The Myth of the Middle Class

The world's most pandered-to demographic is no more economically productive or civic-minded than anyone else.

BY CHARLES KENNY | SEPTEMBER 19, 2011

A little more than 160 years ago, a powerful analysis of the role of the middle class in economic development was unleashed on the Victorian public. It described how monopolistic guilds had been "pushed on one side by the manufacturing middle class" which "developed [and] increased its capital" as it reformed economies and polities. The middle class had "created more massive and more colossal productive forces than have all preceding generations together," the text suggested.

A century and a half later, few subscribe to the political doctrines of that analysis, Karl Marx and Friedrich Engels's Communist Manifesto. Yet the idea of the middle class as central to economic growth and democratization is still very popular. Indeed, the view that "bourgeois" values -- seen by Marx as an important stepping stone on the way to revolution and utopia -- are a vital part of progress to the end of history  is almost universally held among middle-class historians and middle-class political scientists. Why did Britain lead the world in the 19th century? Because of "the great English middle class," answers Harvard University economic historian David Landes in his magisterial book, The Wealth and Poverty of Nations.

For the future, continuing worldwide growth through closer integration in the 21st century will "depend on what can be done for the great global middle," suggests U.S. President Barack Obama's former economic advisor Larry Summers. It is hard to think of any greater shibboleth in American politics; in January 2010 Obama convened a task force dedicated entirely to its needs. But this isn't just an American mania; it is worldwide. Indian Prime Minister Manmohan Singh, for example, has called for "thinking people … from enlightened middle classes" to play a larger role in public life.

But is there any evidence to support the argument that the middle class is so vital to prospects for stability and economic growth? In fact, the middle class exhibits little more of the entrepreneurship or social progressiveness that is typically ascribed to it than do poor people.

And who, exactly, is in the middle class? That is a matter of some confusion. In their paper, "What Is Middle Class About the Middle Classes Around the World?" MIT economists Abhijit Banerjee and Esther Duflo use a historical estimate based on the British middle class, which is often thought to be critical to Britain's rise as a world power. They suggest that income for a family living off the wages of a clerk in his 30s in Britain in 1825 would be about $10 per person per day in today's U.S. dollars. They define a middle class as people with incomes between that level and the global poverty line of $2 a day. Economist Homi Kharas at the Brookings Institution, meanwhile, uses a definition stretching the other direction from the $10 mark, between $10 and $100 a day. Nobody is middle class according to both definitions.

Martin H. Simon-Pool/Getty Images

 SUBJECTS: FINANCIAL CRISIS
 

Charles Kenny is a senior fellow at the Center for Global Development, a Schwartz fellow at the New America Foundation, and author, most recently, of Getting Better: Why Global Development Is Succeeding and How We Can Improve the World Even More. "The Optimist," his column for ForeignPolicy.com, runs weekly.

AL200

9:23 PM ET

September 19, 2011

Mediocre Economics

As an economist I can appreciate the halfbaked scientific argument your putting across but even in those terms its hard to shake off the ideological diarrhea. If humans were robots then the facts you point out would amount to something but if you factor in the socio-political importance of the middle class then your argument turns out to be complete BS, and just a really lame attempt at jumbling some statistics to throw pot shots at the president.

I suggest you read Fareed Zakaria' s the future of freedom... Get your facts and notions straight

 

KOMASA

10:07 AM ET

September 20, 2011

Agreed

Economics can be worser at bad hands. Middle class erosion must be stopped before it's too late. oyun

 

MARTAMASSAGEM

10:02 PM ET

September 19, 2011

Mediocre....

yea, i agree the ideological diarrhea. If humans were robots then the facts you point out would amount to something but if you factor in the socio-political importance of the middle class then your argument turns out to be complete BS...Thanks!
Ar Condicionado Imoveis Acompanhantes Massagistas

 

SIEGGY

9:15 AM ET

September 20, 2011

This was an extremely poorly

This was an extremely poorly thought out and written piece. Middle class is different in every culture and economy, and rather than trying to nail down an economic standard, go with a more subjective standard.

My definition of the 'Middle Class' would be more along the lines of 'getting by comfortably though not ostentatiously'. A large enough income to allow for the basics needs of life, some luxuries, and enough to set aside as a cushion against bad times and to allow for the upward advancement of your progeny. For the most part, they're not looking to become 'Wealthy', they want to do 'Well'. Most if not all of the 'Middle Class' are not so much devoted to the acquisition of wealth as they are the fulfillment and quality of their lives, and those of their families.

But the poor are neither defeated or listless. they have the same desire to improve their lot as anyone else. The 'Poor' are those who are facing true hardship, who must choose between which necessities they must forgo in order to survive. Where I mark the break between the poor and the middle class is when even though both must budget their resources, the poor must husband even the smallest amount in order to survive whereas the middle class has (no matter how small) resources that can be expended on things other than sheer necessity.

The Middle class doesn't have to choose between food or shelter . . . they have to choose between chicken and steak, a house or an apartment, if you will. That frees them from the 'grind of poverty', and allows the resources of their minds and spirits to express themselves.

There is nothing wrong with being a shopkeeper or an employee. But that's merely a stepping stone - you should realistically expect that your children should do better than you. They may take over your shop eventually, but they now have the option of opening another, or expanding, or going to school and becoming something better than you. The 'Middle Class' is the yeast whose fermentation allows societies and economies to rise. Kill off the yeast and the bread stays flat . . .

 

XTIANGODLOKI

9:34 AM ET

September 20, 2011

The middle class is a political concept

Personally I think middle class should be defined by amount of assets/networth compared to rest of the population, let say 50-90 percentile. So in India if you make over 1000 a month and worth 20k USD you would definitely fall into middle class because on average people make and worth a lot less. Whereas in the US the middle class would cover a much bigger range of salaries.

That said, the whole "middle class" concept is used as a political concept to rally supporters more than anything else. Since most people think they are part of the middle class it's easily to use this concept to unite people into some kind of common cause. This is why so few people bothered to create a good definition for "middle class", doing so would create division among the population and more importantly the message.

 

BING520

11:54 AM ET

September 20, 2011

CHARLES KENNY

I have a hard time understanding what CHARLES KENNY is trying to tell us or to prove to us. I don't always ascribe entrepreneurship or innovation to middle class. Entrepreneur comes from all classes. I descry that upper middle class seem to be more innovative because of education and resources more lavishly available to them. Innovation takes time. When you work 3 jobs, it is a little harder to innovate.

Middle class is the bedrock of a stable society and productive economy for numerous reasons. It is vexatiously puzzling to be ricocheted with a fable under the guise of scientific findings that middle class "is no more economically productive and civic-minded than anyone else".

If CHARLES KENNY is trying to convince us that a society or an economy with few or no middle class is as good as a society with dominant middle class, he is doing a poor job. "The Myth of the Middle Class" is no more mysterious than a reporter trying to come out with something just to meet a deadline or to keep the conversation going at an Irish bar. It is not well thought.

 

DDSNAIK

9:31 PM ET

September 20, 2011

Yep

I also fail to see his point or follow his logic. Think all he managed to do, ironically, is highlight the value of a middle class given the attempted drivel to the contrary.

 

WOWTHATWASBADCHARLESKENNY

2:13 PM ET

September 20, 2011

I made an account because this article is an embarrassment.

FP should be ashamed for putting this article online. This article is not only a defecation on the reputation of SAIS, but is just stunning in the low quality level of its argument and analysis. As a conservative, or from any ideological standpoint, this kind of writing is just incredibly isolated, embarrassing, and revolting to read as a student.

The only "optimistic" thing about this author is that he inspires me to have faith in our C+ business students; particularly, that they might someday be able to become seniors fellows at the Center for Global Development. The only thing that we surmise about Charles Kenny is that along with masturbating with $100 bills in front of his vanity mirror, he also enjoys verbally pissing on those "below" him.

I would rather throw up into my hands and blind myself then read another article by such a detached and distanced "professional." Absolutely embarrassing.

 

OH GOODNESS

4:29 PM ET

September 25, 2011

...........

My main concerns weren't limited to the incongruity of the argument on a rational level or lack of proper definitions, but also on a direct data level. Not only are his claims unclear, they are falsified and illegitimate. It is simply a jejune asseveration.

To state that the income for a family living off of the wages of a clerk in his 30s in Britain in 1825 would be about $10 per person per day in today's U.S. dollars, is blasphemy – regardless on the interpretation. By referencing International Finance: Theory and Policy by Steven Suranovic, one would have to assess the US/GB gold exchange rate, which is $20.67/£4.24, equaling a difference of 4.875$/£. This calculated is $4.875/20.67$/oz = .23585 oz of gold, or .23585 oz (4.24£/oz) = £1.00. Resulting in an exchange rate of $4.875= £1.00 in 1825. Currently, 1 GBP is equivalent to 1.5716 USD – leaving Mr. Kenny with uncountable variables in fluxation… and pure absurdity regarding how monetary values have evolved.

Evaluating this assumption from a mathematical standpoint leaves the mind boggled. Making $10 per day in present time is not something one should be thankful for, but rather disgusted by. The US Department of Health and Human Services, in 2009, stated that a single individual making less than $10,830 per year is in poverty, which would be less than $29.67 per day. So… if Mr. Kenny is declaring that we should be happy and appreciative of the middle class living in poverty, he has done a good job.

Mr. Kenny appears to be enclosed and held captive in the narrow microcosm world of elitism, which, to some, may pass as a pitiful excuse; but what is truly inexcusable is how he is blatantly uninformed and lacking pivotal points of data on which his claims are reliant. This piece of work is flirting with being offensive, but for me, it comes closer to being ridiculous. His loquacious spew is merely resulting in an incompetent argument.

 

GNOMAPHOBIC

6:19 PM ET

September 20, 2011

I will say one thing...

Nobody seems to be addressing the one good point I believe the author made concerning the overwhelming role of the poor in the Arab Spring. The reluctance of business owners in Syria, for instance, to join in the opposition against their privileged position in society as a result of Assad's regime seems to confirm this theory. Similarly, one cannot ignore the facts Mr. Kenny raises as regards the primary actors of the revolution in Tunisia.

Having said that, I do not endorse the overall thesis of the article as regards to the importance of a middle class in a growing society; in fact I believe the example I raised in Syria confirms this hypothesis as the Syrian economy is most certainly not growing. If the opposition can encompass business leaders and gain their support in the revolution - and most importantly maintain their cooperation afterwards! - the aftermath could be a more robust and industrious society.

 

DR. SARDONICUS

9:33 PM ET

September 20, 2011

Obtuse Leadership – and the End of the World

The primary source of creativity for members in the Middle Class is enough spare time and income to pursue hobbies and other negative cash flow R&D schemes, a very few of which turn out to be extremely valuable in the long run despite merciless censorship and suppression by the rich. Unlike the poor who have little spare time and cash to do this; and the rich too busy waging class war for their short-term gain and to everyone else’s detriment.

Plus Middle Class values of hard work, delayed gratification and the intrinsic value of art, scientific curiosity, civic mindedness, compassion and creativity are better motivators for its young students to excel, than the mere desperation of poverty and smug self-entitlement of the rich.

Finally, the Middle Class serves the rich as a sword and a shield. First, it provides them with a protective corps of teachers, officers, shrinks, lawyers and judges. Second, as a near-to-hand ablative shield of victims for the petty criminality poverty multiplies and wealth insulates against. Third, as an exemplary promise of reward for the hard-working poor and their children, provided they behave.

Of course, this sword and shield can be reversed just as readily in favor of the poor and against the rich, should the latter prove stupid enough to provoke that reversal. Revolutionaries tend to be children of the Middle Class.

All the above should be obvious to you and would be if your critical faculties were not hopelessly atrophied. Out of pure curiosity, please tell me: did you become obtuse because you are well paid to be, or did you become well paid because you are naturally obtuse?

As with your entire class, the jury is still out.

As for the End of the World with good betting odds, based on leadership by the terminally obtuse: read ‘em and weep.

http://www.naturalnews.com/033564_solar_flares_nuclear_power_plants.html

 

MARCUS_HOLCOM

5:21 AM ET

September 21, 2011

Who or what is the middle class?

When politicians, economists, academics and journalists try to assess the current economic status of the "American middle class," the debate often begins with a question that some concede is all but impossible to answer: Who, exactly, is middle class in America today?One way to find out is to ask Jerry Orzechowicz, a salesman in the hospitality industry, who lives in Merrillville, Ind., population 30,000, tucked in the northwest corner of the state, about 35 miles outside Chicago.

Orzechowicz and his wife, who also works, earn a combined annual income of between $70,000 and $90,000 and have two kids, one of whom is still in college. They own their own home, four cars and four TVs — including a high-definition widescreen model with surround sound, They can also make use of Affiliate Programs to get benefits for their social awareness programs. Orzechowicz says just about anyone living on $50,000 a year can enjoy a middle-class existence in his neighborhood, which is why he says he’s puzzled when he hears that it’s getting harder to maintain that lifestyle in America.“You can have a house and pay the bills and put food on the table and save a little and take a little vacation once a year," he said. "To me, that’s maybe lower end of the middle class, but it’s better than 98 percent of the people in the world.”

 

FRANKLYFRANK

6:25 PM ET

September 21, 2011

No myth

I don't think people are ever going to agree one where exactly the line between classes lay, but anybody who's neither exceptionally poor nor exceptionally wealthy could be considered middle class and I think most people recognize that the "middle class" constitutes the majority of consumers.

A growing economy is largely dependent on a strong middle class, right now we don't have that.

 

CHANGS

8:41 PM ET

October 17, 2011

Depends on and country

It is foolish to consider an income level as qualify for middle class world wide, as income levels vary widely from country to country and even between cities within a country.

Plus there are too many examples of famous men and women coming from very humble beginnings for his conclusions to be valid.

He did not plan his argument very well or did not do a good job of explaining his argument relating middle class to the advancement of the human race

 

FERROLI

6:03 AM ET

September 22, 2011

Thanks

This blog is fantastic.I would like to introduce this nice website to my friends. My products: condizionatori climatizzatori

 

HECTORBD

12:25 PM ET

September 23, 2011

middle class

middle class of course if the largest group
, and the middle class indeed has the great impact on the economy.

 

YARINSIZ

7:04 PM ET

October 14, 2011

I have a hard time

I have a hard time understanding what CHARLES KENNY is trying to tell us or to prove to us. I don't always ascribe entrepreneurship or innovation to middle class. Entrepreneur comes from all classes. I descry that upper middle class seem to be more seslichat innovative because of education and resources more lavishly available to them. Innovation takes time. When you work 3 jobs, it is a little harder to innovate.

 

CORTES

3:18 PM ET

October 15, 2011

What the worldwide evidence

What the worldwide evidence recommends is that turning into middle class may not suddenly turn you into an entrepreneur or an innovator. Indeed, quite the opposite is true: The reason that many in the middle classes are richer is considering more of them receive constant 9-to-5 careers, with weekly or month-to-month paychecks. By way of contrast, poor folks are more likely to work in casual labor, usually paid by way of the hour, regularly going stretches without employment. We might speak about every brand-new graduate into the middle class as a possible next Invoice Gates, however the certainty is that many more reasonably aspire to be the next Walmart employee.

 

CHANGS

8:32 PM ET

October 17, 2011

Numbers meaningless

"Ninety-one percent of Americans self-identify as upper-middle, middle, or lower-middle class."

If $10 a day or $3,650 per year defines middle class then they are right. The United States $10,890 is the line for poverty, with roughly 14% below that level.

forexample he U.S considers lower Middle Class to be from $35,000 per year, which would be Upper class in some countries.

The rest of what he says is also meaningless, and appears just to be an example of meaningless unrelated facts to try and prove his viewpoint.

It's a shame it did not provide a method to test his theories.