Following the victory of Donald Trump in 2016, and the rise of Eurosceptic parties in Britain and Europe, a paradigm took hold in the popular press, on both sides of the Atlantic: this populist uprising was a xenophobic, nativist backlash against progress and multiculturalism and liberalism, an unleashing of the crudest and most primitive political instincts of a backward-looking class of country bumpkins. Almost every criticism that adhered to this paradigm, no matter how tendentious or condescending or vicious, was allowable, while every criticism of the paradigm was overlooked or shouted down. Michael Lind, a professor of politics and public affairs at the University of Texas, has dealt that paradigm a death blow with The New Class War, which posits an altogether different thesis, and one decidedly less flattering to the class of well-educated, well-paid “managerial elite” who looked upon themselves as the last defenders of liberalism in the age of populism. In Lind’s telling, the accusations of nativism and xenophobia come from a wealthy aristocratic class – one in which “degrees are the new titles of nobility and diplomas the new coat of arms” – eager to safeguard an economic system that has made them fantastically wealthy even as it eroded national sovereignty, sold off manufacturing jobs, and doomed the working classes to stagnant or falling wages and ever-greater job competition.
From the outset, it should be said that Lind takes a realpolitik approach, quoting approvingly from the late philosopher James Burnham: “No theory, no promises, no morality, no amount of good will, no religion will restrain power … Only power restrains power.” The difficulty, he argues, is that the story of the last 50 years has been a steady erosion of the working classes’ ability to wield effective, countervailing power against an economic elite – variously described by Lind as “the overclass” or “the managerial elite” –who have been busily imposing their vision of the good society on their fellow citizens – and profiting handsomely from every new development.
Between the 1960s and the present, as declining fear of great-power conflict gradually reduced the incentives of Western elites to make concessions to Western working classes, the postwar system has been dismantled in a revolution from above that has promoted the material interests and intangible values of the college-educated minority of managers and professionals, who have succeeded old-fashioned bourgeois capitalists as the dominant elite.
What does this look like in practice?
In the realm of the economy, corporations have promoted deunionization and labor market deregulation to the detriment of workers. Firms have also embraced global labor arbitrage, in the form of offshoring production to poor workers abroad or employing immigrant workers, to weaken unions and escape the constraints of national labor regulations.
But these trends transcend the economy. In the culture at large, newspapers and news programs were shrunk or consolidated, with fewer outlets ending up under the control of ever-fewer corporations. Legislative powers silently passed to courts, lobbying groups, and transnational organizations, whose decisions took on greater and greater importance, impacting the lives of more and more people, even as they became less and less democratically accountable. Conspicuously, the people in charge of these increasingly powerful organizations do not much resemble the people they are ostensibly representing. The “managerial elite” was already well described, both by Burnham and Christopher Lasch, but Lind reiterates the important points: they are overwhelmingly city-dwelling, college-educated, liberal, secular, and “global” in their outlook, speaking multiple languages, traveling frequently for work, and happy to think of themselves as “citizens of the world” rather than rooted nationalists.
Lind amusingly describes their gradual usurpation of power in Western nations as a “technocratic neoliberal revolution from above,” and does an admirable job pointing out some of their hypocrisies: they are likely to enthusiastically support mass immigration, for example, though their own jobs – requiring expensive and years-long educational training – are immune from the downward wage pressure created by surplus labor. Likewise, they affirm, everywhere and always, the importance of “diversity,” but themselves opt to live in wealthy, homogenous and often gated communities, thereby foregoing any role in actually helping to assimilate – or even interact with – the newcomers. Worse, still: they don’t merely escape the negative impact of high immigration, but profit from it.
High levels of immigration, both legal and illegal, also maintain the populations and economies and real estate prices of overclass-dominated hubs. For decades, there has been a new outflow of US citizens moving out of unaffordable big cities like New York, San Francisco, and Los Angeles and their counterparts in Europe.
And Canada, I might add. Property valuations in these metropolises have skyrocketed in recent decades, propped up both by the artificial rise in population enabled by mass immigration and by the opening up of real estate markets to foreign buyers. The result has been hyperinflation, leading to massive profits for the property classes and a lifetime of renting shoebox-sized one- or two-bedroom apartments for everyone else.
Lind’s exploration of the intersecting interests of large corporations and government legislation is particularly worthy of mention – and particularly enraging.
Tax arbitrage is the practice by which firms take advantage of differences in tax rates and subsidies in different countries in order to similarly boost profits without boosting productivity. The former chief economist of McKinsey & Company, James S. Henry, has estimated that roughly one-fourth of all the world’s wealth is held in tax havens. According to the Congressional Research Service, in 2015 US-based multinationals recorded 43 percent of their foreign earnings as taking place in five tax havens – Bermuda, Ireland, Luxembourg, the Netherlands, and Switzerland – which accounted for only 4 percent of their workforces. A single office building in Grand Cayman, named Ugland House, is the registered legal address of 18, 557 companies.
And if that weren’t bad enough, these same corporations have successfully lobbied for “regulatory arbitrage, the selective harmonization of laws and rules, when it has been in their interest to do so.”
The economic sectors chosen by Western governments for arbitrage and harmonization reflect the interests not of national working-class majorities but of national managerial elites. Harmonizing labor standards or wages would undercut the corporate search for the cheapest labor, while transnational crackdowns on tax avoidance would thwart the strategy of tax arbitrage by transnational firms. Instead, the emphasis in harmonization policy has been on common industrial standards, the liberalization of financial systems, and intellectual property rights, including pharmaceutical patents. These kinds of harmonization benefit transnational firms, investors on Wall Street or in the City of London, and holders of intellectual property rights in Silicon Valley and the pharmaceutical industry.
Even the means of enacting these legislative changes is often underhanded: when corporate lobbying fails, the desires changes are “repackaged and hidden in harmonization agreements masked as lengthy trade treaties, which are then ratified by legislatures without adequate scrutiny.” Lind quotes from infamous remarks made by the odious Jean-Claude Juncker, former president of the European Commission: “We decree something, then float it and wait some time to see what happens. If no clamor occurs … because most people do not grasp what had been decided, we continue –step by step, until the point of no return is reached.”
In one important section, Lind attempts to quantify the impact of “technocratic revolution from above” on the American workforce.
According to the Commerce Department, between 1999 and 2009 US multinational corporations cut 864,600 workers in the US while adding 2.9 million workers abroad. Fifty-seven percent of the foreign hiring by nonfinancial companies was in Asia, with multinationals adding 683,000 workers in China and 392,000 workers in India. In the same period, multinationals cut capital-investment spending in the US by 0.2 percent a year, while increasing it abroad by 4 percent a year.
To be sure, there were massive benefits to these changes, but those benefits accrued mainly to the “overclass,” who enjoyed cheaper consumer goods without having to sacrifice their livelihoods for the pleasure. For the American worker, the story is less cheerful:
The economist David Autor and several coauthors have shown that “the China shock” – the flood of Chinese imports into the US following China’s entry into the WTO – did far more damage to US manufacturing employment than the previous consensus held, destroying 2 million to 2.4 million net jobs in manufacturing and manufacturing-related industries between 1999 and 20111 and contributing to the “employment sag” in the US in that period. A study in 2013 by Michael W. L. Elsby, Bart Hobijn, and Ayseugal Sahin concluded that “increases in the import exposure of US businesses can account for 3.3 percentage points of the 3.9 percentage point decline in the US payroll share over the past quarter century.”
Most damningly, the legislative impetus for this economic devastation has enjoyed large bipartisan support, which is exactly why populism erupted so powerfully four years ago: when neither party in America’s two-party system encapsulates or even acknowledges the real concerns of the majority of its constituents, fringe candidates come to seem attractive.
I thought of Lind and his insights recently when I spied an online headline about Apple’s latest “anti-racism” activism: “Apple to Remove ‘Master/Slave’ and ‘Blacklist’ Terms From Coding Platforms.” Needless to say, both the master/slave designations and the term “blacklist” have nothing whatsoever to do with racism, and their removal will do nothing to improve the lives of black Americans, but that isn’t really the point: what Apple has done is performative, and the message is tailor-made for the over-educated overclass types who have spent the last six months fawning over the writings of Robin DiAngelo and Ibrahim Kendi. Meanwhile, Apple merits a mention in Lind’s book: “Apple in particular has mastered the arts of tax, regulatory, and labor arbitrage. Through subcontractors, Apple employs Chinese workers to assemble most of its iPhones and iPads for wages and under working conditions that would be illegal in the US or any Western democracy.” Apple’s feint serves a clever purpose, however: in loudly championing the fashionable nonsense of the overclass, they can escape scrutiny for their less progressive labor practices.