Jim Devine wrote:
Awhile back, "Mad" Max Sawicky suggested a way to define the working class. By bizarre coincidence -- since we _never_ agree on anything -- it roughly coincided with my own workable definition. Of course, I look at it from the opposite direction, looking at the capitalist class. In one of my many unpublished manuscripts, I write:"to be a capitalist, one requires at a minimum enough income-producing property to allow leisure for the rest of one's life, long before retirement, while actually adding to one's wealth. Such independently wealthy individuals can earn at least an average standard of living by simply being a coupon-clipper, a rentier.[1] This represents roughly 7% of the families in the United States.[2] Of course, capitalists usually want to work, and choose to do so -- since they can afford to reject all unpleasant jobs and can usually control not only their own work lives but those of others. Workers lack such choices. This minimum cut-off is not enough to actually gain control over the production process, however. To be this kind of active capitalist who can afford to lose and thus take risks with millions of dollars, one requires many times more wealth.
"[1] This is my interpretation of Marx [CAPITAL, volume I, International Publisher's 1967 ed.: 308-309], especially his footnoted quote by Richard Jones. Note that since the average standard of living changes over time, the cut-off wealth level would also change, fitting with Marx's notion that the minimum amount of capital changes as part of the historical process.
"[2] In 1999, for example, the median income of a U.S. family was $48,950 per year [CEA, 2001: table B-33]. To earn this with a 5.43% after-tax rate of return, a family would have to have nonresidential net worth of $900,000. (With a lower rate of return, more wealth would be needed. The 5.43% is the yield on high-grade tax-free municipal bonds in 1999 [CEA, 2001: table B-73], so that taxes play no role.) The mean net worth of the richest 1% of wealth-holders in 1998 was about 11 times this, while that of the next 4 percentiles is about 1.6 times this. The mean net worth of the next "poorest" 5% after that is only 69% of $900,000, suggesting that one has to be toward the high end of this part of the distribution to attain the cut-off. As a first approximation, the cut-off would correspond to the bottom of the top 7% of wealth-holders. (The data come from Edward Wolff, see table 3 of his paper at http://www.levy.org/docs/wrkpap/papers/300.html) Though this calculation is based on assumptions and is subject to argument, the basic principle of the cut-off is clear."
[it's revised a bit, especially note 2.]Jim Devine [EMAIL PROTECTED] & http://bellarmine.lmu.edu/~jdevine
