Top-Down CIass Warfare
by Robert Kuttner
American Prospect magazine, October 23, 2000
It is difficult for a liberal to raise concerns about irresponsible
corporations without being accused of class warfare. The Wall
Street Journal recently ridiculed Al Gore for "schlock populism"
and cynical "business-bashing."
In truth Gore's criticism is carefully calibrated and directed
against assaults that affect the broad middle class. The vice
president goes after drug companies for price-gouging, managed
care companies for second-guessing doctors, tobacco companies
for marketing products to kids, and Hollywood for purveying violence.
Most voters agree with Gore. But the vice president hasn't attacked
corporations in general. Nor has he addressed America's gross
disparities of income and wealth, or the fact that tens of millions
of full-time jobs fail to pay a living wage, or the abuses of
welfare reform. That brand of class politics takes exceptional
political courage because most of America considers itself middle
The real class warfare in America today is top-down, as it
has been ever since Ronald Reagan. The proposed Bush tax cut,
which would bestow 43 percent of the money on the top 1 percent
of earners, is just the beginning. The general conservative assault
on social endeavor is occasionally principled and libertarian,
but can be usefully understood in terms of class.
The rich don't need government because they can simply opt
out-to private schools, exclusive clubs, gated communities, personal
physicians, nannies, limousines, and helicopters. The rest of
us depend on basic public services and social infrastructure.
Starve Medicare, and you ration health care for those with a limited
ability to pay. Cut federal help to schools, and you deny upward
mobility to the children of the nonrich. Refuse to address the
job-family straddle faced by working parents, and you assault
every child whose parents cannot afford expensive private day
care. That's class warfare, big-time.
Collective purpose is not just about social investment. Deregulation
has been a backdoor form of class warfare. A generation ago, industries
such as airlines, electric power generation, trucking, telephone
service, hospitals, and banks were all government-regulated. Supposedly,
deregulation would help consumers, but its practical effect has
been a mixed bag. Airline fares have come down on average (along
with service), but prices today are a crazy quilt, and average
prices actually fell at a faster rate before deregulation. The
whole airline system is now a mess. Likewise, electric power.
Ditto banks. Ditto telephones. Verizon recently advertised that
it is now possible to have your local and long-distance service
conveniently provided by the same carrier. Imagine, one phone
company! What will the free market dream up next?
But if it's a mixed blessing for consumers, deregulation has
been devastating for blue-collar workers. The old regulated phone
company had a social compact with its workers. Regulation guaranteed
stable (but not excessive) profits. This climate, in turn, allowed
gains of productivity to be shared with workers. The old AT&T
accepted its unions, and its employees delivered a high quality
of service to consumers.
With deregulation the cutthroat battle for market share is
often waged via steady erosions in pay, working conditions, and
job security. Union workers with decent incomes are played off
against casual labor. Consumers also suffer. If you wonder why
some telephone operators sound barely literate, consider that
many are nonunion workers who make as little as $6 an hour, and
that turnover is high. The recent Verizon strike was not primarily
about pay scales but about job speedup and the company's war on
unions. The Communications Workers of America and the International
Brotherhood of Electrical Workers won a significant victory, which
will help them organize nonunion parts of the company.
What is true of telecommunications is also true of the airlines,
hospitals and nursing homes, trucking companies, and public utilities.
Deregulation guts good jobs. The blue-collar middle class, once
the pride of America, is becoming an endangered species.
Deregulation of global commerce is also a form of class warfare.
It puts pressure on rich and poor nations to shred their social
safety nets in order to reassure investors and bankers. It pits
modestly well-paid industrial workers in the North against desperate
ones in the developing South rather than forging a common strategy
that applies basic rules of decent conduct to all capital investment
Lamentably, many Democrats as well as Republicans embrace
the formula. You don't hear much about this form of class warfare
because it is never advertised as such. Rather, the rhetoric is
one of general efficiency: Shrink government, lower taxes, get
rid of regulation, liberate capital-and the economy will soar.
"Everyone" will benefit. But the past decade has conclusively
demonstrated that everyone doesn't benefit.
I began by observing that it is hard for American politicians
to address the plight of the poor in a largely middle-class country.
The one proven way to join the interests of middle-class and poor
families is through universal government programs and through
regulation that protects the entire citizenry. But discredit government,
and you sever that alliance. So class warfare from the top not
only harms the economic security of ordinary people; it wrecks
progressive coalition politics.
Maybe it's not so bad to be accused of class warfare. Class
is the great unmentionable in America. If it can finally be spoken
of, we may appreciate that only a small minority really benefits
from top-down class politics-and the rest of us have more votes.