An Outsider’s View—8 ,Adopt Middle Path economics best of capitalism and socialism to bridge Wall and Main streets
Posted on November 8th, 2011

By Shelton A. Gunaratne
Professor of mass communications emeritus, Minnesota State University Moorhead

 How can a democracy committed to “equality and justice for all,” a phrase Americans recite in their Pledge of Allegiance, allow itself to become a nation, in which:

  • The top 1 percent own 34 percent of the wealth (income plus assets), and the next 9 percent own 38 percent of the wealth, thereby entrusting the top 10 percent of Americans with 72 percent of the nation’s wealth?
  • The top 1 percent of Americans own 23 percent of national income? And the top 10 percent share 50 percent of national income?

Whether we look at this massive discrepancy in terms of wealth or income, no reasonable person can endorse the existing lopsided distribution of economic power in favor of the upper bourgeoisie (comprising the top 1 percent superclass, and the next 9 percent upper class, who control the means of production and the means of coercion). Through its massive economic power, the upper bourgeoisie determines the political direction of the country, which they claim to be the world’s showcase of democracy, where the Supreme Court has ruled that limitation on campaign spending is a violation of free speech.

This bourgeois minority has used what the German philosopher JƒÆ’†’¼rgen Habermas calls the “norm-free steering media of money and administrative power” to amass its lopsided wealth.

Next comes the lower bourgeoisie or the middle class (roughly about 36 percent of the population) comprising small-scale entrepreneurs who hire wage labor, the professionals, the self-employed, etc. In American usage, the adjective bourgeois often refers to the lifestyle of conspicuous consumption associated with the middle and often aspiring classes. This class generally supports Republican ideals and the Tea Party movement.

In this essay, I am using Marxist theory and terminology to explicate the clash between the American bourgeoisie and the proletariat keeping in mind that America has transitioned from an industrial manufacturing economy to a technological post-industrial economy.

Marx identified the proletariat as the class of a capitalist society that does not have ownership of the means of production and whose only means of subsistence is to sell their labor power for a wage or salary. Kumar David, a political economist who writes a column for the Sunday Island, blames superficial sociologists for propagating the myth that the working class (proletariat) has shrunk to a small minority in Western society and a large middle class (bourgeoisie) has replaced it. About 53 percent of Americans make up the working or lower classes (proletariat), according to the class models of Dennis Gilbert or Thompson and Hickey. Those who live below the poverty level, the bottom 10 percent of Americans, also fall into this class. David says that the Marxist theory of the class struggle under capitalism gains new momentum when the proletariat is re-defined to include

the millions  of educated young people [who] play exactly the same role in the capitalist economy today as any coal miner or factory worker did in days gone by. They function as the source of labor power; they are the creators of value and surplus value. The profits of modern industry relates to them in the same way as the output of the proletariat that Marx spoke of related to capitalism at that time.

This disgruntled new proletariat was instrumental in electing reformist Barack Obama as president in 2008, the year that saw the beginning of the New Depression. They have now formed the Occupy Wall Street (OWS) movement, which has inspired similar demonstrations elsewhere in the world. OWS is most likely the beginning of the clash of classes to end the lopsided arrogation of income and wealth by those who champion capitalism.

Recovery from the New Depression, which may take longer than the Great Depression of the 1930s, is unlikely to occur until the global community agrees to implement an economic system that eliminates the injustices of the capitalist system that has created a widening gap between the rich and the poor.  

Immanuel Wallerstein says that the end of world economic system dominated by America and Europe has reached its bifurcation point after 500 years. This bifurcation will occur because the existing system cannot any longer resolve the monumental problems it has created. The United States and the world have no alternative but to initiate a more complex and efficient economic system that will incorporate, in my view, the best features of capitalism and socialism.

 

(Next: An explanation of the capitalism-socialism spectrum)

One Response to “An Outsider’s View—8 ,Adopt Middle Path economics best of capitalism and socialism to bridge Wall and Main streets”

  1. gamunu6 Says:

    Thank you Prof: Gunaratne!

    I have sent some documents regarding our learned elite, Profs; political leaders even if they live far away from Sri lanka. Hope you had a chance to read them.

    I have followed your articles of travel in USA & parts of Canada. I use to work in North of MN a city called Winnipeg, MB- Canada back in the eighties. Have visited MN many times doing day trips to USA.

    It is essential that we follow the MIDDLE PATH.. as Lord Buddha said extremes are very harmful to people as well as countries. Most countries DO FOLLOW the MIDDLE PATH, not only why Lord Buddha preached BUT either alingning oneself with the RIGHT or with LEFT has not produced any profound results for GOVTS & indivduals alike.

    I applaud our Professors specially of Sri Lankan origin to speak up against FALSE propoganda & distorting the tRUTH in the name of HUMAN RIGHTS which is darling of the west. There should be peace & harmony for any Govt: to practice & tolerate the HUMAN RIGHTS as the Western Countries & their media see it.

    It is basic human dignity & right to practice their own beliefs, culture, heritage and being a law abiding, productive human being. Sri lanka has done that time and again. We as a small nation has shown the correct way to criticize, lead & influence when decisions have to be taken in World stage.

    From the days of league of nations ( in 1945) to present day Commomwealth participation, we always stood by FAIRNESS & good multicultiral leadership in matters concerning individual countries. We were outspoken when Japan was unfairly critized in San Fransico Conferene, When Pakistan wanted to refuel planes in Indian / Bangkadeshi / East Pakistan war & more recently when FIJI the Island nation was punished by Commonwealth nations.

    My opinion may sound bias BUT these are facts we govern ourselves by & also practice the teachings of Lord Buddha, which preached & practiced the MIDDLE PATH.

    Thanks again Dr. Shelton Gunaratne for your valuable contribution……Gamunu Alahakkone. P.Eng Canada, C Eng UK,
    ( retired engineer-Canada).

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