ARTICLES have appeared in this newspaper speculating about the size of Pakistan’s middle class under the notion that the bigger this class, the more vibrant the economy.
Before one speculates about its size, however, middle class needs to be defined and its role in the country’s socio economic development examined.
The term is usually applied to an intermediate social class between the upper and lower classes, income being only one of the criteria, though an important one, for assigning an individual to a social class. Other criteria include education, occupation, culture and values etc. Seen in this perspective, the connotation of the term ‘middle class’ has varied in different epochs. The concept today is a socio economic rather than a purely economic one.
In capitalism, two clear-cut classes have been identified: the class owning the means of production, or the bourgeoisie, and the class that lives by selling its services, or the proletariat or working class. Marx did recognise the middle class as a class interposed between the above classes, but thought that it would in due course decline.
Die-hard proponents of capitalism argue that this has not happened so far in today’s advanced capitalist societies, a refutation of Marx’s assertion. Neo-Marxists believe that the phenomenon seems to be a reflection of the much more complex and technology-driven world than the one that existed in the 19th and early 20th centuries after the industrial revolution.
The more advanced economies now have a much larger service sector, though the wage-dependent middle class remains very much a part of the working class and the basic cleavage between the bourgeoisie and the proletariat remains unchanged. It could just be an interim phenomenon before contemporary capitalism gives way to some other system.
Since many better paid job opportunities have been created for high skilled professionals than ever before in both the domestic and global markets, their dependence on employers and their jobs is consequently less total than it is for the ordinary workers.
But they cannot completely divorce themselves from dependence on jobs, as is being increasingly shown in the West, where corporations often shift manufacturing and outsource jobs to low wage developing countries, enhancing profits at the cost of their workers, and even causing unemployment among some high skilled personnel.
In the developing countries, some workers gain from higher wages. However, some of the educated and high-skilled manpower in demand in the developed countries are lost permanently due to emigration to the developed world, where they serve to keep wages in check. This certainly has an impact on the size of the middle class in the developing countries since it takes time to replace trained and educated individuals.
The contemporary global system is best understood through the world systems theories, which look at the world in its totality, rather than considering each country separately. Immanuel Wallerstein calls the current global system the ’capitalist world economy.’ It has a 3-tier structure. The state system’s three tiers are: industrialised countries, called the ‘core,’ raw-material producing states, called the ‘periphery’ and an intermediate group of semi-industrialised countries, the ‘semi-periphery.’
In individual national societies, the three classes are: the owners of the means of production, the bourgeoisie, the workers or the proletariat, and an intermediate ‘middle class.’ The last helps to sustain the status quo by generating hopes of upward mobility among people in lower classes. Income distribution varies widely within individual classes. Some salaried managerial/technical positions have higher income than entrepreneurs managing their own small/medium businesses.
This greatly modifies the class struggle, though class-consciousness does not go away. How the intermediate classes see their interests and align themselves in the struggle for power and resources, are crucial in determining the nature of socio-economic development and distribution of final output.
Many of the government officials (regulators) and salaried technocrats (managers) are often placed in controlling positions in business and industry. Wallerstein calls these educated and comparatively well-off proletariat, part of the ‘controllers’ of production, proletariat-turned-bourgeois.
The white-collar professionals of the middle level needed to supervise direct producers and smoothly run the system, are called ‘cadres’ of world economy. Their net impact may be to mitigate class conflict, though this does not reduce the power of capital or the dominant position of the owners of means of production.
The proponents and apologists of capitalism make much of the ownership of stock market shares by people described as ‘middle class,’ citing it as ‘proof’ that a large number of people now have a stake in the system, but this perception is created more to help the dominant classes maintain the status quo than to diversify assets ownership! The structure of the system per se, remains. Its contradictions continue, as manifested by the current global financial crisis.
The important thing is that they do not identify themselves with the proletariat. In Pakistan, the middle class seldom empathises with working class and at the same time cannot become a part of the upper class.
In the last few decades, the size of the middle class has shrunk, one of the reasons being the impact of the neoliberal economic policies.
When the government abdicates its responsibility in the fields of health and education, does not control non-development expenditure, increases the prices of inputs like fuel and power and, above all, its leaders and officials indulge in unbridled corruption, disposable incomes of the working classes drastically reduce. The erosion of purchasing power affects production as there may be a lack of buyers.
The governments’ failure to regulate is the cause of imbalance between production and demand, which the market proves ineffective in solving quick enough.
One solution some policymakers resort to is to grant consumer loans for automobiles, air conditioners and such other goods as a support to local assembler industries but this often makes matters worse. Lack of coordination with local ground reality has its impact on other sectors. For example, one can well imagine the impact of a large number of air conditioners in a city short of electric power! The increase in poverty coupled with the ongoing global financial crisis shows that neoliberalism already is at a dead end!
Has the middle class played a constructive socio-economic role in Pakistani society? It has, on its part, been more interested in emulating the upper classes. It generally keeps aloof from any struggle for the amelioration on its own and the working class’s economic conditions. It seldom empathises the working class while a large percentage of the poor and marginalised has zero assets.
In a capitalist society, the middle class is often thought of as the main consumer class that keeps the wheels of many industries going, while also providing the bulk of the managerial and skilled labour force for industry. The economic fallout of this is presumed to be benign for the economy.
But to sustain consumption, wages should be enough to generate a reasonable disposable income for wage earners. Hence the constant need to keep a healthy balance among profits, rent and wages. It is important to keep the cost of health and education low to help create a healthy and skilled workforce.
Instead of worrying about the size of the middle class, one ought to be seeking ways to create the enabling environment that can help boost economic development through good planning and entrepreneurship. On the contrary, indirect taxation is being increased—note that inflation is also a form of indirect taxation—while no attempt is being made to prevent drain of national resources on account of corruption!
Self-centred dominant elite and unimaginative planners is a deadly combination that has primarily been preoccupied with preserving the status quo, to promote personal and class interest.
The economy’s perpetual crisis is due to the policy of bridging the fiscal gap created through foreign aid and loans, without building up the economy’s productive capacity through progressive economic activity.
In such a milieu, the onus to struggle against gross inequality and social injustice devolves on the middle class, which must wake up and play a role to bring about positive socio-political change. Qualitative change is more important than quantitative change. Effective leadership, committed to safeguarding the interests of the working classes is badly needed!