Category Archives: Class and Capitalism

Theory of class, capitalism, social relations of production, technology and the general Marxist or post-modern (Re-thinking Marxism) discussions.

Industrial Relations, Income Flows and Inequality

With Australia’s new industrial relations law now through the federal parliament, there is talk of increased wages, or at least a hope that real wage increases will be possible with workers having better bargaining tools to try to secure them. After years of wage stagnation, obviously any increase in wage levels is welcome, but much of the public debate has focused on the need for wage increases to help households, especially low-income households, with increased cost of living. But increasing wages is also fundamentally important to macroeconomic income flows and equality.

In his landmark Captial in the Twentieth Century, Thomas Piketty noted that in many western countries inequality was increasing to levels unprecedented since the turn of the last century because the growth of capital incomes was outstripping wage incomes. Capital incomes are concentrated at the high end of income distribution, so the relative share of society’s income going to capital and to labour was a crucial determinant of inequality.

However, in a really interesting exchange after the release of Piketty’s book, political economist Anwar Shaikh argues that Piketty’s work focuses largely on the final distribution of income, but a far more nuanced understanding of inequality could be gained by tracing the primary, secondary and tertiary income flows which lead into that final distribution.

Shaikh argues that in a capitalist economy, production is based on the harnessing of labour power to produce new value from which capital can make a profit. Accordingly, the primary income distribution is that between labour and capital in the production process. At the macro level this primary distribution is captured in the structure of the national accounts where the income side of Gross Domestic Product is divided into compensation of employees (labour income) and gross operating surplus (capital income). In June 2022, labour received 44% of GDP, and the historically low labour share was one of the driving forces of the government’s Future Work Summit and the push industrial relation changes (see for instance the ACTU Job Summit Paper: An Economy that Works for People).

However, this primary distribution does not tell us the full story because from this primary distribution there are secondary distributions. Wages (compensation of employees) is split between taxes and disposable “take-home” income – an important distribution as progressive taxation is a significant factor in equalising take home wages from what is a much more unequal original distribution between wage earners. But gross operating surplus is also split into rents, royalties, profits, interest and taxes. These distributions are the property claims of different types of capital on the surplus income. The relative amounts of the secondary flows between these types of capital reflect the structure of production and the balance of class power within capitalism – so that, for instance, it has been suggested that finance capital has claimed most of the gains of neoliberal economic growth over the last 20 years.

Finally, there is the tertiary distribution which is redistribution of the taxes (taken in the secondary distribution) to households through transfer payments and to capital via subsidies and industry support. This is important because these social security transfers are the most visible face of “redistribution” and efforts to over-come inequality (e.g. campaigns to increase income support payments, or to provide public services). However, as we will see below, it is also the smallest of the distributions. While interventions in this space are necessary – especially for those outside of the circuits of capital and production income – they are also necessarily limited as the size of the tertiary flow is inevitably determined by the primary and secondary income flows.

The focus on primary, secondary and tertiary income flows arises out of classical and Marxian political economy, but they are difficult to quantify because our national accounts are based on Keynesian and neoclassical principles. Accordingly, the accounts do not necessarily record these flows. However, some data is available and is captured in the table below.

Income Distributions, Australia, June Quarter 2022

Table showing primary, secondary and tertiary income flows:
GDP $609,133m
Wages $268,573m
Surplus $182,263m
Total Taxes $174,807m
Social Security Transfers $36,991m

Source ABS, Australian National Accounts, June Quarter 2022, Tables 7, 22, 23.

These numbers are important because they show the magnitude of the different income flows and the potential impact of changes in them. For instance, a 2 percentage point increase in the labour share of the economy (compensation of employees), which would return labour to the levels of twenty years ago, equates to a $12bn or 4.5% increase in total wages for the quarter. By contrast, even a 10% increase in social security payments (personal benefit transfers), would only see a $3.6bn redistribution of income.

Again, this is not to say that arguments for social security increases are unimportant, but it does emphasise the importance of industrial contestation over the primary income distribution. Or put another way, it emphasises the importance of class (income flows based on relationship to the means of production) to understanding inequality.

A similar argument could be made around gender. Applying the proportion of the total wage pool noted in a previous post to the above national accounts data, a 2 percentage point increase in the female wage share would equate to a $5.3bn (5.1%) increase in women’s wages in the quarter. Again, that is more than the total of social security transfers (which also disproportionately go to women). Arguably then, closing the gender pay gap or increasing women’s labour force participation is a more direct route to gender equality than social security payments – albeit with application to different women.

Obviously these class and gender arguments reprise my previous arguments about the importance of a structural approach to addressing inequality, but they may be particularly important as the labour movement goes forward with the campaigns under the new industrial relation system.

Snapshot of Inequality – South Australia and National

This snapshot of inequality summarises my series of recent posts on this subject. The series has been a journey. I didn’t completely know where the data would take me and I am now asking different questions than when I started. However, frustrated by the mono-dimensional analyses that often dominate discussion of inequality (including in my own work) I was keen to explore the multi-layered nature of the beast.

Inequalities in income and wealth distribution between households, across states and regions, and between structurally differentiated social groups all matter, so I was keen to analyse the data on all of these – even if in an iterative fashion. I also wanted to look particularly at South Australia, partly for local relevance and partly because state-level data is often not factored in to the analysis of inequality.

Snapshot of Current Inequality

Overall the data examined in this series (almost all it sourced from the Australian Bureau of Statistics) showed significant levels of inequality across the country, as summarised in the table below.

 AustraliaSouth Australia
Household Income (between states) (2019-20)Australian average (mean gross) income $2329 per week, but state averages range from $1,736 (Tas) to $2,422 (NSW)Average household income $1,989 p.w. = 85.4% of national average, although difference mainly at top end. SA receiving 6.3% of all household income (which is below its population share).
Household Income (within states) (2019-20)  Bottom 40% of households received 13.4% of the total income. High-income households (90th percentile) received 9 times the income of low-income households (10th percentile).Inequality broadly reflects national patterns, but relatively lower incomes at the top end of the income spectrum
Household Income (Regional Areas) (2019-20)Regional Australia accounted for 31% of the population, but received only 27% of income.Regional SA share even smaller with 19.9% of population, but just 17.7% of income.
Household Wealth (2019-20)Distribution more unequal than distribution of income: highest wealth quintile held 62.2% of all household wealth, while the bottom 40% of households held only 6.1% of wealth.Distribution data not available, but wealth holdings in SA have a different structure (relatively less wealth in home ownership, more in financial assets).
Labour Share of the Economy (2021)“Compensation of employees” at historically low levels (47.7% of GDP).Labour share slightly higher (49.3% of GSP)
Gendered Wage Patterns (2022)Gender pay gap of 14.1% in full-time ordinary-time earnings. Bigger gaps when all earnings and all employees included.At 7.4%, f/t ordinary-time earnings gap is around half the national average, but on lower earnings and relatively lower male earnings. Difference between national and SA figures narrows when all earnings and employees included.

Changes Over Time

The above snapshot of inequality is precisely that – just a snapshot at the current point in time. Arguably, a more important story is evident when changes over recent decades are considered.

That story is not straight-forward and has been explored more fully in the earlier posts. However, the short version is that, at the national level:

  • income inequality between households has increased slightly,
  • inequality between cities and the regions, between capital and labour, and inequalities in household wealth have all increased more markedly,
  • gender wage inequality was the only measure where inequality decreased.

These trends are evident in the graphs below which trace changes in the share of the various pools of total income (or wealth, or production), alongside the same data for South Australia (i.e. share of SA total income/product). The time periods vary depending on data availability.

Household Income and Wealth

As can be seen, nationally, the share of total household income of the lowest two (equivalised) income quintiles has been relatively stable, peaking in 1996-97 at 21.4% and falling to 20% in 2019-20. However, while this fall in income share appears small, every 0.1% change represents over $22.6m (in 2019-20) going from the lower to higher income quintiles. Even more significantly, the share of national wealth held by the poorest two wealth quintiles fell more markedly, although the data is more limited, and is not available for South Australia.

Time series snapshot of inequality: share of household income and wealth captured by the bottom two (equivalised)  income quintiles, 1994-2020.

Households in Regional Areas

The share of total income received by households outside Australian capital cities fell from 30.7% of the national total in 2000-01 to 27% in 2019-20. (Note: not all years are included in this data). The South Australian data is more volatile, and shows a lower share overall (with proportionately fewer households outside the capital), but the trend is similar.

Time series snapshot of Inequality: Share of national and SA income captured by households in respective regional areas, 2000-2020.

Class

Nationally, labour’s share of the economy fell from 48.8% in June 1994 to 47.7% in June 2021, with each 0.1% change in this data set representing $2bn (in 2021) lost from labour payments. However, the South Australian data here is different, falling more swiftly from a higher share of the economy to a low point in June 2004, then recovering to 49.3% of Gross State Product in 2021 – a larger share of the economy than the labour share nationally.

Time series snapshot of inequality: labour compensation's share of the economy, SA and Australia, 1990-2020.

Gender

As noted above, the gender wage share is the only indicator to see a reduction of inequality with women increasing their share of the national wage pool from 33.1% in November 1994 to 39% in May this year.

Time series snapshot of inequality: female share of total wage pool, SA and national, 10094-2022.

Caveats and Conclusions: Why the Numbers Matter

This snapshot of inequality focuses on shares of total pools of income/wealth, rather than the more traditional but disparate average income figures. My approach enables some consistency of analysis across the different data sets, but I make no claim of a causal relationship or that the inequalities are comparable in nature. Clearly, inequalities can contribute to each other and the data sets overlap, but they are analytically separate and the different trajectories show why it is flawed to simply focus on one dimension (usually household income) when considering questions like whether inequality is increasing or not.

In a future post examining the South Australian data in more detail I will explore more specific interactions between different axes of inequality, but the point of this snapshot of inequality is simply to summarise the data and note the importance of considering multiple forms of inequality alongside each other, rather than the usual mono-dimensional focuses.

In arguing for a broader focus on the multiple forms or layers of inequality, I am not calling for endless sets of data or the infinite division of society until we are left only with individuals (as in the neoliberal dream). Rather, my point is that statistics (and all research data) is a reflection of the questions we ask and the theoretical understandings underpinning the research. Our national economic statistics are a product of the neoclassical and Keynesian theories that gave rise to them (that was Chapter 1 of my PhD). So too, the data we use to describe inequality reflects particular theoretical standpoints.

More than that, the data can limit the way we see society and the policies we might pursue to address both inequality and political economy more generally. For instance, data on the distribution of income between households tends towards a tax-and-transfer redistribution (after the fact) to support households in the lowest income brackets. By contrast, labour share data begets industrial policies, while regional data inevitably leads to development debates.

In saying that, I am mindful that my analysis is not comprehensive. I am sure that people with better statistical programs and skills could provide more nuanced numbers, and not all structures of inequality have been examined. Most notably, there is no consideration of structures of racial inequality, although with relevant census data to be released later this year I may be able to add to the analysis later. Perhaps more importantly, I am also acutely aware that race, gender and class inequality is ultimately not reducible to numbers – or even to the economic.

All that said, the economic aspects of inequality are important, and the numbers do provide useful points of reference. At its most basic, it seems to me to be important to have some sense of the scale of inequality, whether things are getting better or worse, and in what areas.

The Labour Share: No Paradise for Workers

This is the fifth post in the series on inequality in South Australia. While previous posts used ABS data to identify and track inequality between households, this post shifts the focus to structural inequality, and questions of class in particular – as evidenced by the changing labour share of the economy. Future posts will look at other structural inequalities based on gender and race.

Structural Inequality

The shift in focus is important because while the household data reveals much about patterns of inequality, it also has many limitations. Household income and wealth data is based on an assumption that households share resources. This assumption is probably unwarranted for many households, including the 13,000 “group households” in South Australia (272,000 nationally) where some expenses may be shared, but income is likely not shared. Further, viewing the household as the basic economic unit hides dynamics of potential inequality within households – most obviously gender and age dynamics, which then have ramifications in society more widely.

Further, the household data produced by the ABS, and used in many studies of inequality (for instance, the Productivity Commission report and the ACOSS/UNSW research) presents a mono-dimensional stratification of income distribution: a continuous spectrum from lowest to highest income/wealth on which all household/individuals are located. The measures of inequality are then based on the relationship of arbitrary points along this continuum such as income quintiles, top-bottom deciles. They do not tell us much about what is driving this stratification.

While it is possible to look at different demographic characteristics of households at various points on this spectrum, it is still largely only a scoring of an end point of distribution – not the mechanism of unequal distribution itself. By contrast, structural inequality is not simply a different location on a spectrum, it is a systemic and often conflictual relation, buttressed by a range of institutional arrangements where the economic inequality drives or at least contributes to the reproduction of that inequality.

Class – the Labour Share of GDP

This description of structural inequality and some of terms above are loose and contested, and there are mountains of academic writings on the subject. I have previously discussed Erik Olin Wright’s attempt to draw together classical Marxist, Weberian and Durkheimian approaches to class. All these approaches offer different insights, and all are added to and cross-cut by analysis of other structural inequalities. However, with no claim to being comprehensive or determinative, in this post I want to keep it fairly simple with just one measure of one structural inequality: class, as measured by the relative financial returns going to capital and labour.

The usual measure of these class-based economic flows is the share of national income going to labour (“compensation of employees” in ABS-speak), or alternatively, the labour share of the whole economic pie (that is, the share of Gross Domestic Product going to labour). I am sure there is a PhD somewhere critiquing the notion that “GDP = the economy”, but nonetheless, the labour share of GDP is a convenient measure as there is a robust ABS data set and changes in the labour share reflect changes in class power within the economy.

The Labour Share Data – National and South Australian

As is well-known, labour’s share of GDP in Australia has been falling in recent times. In 2018, the Journal of Australian Political Economy dedicated an excellent issue to highlighting the issue and examining the causes, and the labour share remains a cause of concern for the labour movement and many on the left.

Rather than add to the debate about causes or solutions, in this post, I simply want to look at the figures and compare the situation in South Australia with the rest of the country. As can be seen in the table below, despite lower average wages and lower workforce participation rates, the most recent ABS data (June 2021) shows that labour share of the South Australian economy was slightly higher than the labour share nationally.

AustraliaSouth Australia
Average Total Weekly Earnings$1,797.10$1,626.00
Participation Rate66.2%62.7%
Labour Share47.7%49.3%

While this suggests a slightly better distribution of income to workers in South Australia (i.e. a more equitable outcome in class terms), as the graph below shows, this is not historically consistent. The labour share in South Australia is more volatile and slumped below the national average in the decade from 1996 to 2006.

Time series showing labour share of economy in SA and nationally from 1990 to 2021. Long term decline in national series, while SA slumped but regained ground from 2010.

It should also be noted that the national data here does not show the current “historically low” labour share discussed in the media. That discussion is rightly based on seasonally-adjusted figures, but these are not published at the state level so I have used the ABS “original” data series to ensure a like-for-like comparison. That said, the seasonally adjusted figures show an even lower labour share nationally (46.1%), so either way, it would appear that SA labour’s share of the state economy is higher than labour’s share at the national level.

While this may appear to be good news for South Australian workers, this is a higher share of a decreasing part of the national economy. In 1990 the SA economy (Gross State Product) accounted for 7.7% of the national economy (GDP). In 2021, SA’s share was 5.7%. As the graph below shows, South Australian labour’s share of the national economy (in orange plotted on the right axis) has declined over the last 30 years, even while largely retaining its share of the state economy (black line plotted on the left axis).

Time series graph repeating SA labour share of GDP, but also showing long even decline in SA labour's share of national economy (GDP)

For South Australian labour there is then a double-challenge – the class challenge of retaining and increasing its share of income, and the development challenge of growing the economic pie overall. Of course this struggle is not unique, but it is a particular challenge given the arguments in previous posts about being at the economic periphery.

Caveats and Conclusion

It is worth emphasising again that the labour share is a class distribution, an economic process rather than a positioning of people or households. Many people and households (particularly higher-income households) have multiple sources of income including government transfers, bank interest, investment income, imputed rents and capital gains. These are different economic flows (class processes) and those households’ labour income does not necessarily determine their total income, lifestyle options or position in society.

That said, labour income is the major income source for the majority of Australian households. Accordingly, changes in the labour share of income are a key contributor to the household income spectrum, while also being important in their own right as a reflection of structural inequality.

In this context, my interim conclusion (to be added to in future posts) is simple: with a declining share of the national economy, it is no paradise for workers[1] – either in South Australia or nationally.


[1]  With apologies to Ken Buckley and Ted Wheelwright for stealing their classic title.

Class In Australia: Everything and Nothing?

A book, a red book (of course), simply titled Class in Australia. A front cover emblazoned with Sally McManus proclaiming that it is “a powerful and vibrant study of the complex realities of class in modern Australia”, and a back cover announcing an examination of class rooted in the specifics of Australian settler-colonialism which also takes account of race and gender relations. A big promise from Monash University Publishing about Steven Threadgold and Jessica Gerard’s book which was published in February this year.

Book Cover:  Class in Australia, by Steven Threadgold and Jessica Gerard

With this advance advertising, I pre-ordered a copy, but I am afraid I was ultimately disappointed in the purchase. As an edited collection of essays, it is a hard ask to generate a coherent picture of the complexities of class (and that was probably not the aim), but from the opening chapters I was not sure who the audience was for the book.

Much of the work plotted issues or the various authors’ research in relation to existing academic literature, but without a knowledge of that literature it was hard to evaluate the arguments and contributions. But for an academic audience, the short generalist pieces lacked the data and detail to be convincing. My reading was somewhere in between, and I was left wanting more.

Theory

Threadgold and Gerard’s introduction argued for the importance of class as a concept, and against arguments of the “death of class”. They argue that

“class is necessary for understanding how Australian society functions, how the powerful maintain their interests, and how social and cultural institutions work to reproduce inequality”.

No argument from me on that, but they neither define class or a particular approach to class analysis, beyond emphasising the need for an open analysis of the complexity of class which takes account of gender, sexuality, race, ethnicity and the particular context. From that atheoretical (or at least non-structural) starting point I was not sure what “class” meant or was grounded in.

The first chapters designed to “situate class analysis” within the specifics of Australian experience were vague and disconnected – one leaping from Poulantzas to the class contradiction of one working class man’s love of classical music, while another described property relations in settler colonial society, but appearing fairly dated in its sources. The most theoretical of the chapters in this section set out its key definitions and assumptions, and adopted a categorisation of class based on income from paid work for owners (employers and petty bourgeoisie) and labour distinguished by control of operational skills and managerial rights (expert managers, managers, experts, workers). There was data on the numbers of people in each of these classes, and some discussion of the interplay of income, assets and culture. IMHO, it was a too dismissive of housing as a class asset (for reasons discussed here), but in any case, the chapter was too short to develop its key themes and, in an edited collection, this framework did not necessarily apply to other chapters.

Race/Aboriginality

Beyond the early chapter on settler colonial society, there were various references to race and the experience of Aboriginal people, but few were developed. For instance, in the concluding interview, Raewyn Connell contrasts Australian colonialism with South African settler society in that:

“Except in the pastoral industry and especially in Northern Australia, colonialism in Australia did not subject the Indigenous population as a labour force … That produced a different pattern of racism in Australia which we still have elements of today – exclusionary rather than hierarchical.”

This struck me as in important entry point to understanding an intersection of class and race, but I wanted a more detailed analysis of how these geographic differences played out, and how the situation changed over time. In 2016, 51% of Aboriginal and Torres Strait Islander adults were employed. This was still well below the 76% of the non-Indigenous people, but it shows that the exclusion from employment/class is not total. So how are we to understand the class processes and differences for both Aboriginal employees and non-employees?

Similarly, the interview with Larissa Behrendt was a story of exclusion in highlighting the discrimination she has experienced in her career. While her story is inspirational, I was not sure what it says about class that is not simply captured by the notion of discrimination (with “class” being redundant).

Industrial Relations

For me, one of the most interesting chapters was an analysis by Tom Barnes and Jasmine Ali of an industrial dispute over retrenchments in a Woolworth’s warehouse in suburban Melbourne. The analysis adopted Erik Olin Wright’s multilevel synthesis of Marxian, Weberian and Durkheimian theory (which I considered in an earlier post) to show the divisions within the warehouse staff. Wright’s work in fact appeared several times in the book, but Barnes and Ali’s chapter was a great example outlining the (Weberian) distinctions between entitlements of full-time, casual and labour-hire workers and the (Durkheimian) situational differences within the formal and informal workplace culture and hierarchy. This was framed within a Marxian logic of the power of capital in deciding production location and warehouse closure.

In the end, the union got a good outcome (much improved redundancy and rights) based on identifying the unity of class interests against capital. While that may be good news, I would have liked to have known more about how those institutional and work-floor divisions were navigated – i.e. how class was mobilised. The article also said little about race or gender intersections, so while it was a good exposition of Wright’s methodology, it did not fully situate class in the current context.

Conclusion

There is not space here to comment on each chapter of Class in Australia, which was something of a smorgasbord (or at least a tasting tray) of class discussion. Suffice to say that the cultural studies chapters analysing an SBS documentary (Struggle Street) and rural romance novels failed to convince me of the generalisability or importance of the topic. And I did not read the chapters on class and education because …

Throughout the book (and somewhat in contradiction to Threadgold and Gerard’s statement cited above), I got no sense of one (or more) classes accumulating wealth and power from their class position or at the expense of other classes. There was a sense of inequality based on class and hierarchy between and within classes, but not really a sense of exploitation or of class processes as drivers of macro-economic structures or of social change or stability. Rather, (and perhaps because they generally reject a priori theory in favour of class forming in context) class appears as the wash-up of other economic and social processes. This is unsatisfactory both analytically and politically as it robs classes of agency.

There is much to say about class in Australia, and Threadgold and Gerard set out to raise rather than answer questions. But I would argue that the class processes and conflicts which determine (or at least influence) the distribution of income and wealth at the macro-level are more important than the musical tastes, and even the education levels or voting patterns, of the players in those processes. Ultimately, that is why I am drawn to political economy rather than sociology, even while acknowledging the importance of other analysis.

Understanding Class: Reflections on Erik Olin Wright’s Multi-layered Synthesis

Class is a key category and concept in political economy. In saying this, I am not saying that class is the totality or the cause of all inequality, or the base of all economic processes. The days of seeing all history as the history of class struggle are long gone, but the distribution of wealth among different classes of people, and the understanding of class behaviour, mobilisation and power remain of critical importance – both to political economy and to society generally.

Yet despite (or because of) this importance, the concept and analysis of class is hotly contested and muddied by different meanings and analytical frameworks. In this context I recently came across a reference to Erik Olin Wright’s attempt to bring together Marxist, Weberian and Durkheimian definitions and theories of class into a coherent (rather than competing) multi-layered framework. (While Wright is famous, I have not read much of his work – not sure why!) The following is my summary and reflections – informed as always by some concrete campaign problems I am currently thinking about.

Photo of book: Understanding Class, by Erik Olin Wright

Understanding Class

In one of his last books, Understanding Class (2015), American sociologist Erik Olin Wright starts with the broadest of framing of different class traditions:

  • Marxist: where class is a system of exploitation structured around the accumulation of wealth based on the ownership of capital;
  • Weberian: where class is a location within market relations built on the hoarding of economic privileges to the exclusion of others (think: education credentials or licencing requirements for middle-class jobs, union closed shops or the exclusive rights of private property);
  • Durkheimian: where class is a collection of attributes and life conditions which determine people’s position in society (e.g. geographic location, occupation, cultural traits, health, housing conditions – all of which impact on access to income and resources).

My first experience of these differences was a long time ago when a mad activist sought to verify my proletarian credentials by grilling me about my parents’ occupation and where I went to school. I replied that I did not own the means of production and had to sell my labour power. Talking at cross-purposes.

However, Wright brings these broad approaches together by seeing them as simply operating at different levels and asking different questions. This is best explained by a metaphor of a game. Marxism is interested in what game is being played (capitalism or socialism). Weberian class is about the rules of the game (how the system is regulated and maintained – with various regulatory regimes being possible within capitalism). The Durkheimian tradition is about moves within the rules of the game – with individuals or interest groups vying within a given set of rules to get a better slice of the pie.

I have adapted one of Wright’s tables (and associated discussion) to summarise the framework.

LevelGame MetaphorPolitical Focus/IssuesClass Analysis
SystemicWhat game to playRevolutionary v counter-revolutionary politicsMarxist
InstitutionalRules of the gameUnion regulation, employer rights/control, role of the stateWeberian
SituationalMoves in the gameGovernment spending, tax rates, subsidiesDurkheimian

Wright takes his analysis in a strange sociological direction with lots of graphs of class politics and political strategy. However, applying his multi-layer model to local politics, I would suggest a mud map of left-of-centre class politics as follows:

  • the NGO left operates mostly at the level of situational inequality (in part because they are formed and funded around particular issues),
  • left-leaning economists, the “industrial left” and the majority of those identifying as “socialist” operate mostly at the institutional level (eg. social democracy v neoliberalism), while
  • everyone claims to be operating at the systemic level!

Critique

As a tool of class analysis, I have a few issues with Wright’s framework. It implies that Marxism has little role in institutional struggles around tax, distribution and regulatory regimes. Yet an analysis of the processes of accumulation is surely central to such politics.

Further, it reduces the “systemic” choice to whole of society changes (revolution or counter-revolution), rather than seeing capitalism as just one particular set of production relations among many – albeit the dominant set (although as noted in an earlier post, even this hegemony is debatable in a digital age). From this perspective, the system-choice politics at the top level of Wright’s analysis may be less than revolutionary – everything from debates over public ownership/privatisation of utilities (i.e. production by the state or by capitalist businesses), to whether a forest is protected (i.e. kept outside production) or felled as a commodity for a capitalist production process. And, most mundanely, the question of whether to cook dinner at home (non-commodified household production) or to eat out (capitalist production) is a system-choice.

Finally, some things will have some characteristics or elements which could fit in to different categories. For instance, a minor concession reform to extend support to someone with a particular attribute (e.g. low paid, precarious work) may simply be a situational move which does not change the position or power of the recipient. However, it still implies and calls for a particular redistributive role for the state – which is an operation at the institutional level. And as Wright notes, the cumulative impacts of a number of situational moves/policies at some point could amount to or force institutional reform.

The Usefulness of the Analysis

However, despite these concerns, the multi-layered framework in Wright’s Understanding Class is important and useful for a number of reasons. Firstly, it reminds us that while we may be using similar terms, such as “class”, we may mean very different things and have very different understandings of what that means. But more importantly, it highlights the incompleteness of any of the paradigms.

This has very direct implications for policy development and what to do about inequality. To focus simply on systemic issues and institutions which promote or challenge class inequality is to ignore the very different ways those structures and institutions impact on people in different situations. Conversely, to simply focus on the attributes of people or their differing situations risks victim-blaming (it is about their attributes) and not challenging the institutions and structures which drive inequality.

As an example, I am thinking about my current work developing a campaign for more public housing. It seems to me that if we simply argue on the basis that certain groups are excluded from housing, then even if we can identify these groups by particular attributes (e.g. older women, ex-prisoners, unemployed youth), we will not get more public housing unless we also win the institutional campaign around the role of the state in providing housing – and perhaps we won’t win that debate without making inroads into the systemic ideology around the limitations of a capitalist market. That said, if we are too focused on big picture debates about economic systems, people won’t see a relevance to their particular circumstances and we won’t mobilise the support needed to change anything. And of course, most organisations/campaigns simply don’t have the resources to operate at all three levels.

Further, it is not even as simple as which level to focus on. There are also questions about the language and data we use. To take a different example, if we define poverty or inequality as being based on household income (the mainstream definitions) and then to do analysis of the dis/proportion of women in poverty, or on different educational levels or sources of income within the poverty cohort, we are talking (often unintentionally) a Durkheimian language of attributes rather than systems (in the Marxist sense) or the institutional arrangements (in the Weberian sense) which drive that poverty and inequality. To talk about those things, we may need different data (e.g. the wage share of GDP, but much more besides) and a different language.

Conclusion – of sorts

Like Erik Olin Wright, I originally came from a particular camp in the great class debate, but now want to acknowledge the power and potential of different perspectives – even if I don’t quite know how to develop this in practice. How can we organise politically at multiple levels – especially if we don’t have a shared language or understanding? What might class alliances look like if they are splintered by the different (and potentially conflicting) attributes and situations that people bring to confronting the institutions and structures of class (and other inequalities for that matter)? Indeed, according to one reading of his last book (2019), Wright himself came to believe that the working class had become too fractured to play the role Marxism traditionally assigns to it.

Or there is the question I ask myself most often at work: how do we address structural inequality if the language, data and rules of the game (including views of what is possible) are already set to a limited field of situational inequality?

I occasionally see opportunities to use data differently, to ask different questions or challenge orthodoxies or unconscious theoretical propositions, but I don’t have a macro-theory or big answers – particularly to the question of organising diversity.

However, despite my questions and lack of answers, I think Wright’s approach in Understanding Class is interesting and provocative. It will be the background I will bring to reading a forthcoming book edited by Steven Threadgold and Jessica Gerard on Class in Australia, which I have just pre-ordered. I look forward to seeing what frameworks are engaged and at what level we might progress. UPDATE: Post on Class in Australia here.