The Middle Class Is Not a Myth

A Class Analysis of the Global North

Introduction

In pursuit of communism, every socialist who subscribes to a theory, be it Marxism-Leninism, Kimilsungism-Kimjongilism, or even Maoism, argues at least formally that socialism must be scientific to achieve its methods. Scientific socialism of course does not simply mean atheistic socialism or technology-focused socialism, but the application of dialectical materialism to human society, which itself leads to the conclusion of socialism’s necessity as well as the methods required to reach socialism.

In this application, every notable Marxist-Leninist, from Mao Zedong to Kim Il Sung or Thomas Sankara, has understood that different nations have distinct material conditions that result in different strategies to bring about revolution. Integral to this struggle are updated class analyses, and in this vein, we find Mao Zedong’s higher collaboration with the peasantry and lumpenproletariat, Frantz Fanon’s understanding of the colonial bourgeoisie’s mercantile, stunted nature, and Amilcar Cabral’s understanding of the petit bourgeoisie’s necessary “class suicide”. All these theories both operate on particular material conditions and offer universal lessons through their common connection with the method of dialectical materialism.

The problem and subsequent failure of revolutionary action in the Global North, in the imperialist nations, is in part a failure to properly apply dialectical materialism to the class realities there. Many socialists in the Global North understand that there wasn’t—for example—a substantial proletariat in pre-revolutionary China, but they simultaneously assume that the Global North has maintained a classical Marxist class dynamic, rather than immensely diverging from this dynamic.

As Walter Rodney, Frantz Fanon, and Mahdi Amel understood, the imperialist spread of capitalism to the colonized nations of the world does not create new dynamic classes, but rather disrupts the prior (typically feudal) mode of production to replace it with a form of subordinated capitalism. The term “underdevelopment” is useful in understanding this dynamic, but we should prioritize Mahdi Amel’s discovery of “the colonial form of production”, as his theory understands subordinate capitalism as a mode of production which develops inversely to the consolidation of monopoly capitalism.

As a result, Mahdi Amel’s conception conveys how neocolonialism is a furthering of the colonial form of production rather than a distinct stage from it:

“The term ‘neo-colonialism’ currently tossed around in our political discourse is not accurate because it relies on and implies a false theoretical definition of colonialism. Colonialism is actually the colonial relation, and it does not necessarily disappear with the disappearance of colonizing forces, the presence of which is but one of the violent forms taken by this relation.” (Amel 116)

In Amel’s conception, we should not be examining the modern progression of internal class relations in the Global South as one of widespread bourgeois nationalist revolutions that have led to neocolonialism even in their newly independent capitalist societies, but rather as a continuation of the colonial economic mode of production under shifting political forms. His theory is consistent with those of Walter Rodney, Frantz Fanon, and Amilcar Cabral among others in identifying the mercantile nature of the colonial bourgeoisie as classes which do not truly guide production and the small presence of a proletariat that—in its incomplete development—has looser class distinction from the wide masses of peasantry.

But that class dynamic is not what we need to examine. Mahdi Amel conceives the capitalist and colonial relations of productions as a dialectic relation between a dominating and dependent power which are driven in their trajectories by the internal class struggle of both:

“This complexity, which characterizes the contradictory movement in the development of these structures’ historical unity, reflects the layers of contradictions at play therein: there is the basic contradiction that encompasses the structural contradictions in each particular structure; then there is the complication presented by the existence of a dominant contradiction, in the unity of contradictions in each structure.” (Amel 113)

Both of these relations of production develop according to their internal class dynamics, but also and principally by their external relation of dominance. Just as this dominance, the flooding of colonial markets by cheap metropolitan goods and the seizure of natural resources and forced labor, disrupts the feudal relations of production in the subordinate nations and establishes a colonial mode of production with the modified class relations identified by Mao, Fanon, or Cabral, so too is the capitalist class structure distanced from its classical examples by the further development of the colonial relation.

Labor Aristocracy’s Beginning

Much has already been said about the labor aristocracy in the Global North, but frequently, such analyses fail to sufficiently question their assumptions about capitalist class structures because doing so would threaten beliefs that are held as Marxist orthodox, namely that the most developed capitalist nations are supposed to have the most developed proletariat strata. While Mahdi Amel’s shift in understanding is essential to our examination, the history of socialist revolution should itself indicate why this assumption is false. Socialism has achieved victory where the chains of capitalism were weakest compared to the consciousness of the working masses, where a small or barely existent proletariat gained hegemony over and an alliance with the working masses of peasantry or other intermediate strata.

While this historical reality lent Leninism an understanding surpassing that of dogmatic Marxists, adding onto this fact with Amel’s notion of a colonial mode of production furthers our understanding of the material conditions underlying both socialist victory in the Global South and socialist malaise in the Global North. For the decisive factor in successful socialist revolutions comes from revolutionary class consciousness, and class consciousness must be built on material conditions. It is pointless to point to capitalism’s weakness in pre-revolutionary Russia as a condition for soviet victory if that capitalism is also, subsequently, interpreted as so weak that the proletariat is undeveloped and therefore does not operate on the conditions necessary to exert ideological hegemony over the peasantry.

Amel’s conception changes this and takes us closer to understanding the other side of the coin in internal imperialist class dynamics. The colonial mode of production does not unequivocally favor class consciousness, but rather enables greater fluidity between classes:

“In other words, the class transition of peasants from one differentiated class to another, i.e. from his village and land to the city and factory, that transpires in a colonial society is incommensurable with this transition in a capitalist society, where it is truly a transformation. The ‘freedom’ to switch classes is a defining characteristic of the relations of colonial production.” (Amel 126).

Amel highlights that this fluidity can even harm class consciousness by helping the large petit bourgeois strata seek to substitute the colonial bourgeoisie. However, Mahdi Amel was emphatic that the trajectory of colonial production led towards socialism, and the victorious examples of the modern socialist nations bear out his prediction.

Unfortunately, Amel’s writing on the prospects of socialism under the colonial mode of production are unpublished in English, but we only need to keep in mind for our examination here that the colonial mode of production underdevelops certain classes, reduces the differentiation of others, and both of these acts naturally effect the establishment of class consciousness in the Global South, tending towards a furthering of the colonial mode of production under ostensible political independence, or an abolition of that dependence under socialist development. In analyzing the Global North, we must remember that it is a system which has developed both according to its own internal class struggles and differentiation, but also through a dominance and developing dependence on exploitation of the Global South.

An understanding of this fact is not alien to Marx, Engels, or Lenin. All understood the development of a labor aristocracy within Britain which sapped its class consciousness:

“In a letter to Marx, dated October 7, 1858, Engels wrote: ‘...The English proletariat is actually becoming more and more bourgeois, so that this most bourgeois of all nations is apparently aiming ultimately at the possession of a bourgeois aristocracy and a bourgeois proletariat alongside the bourgeoisie. For a nation which exploits the whole world this is of course to a certain extent justifiable’.” (Lenin, “Split in Socialism”)

In this quote in particular, Engels does not point to the classic understanding of the labor aristocracy as an additional, privileged strata of compromised union leaders, but refers to the proletariat as “more and more bourgeois”. This is not oxymoronic or a mere turn of phrase but a clear choice on Engel’s part to indicate that the proletariat of Britain was in the process of sacrificing its autonomy as a class for the sake of privileged security as an appendage of the bourgeoisie proper.

We should understand that this interest on the part of the British proletariat must be viewed as directly resulting from Britain’s status as “a nation which exploits the whole world”. History bears out this connection. What was the result of the labor aristocracy in Europe? Social  chauvinism and support for the first world war in the side of their national imperialisms. It was Bernstein who supported the ‘civilizing mission’ of Europe in the colonies, while splits with these opportunistic groups were inaugurated by Rosa Luxemburg and Karl Liebknecht with the Spartakusbund. It could have ended in few other ways, as the creation of a “bourgeois proletariat” was a proposition bound up in the economic trajectory of these nations:

“Because monopoly yields superprofits, i.e., a surplus of profits over and above the capitalist profits that are normal and customary all over the world. The capitalists can devote a part (and not a small one, at that!) of these superprofits to bribe their own workers, to create something like an alliance (recall the celebrated “alliances” described by the Webbs of English trade unions and employers) between the workers of the given nation and their capitalists against the other countries.” (Lenin, “Split in Socialism”)

 Lenin notes here that these superprofits are a result of monopoly imperialism, but to understand this phenomenon in full, we need to understand the process that led to it as part of the differentiation observed by Mahdi Amel between the capitalist and colonialist modes of production.

How did capitalism create the conditions for imperialism? By expanding to new, colonial markets and flooding those markets with goods that could be produced for cheap by its more efficient productive system. In the initial stages, force was used both to open foreign markets to European goods and to proletarianize Europeans to further the production of these goods:

“When the Western European nations moved overseas, it was the product of an internal dynamic, which was not navigated or even deflected by new trades with Africa, Asia, and the Americas. Enclosures continued in the English countryside, and agriculture in Western Europe generally continued its slow rate of evolution, serving to support a larger population and to provide a more effective basis for the wool linen industries.” (Rodney 104)

Rodney’s observation is consistent with Mahdi Amel’s scientific reexamination. Capitalism developed, as Marx notes throughout the concluding chapters of Capital, through state intervention on behalf of private property and primitive accumulation abroad, simultaneously opening new markets for its heightened productive capacity.

In this trajectory wherein the capitalist and colonial productive systems differentiate, it is essential for the proletariat to be developed in the initial stages of imperial development under industrial capitalism. Under this initial industrial stage, class consciousness rises, we see the classical forms of class conflict arise in an upswell of socialist enthusiasm honed by Marx and Engels, reaching its most potent 19^th century victory in the Paris Commune. In Lenin’s time, the transition between this industrial capitalism and its financial counterpart was ongoing, a transition marked by monopolization in which finance capital was the growing force: “What distinguishes imperialism is the rule not of industrial capital, but of finance capital, the striving to annex not agrarian countries, particularly, but every kind of country” (Lenin, “Split in Socialism”). While financial capital was emerging in the US, Germany, and France at the time as well, it was Britain in which it came to hold the strongest share of the economy, because it was Britain in which industrial monopoly gave way to financial monopoly, and monopoly superprofits created the rule of opportunism: “Between 1848 and 1868, and to a certain extent even later, only England enjoyed a monopoly: that is why opportunism could prevail there for decades. No other countries possessed either very rich colonies or an industrial monopoly” (Lenin, “Split in Socialism”). In the differentiation of capitalism from the colonial mode, this opportunism is both prompted by the trend of monopoly superprofits and a need to blunt the class conflict created by the pursuit of industrial capital.

For industrial capital to develop, it requires the proletariat to develop, for the petit bourgeoisie to slowly be expropriated and cast into the proletariat, with a scattered few ascending to the bourgeoisie proper. How does this trend change under the transition to financial capitalism? We have already seen a tendency towards labor aristocracy, the “bourgeoisification” of the imperial proletariat, the infiltration of the labor movement by “respectable” union leaders representing bourgeois parliamentarian interests. We must examine this trend by comparing our real history with the scientific predictions of Engels and Lenin. Both believed that a breakup of British monopoly would reduce the position of the British proletariat to the point of raising its class consciousness towards revolution. Engels predicted this within Britain’s declining industrial monopoly:

“During the period of England’s industrial monopoly, the English working-class have, to a certain extent, shared in the benefits of the monopoly. These benefits were very unequally parceled out amongst them; the privileged minority pocketed most, but even the great mass had, at least, a temporary share now and then. And that is the reason why, since the dying-out of Owenism, there has been no Socialism in England. With the breakdown of that monopoly, the English working-class will lose that privileged position; it will find itself generally — the privileged and leading minority not excepted on a level with its fellow-workers abroad. And that is the reason why there will be Socialism again in England.” (Engels, “English Preface 1892”)

Unfortunately, Engels’ optimism in 1892 was not borne out in Lenin’s time.

Lenin observed the trend of social chauvinism in the British labor movement, the creation of “bourgeois labor parties”, and Lloyd-Georgism, named “after the English Minister Lloyd George, one of the foremost and most dexterous representatives of this system in the classic land of the ‘bourgeois labour party’. A first-class bourgeois manipulator, an astute politician, a popular orator who will deliver any speeches you like even r-r-revolutionary ones, to a labour audience, and a man who is capable of obtaining sizable sops for docile workers in the shape of social reforms (insurance, etc.)” (Lenin, “Split in Socialism”). The truth is that while Engels was in a sense correct, and socialist politics were once again stirring in his time, they were doing so not under the breakup of monopoly, but only the breakup of industrial monopoly, the transition to financial monopoly in Britain.

Lenin defines this transition clearly, understanding the prevalence of inter-capitalist conflict through the scope of the first world war:

“Although England’s industrial monopoly may have been destroyed, her colonial monopoly not only remains, but has become extremely accentuated, for the whole world is already divided up! … Not only have the capitalists something to fight about now, but they cannot help fighting if they want to preserve capitalism, for without a forcible redivision of colonies the new imperialist countries cannot obtain the privileges enjoyed by the older (and weaker) imperialist powers.” (Lenin, “Split in Socialism”)

Engels understood correctly that the breakup of industrial capital would further the proletariat’s class consciousness, but Lenin adds to this understanding by clarifying the role of financial monopoly and its furthering of the trend noted by Engels. In this light, through their observations and Mahdi Amel’s understanding of capitalism’s differentiation, it becomes clear that labor aristocracy is not some static caulk that the bourgeois clumsily sprays over the faucet of revolutionary class consciousness, but a trend of capitalism itself that is opposed to the development of superprofits drawn from the colonial mode of production.

Labor Aristocracy in Finance and Fordism

Therefore, we should not view the labor aristocracy as the final word on imperialist, capitalist relations, but as a trend which must be closely followed to see where it extended and retreated alongside the trajectory of the industrial and financial phases of capitalism. The financial capitalism of Britain was decisively superseded by the industrial potential of the United States, as predicted by Lenin, but it’s important to note that this supersession occurred as a natural conclusion of financial capital that continued its development worldwide. Financial capitalism, though trending towards rentier profits and deindustrialization in Britain, did so by following investments in productive industrial capital:

“Not only did the protectionist countries follow the logic of finance capital that so contrasted with British focus on commercial profit and interest, but the two logics developed a complementary relationship. The protectionist countries not only exported profit-making industrial capital of their own, they ‘also imported a part of the capital required for their own economies from abroad … in the form of loan capital from countries with a slower rate of industrial development but greater accumulated capital wealth’.” (Desai 65-6)

Therefore, financial capital did not retreat while industrial capital resumed its historical role, instead, the industrial monopoly of Britain was broken up as a new financial monopoly both superseded it and began to shift its pole towards a United States which was better able to carry out finance capital’s initial attraction towards industrial productivity.

As a result, when we discuss class relations, we must move towards an understanding of these class relations under financial capitalism even as the dominant capitalist countries are initially achieving their status through industrial policy, as financial capital still facilitates this growth while countries like Britain retain a high degree of affluence through their dependence from the colonial mode of production:

“Moreover, early in the process [of industrial decline], the British Empire rendered [combined development] less urgent. First, it counteracted pressures of industrial competition with the colonies’ massive export surpluses with the rest of the world, permitting Britain to tolerate declining industrial competitiveness for decades. Britain’s relative industrial decline became more of a problem as Britain lost her empire and concern mounted in the post-war decades.” (Desai 66-7)

The colonial mode of production becomes key in this trajectory as its exploitation becomes essential for the growth of finance capital and the salving of class fissures. However, as the capitalist mode of production progresses, it is also confronted with the superior socialist mode of production, which threatens its colonial dependency through its industrial and developmental capacity.

This confrontation affects both the capitalist and colonial modes of production. While monopoly and class conflict promoted the establishment of labor aristocracy, increasing competition in the industrial sphere inaugurates what Gramsci called Fordism. In this drive towards further efficiency under capitalist production, a more productive worker is required, and Fordism subsequently receives an incentive to heighten the wages of the proletariat in the US:

“The production of savings should become an internal (more economical) function of the productive bloc itself, with the help of a development of production at diminishing costs which would allow, in addition to an increase of surplus value, higher salaries as well. The result of this would be a larger internal market, a certain level of working-class saving and higher profits … The alliance of captains of industry and petit bourgeois savers would be replaced by a bloc consisting of all the elements which are directly operative in production and which are the only ones capable of combining in a union and thus constituting the productive corporation.” (Gramsci 291)

What Gramsci describes here is a convergence between the productive potential of US workers and the growing importance of internal rather than external consumption for capitalist profits. The increase in wages allows for the maintenance of a higher degree of skill in the workforce but is also combined with the increasingly “workaholic” US culture and “puritanical” measures to reduce the unproductive behaviors of US workers, such as Prohibition.

This phenomenon could not arise without monopoly profits however, as Gramsci is well aware:

“In reality, American high-wage industry is still exploiting a monopoly granted to it by the fact that it has the initiative with the new methods. Monopoly wages correspond to monopoly profits. But the monopoly will necessarily be first limited and then destroyed by the further diffusion of the new methods both within the United States and abroad … and high wages will disappear along with enormous profits.” (Gramsci 311)

Gramsci sees clearly that the high wages of Fordism correspond to its monopoly, but also that this industrial monopoly cannot last given the inevitable spread of the methods underlying it. We can observe this clearly in living memory, with Japan almost superseding the US in the late 20^th century and China decisively superseding the US’s industrial capacity in the 21^st. However, while the industrial superiority of the US has faded, its colonial hegemony and financial monopoly persist.

While early industrial monopoly, before its supersession by financial monopoly, established a layer of labor aristocracy, industrial monopoly’s breakup and subsequent reformation under financial capital resulted in Fordism, a broadening of the enrichment of workers in the Global North under pressures to increase productivity. Financial capital furthers this trend’s consolidation of the interests between the imperial bourgeoisie and proletariat through the function of “savings”. In the context of an Italy suffering the effects of the Great Depression, Gramsci observes an important shift come from the stock market’s crisis:

“[The mass of savers] prefers government bonds to any other form of investment. It could be said that the mass of savers wants to break off any direct connection with the ensemble of private capitalism, but that it does not refuse its confidence to the State. It wants to take part in economic activity, but through the State, which can guarantee a modest but sure return on investment. The State thus finds itself invested with a primordial function in the capitalist system, both as a company (state holdings) which concentrates the savings to be put at the disposal of private industry and activity, and as a medium and long-term investor.” (Gramsci 314)

We see the imperial proletariat under Fordism inching closer towards the petit bourgeoisie by deriving part of its wellbeing in partial ownership of private capitalist ventures through shares, but more importantly, we also see the proletariat learning to invest its savings in the capitalist state itself through bonds, becoming more and more invested in the success of a state whose international position is guaranteed by the colonial relation, a relation that also ensures the profits of international capitalist ventures.

This trend operated in parallel with a growing need for the capitalist state to intervene in the private sector to save it from itself. We can see the obvious parallels to this in the modern day with the bank bailouts and quantitative easing of the 2008 crisis and the more recent salvaging of venture capitalist deposits in the Silicon Valley Bank, but Gramsci had understood the potential of this trend nearly a century earlier:

“It is in these necessary developments that private initiative is involved in the greatest risks, and here therefore that State intervention should be even greater, not that it is entirely free from dangers itself, indeed far from it … there are also other elements which are leading towards State intervention, or provide a theoretical justification for it—increasing protectionism and autarkic tendencies, investment premiums, dumping, salvaging of large enterprises which are in the process, or in danger of going bankrupt; in other words, as the phase goes, the ‘nationalization of losses and industrial deficits’.” (Gramsci 315).

Gramsci understands that, while capitalist crises have always bled the working masses by thrusting them into unemployment and poverty, the recuperation of crises becomes an increasingly national undertaking as the capitalist mode of production develops along a trajectory towards financial monopoly and the furthering of the colonial relation.

Credit becomes a means of achieving industrial innovation, urging industrial competition, which, as previously mentioned, resulted in the US overtaking Britain as it gained both a superior industrial and financial capacity. Rosa Luxemburg saw the mechanism by which even the shareholding capacity of wage workers with savings facilitates this: “Credit, through shareholding, combines in one magnitude of capital a large number of individual capitals. It makes available to each capitalist the use of other capitalists’ money – in the form of industrial credit. As commercial credit it accelerates the exchange of commodities and therefore the return of capital into production, and thus aids the entire cycle of the process of production” (Luxemburg, “Reform or Revolution”). While this increases industrial production, Gramsci observes that it also nationalizes capitalist losses and drives workers towards bond investment. However, credit also increases the severity of crises themselves:

“It stimulates at the same time the bold and unscrupulous utilization of the property of others. That is, it leads to speculation. Credit not only aggravates the crisis in its capacity as a dissembled means of exchange, it also helps to bring and extend the crisis by transforming all exchange into an extremely complex and artificial mechanism that, having a minimum of metallic money as a real base, is easily disarranged at the slightest occasion.” (Luxemburg, “Reform or Revolution”)

It's easy to recall a modern example of this unraveling in the housing bubble’s crash in 2008, but these asset bubbles have continued to bloom in the US’s parasitic, financial economy to the modern day thanks to a deliberate policy of quantitative easing to encourage rampant speculation via low interest rates. While the financialization of the US economy has undoubtedly hurt its workers within the neoliberal era, what Luxemburg and Gramsci expose is the vested interest and nostalgia imperial workers gain for their empire’s success via the severity of what they suffer under capitalist crises. An implicit understanding emerges that the US’s privileged middle stratum enjoyed far more stability under the “Long Boom” after WW2, whereas the financial crises which threatened them in the 1970s and 2008 correlate to an increasing loss of international economic hegemony.

The financialization of the colonial relation also furthers the entanglement of the Western proletariat with their empire. Rather than reducing the dependence of the imperial nations on the Global South, the financial nature of “neocolonialism” allows for greater profits even as direct political control is lessened:

“Significantly, the neo-colonialist system costs the capitalist powers comparatively little, while enormous and increasing profits are made. This is shown by the ever-rising graphs representing the turn-over figures of the big capitalist business concerns implanted in the neo-colonialist areas of the world, and by the ever-widening gap between the wealthy and the poor peoples of the world.” (Nkrumah, “Welfare State”)

As Mahdi Amel’s notion of the colonial relation of production makes clear, political force is essential to opening markets for capitalism, but it is industrial and then financial monopolies which are the true lynchpin of this relation, not political dependence.

 In the political sphere that created the appearance of “neocolonialism” however, certain developments are key. The victories of national liberation went hand in hand with the worldwide advance of socialism, the establishment of a competing, productive bloc. Not only did capitalism have to compete on a productive basis, inaugurating Fordism, but it also had to shed its overtly dominant skin to overcome an overwhelmingly discredited political position born out of the Great Depression, the Soviet example, and the torrents of capitalist-bred fascist devastation. Class fissures in the Global North had to be healed but could only be addressed by a monopoly bourgeoisie that consented to state intervention. Fordism began the process of validating state intervention in the capitalist economy, but this trend only reached its heights in the US with FDR and the New Deal:

“The New Deal launched by President Roosevelt marked a new stage in capitalism. It came to be accepted that direct intervention by the bourgeois State was essential for capitalist growth in general and to address its crisis in particular. Thus emerged the phenomenon of state monopoly capitalism, which was the alliance between monopoly capital referred to by Lenin and the bourgeois State. Both bourgeois democracy and fascism were manifestations of this new phenomenon represented by President Roosevelt in the USA and Hitler or Mussolini in Germany and Italy.” (Namboodiripad 107)

Capitalism could only survive its financial and political crises of legitimacy by state intervention and adaptations of the colonial mode of production. Whereas the spoils of colonialism were initially pocketed by the capitalist class and a small but decisive labor aristocracy, the capitalist state now had a vested interest in sharing the growing profits of financial colonialism.

Fordism raised the wages of imperial workers, but welfarism propped up their social environment as well:

“To avoid and internal breakdown of the system under the pressure of the workers’ protest movement, the governments of capitalist countries granted their workers’ certain concessions which did not endanger the basic nature of the capitalist system of exploitation. They gave the social security, higher wages, better working conditions, professional training facilities, and other improvements.” (Nkrumah, “Welfare State”)

One might question how this affects the basic class structure of the imperial core, because improvements in working conditions and healthcare, for example, do not directly affect the relationship of imperial workers to the means of production. This questioning is valid but assumes that the new, imperial petit bourgeoisie that these trends develop is identical in nature to the classical petit bourgeoisie of small land and business owners. The imperial petit bourgeoisie is defined primarily by a collective stake as a class in the maintenance of the colonial relation. Part of this stake comes from the financialized way in which the capitalist state allows this class to distance itself from the propertyless existence of the classical proletariat:

“A similar logic — of facilitating homeownership through government support of banks — was continued in the Roosevelt administration, in the form of the New Deal program Home Owners’ Loan Corporation. This program helped many Americans become and remain homeowners, but also originated the practice of redlining, in which financial services were withheld from applicants living in neighborhoods with Black residents.” (Malone, “Concessions”)

The New Deal promoted the use of loans to increase the propertied class reality of workers in the US, but in the typical US fashion of maintaining a landed white class of settlers while impoverishing black communities.

A New Middle Class Is Born

In the US, as a general rule resulting from its history of settler-colonialism, assume that the imperial petit bourgeoisie is in most instances a predominantly white class. White proletarians certainly exist throughout this process, but the white proletariat is perpetually in a state of ephemeral class consciousness, while Irish, Italian, and Eastern European immigrants among others began as predominantly proletarian populations but were quickly subsumed by the white imperial petit bourgeoisie as the US’s capitalism developed and produced threatening class tensions. Colonial exploitation at home and abroad became the basis of this ascension:

“Throughout the Empire this movement of the immigrant proletarians into the settler ranks was evident. A history of Mexican labor importation notes: ‘In the beet fields of Colorado, as elsewhere in the West, other immigrant groups, such as the Italians, Slavs, Russians, or Irish, found that they could move up from worker or tenant to owner and employer through the use of Mexican migrants’.” (Sakai 174).

As is broadly the case under the colonial relation, stratification into settler and indigenous, white and black, transposes intra-racial and intra-national class divisions into inter-racial and international class conflict.

It would be accurate, at least in the case of the US, to refer to the imperial petit bourgeoisie as a petit bourgeois stratum of settlers, especially given their continued class participation in gentrification and their obsession with homeownership. However, for our investigation, the financial character of this unique petit bourgeois strata is key. More than refuting classical Marxism’s understanding of the petit bourgeoisie as a disintegrating class, this phenomenon proves that theory’s soundness by explaining the conditions, namely the colonial mode of production and financial monopoly, that allow the appearance of a new petit bourgeoisie. In truth, we are not dealing with a petit bourgeoisie in the traditional Marxist sense of small (petit) owners, but a petit actionnaire [shareholder] class where the function of this class shifts from production to being the shareholding reserve of the imperial bourgeoisie.

We refer to the petit actionnaire class as such because it can no longer be properly defined as proletarian or bourgeois. It acquires means of ownership and self-enrichment, but these means are transient measures. The financialization of the capitalist economy of the US begins to overtake the bourgeoisie’s means of attenuating class conflict, not only in loans for homeownership, but in the function of savings itself:

“Not only were working people encouraged (though not always permitted) to compensate for the inadequacy of wages with credit, their pensions were increasingly financialized … While workers paid more and more into ‘defined contribution’ plans that would provide uncertain benefit, while these contributions created vast pools of funds that served the financial institutions, which ran pension funds, as hefty additions to the throw-weight they could muster on ever-thinner margins, pervasive insider trading and the pecking order of finance ensured that workers and pensioners always gained less when the markets rose and lose more when they fell or crashed.” (Desai 114)

In this exchange, while the petit actionnaire class begins to repeat the dynamic of the original proletariat by receiving a lessened share of the imperial pie, it still finds itself enriched during the financial market’s upswings, though it is increasingly impoverished and narrowed by its downswings. The petit actionnaire class can convert investments into the real trappings of the petit bourgeoise—i.e. ownership of land, small enterprises, and university education.

However, these effects are byproducts of the petit actionnaire class’s emerging mission. Rather than directing production (like the bourgeoisie) or performing production (like the proletariat), the petit actionnaire class comes to be defined by its levels of consumption. While the colonial relation initially expanded markets to turn the colonized nations into consumers of the Global North’s manufactured goods, capitalism could never continually expand its market by this method, as it could simultaneously never expand the capacity for consumption of the colonized peoples:

“So long as neo-colonialism can prevent political and economic conditions for optimum development, the developing countries, whether they are under neo-colonialist control or not, will be unable to create a large enough market to support industrialization. In the same way they will lack the financial strength to force the developed countries to accept their primary products at a fair price.” (Nkrumah, “Neo-Colonialism” xiv)

These tendencies, essential to the survival of the colonial relation through dependence on the industrialized nations, simultaneously shift the pole of consumption back towards the Global North and the petit actionnaire class which has acquired a higher capacity for consumption.

Ironically, while the colonized world cannot fully industrialize under the colonial relation, their lack of financial strength and cheapness of labor incentivizes the bourgeoisie to divert light consumer manufacturing towards the Global South:

“Puerto Rico and other Latin American countries that offer cheap labor are fast becoming centers of manufactured consumer goods, frequently processed from imported raw materials and sent to the United States to compete with American-produced commodities at only slightly reduced, or the same, prices. This gives greater profits still to finance capital.” (Nkrumah, “Neo-Colonialism” 48)

While manufacturing may physically move to the Global South, finance capital’s long tendrils ensure that the profits go to the imperial bourgeoisie while the petit actionnaire class reaps the benefits of consumption as imperialism swells its internal market.

Furthermore, the industrial and financial monopolies of the Global North also establish a simultaneous need and capacity for an increasing reserve of technical management which the petit actionnaire class provides: “As the post-war expansion of education swelled the ranks of the [Professional Managerial Class], they were absorbed into the wide and deep structures of monopoly capital and the post-war state expanded by its welfare and social commitments and now employing vast numbers of the credentialed” (Desai 221). This change not only shows how the petit actionnaire class’s formation shifts its members away from direct production, but also how it moors the intellectual class of the modern Global North in the material interests of empire.

The petit actionnaire class comes to occupy a vital position for the prolonging of capitalism’s existence in the Global North, but it cannot overcome the contradictions of capitalism. This is because it cannot innovate productively, only sooth class contradictions and wring greater Fordist-style efficiency out of the existing productive relations. When we talk about the petit actionnaire class, some might question their relevance given the fact that the “middle class” in the US is already shrinking. This is because capitalism’s contradictions remain, and the socialist system’s development is an inherent challenge to the colonial relation.

As socialist productive forces develop (especially in China and Vietnam), the poles of industry and manufacturing continue to move away from the US, especially given that they are already diverted from the US by its more industrial capitalist subordinates, i.e. Japan and Germany. While the petit actionnaire class remains a potent force, bourgeois investment continues to shift away from the US as an ironic consequence of its financial monopoly. The policy of neoliberalism has essentially resulted in a doubling down on the loss of industrial monopoly; capitalism has survived by eating its legs out from under it, privatizing its welfare institutions to escape its contradictions on time borrowed by colonial exploitation.

The Instability of the Petit Actionnaires

However, the colonial relation finds its inevitable death in the industrial development that socialist countries popularize. China’s economic model has created a competing sphere of relations based on win-win cooperation through infrastructure projects in the Belt and Road Initiative. As industrial initiatives shift away from the metropoles, their class conflicts inevitably sharpen, because the petit actionnaire class finds itself squeezed alongside the neoliberal effort to address the crises of capitalism by prioritizing the survival of its financial monopoly.

The financial monopoly, given full reign under zero interest rate initiatives like the post-2008 quantitative easing of the Obama years, ultimately throttles the same class it birthed by encouraging rampant speculation and predatory practices. Where once the financial market was used to promote home ownership, now the housing market is permitted to inflate until home ownership becomes an impossibility, even to many young petit actionnaires. Therefore, this class has—like its petit bourgeois forbearer—shrunk. Hence, we receive the same rhetoric throughout the 2000s and 2010s of the US’s shrinking “middle class”.

Many comrades, assumedly with good intentions, have pointed to the US’s rhetoric of the “middle class” as an obfuscation of the divide between proletariat and bourgeoisie. This is only true to the extent that the term “middle class” implies the natural state of society to be one in which the majority fit into this intermediate stratum while the poor and wealthy are extraordinary minorities. The reality is that—despite the social democratic rhetoric of a 1% with one third or one half of the US’s wealth—the US’s rhetoric of a middle class is not based on nonsense and reflects the real presence of a large, relatively wealthy intermediate strata.

In the case of the US, such a stratum is a near constant player in its history, although not always in the petit actionnaire form:

“The Euro-Amerikan class structure at the time of the 1776 War of Independence was revealing … Not only was the bourgeois class itself quite large, but some 70% of the total population of settlers were in the various propertied middle classes. The overwhelming majority were landowners, including many of the artisans and tradesmen, and an even larger portion of the Euro-Amerikans were self-employed or preparing to be.” (Sakai 19)

We must also remember that over the course of the US’s early life throughout the 1700s and 1800s, the primary source of its growing population of small landowning settlers were European immigrants, often those uprooted by the development of capitalism in Europe, which Marx noted as the cause of arrested capital development among the settler population of the US:

“There, the absolute numbers of the population increase much more quickly than in the mother country, because many workers enter the colonial world as ready-made adults, and still the labor-market is always understocked. The law of the supply and demand of labor collapses completely. On the one hand, the old world constantly throws in capital, thirsting after exploitation and ‘abstinence’; on the other, the regular reproduction of the wage-laborer as a wage-laborer comes up against the most mischievous obstacles.” (Marx 936)

This relationship between the middle strata of the US and the capitalism violence of Europe shows how the seeds of modern class structure were sewn by the “American” model, by the small owners who learned that their material interests lay in settler-colonialism.

What does this trajectory mean in the modern day with the petit actionnaires? It is a partial explanation for the failure of communism in the Global North. While the labor aristocracy ate away at class conscious organization in the late 1800s, the petit actionnaire class consolidates the collective nature of exploitation in the colonial relation, thus giving the population of the Global North a practical, material interest in maintaining this relation. When the interests of the petit actionnaires dominate the class struggle in a given colonizer nation, that struggle can only take on the form of a redistribution of the proverbial pie, as can be inferred from the democratic socialists’ constant prattling about the top 1% of the US’s unfair share.

The contradictions of capitalism and the erosion of the colonial relation by socialism have resulted in the shrinking of the petit actionnaire class. However, it remains a potent force in the extension of the bourgeoisie’s hegemony, and that potency can be seen clearly in the trajectory of US politics in the aftermath of the 2008 crash and the US’s broad decline on the world stage. The decimation of trust in the “establishment” politicians epitomized in Barack Obama and his “centrist” cohorts did not initially result in a revival of working-class politics but an energized movement of the discontented petit actionnaires. The left and rightwing leaders of this common discontent are Bernie Sanders and Donald Trump respectively.

They are united by a class basis that results not in any real call for a reorganization of productive relations in the US but in a call to cease the continual narrowing of the petit actionnaire class. Whether this comes in the form of Sanders’ welfarism or Trump’s racist tirades against migrant labor means little when considering their class nature. Like in the earlier case of FDR, the bourgeoisie understands that it can no longer get away with a blatant espousal of neoliberal free market idealism; even an old vampire like Biden dares not do so. Capital cannot be defended head on when its lumbering movements threaten its main reserve force, so this force—the middle stratum—must be consolidated by other means.

Hence, we arrive back at fascism, not a new phenomenon for the US by any means, especially given our prior assertion that FDR’s policies were a parallel to those of Hitler and Mussolini. Andrew Jackson inaugurated a form of fascism on the basis of a more traditional petit bourgeoisie in the 1800s, and FDR’s program laid the groundwork for the petit actionnaire class to develop. What these fascisms have in common is the settler-colonialism of the US, a relationship that inspired Hitler and suffused the US’s whole history with a dialectic of waxing and waning fascism. And this fascism can be said to wax and wane in addition to its interior development, beginning with white supremacy and “Herrenvolk democracy” under Andrew Jackson, progressing into large-scale state economic intervention under FDR, and perhaps finally regressing into blatant one-party rule under Trump or his successor.

Why else did Donald Trump appear as a disturbance to the established political order of the US even before his failed attempt to remain in power by putsch? Because the movement that Trump leads is an outgrowth of the petit actionnaire class; a fascism that must appropriate a new motive force. In many ways, fascism’s historical mission is not changed; China is productively surpassing the US just as the USSR productively surpassed the imperialist powers during the Great Depression. Fascism has arrived to consolidate bourgeois control in the face of local and international working-class consciousness.

As is broadly understood in leftwing circles, fascism accomplishes this in part by appealing to the petit bourgeoisie to gain a fragile mass support. This tendency must appeal to slightly altered premises to capture the unique interests of the petit actionnaires; however, there is much overlap as well because the petit actionnaires have subsumed the traditional petit bourgeoisie. Where the petit actionnaires provoke a different approach is in MAGA fascism’s focus on the areas where the middle stratum has been expanded past the realm of traditional ownership. The expanded labor aristocracy—those who work under relations to the means of production that are proletarian in form but actionnaire in social content—give the fascism of MAGA its unique features.

What do we see under Trump? Racist violence against migrants, against the “theft” of jobs by migrant labor. Trade wars and tariffs against Chinese products, against the “unfair” competition of their economic model. And a hollow promise to protect the coal industry from competing energy sectors. All these measures are lip service to the defense of ostensibly proletarian relations but are, in reality, a defense of the petit actionnaire class’s mass basis. The US has always found its true proletariat class in its imprisoned nations, so it is unsurprising that a defense of the petit actionnaires’ privileges would appear in racist panics over the prospect of being proletarianized by capitalists who are pressured by market forces to seek sources of labor cheapened by US colonialism. Tariffs and tax cuts under Trump may have been billed and indeed even been genuinely targeted at protecting the interests of petit bourgeois business owners, but the opening salvo of Trump’s rhetoric was a synthesis of their interests with those of the labor aristocracy and an appeal to the “great” days of industrial capitalist hegemony.

Of course, as with his fascist predecessors, Trump’s actions in power reduced the fetters of finance capital and expanded its monopoly and hence imperialism, but his rhetoric is significant as a demonstration of his bourgeois sect’s strategies in diverting the rising tide of class discontent into class unconsciousness. The nature of the petit actionnaire class allowed for a further collectivization of colonial plunder, and when the contradictions of capitalism and the colonial relation threaten this class’s existence, Trumpian fascism arrives on the scene to tout an impossible return to a previous iteration of US empire. What remains to be seen is whether or not his future campaigns for power will also involve an attempt to wring more productivity out of productive relations as in corporativism in fascist Italy or Fordism in the US. As Palmiro Togliatti repeatedly emphasized in his lectures on Italian fascism, we must remember that even fascism itself, its rhetoric, and its internal ideological factions, undergo a process of development.

What Is to Be Done?

What does this mean for the strategy of communists in the Global North? Particularly in the US? It means that the idea that the US middle class is a myth is, itself, a myth. Call them settlers, the petit bourgeoisie, or the petit actionnaires; the name has little significance compared to whether we as scientific socialists accept the reality of this class. The old theory of the labor aristocracy is insufficient as well. We must accept that at least within the Euro-American population of the US, the class with the largest, decisive share of the mass base is not a white proletariat but a petit actionnaire class. Are there Euro-American or white proletarians? Of course. But as a class, the Euro-American proletariat is at best in its embryonic stages and as such finds its leaders in Sanders and Trump, those who want to preserve the US middle class.

When we talk about the folly of trying to abolish the colonial relation from above—of the hollowness of leftwing anti-imperialism situated from a desire for redistribution unpaired with the breakup of empire—we are not speaking as moralists but as scientists. Within the borders of the US, there is no fully formed white proletariat. J. Sakai’s perennially misrepresented thesis holds true. Proletariat class relations can be found in the oppressed nations of the US, among Indigenous, Black, Brown, and Asian peoples. The maturity of their proletariat classes does not merely result from compounded oppression but from their continuing roles as centers of the US’s economy; from the slave economy that birthed the US to the service industry in which the white population is predictably underrepresented.

Where is our strategy now, in reflecting on this? It is clear that a revolutionary environment within the US’s borders cannot come merely from the “top-down” of a “socialist” USA or the “bottom-up” of a revolution driven solely by anti-imperial action abroad. These international efforts have brought the colonial relation towards its inevitable death, but to imagine that this means our local class contradictions disappear and that it is pointless to organize for revolution thanks to the bourgeoisie’s attempts to create collective imperialism would be the height of revisionism. The struggle for socialism and the campaign against imperialism must be waged on all fronts. It is the duty of communists in the US to tailor their strategy to complement that of the international struggle for an anti-colonial, multipolar world.

What is the best way to provide this assistance? Certainly material support is one aspect, but it would be a mistake to think that the class struggle within the US is totally separate from the external struggle against imperialism, even as we must be denounce class struggle which aims at colonialist redistribution. After all, what kind of material support can we offer that is more valuable than a divided enemy? The US is losing power on the international stage in lock step with its rising internal divisions, and allowing the US to consolidate itself as a unified force would be more dangerous than any other alternative.

So what are our tactics? We must raise the contradictions of the domestic US. We must protract its internal divisions. Therefore, we cannot engage in tailism of any kind; to do so would be contributing to the potential victory of a political movement that would accelerate the consolidation of US political power. The MAGA“communists” play second fiddle to Trump; the democratic socialists and CPUSA do the same for Sanders and the democrats. Of Sanders and Trump, it’s been made clear by their respective 2016 and 2020 primaries that only Trump has the political savvy and will to actually conquer hegemony over his party. One might therefore think that supporting the Democrats would be a valid tactic in prolonging the division of the US, due to their political impotence. Biden’s presidency has certainly overseen a continued division, but his political and economic impotence has also only contributed to the political prestige of Trump and the prompted the transphobic crusades of ghouls like DeSantis.

Therefore, tailism towards either party leads to the consolidation of fascist power. While in power, the true class nature of Trump as a representative of the bourgeoisie eats away at his political sway even though he has gained an organizational victory. When removed from power, Trump sheds his skin and returns to his populist rhetoric, finding easy ammunition in Biden’s perpetuation of neoliberalism’s lumbering journey towards collapse and the war the US orchestrates in Ukraine. Tailism diverts class discontent towards fascism; an opposed strategy must be adopted that builds a united front led by the US proletariat, not the petit actionnaires.

Leftwing forces in the US can only put pressure on the Democrats when they are willing to withhold the smidge of political power that they possess over them: their votes. As long as Democrats can rely on fear of Trump to generate votes, they will continue to fund MAGA candidates in Republican primaries and abide by the neoliberal policies towards which Trump and his ghouls can then position themselves as radicals. Organizational power must not be devoted to mobilizing leftwing forces for the vote, but on explaining the true class content of MAGA and democratic socialism to voters in order to demobilize them. This does not mean dogmatically swearing off participation in the US government or discounting the possibility of a tactical alliance against MAGA with the democratic socialists or the Democrats. It means heightening the pressure brought to bear on these factions by increasing the class consciousness of the US. For this consciousness to rise, we need to have an accurate understanding of the US’s classes, and developing our understanding of the middle class is essential.

This is only a broad sketch of what we need to change in our strategy regarding US elections. It is accurate to say that both the Democrats and Republicans are US fascists, but simply declaring this as our reason for not supporting either in their elections is not enough; we must have a strategy. How does this strategy expand to general political work among the masses of the US? The petit actionnaires must be exposed and neutralized as a class. This class provides fascism’s mass support, so if we want to combat fascism, we must bring to our side those elements that we can, concentrating on those who have been truly proletarianized, while demobilizing the rest. Demobilizing in this context means raising class consciousness among petit actionnaires. It means making them confront the reality that they are a disintegrating class. Does this mean that they will accept socialism as the future? In many cases no, but a petit actionnaire who has been forced to reckon with Trump and Sander’s mutual inability to save their privileges is unlikely to support either of these opportunists with the same energy.

The class conscious elements of the US can be found predominantly in its oppressed nations, but also in the service industry and among queer and transgender communities. When the MAGA”communists” devote half their time to disqualifying baristas as proletarian and spreading transphobia, that is a good indication that these elements are precisely where we must be organizing. After all, what value does the “ideal” proletarian that they desire have in a country where that productive force hardly exists? We will not find our solution in gruff men working in the coal mines; we will find our best comrades in the dispossessed and ostracized.

This means making it known that the bourgeois Democrats cannot stop fascist violence towards gay and transgender people—just as only socialized healthcare can guarantee the right to abortion. This means never subordinating the national struggles of Indigenous, Black, Hawai’ian, Puerto Rican, and Chicano people to a multiracial antifascist front, but vice versa. It also means never scorning class elements for being unhoused or lumpen but working to direct their energy and potential into creative struggle. And with no less importance, it means turning the nihilistic humor of Gen Z into revolutionary optimism; after all, it was the nihilist movement in Russia which preceded the Bolsheviks, and it is of special importance in the US context to combat the cynical, isolationist cultural hegemony of the petit actionnaire class with a collective faith in our human abilities. Rather than only heightening the contradictions, we must also develop the class struggle to train these groups to seize power when a critical moment arrives; that is the difference between accelerationism and revolution.

These are broad prescriptions. However, it is essential to direct our energies towards new directions and then hone these tactics through practice. Dogmatic adherence to old formulas of revolution in the Global North is a dangerous and therefore intolerable tendency in our moment of rising fascism. We must rethink the dimensions of class in the Global North and understand the systemic nature of past leftwing failures without becoming pessimistic. Even when the petit actionnaire class was growing, the bourgeoisie could not snuff out the communist threat domestically, and our moment now is one of massive disillusionment with the US’s economic and moral superiority. There is discontent to be organized, but we must study to adapt our class analysis if we want to harness it.

Works Cited

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Gramsci, Antonio. Selections from the Prison Notebooks. International Publishers, 1987. Web Link.

Lenin, Vladimir. “Imperialism and the Split in Socialism.” Sbornik Sotsial-Demokrata, 1916. Web Link.

Luxemburg, Rosa. Reform or Revolution. Dover Publishers, 2006.

Mahdi Amel. Arab Marxism and National Liberation. LeftWord Books, 2022.

Malone, Alice, “Concessions.” Redsails.org, 2023. Web Link.

Marx, Karl. Capital: Volume 1. Peguin Classics, 1990.

Namboodiripad, E.M.S. and P. Govinda Pillai. Gramsci’s Thought. LeftWord Books, 2021.

Rodney, Walter. Decolonial Marxism. Verso, 2022.

Sakai, J. Settlers. Kersplebedeb, 2014.