the artificial dialect devised by leftist activists and spread by university and corporate bureaucrats that serves as a class marker distinguishing the college-educated from the vulgar majority below them.

In the United States, the shift from post-1945 democratic pluralism to technocratic neoliberalism was fostered from the 1960s onward by an alliance of the white overclass with African Americans and other racial minority groups. The result was a backlash by white working-class voters, not only against nonwhites who were seen as competitors for jobs and housing, but also against the alien cultural liberalism of white “gentry liberals.” The backlash in the North was particularly intense among “white ethnics”—first-, second-, and third-generation white immigrants like Irish, German, Italian, and Polish Americans, many of them Catholic. The disproportionately working-class white ethnics now found themselves defined as bigots by the same white Anglo-Saxon Protestant (WASP) elites who until recently had imposed quotas on Jews and Catholics in their Ivy League universities, but who were now posing as the virtuous, enlightened champions of civil rights.

Today’s populism is a counterculture, not a counterestablishment. A counterculture defines itself in opposition to the establishment. A counterestablishment wants to be the establishment. Members of a counterculture relish their outsider status. Members of a counterestablishment regret their outsider status. A counterculture is the heckler in the audience. A counterestablishment is the understudy, waiting in the wings for a chance to play the title role.

Both minoritarian rule by enlightened technocrats and pseudo-majoritarian rule by charismatic tribunes of the people are rejected by democratic pluralism, based as it is on a vision of society as a complex whole composed of many legitimate communities, each with its own institutions and representatives, rather than a fluctuating mass of atomized individuals.

For them, a good society is a mosaic of vibrant smaller collectivities—trade unions, universities, business associations, local authorities, miners’ welfares, churches, mosques, Women’s Institutes, NGOs—each with its own identity, tradition, values and rituals.

Genuine democracy requires never-ending, institutionalized negotiations among many major social groups in politics, the economy, and the culture, each equipped with substantial bargaining power and the ability to defend its interests and values. By this definition, technocratic neoliberalism and demagogic populism are not forms of democracy at all.

The oligarchs may not have numbers, but they control most of the wealth, expertise, and political influence and dominate the media, universities, and nonprofit sectors. Most populist waves break and disperse on the concrete seawalls of elite privilege.

Only a new democratic pluralism that compels managerial elites to share power with the multiracial, religiously pluralistic working class in the economy, politics, and the culture can end the cycle of oscillation between oppressive technocracy and destructive populism.

A Gallup poll in August 2018 showed that 78 percent of Democrats believed not only that Russia interfered in the election but also that it changed the outcome, denying Hillary Clinton the presidency.

In December 2015, the progressive documentary filmmaker Michael Moore told Business Insider: “Donald Trump is absolutely going to be the Republican candidate for president of the United States.”8 In July 2016, after Trump won the nomination to become the presidential candidate of the Republican Party, Moore wrote an essay on his website, “5 Reasons Why Trump Will Win.”

Former US secretary of state Madeleine Albright, in a book entitled Fascism: A Warning, has declared that Donald Trump is the first “anti-democratic” president.15 Yale philosophy professor Jason Stanley in How Fascism Works: The Politics of Us and Them, lumps Trump in with Hitler, genocidal mass murders in Rwanda, the Confederates, and the government of Myanmar.16 “A leading Holocaust historian just compared the US to Nazi Germany” shrieked a headline on the neoliberal website Vox in October 2018.17 The article referred to an essay in the New York Review of Books by the historian Christopher Browning. In addition to making the usual comparison of Trump to Hitler, Browning displayed his supercilious erudition by comparing Republican Senate majority leader Mitch McConnell to Hitler’s predecessor and enabler German president Paul von Hindenburg.

According to an NPR/PBS NewsHour/Marist poll of August 17, 2017, when given the choice between allowing Confederate statues to “remain as a historical symbol” or “be removed because they are offensive to some people,” the only two political factions in the American population in which majorities said that the statutes should be removed were those who identified themselves as “very liberal–Liberal” (57 percent) or “strong Democrats” (57 percent). Strikingly, even 34 percent of these “strong Democrats” and 31 percent of “very liberal–Liberal” respondents opposed removal. A majority of “soft Democrats” favored leaving the statues in place (52–33, with 15 percent undecided). Among African American respondents, more favored leaving Confederate statues in place as historical symbols (44 percent) than removing them as offensive (40 percent); 16 percent were unsure.

The urban working class, which favored social democrats and communists, like Catholic Germans, was consistently underrepresented among Hitler’s supporters, who were disproportionately university graduates, civil servants, small business owners, inhabitants of small towns, and Protestants.

To test the susceptibility of individuals to fascist demagogy, Adorno and colleagues devised a personality test in 1947, including a measure called the California F Scale (“F” standing for Fascism). The test was supposed to measure latent fascist propensities along multiple vague dimensions, many of which were connected with fascism only in the minds of mid-twentieth century Marxists, like “Conventionalism. Rigid adherence to conventional, middle-class values”

Altemeyer’s right-wing authoritarianism (RWA) test devised in 1981 purports to identify authoritarian tendencies on the basis of responses to questions that include these: “The ‘old-fashioned ways’ and the ‘old-fashioned values’ still show the best way to live” and “There is absolutely nothing wrong with nudist camps.”28 Those who prefer old-fashioned values to fads and nudist camps are defined as “authoritarians.” The C-Scale test, purporting to measure conservatism, created by Glenn Wilson and John Patterson in the 1960s, used attitudes toward jazz as a touchstone.29 Combining the work of Altemeyer, Wilson, and Patterson, we may conclude that individuals who dislike both jazz and nudist camps are authoritarian conservatives.

THE AUTHORITARIAN PERSONALITY theory was first weaponized in American partisan politics in the 1950s. In The New American Right (1955), Daniel Bell, Nathan Glazer, Peter Viereck, and others explained McCarthyism as an anti-intellectual revolt of working-class Americans afflicted by status anxiety.32 One of the contributors to The New American Right was the historian Richard Hofstadter, who adopted the term “pseudo-conservative” from the Adorno school.33 In several influential books and essays, Hofstadter tried to rewrite the history of the New Deal by downplaying the importance of organized farmers and organized industrial workers in order to make college-educated professional reformers the heroes of twentieth-century American history.

Hofstadter misled a generation of readers into thinking that the American agrarian populist crusade of the 1890s had been an essentially anti-Semitic and protofascist movement.35 Jon Wiener writes that Hofstadter “saw Joe McCarthy as a potential American Hitler and believed he had found the roots of American fascism among rural Protestants in the Midwest. It was history by analogy—but the analogy didn’t work.”36 The erroneous thesis that McCarthyism was the rebirth of agrarian populism was refuted by a number of historians, including C. Vann Woodward in his 1959 essay “The Populist Heritage and the Intellectual.”37 In 1967, the fatal blow to Hofstadter’s application of Adorno’s status anxiety theory was delivered by Michael Paul Rogin, who showed in The Intellectuals and McCarthy: The Radical Specter that McCarthy’s major supporters were suburban upper-middle-class Republicans, not rural populists.

In a 1966 essay, Hofstadter coined a phrase, “the paranoid style in American politics,” which to this day is invoked by lazy journalists and thinly educated pundits, most of them neoliberals or establishment conservatives, to delegitimate leftists as well as populists or conservatives with working-class or rural constituents.39 In the 1960s, the rhetoric of “pseudo-conservatism” and “status anxiety” and “the authoritarian personality” was revived again by centrist Democrats and some moderate Republicans to smear the followers of the conservative Republican presidential candidate Barry Goldwater in 1964 as potential fascists. So many academic American psychologists and psychiatrists declared the Republican candidate for president mentally unstable that the American Psychological Association in 1973 was compelled to enact a “Goldwater Rule” forbidding members from diagnosing politicians they did not like from a distance.

The coinage of the term “homophobia” by the psychologist George Weinberg in the 1970s has been followed by a proliferation of pseudoclinical terms in which those who hold viewpoints at variance with the left-libertarian social consensus of the transatlantic ruling class are understood to suffer from “phobias” of various kinds similar to the psychological disorders of agoraphobia (fear of open spaces), ornithophobia (fear of birds), and pentheraphobia (fear of one’s mother-in-law). The most famous use of this rhetorical strategy can be found in then-candidate Hillary Clinton’s leaked confidential remarks to an audience of donors at a fund-raiser in New York in 2016: “You know, to just be grossly generalistic, you could put half of Trump’s supporters into what I call the basket of deplorables. Right? They’re racist, sexist, homophobic, xenophobic, Islamophobic—you name it.”

But the willingness of Western elites to refrain from imposing their deeply held left-libertarian values on their fellow citizens or to pay higher taxes to bribe the masses below them is undoubtedly limited.

British socialist thinker Ralph Miliband put it, “access to positions of power by members of the subordinate classes does not change the fact of domination; it only changes the personnel.”

What about occupations with the greatest absolute number of job openings? Here the only STEM job category among the top ten is “software developers, applications” at number four, paying $101,790 a year. The other categories with the most openings in the US are personal care aides; combined food preparation and serving workers, including fast food; registered nurses; home health aides; janitors and cleaners, except maids and housekeeping cleaners; general and operations managers; laborers and freight, stock, and material movers; medical assistants; and waiters and waitresses. Among these non-STEM jobs, only two pay relatively well—general and operations managers ($100,410) and registered nurses ($70,000). These happen to be the only two that require college degrees, according to the BLS. None of the other jobs with the greatest absolute growth in the US pay more than the annual salary of a medical assistant ($32,480).

In one study, in sixteen Western democracies labor productivity grew far more rapidly than average real wages and fringe benefits, but most income growth went to profits of owners and shareholders.5 Another study of thirteen advanced capitalist countries found that the growth in real wages, which had been 4 percent in the 1970s, was less than 1 percent between 1980 and 2005, while the wage share of income declined from 78 percent to 63 percent, with the rest going to income from profits, interest, dividends, and rents.6 The big money is not in “human capital” but in plain old-fashioned capital. The new economy is really a new version of the old economy—the managerial capitalist economy, not some mythical, immaterial “knowledge economy.”

In most of these jobs, the low wages are caused not by a lack of university education, which is not needed, nor by a lack of vocational skills, but by a lack of bargaining power on the part of workers.

A “robot tax” has been endorsed by French socialist Benoît Hamon and American capitalist Bill Gates, to fund a UBI as a solution to the as-yet-nonexistent problem of mass technological unemployment. But if robots were cheap and common enough to cause mass unemployment, the commoditized robot industry might not generate enough profit to support a massively expanded welfare state; you might as well try to pay for a universal basic income with a microwave oven tax. If, on the other hand, robots were scarce and selling for a premium, technological unemployment would not be a problem—and the robot tax perversely would encourage the substitution of low-wage workers for advanced machines, putting the Industrial Revolution into reverse.

In the unlikely event that a UBI was adopted by any country, it might create enormous political pressure on the part of many voters to drastically cut even reasonable levels of legal immigration in order to prevent the country from becoming a welfare magnet. In addition, families with one or a few children might denounce families with many children for diluting shares of the national dole. Advocates for the poor might try to increase UBI amounts by means-testing the giveaway, turning the affluent into enemies of the program. Far from ending class war and promoting

In the US, large firms with over five hundred workers in 2007 employed 44 percent of all workers but only 28 percent of low-wage workers. Firms with fewer than ten workers employed only 20 percent of the workforce but 42 percent of low-wage workers.

Compared to more direct prolabor measures like minimum wages, collective bargaining and limits on global labor arbitrage, pulverizing the most productive firms in the economy is a very roundabout and inefficient way to try to raise wages, like burning down a barn to roast a pig in the famous fable by Charles Lamb.

Just as a UBI cannot work without stringent and strictly enforced limits on immigration, so a neo-Brandeisian antimonopoly policy cannot work except in a much more protectionist and autarkic US economy, which could only be created by measures that cosmopolitan, open-borders progressives, like their newfound libertarian allies in matters of trade and immigration, would be sure to denounce as xenophobic, racist, and nativist.

Daniel McCarthy has aptly called approaches like the ones I have criticized in this chapter “palliative liberalism.”14 However popular these miracle cures may be among the managerial elite and the overclass intelligentsia, as remedies for working-class distress in the deindustrialized heartlands of the Western world the panaceas of redistributionism, education, and antimonopolism are like prescriptions of aspirin for cancer.

But whatever the immediate stimulus, the underlying cause is the same—long-smoldering rage by non-college-educated workers against damage done to their economic bargaining power, political influence, and cultural dignity during the half-century revolution from above of technocratic neoliberalism.

In the words of David Marquand: The alternative power centres on which [pluralists] rely to check the power of the intrusive state must have a capacity for self defence. This means that they cannot be anarchistic communes. They too must be led, and leadership is elitist by definition. For pluralists, the notion that we can live in a world without elites is as fatuous and as dangerous as the notion that we can live in a world without power. If power checks power, elites countervail elites.

Interclass tensions can be dissipated in thousands of small-scale negotiations, instead of accumulating until there is one huge explosion.

In the economy, a new class peace treaty to end the new class war would involve the restoration of tripartite bargaining among labor and capital in some form.

In Britain and other countries, as well as some states of the US, “wage boards” have been used to set wages and working conditions in so-called sweated industries, which have many small employers and low-wage workers and are difficult to unionize. Recently a wage board raised the minimum wage for fast-food workers in the state of New York. For many of today’s dispersed service workers, representation on local or national wage boards, with representatives chosen by workers through elections or company works councils or other means, may be a more effective basis for government-brokered business-labor negotiation than old-fashioned, site-based collective bargaining.

Basic civil rights should be identical everywhere within a nation, and in a federal system social insurance is most efficiently handled at the national level. But there remain many local institutions that can be provided as amenities for all local residents—public clinics, public libraries and museums, city and county parks, even public golf courses, basketball and tennis courts, and swimming pools. To ensure that what Ganesh Sitaraman and Anne Alstott call “public options” like these are adequately funded even in poor localities, they should be financed by national revenue-sharing schemes allocated on a per capita basis for public goods to be chosen by local citizens.

Why don’t the lazy losers in heartland communities show some initiative and move to the Bay Area to invent an app, or relocate to London to work in finance? But the geographic immobility of the working class is both a political challenge, in a world of mobile capital, and a political opportunity—an opportunity to build multigenerational communities instead of transient labor camps.

Rebuilding democracy at the local level is not enough. In a post-neoliberal democratic pluralist regime, provincial and national legislatures must regain some of the power that they have lost to executives and judges.

The evolution of managerialism in the West has replaced the distant and snobbish—but thankfully indifferent—bosses of the post-1945 years with a new “woke” corporate elite. Under the cross-class settlement in the mid-twentieth-century West, once the whistle blew, the proletarian could leave the factory gate for the safety of a world that excluded the bosses, a world of working-class neighborhoods, churches, clubs, and taverns. Under technocratic neoliberalism, however, the boss class pursues the working class after the workday has ended, trying to snatch the unhealthy steak or soda from the worker’s plate, vilifying the theology of the worker’s church as a firing offense and possibly an illegal hate crime to be reported to the police, and denouncing the racy, prole-oriented tabloid Internet as “fake news” to be censored by the guardians of neoliberal orthodoxy and propriety.

The democratic pluralist version of democracy necessarily puts great emphasis on national sovereignty—external sovereignty, not internal sovereignty. All of the various schools of thought that inform the democratic pluralist tradition—English pluralists, French solidarists, Catholic corporatists, and New Deal defenders of countervailing power in the broker state—reject the eighteenth-century idea of unlimited popular sovereignty shared by the American and French revolutions. For democratic pluralists, the state—usually a nation-state, but sometimes a multinational state or independent city-state—is not a mass of individuals to whom a general will can be attributed, but a community made up of smaller communities.

Cross-class compromises among labor and business, for example, are pointless if businesses can unilaterally annul the contracts at any time by transferring operations to foreign workers or bringing foreign workers into the country to weaken or replace organized labor. The various cross-class settlements in the US and Europe from the 1940s to the 1970s would not have been possible if employers had been able to use large-scale tax and regulatory arbitrage and offshoring and access to high amounts of low-wage, non-union immigrant labor to escape the constraints imposed on them by “new deals” with organized labor and democratic national governments. For this reason, a world order that can support many countries organized along democratic pluralist lines will be quite different from a neoliberal world order in which most decision-making has been transferred from nation-states to supranational institutions or from national legislatures to national executive bureaucracies and judiciaries. Rejecting neoliberalism at the national level requires the rejection of neoliberalism at the global level as well. A world safe for democratic pluralism will not be a neoliberal world order.

DANI RODRIK has argued that “democracy, national sovereignty and global economic integration are mutually incompatible: we can combine any two of the three, but never have all three simultaneously and in full.”1 If Rodrik’s trilemma, or “impossibility theorem,” is correct, then global integration should be sacrificed to the need to preserve and strengthen the peace treaty among the classes at home. At the global level, this requires abandoning the ideal of a rule-governed global market for an à la carte approach to cross-border integration. Rich and poor countries alike should be allowed to use national developmentalist strategies tailored to their particular needs.

A 2017 report prepared for the US-China Business Council for Oxford Economics estimated that “average prices are 1–1.5 percent lower as a result of imports from China. Oxford Economics estimates the influence of such low prices boosted US GDP by up to 0.8 percent in 2015.” Oxford Economics cites other studies that have concluded “that greater import penetration from China reduced US inflation by about 0.1 percent annually in the late 1990s and early 2000s” and that an Apple iPhone might cost 5 percent more if assembled in the US.5

Union membership in the US has plummeted from roughly a third in the mid-twentieth century to only 10.5 percent in 2018.9 This is a transatlantic trend. While a few countries retain high union density, among the developed nations of the Organization for Economic Cooperation and Development (OECD), the percentage of the labor force that is unionized has declined from 30 percent to 17 percent on average.10 This matters because, according to one estimate, the decline in unionization explains as much as a third of the growth in wage inequality.

Milton Friedman: “If you have a welfare state, if you have a state in which every resident is promised a certain minimum level of income, or a minimum level of subsistence, regardless of whether he works or not, produces it or not. Then [free immigration] really is an impossible thing.” Friedman callously welcomed illegal immigration—but only as long as illegal immigrants were ineligible for welfare: “But it’s only good so long as it’s illegal. . . . Make it legal and it’s no good. Why? Because as long as it’s illegal the people who come in do not qualify for welfare, they don’t qualify for social security, they don’t qualify for the other myriad of benefits.”

Robert Shapiro argued in 2019 that much of the unexpected contraction in employment among native white Americans in recent years had been the result of direct competition of white workers who shared higher wage expectations with immigrants as well as members of minority groups willing to work for lower wages: A final critical reason why many employers are more inclined to hire Hispanics, Asians, and blacks than whites in this business cycle is the economics of wages. At every educational level, except people without high school degrees, whites’ wages are higher than the wages of blacks, Hispanics and, in some cases, Asians. There is a long history of immigrants and minorities working for less than others with the same education, sometimes willingly and often unwillingly. Italians, Poles, Eastern Europeans, and Irish, as well as blacks, did so a century ago. Apparently, that pattern has not changed a great deal.

The beneficiaries tend to be affluent overclass households that hire servants and firms whose business models rely on cheap labor. The victims are the working poor, including previous waves of immigrant workers. According to the US Commission on Civil Rights in 2010, “illegal immigration to the United States in recent decades has tended to depress both wages and employment rates for low-skilled American citizens, a disproportionate number of whom are black men.”25 A 2017 National Academies of Sciences, Engineering, and Medicine report noted that previous studies had found “more-negative results for low-education blacks than low-education whites” and “larger negative effects for Hispanic dropouts than for all dropouts. This could be because native dropout minorities are the closest native substitutes for immigrants.”

A legitimate case can be made for modestly increasing skilled immigration. As we have seen, there is widespread public support in Western democracies for increasing the numbers of skilled immigrants, even among many who want unskilled immigration to be cut. But if their numbers are increased, skilled immigrants should be legal permanent residents with the rights to quickly become citizens and to quit one employer for another, not easily intimidated and easily exploited indentured servants whose lack of bargaining power makes them attractive substitutes for workers who possess more rights.