The decline of middle-class capital is partly self-inflicted.
Conventional explorations of why the middle class is shrinking focus on economic issues such as the decline of unions and manufacturing, the increasing premiums paid to the highest-paid workers and the rising costs of higher education and healthcare.
All of these factors have a role, but few comment on the non-economic factors, specifically the values that underpin the accumulation of capital that is the one essential project of middle-class households.
Daniel Bell’s landmark 1976 book The Cultural Contradictions of Capitalism held that“capitalism–and the culture it creates–harbors the seeds of its own downfall by creating a need among successful people for personal gratification–a need that corrodes the work ethic that led to their success in the first place.” The Cultural Contradic... Best Price: $6.49 Buy New $12.15 (as of 11:15 EST - Details)
I would phrase this in the language of values and capital:
The primary cultural contradiction of the Great American Middle Class is the disconnect between the values needed to build capital and those of gratification via debt-based consumption.
Accumulating capital–not just financial capital but human and social capital– requires a distinct set of values and soft skills:
1. Sacrifice of current consumption in favor of accumulating capital to be invested.
2. Thrift: repairing broken items, buying used replacements, waiting for deep discounts, etc.
3. Personal integrity and trustworthiness above all else. One’s word is one’s bond.
4. Self-discipline/self-control in service of long-term goals and the other values.
5. Humility: there is always more to learn; pride goeth before a fall. Get a Job, Build a Rea... Best Price: null Buy New $6.95 (as of 04:50 EST - Details)
6. Lifelong learning: human capital is skills and experience. Adding skills and experience takes work, focus, accountability–what I call the eight essential skills in my book Get a Job, Build a Real Career and Defy a Bewildering Economy.
7. Accumulating the social capital of emotional intelligence and trustworthy collaborators.
8. Setting and achieving long-term goals: saving enough money to buy a home or investment property with a 50% down payment, saving enough to pay for college in cash (with the student working part-time in the academic term and full time in summers), etc.
9. The desire to own productive assets rather than unproductive bling such as luxury vehicles or a fancy home.
10. Work-family-leisure balance: avoid burnout and maintain strong family/friends ties.