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On the Necessity of Being a Multi-Millionaire under Late Capitalism: 1

July 5, 2020 31 comments

A few years ago, I wrote about how the Simpsons show was a marker for demise of middle-class in USA. The point I made in that post was that the Simpson family’s lifestyle, as depicted in that show, was not only possible, but considered normal as late as the early 1990s- when that show debuted. However, today the idea of a guy who barely completed high school having a stable job which pays enough to support a wife and three kids, own a modest house along with a couple of second-hand cars would be considered fantasy. So what happened between the early 1990s and today? How did we go from a point where a stable middle-class existence was the unquestioned norm in western countries to one where most people are heavily indebted precariats with zero chance of a better life in less than three decades- but especially in the anglosphere.

To better understand what I am talking about, let me tell you a little story. See.. there are two reasons why I took the educational trajectory which I ended up taking. Firstly, I liked my area of study and was very good at it. However, there was a second reason- employment in that area provided a guaranteed stable upper-middle class lifestyle for many decades (starting from end of WW2 to the mid-2000s). Even academics in that area could expect a very nice and stable upper-middle class, albeit a bit less well compensated than those in industry. For example, one of my academic mentors (born in 1945 or 1946) became a tenured professor by 30, got married, had three kids, was able to buy a nice house and expand it, buy a second vacation home, decent cars etc, take long vacations, a few sabbaticals, got a steady stream of OK grants and ultimately retired with a decent guaranteed pension.

The important thing is that he was able to all of that with an income equivalent to somewhere between 70-120k/yr adjusted for current levels of purchasing power. Sure, his wife worked too for some years, but she made probably 40% of what he made even in the best years. In other words, it was possible to enjoy a very nice and stable upper-middle class lifestyle for somewhere between 100-150k/yr even if you had three children who had to be put through university. Sure, it helped that the city in question was not coastal California or NYC level expensive. But still.. my point stands, and he was not the only one. As late as end of 1990s and early 2000s, this lifestyle was considered normal for someone in academia- at least in the parts where I lived. Industry paid better, and starting salaries of 80-90k after a PhD were fairly common even in late 1990s. A good number of them ended up making the equivalent of somewhere between 120-150k for most of their careers. Did I mention that the jobs were far more stable then?

Anyway, the point I am trying to make is as follows: it was perfectly possible for a couple making about 200k/year with one or both in pharma or allied sectors to live a very comfortable and nice lifestyle in certain places in NE USA (MA, NJ, non-NYC NY) or west coast (Bay Area, San Diego, Seattle). Also, these jobs came with excellent healthcare packages and defined-benefit pensions. Of course, this has not been the case since 2009- but that is another story. Now ask yourself a simple question, how was the pharma sector capable of providing such nice working conditions for many decades and why did this start coming to an end by middle of early 2000s? It is not as if pharma suddenly became a far less profitable industry, did it? So why did that sector change its business model after decades of it working nicely, starting in the 1990s. Yes.. the rot began a decade or so before things went to shit.

To understand what went wrong in that sector and many others all over the west, you have to begin by asking a simple question- who are corporations run for and by whom. Well.. as it turns out, for many decades after end of WW2, corporations in the west were run to achieve two ends- personal profit for owners of capital AND well-compensated stable employment for the rest. The idea was that a high standard of living would keep people from getting interested in more ‘radical’ ideologies such as socialism and even full-blown communism. But once state communism fell in Eastern Europe by 1989, the west (especially anglosphere) had no reason to balance the interests of capital AND employees. It is therefore not surprising that neoliberalism, which started in the late 1970s, did not really take off until 1991. Yes.. that is why a lot of the deregulation of western economies started after 1991. But what is neoliberalism anyway?

Well.. if I had to define neoliberalism, here is how I would do it. Neoliberalism is an ideology that pretends to profess belief in “free markets”, “free trade” and other totems of classical liberalism such as individualism while transferring power and money from elected government to unelected corporations using excuses based in the bullshit lies of pliant economists and other so-called “social scientists”. For examples, government deficits and ‘printing money’ are very bad if they are used to fund the needs of average people but very smart and correct if they are used to make corporations and a few people very rich. Here is another example- according to this ideology, allowing monopolies and oligopolies to exist is a great idea as long as you can pretend to show that they don’t overcharge customers. Here are a few more examples..

Pretending to care about black lives and diversity is the right thing to do, even if you are actively involved in trying to suppress wages, steal wages and otherwise screw your employees- many of who might be black and non-white. There is a reason why corporations are so enthusiastic about supporting “woke” activism. It is all about maintaining a fake image that nobody but their own inner circle believe in- not unlike Nazis pretending that they were committing ethnic genocide to make the world ‘a better place’ or Zionists pretending that they are on a civilizing mission in the Middle-East. Same crap, different bottle- rinse and repeat. As I have said many times, the difference between LIEbralism and CONservatism is that the former are more vain about their public image, while the later are clueless.

Anyway.. let us get back to the topic at hand, specifically the part about how it is necessary to be a multi-millionaire to enjoy living under late capitalism aka financialism aka Neoliberalism. A few months ago, I decided to calculate the amount of income and wealth necessary for somebody in 2020 to live like an OK paid professor in 2000- in the same city. After some calculations I arrived at an interesting range of numbers. See.. to do everything he did and live with same margin of comfort, a person would require around 300k. But wait.. some of you might say, haven’t you accounted for inflation. Yes, I have and that is why I listed his pay range as 70-120k/yr (over career) adjusted to current levels of purchasing power. And you know something else, that is very close to the current pay range for positions he occupied in that university over his career.

To make another long story short, he simply could not have enjoyed the lifestyle he did had he joined the same university 25 years after he did (so, in the late 1990s) or today. And this is true not just for him and other academics but for most people in pharma, biotech, law and even programming. While Google and FB reputedly pay 200-250k for some of new hires in the Bay Area, I would like to ask you to have a look at living costs in said area. Try finding a modest but decent house within a 30 minute drive of workplace that is less than a million. Have a look at the costs of houses in areas with “good school districts” (an insanity most peculiar to USA). Calculate the costs of sending kids to university even if you get a few scholarships.

And we are not even getting into issues such as age discrimination, poor job AND career security, risk of divorce leading to financial ruin etc. It is so bad that only types of professions currently make enough money to live a secure upper-middle class lifestyle as it existed twenty years ago- medical practitioners and established lawyers. I am sure that some silly valley fuckwit will jump in now and say something about “learning to code” or some other inane bullshit about getting the right credentials. But it doesn’t matter anymore. We have already reached a stage where entire professions from academia, scientists, engineers, accountants, mid-level managers and many many more have gone down from solidly upper-middle class vocations to working class.

And they are the “lucky” ones since professions that once used to solidly middle-class such as assembly line workers, retail staff, construction workers etc have gone from middle and working class to precariat, while those that were working class such as delivery drivers, truckers, hotel and restaurant workers etc have become the working poor. It is no wonder that more than half the people are a couple of paychecks away from irreversible financial ruin. In the next part, I will go further into how financialism aka neoliberalism destroyed affordable housing, healthcare, education and a whole lot more while boomers were cheering for deregulation in 1990s. You will also see more examples of how being a multi-millionaire is a necessity under late capitalism.

What do you think? Comments?