America's low savings rate

Lawrence lawrence at krubner.com
Tue Aug 21 00:40:19 PDT 2001


From: "Gordon Fitch" <gcf at panix.com>
> Independent of what? In the kind of social configuration
> where one observes a middle class of professionals and small
> businessmen, with the rich above and the poor and working
> class below, most middle-class individuals and families are
> highly dependent. Many of them, especially those involved in
> trade or the professions, depend on the welfare of the lower
> classes to provide them with profits and fees; when hard times
> come to these, then there is that much less that can be gotten
> out of them.

Using this line of reasoning, couldn't one argue that no one who lives in a monetary economy is independent? During recessions the rich also get less money out of the poor, in the same way you here ascribe to the middle class.


> At the same time, if middle-class people wish
> to maintain their social status, especially as families, they
> have to accomodate and adapt themselves to many institutions
> ordained by the ruling class, from IRS to the academic system,
> while taking care to outbid their many competitors for places
> in desirable neighborhoods and good job situations when
> necessary. It's a pretty constrained life.

That's an interesting take for a leftist to put forward. Isn't it an old fantasy of the left that someday everyone can belong to the middle class? That the rich will be brought down and the poor lifted up? Equality, fraternity, and solidarity for all?

Aren't the constraints you describe merely the contraints of living in a human society? Can you imagine a society in which there are no constraints on any of us? Your argument seems like a good one for libertarianism.


> If the working class and poor somehow
> managed to save, along with the middle class, that money would
> be taken from consumption and therefore profits; as it
> accumulated in bank accounts and mattresses it would become
> a resource for resistance to bourgeois discipline; and it
> would increase the supply of capital and drive its price down.
> All of these are bad things to the bourgeoisie, so they would
> labor mightily to prevent them from happening.

Capitalists obviously have an interest in cheap money, it's one of their main costs when starting a new business. Banks might like high interest rates but I don't think any other element in the business community likes high interest rate. Go talk to any business person, ask them what they prefer, cheap money or dear?

Historically, from what I've read, as nations have devoloped, the leadership of the nation has pushed for high savings so that business could get capital as cheap as possible. That was true in America, and more so in Japan, and then even more so in Korea and Taiwan. In fact, it seems with each new entrant (or almost-entrant) to the league of wealthy nations, the need for ever higher savings rate and ever cheaper capital increases.


> Everyone can't be middle class, but
> class can be abolished.

Why can't everyone be middle class? My parents and grandparents all fought for an America where everyone was middle class. My grandparents on my mother's side were both member of the American Socialist Party back in the 20s, then they joined up with the Democrats when Eugene Debbs joined up with the Democrats. I imagine in their youths they might have fought for something more radical than everyone joining the middle class, but of what I knew of them, and of what my folks fought for too, was the ideal of everyone belonging to the middle class. It certainly seemed possible for awhile, back in the 50s and 60s and 70s, when strong unions made working class jobs pay just as much as middle class jobs.



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