I’ve spent a lot of time over the past year or so taking on the bizarre and often cynical theories of “class” being floated on the right. And understandably, whenever I do this, I always encounter the same question: Okay, so how do you define class?
In brief, I agree with Marx that we have to make a basic distinction between people who do not have reliable access to what they need, and thus have to sell their labor in order to survive — and the people who control so much capital that they can buy that labor.
Since our economy is so complicated this can often be a tricky distinction to make. But one way we can start thinking about this, I would argue, is to look at a simple measure: capital income. Popular discussions about class often just focus on income in general, but what if we looked specifically at income that isn’t compensation for labor — income you get simply from owning stocks, assets, and so on? If you have enough capital income then you never have to work again; you’ve hit capitalism’s escape velocity and are no longer, in a very literal sense, a part of the working class.
To get a handle on this, I graphed out capital income by percentile using data compiled by Thomas Piketty, Emmanuel Saez, and Gabriel Zucman. Unfortunately when you include the top 1% in this graph, it tells us very little:
This is even more ridiculous than the wealth and income hockey stick graphs we’re all familiar with since capital ownership is so intensely concentrated among the top 1%. But if we zoom in considerably, we can get a better view:
From here you can just ask yourself: what’s the least I could make and feel financially secure enough to stop working? The number is going to vary from person to person based on all kinds of circumstances, but already we can see that this conception of class is significantly narrower than what we often hear from the right. For example, entry into the middle class — what most Americans consider “comfortable” — begins at around $50,000 a year; so to make that much in capital income, you’d have to be in the top 5% of Americans. For comparison, when we are looking at total income, the top 5% is making at least $122,000 a year.
This measure does not, of course, capture everything about class under modern capitalism; but if anything, it is probably too broad. For example, making enough off of capital income that you no longer have to work does not necessarily mean that you can actually control the means of production; a minority shareholder can always be overruled by a majority shareholder.
Regardless, these complications do not even start coming into play until you reach the top 5% of the population. And this gives us a very different understanding of class than right-wing arguments about some massive “overclass” that includes everyone from kindergarten teachers to retail employees with a college degree. At least 95% of the US population lives in precarity under capitalism, either selling their labor to survive or dependent on welfare subject to the whims of the ruling class. Obviously this number is extremely important for anyone who wants to understand how economic power and oppression work under contemporary capitalism. If you are a Marxist, it is crucial.
Thanks to Matt Bruenig for checking my math on the graphs.