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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Road Walker who wrote (186037)	4/5/2004 5:56:39 PM
From: TimF	Read Replies (1) \| Respond to of 1575001

theatlantic.com The truth is that each of America's successive middle classes has been artificially created by government-sponsored social engineering—a fact that is profoundly important for us to admit as we think about the future of middle-class America. Consider the first American middle class, composed of yeoman farmers. There could never have been a mass agricultural middle class in the United States without vast quantities of cheap farmland, divided up into small farms. There was vast quantities of land available. The government might have grabbed control over it and then given it to people to set up their farms but it didn't create the land. The story was similar for the second American middle class, made up of prosperous urban industrial workers. From Abraham Lincoln to Herbert Hoover, American politics was dominated by a bargain between capitalists and workers; high tariffs on imports served the interests of both, by protecting goods from foreign competition. In addition, the dominant industrial labor force successfully lobbied the government to protect it from competition with other groups. Protectionism is nothing new but the industrialization of America and the extra wealth and hire salaries that it created would have happened with or without a large degree of protectionism. Similarly the restrictions on women or on men from certain races may have helped white men relative to those groups but they did not "create the middle class". Today nostalgic conservatives attribute the prosperity of the 1920s to free enterprise. In reality the market was rigged. I'm not nostalgic for the 1920s but the prosperity then was created by the market. Then as now the government did interfere in the market and redistribute wealth (it does the latter a lot more today) but the prosperity was created by people acting in a relatively free market. Whereas the second American middle class was founded on high wages for workers in the industrial sector, the third American middle class was founded on the supplementation of wage income by government benefits that collectively constituted a "social wage." No it wasn't. Earlier in the same article the author says the "third middle class" was office workers and professionals. Neither their jobs, nor the fact that their jobs paid enough to make them members of the middle class, was created by government supplementation of their wages. Some economists assert that increases in productivity will inevitably translate into higher wages throughout the economy. But this is a matter of faith, not fact. Baumol's analysis tends to undermine such easy optimism. Most productivity advances occur in mechanized and automated sectors, which employ a shrinking number of Americans; so how will the growing number of Americans in service jobs share the gains of high productivity growth? 1 - Increases in productivity are not just in manufacturing. 2 - As less people can manufacture more goods through increased productivity the cost in terms of hours worked to buy those goods goes down. The people who no longer are need to produce goods can produce additional services. Production of both will increase faster then population growth. In the absence of some system of private or public redistribution, then, there is no guarantee that rising national productivity will spontaneously and inevitably produce rising incomes and wealth for most Americans, rather than just windfalls for the fortunate few. There never has been such a guarantee, even with systems of redistribution but the typical American continues to get wealthier. One can imagine the possibility that ALL of the new wealth produced by higher productivity could go to a select few, but in the absence of government intervention to concentrate wealth and benefit the already wealthy, such a result is very unlikely. Monopolies that aren't supported by the government do tend to eventually lose their monopoly (or the monopoly itself loses importance as people use substitutes), and in any case the government has laws against monopolies. These laws are not always rigorously enforced (and in fact the government itself creates or supports the majority of existing monopolies in the US) but they are enforced enough to have an impact, and even monopolies for a particular good or service have to compete for workers and compete for customers with other goods and services. Since the 1970s inequality of both income and wealth in the United States has increased dramatically. As Paul Krugman has observed in The New York Times, a Congressional Budget Office report shows that from 1979 to 1997 the after-tax income of the top one percent of families climbed 157 percent, while middle-income Americans gained only 10 percent, and many of the poor actually lost ground. I believe this is household income. The typical household is now smaller so the income per person, for all groups, has risen more then these figures suggest. Also the not many of the poorest have lost ground. Many people who where among the poorest no longer are. Many of the poorest are immigrants, esp. illegal immigrants and while they may be poorer in some ways then the poor in America in the past they are wealthier on the average in the US then they where in their home country. Also see - THE GOOD OLD DAYS ARE NOW Forget what you've heard about "working harder and getting less." Most Americans have both more leisure and better goods than they did 20 years ago. reason.com