An obituary to the middle class

Obituaries appear on the last page of mostly local newspapers and only for individuals, written with sadness at the predictably eventual end of someone dear or with regret at the untimely end of someone whose days passed by in overdrive much faster than was expected. Rare objects, no longer found or produced, are placed in museums, under protective glass and a watchful view of cameras, intended to assure their permanent afterlife. But what if the subject of the discussion was not a single human life or a physical object, nor a national phenomenon of interest only to a local newspaper but a global phenomenon, such as the decline of the middle class? You might be tempted to shake off the argument as needlessly alarmist, see it as another “clash of civilisations” thesis destined to go up in smoke.

Maybe, but since you have already started reading, I ask that you bear with me just a few paragraphs longer. In communist or socialist countries, the middle class was theoretically omnipresent but practically absent by the general state of poverty – financial and emotional - of the said nations. The former USSR and China of 1980s spring to mind as the perfect examples. In many capitalist countries, the middle class seemed to rise throughout the industrialisation period only to slowly disappear in the smoke of “yes we can!”, where a few lucky were able to climb to the top and many others - most others I should say - faced a great delusion. In the great big United States for example, it is reported that the top 1 percent of wealthy control more money than all of the bottom 95 percent combined.

The great families, the Wallenbergs, the Rothchilds, the Fords were able to – with some luck and some persistence - build their wealth on sweat and blood of their servants, much like the Egyptians were able to erect the great pyramids which the global tourism industry unloads busloads to worship. David Landes wrote in "Dynasties: Fortunes and Misfortunes of the World's Greatest Family Businesses" about the rise of industrial families, explaining why some like Rothchilds, succeeded over generations, while others like Fords, trinkled away their hard earned cash, amortising it over years until one unlucky descendant would discover the honey pot empty.

Other wealth came into the hands of oligarchs, sheikhs and other enterprising men and women much later and mostly by sheer luck. When the pendulum struck midnight, they found themselves standing like a certain Cinderella near a pumpkin, except the transformation worked in the opposite direction and instead of a pumpkin, they found themselves in a gold carriage. Reverse Cinderallas started popping up in quite unexpected places from Eastern Europe to the far away Arabia.

The Arab sheikhs literally woke up overnight realising they have been sleeping on black gold, with a new dream to turn the black gold into real gold, while the Russian oligarchs also awoke from their daily routine dictated by five year plans and discovered – much to their own surprise - that stealing on a mass scale was not only possible, but almost encouraged. “That’s what capitalism is all about!”, a few entrepreneur types said to themselves, mentally equalling privatisation and official theft or assets at the acquiescence of the state. And hereby the former republics of the USSR, formerly united by the symbolism five year plans and never ending lines for never-appearing goods, discovered their own version of the Washington consensus - privatisation as a way of asset transfer from the state to the individuals. Very few individuals, like very few sheikhs, royal descent obliging.

Unlike the old wealth, this newly discovered money was not going to be saved for the rainy day, in case competition would eventually show up and require some re-investment. It was going to be spent - and immediately so - on things that its owners could not previously have, because they were too expensive, not imported into their countries or simply did not exist. From Los Angeles to New York to Cannes, the new money found its way and seems to have squeezed out both the old money and the lingering middle class - those who previously worked for the old money, who made the American or the Swiss or the English dream come true, that made London the European financial center, the Swiss its worthy competitor and the French just grumpy that they did not manage to be one or the other. Until the last financial crisis that is, of course.

The difference between the old wealth and the lucky newcomers to the scene is that they latter had no habit of managing the newfound dollars, pounds, dirhams and roubles except for plough ahead, screaming “faster, glitzier, louder!” They flood the boutiques of the very symbolic place Vendome buying scores of Cartier watches and Boucheron rings with swags of euros that are now very much exchangeable from and to the Chinese yuan. They scout every boutique in Cannes to the point that the most spoken language in this charming and one might say – formerly French city – is Russian. They emerge out of their armoured Mercedes on Avenue Montaigne, covered in black niqabs - only to purchase the most exquisite and expensive dresses the world’s fashion capital has to offer. Whether the cooking French anti-burqa legislation will kill the trend is doubtful.

And whatever legislation is passed no longer really matters, because the evolution of capitalism in most capitals of the world has resulted in the death of the middle class, such that one can shop either at Hermes or at Zara, eat either at the bagel shop or at a five star restaurant, live either in the center of in the periphery. Perhaps the biggest irony of all is that the few rich do not need to work as if their situation was rightfully inherited and permanent, based on some ideological right of passage for the sheikhs or the permanent state of corruption for the oligarchs. Without going to Ayn Rand’s often denounced as extremist critique of capitalism, perhaps it’s worthwhile think about this facet of globalisation and the consequences it carries. After all, it is a global system where the Chinese workers manufacture (for pennies) Chanel sandals bought by Russians in French boutiques (for 500 euros) to where on the swimming pool of their Swiss villa (valued at unestimable and undisclosed amount), while the French shop at Zara for clothes made in the same China (also for pennies) so that those at the helm of those Chinese factories can come to Paris and buy Cartier watches without even counting them.