Index | What's New | Links | Introduction | Bibliography

PDF version of Section B.

B.7 What classes exist within modern society?

For anarchists, class analysis is an important means of understanding the world and what is going on in it. While recognition of the fact that classes actually exist is less prevalent now than it once was, this does not mean that classes have ceased to exist. Quite the contrary. As we'll see, it means only that the ruling class has been more successful than before in obscuring the existence of class.

Class can be objectively defined: the relationship between an individual and the sources of power within society determines his or her class. We live in a class society in which a few people possess far more political and economic power than the majority, who usually work for the minority that controls them and the decisions that affect them. This means that class is based both on exploitation and oppression, with some controlling the labour of others for their own gain. The means of oppression have been indicated in earlier parts of section B, while section C (What are the myths of capitalist economics?) indicates exactly how exploitation occurs within a society apparently based on free and equal exchange. In addition, it also highlights the effects on the economic system itself of this exploitation. The social and political impact of the system and the classes and hierarchies it creates is discussed in depth in section D (How does statism and capitalism affect society?).

We must emphasise at the outset that the idea of the "working class" as composed of nothing but industrial wage slaves is simply false. It is not applicable today, if it ever was. Power, in terms of hire/fire and investment decisions, is the important thing. Ownership of capital as a means of determining a person's class is not as useful as once was, since even many working-class people now own shares (although not enough to live on or to give them any say in how a company is run) and since most large companies are owned by other large companies, through pension funds, multinationals, etc. Hence we now have a situation in which the people who have massive power may technically be "salary slaves" (managing directors, etc.) while, obviously, they are members of the ruling class in practice.

For most anarchists, there are two main classes:

(1) Working class -- those who have to work for a living but have no real control over that work or other major decisions that affect them, i.e. order-takers. This class also includes the unemployed, pensioners, etc., who have to survive on handouts from the state. They have little wealth and little (official) power. This class includes the growing service worker sector, most (if not the vast majority) of "white collar" workers as well as traditional "blue collar" industrial workers.

(2) Ruling class -- those who control investment decisions, determine high level policy, set the agenda for capital and state. This is the elite at the top, owners or top managers of large companies, multinationals and banks, owners of large amounts of land, top state officials, politicians, the aristocracy, and so forth. They have real power within the economy and/or state, and so control society. This groups consists of around the top 5-15% of the population.

Obviously there are "grey" areas in any society, individuals and groups who do not fit exactly into either the working or ruling class. Such people include those who work but have some control over other people, e.g. power of hire/fire. These are the people who make the minor, day-to-day decisions concerning the running of capital or state. This area includes lower to middle management, professionals, and small capitalists.

There is some argument within the anarchist movement whether this "grey" area constitutes another ("middle") class or not. Most anarchists say no, most of this "grey" area are working class, others (such as the British Class War Federation) argue it is a different class. One thing is sure, all anarchists agree that this "grey" area has an interest in getting rid of the current system just as much as the working class (we should point out here that what is usually called "middle class" in the USA and elsewhere is nothing of the kind, and usually refers to working class people with decent jobs, homes, etc. As class is a considered a rude word in polite society in the USA, such mystification is to be expected).

So, there will be exceptions to this classification scheme. However, most of society share common interests, as they face the economic uncertainties and hierarchical nature of capitalism.

We do not aim to fit all of reality into this class scheme, but only to develop it as reality indicates, based on our own experiences of the changing patterns of modern society. Nor is this scheme intended to suggest that all members of a class have identical interests or that competition does not exist between members of the same class, as it does between the classes. Capitalism, by its very nature, is a competitive system. As Malatesta pointed out, "one must bear in mind that on the one hand the bourgeoisie (the property owners) are always at war amongst themselves. . . and that on the other hand the government, though springing from the bourgeoisie and its servant and protector, tends, as every servant and every protector, to achieve its own emancipation and to dominate whoever it protects. Thus the game of the swings, the manoeuvres, the concessions and the withdrawals, the attempts to find allies among the people and against the conservatives, and among conservatives against the people, which is the science of the governors, and which blinds the ingenuous and phlegmatic who always wait for salvation to come down to them from above." [Anarchy, p. 22]

However, no matter how much inter-elite rivalry goes on, at the slightest threat to the system from which they benefit, the ruling class will unite to defend their common interests. Once the threat passes, they will return to competing among themselves for power, market share and wealth. Unfortunately, the working class rarely unites as a class, mainly due to its chronic economic and social position. At best, certain sections unite and experience the benefits and pleasure of co-operation. Anarchists, by their ideas and action try to change this situation and encourage solidarity within the working class in order to resist, and ultimately get rid of, capitalism. However, their activity is helped by the fact that those in struggle often realise that "solidarity is strength" and so start to work together and unite their struggles against their common enemy. Indeed, history is full of such developments.

B.7.1 But do classes actually exist?

So do classes actually exist, or are anarchists making them up? The fact that we even need to consider this question points to the pervasive propaganda efforts by the ruling class to suppress class consciousness, which will be discussed further on. First, however, let's examine some statistics, taking the USA as an example (mostly because class is seldom talked about there, although its business class is very class conscious). We find that in 1986, the share of total US income was as follows:

One third went to the bottom 60% of society, one third to the next 30% and one third to the top 10%. In terms of total national wealth, the bottom 90% owned a third, another third went to the next 9% of the population and one third went to the top 1%. Since then, the top 1% has managed to raise its share to 40%, showing that class lines have been greatly tightened during the past decade (see below).

In 1983 the richest 0.5% owned more than 45% of the nation's privately held net wealth. This included 47% of all corporated stock, 62% of non-taxable bonds, and 77% of all trusts. 60% of all US families owned less than $5,000 in assets. Half owned $2,300 in assets, or less. In 1986, the top 1% of families owned about 53% of all income-producing wealth. Only about 51 million Americans directly own stocks or shares in stock mutual funds, which is about 19% of the American population of which the top 5% own 95% of all shares. The richest 1% of households in America (about 2 million adults) owned 35% of the stock owned by individuals in 1992 - with the top 10% owning over 81%. The bottom 90% of the US population has a smaller share (23%) of all kinds of investable capital than the richest 0.5% (who own 29%).

The USA leads the industrialised world in poverty -- 17% of those below age 18 and around 15% of the total population. 22% earn less than half the median income. Forty percent of African-American children lived in poverty in 1986.

All these facts prove that classes do in fact exist, with wealth and power concentrating at the top of society, in the hands of the few.

The following figures from the US Census Bureau show the rate at which wealth polarisation, and hence the tightening of class lines, has been preceding over the past 20 years:

In 1994, the income gap between the top quintile (49.1%) and the bottom quintile (3.6%) was the biggest ever recorded. Clearly it was not just households in the bottom two-fifths who lost ground over the past 20 years, but those in the middle as well. The earnings of a typical full time-worker fell more than $300 in 1993. In fact, as can be seen from the percentage decreases, an amazing 80% of the population was in decline while the top 20% got richer. It's actually more skewed than that, however, because 9.9 percent of the top fifth's 12.9 percent increase went to the upper 5 percent.

Although the percentage share of wealth owned by the richest individuals and families in the US has been rising steadily since the mid-fifties, the rate of concentration at the top accelerated more during the eighties than at any time on record. According to a report in the New York Times, the number of billionaires nearly doubled in 1986 -- from fourteen to twenty-six -- in one year alone!

By far the biggest gainers from the wealth concentration of the last two decades have been the super-rich. No wonder US politicians have recently been dusting off their anti-class rhetoric!

The recent increase in wealth polarisation is due partly to the increased globalisation of capital, which lowers the wages of workers in the advanced industrial countries by putting them in competition for jobs with workers in the Third World. This, combined with "trickle-down" economic policies of tax cuts for the wealthy, tax raises for the working classes, the maintaining of a "natural" law of unemployment (which weakens unions and workers power) and cutbacks in social programs, has seriously eroded living standards for all but the upper strata -- a process that is clearly leading toward social breakdown, with effects that will be discussed later (see section D.9).

Moreover, as Doug Henwood notes, "[i]nternational measures put the United States in a disgraceful light. . . The soundbite version of the LIS [Luxembourg Income Study] data is this: for a country th[at] rich, [it] ha[s] a lot of poor people." Henwood looked at both relative and absolute measures of income and poverty using the cross-border comparisons of income distribution provided by the LIS and discovered that "[f]or a country that thinks itself universally middle class [i.e. middle income], the United States has the second-smallest middle class of the nineteen countries for which good LIS data exists." Only Russia, a country in near-total collapse was worse (40.9% of the population where middle income compared to 46.2% in the USA. Households were classed as poor is their incomes were under 50 percent of the national medium; near-poor, between 50 and 62.5 percent; middle, between 62.5 and 150 percent; and well-to-do, over 150 percent. The USA rates for poor (19.1%), near-poor (8.1%) and middle (46.2%) were worse than European countries like Germany (11.1%, 6.5% and 64%), France (13%, 7.2% and 60.4%) and Belgium (5.5%, 8.0% and 72.4%) as well as Canada (11.6%, 8.2% and 60%) and Australia (14.8%, 10% and 52.5%).

The reasons for this? Henwood states that the "reasons are clear -- weak unions and a weak welfare state. The social-democratic states -- the ones that interfere most with market incomes -- have the largest [middles classes]. The US poverty rate is nearly twice the average of the other eighteen." Needless to say, "middle class" as defined by income is a very blunt term (as Henwood states). It says nothing about property ownership or social power, for example, but income is often taken in the capitalist press as the defining aspect of "class" and so is useful to analyse in order to refute the claims that the free-market promotes general well-being (i.e. a larger "middle class"). That the most free-market nation has the worse poverty rates and the smallest "middle class" indicates well the anarchist claim that capitalism, left to its own devices, will benefit the strong (the ruling class) over the weak (the working class) via "free exchanges" on the "free" market (as we argue in section C.7, only during periods of full employment -- and/or wide scale working class solidarity and militancy -- does the balance of forces change in favour of working class people. Little wonder, then, that periods of full employment also see falling inequality -- see James K. Galbraith's Created Unequal for more details on the correlation of unemployment and inequality).

Of course, it could be objected that this relative measure of poverty and income ignores the fact that US incomes are among the highest in the world, meaning that the US poor may be pretty well off by foreign standards. Henwood refutes this claim, noting that "even on absolute measures, the US performance is embarrassing. LIS researcher Lane Kenworthy estimated poverty rates for fifteen countries using the US poverty line as the benchmark. . . Though the United States has the highest average income, it's far from having the lowest poverty rate." Only Italy, Britain and Australia had higher levels of absolute poverty (and Australia exceeded the US value by 0.2%, 11.9% compared to 11.7%). Thus, in both absolute and relative terms, the USA compares badly with European countries. [Doug Henwood, "Booming, Borrowing, and Consuming: The US Economy in 1999", pp.120-33, Monthly Review, vol. 51, no. 3, pp. 129-31]

Faced with these facts, many supporters of capitalism still deny the obvious. They do so by confusing a caste system with a class system. In a caste system, those born into it stay in it all their lives. In a class system, the membership of classes can and does change over time. Therefore, it is claimed, what is important is not the existence of classes but of income mobility. According to this argument, if there is a high level of income mobility then the degree of inequality in any given year is unimportant. This is because the redistribution of income over a person's life time would be very even. Unfortunately for the supporters of capitalism this view is deeply flawed.

Firstly, the fact of income mobility and changes in the membership of classes does not cancel out the fact that a class system is marked by differences in power which accompany the differences in income. In other words, because it is possible (in theory) for everyone to become a boss this does not make the power and authority that bosses have over their workers (or the impact of their wealth on society) any more legitimate (just because everyone - in theory - can become a member of the government does not make government any less authoritarian). Because the membership of the boss class can change does not negate the fact that such a class exists.

Secondly, what income mobility that does exist under capitalism is limited.

Taking the USA as an example (usually considered one of the most capitalist countries in the world) there is income mobility, but not enough to make income inequality irrelevant. Census data show that 81.6 percent of those families who were in the bottom quintile of the income distribution in 1985 were still there in the next year; for the top quintile, it was 76.3 percent.

Over longer time periods, there is more mixing but still not that much and those who do slip into different quintiles are typically at the borders of their category (e.g. those dropping out of the top quintile are typically at the bottom of that group). Only around 5% of families rise from bottom to top, or fall from top to bottom. In other words, the class structure of a modern capitalist society is pretty solid and "much of the movement up and down represents fluctuations around a fairly fixed long term distribution." [Paul Krugman, Peddling Prosperity, p. 143]

Perhaps under a "pure" capitalist system things would be different? Ronald Reagan helped make capitalism more "free market" in the 1980s, but there is no indication that income mobility increased significantly during that time. In fact, according to one study by Greg Duncan of the University of Michigan, the middle class shrank during the 1980s, with fewer poor families moving up or rich families moving down. Duncan compared two periods. During the first period (1975 to 1980) incomes were more equal than they are today. In the second (1981 to 1985) income inequality began soaring. In this period there was a reduction in income mobility upward from low to medium incomes of over 10%.

Here are the exact figures [cited by Paul Krugman, "The Rich, the Right, and the Facts," The American Prospect no. 11, Fall 1992, pp. 19-31]:

Little wonder, then, that Doug Henwood argues that "the final appeal of apologists of the American way is an appeal to our legendary mobility" fails. In fact, "people generally don't move far from the income class they are born into, and there is little difference between US and European mobility patterns. In fact, the United States has the largest share of what the OECD called 'low-wage' workers, and the poorest performance on the emergence from the wage cellar of any country it studied." [Op. Cit., p. 130]

Therefore income mobility does not make up for a class system and its resulting authoritarian social relationships and inequalities in terms of liberty, health and social influence. And the facts suggest that the capitalist dogma of "meritocracy" that attempts to justify this system has little basis in reality.

We recognise, therefore, that only those at the bottom of society have a self-interest in freeing themselves from the burden of those at the top, and so we see the importance of class consciousness in the struggle of oppressed people for self-liberation. Thus, "[f]ar from believing in the messianic role of the working class, the anarchists' aim is to abolish the working class in so far as this term refers to the underprivileged majority in all existing societies. . . What we do say is that no revolution can succeed without the active participation of the working, producing, section of the population. . . The power of the State, the values of authoritarian society can only be challenged and destroyed by a greater power and new values." [Vernon Richards, The Raven, no. 14, pp. 183-4] Anarchists also argue that one of the effects of direct action to resist oppression and exploitation of working class people would be the creation of such a power and new values, values based on respect for individual freedom and solidarity (see sections J.2 and J.4 on direct action and its liberating potential).

For anarchists, "[t]he class struggle does not centre around material exploitation alone but also around spiritual exploitation, . . . [as well as] psychological and environmental oppression." [Bookchin, Op. Cit., pp. 229-230] This means that we do not consider economic oppression to be the only important thing, ignoring struggles and forms of oppression outside the workplace. To the contrary, workers are human beings, not the economically driven robots of capitalist and Leninist mythology. They are concerned about everything that affects them -- their parents, their children, their friends, their neighbours, their planet and, very often, total strangers.