The years since the early 1950’s have echoed with the claim that the old class structure of capitalism is steadily dissolving. The labels attached to that new order of society which is believed to be emerging from the ruins of the old—the ‘welfare state’, the ‘affluent society’, the ‘home-centred society’, the ‘mass society’, ‘post-capitalism’, and so on—have become the clichés of contemporary debate. Their variety and imprecision indicate some of the uncertainties of diagnosis and prognosis. Evaluations, too, have differed widely: reactions to the trends discerned range from triumph to despondency. But the descriptions offered of current trends generally have much in common: the assertion that the old sources of tension and class conflict are being progressively eliminated or rendered irrelevant; that the structure of contemporary western societies is being recast in a mould of middle class conditions and styles of life; that these developments signal ‘the end of ideology’. Such notions in turn are infused with a sense of a social fluidity which is felt to falsify past characterizations of capitalism.
Yet arguments and evidence alike have often been taken for granted, rather than stated precisely and scrutinized carefully. Rhetoric has obscured both links and gaps in the chain of reasoning. Hunches, impressions and assumptions have been given parity with facts. Minor changes have been magnified into major ones, uncertain indications into certain proof. Evidence consistent with several interpretations has been treated as if only one were possible. The labelling of trends has been extended into a labelling of sceptics as ‘fundamentalists’, their criticisms dismissed as the product of a psychological inability or unwillingness to recognize a changing reality. These are reasons enough for even a cursory review of the main themes and postulates of the fashionable interpretations of mid-twentieth century capitalism and its allegedly dissolving class structure, as they have been formulated especially in Britain and the United States.footnote1
Whatever their variations, these interpretations hinge on two basic assumptions. The first is that the substantive inequalities of earlier capitalism are both diminishing and losing their former significance. The second is that, for these or other reasons, radical dissent is progressively weakened as new patterns of living and aspiration negate or cut across the older class-bound horizons and loyalties. Substantive inequalities are reduced, it is argued, by a continuous redistribution of wealth and the extension of economic security; by a growth in the numbers and importance of occupations in the middle ranges of skill and reward; by a progressive narrowing of the inequalities of opportunity for individual advancement; and by a widening diffusion of power or influence. In so far as power remains concentrated, it no longer derives from the accumulation of private property, but from control over bureaucratic organizations of diverse kinds—public at least as much as private—in which authority is divorced from wealth. Thus two crucial dimensions of inequality no longer coincide. In so far as inequalities remain in the chances of wealth, health, security and individual advancement, these disparities lose their psychological (and, it is often implied, their moral) force as sources of conflict because, with steadily rising levels of living and a widening base of common rights of ‘citizenship’, their effects are confined to a continuously narrowing area of life. Analysis and speculation concerning the cultural, psychological and political repercussions of these changes have, of course, focussed primarily on the manual working class, whose homogeneity and distinctive character, it is argued, are being eroded. Among manual workers, according to one interpretation, old loyalties of class are being replaced by new preoccupations with status: a former unity of industrial and political interest is dispelled by a growing sensitivity to invidious distinctions of social prestige and subtle variations in the styles of life, by which everyday patterns of social acceptance and rejection are symbolized. Alternatively, workers’ aspirations are seen to focus more and more narrowly upon the home and the immediate family, a concern with material achievement predominating that involves
The general tenor of these arguments is familiar; the balance within them between truth and falsehood, fact and speculation, plausibility and implausibility, much less so.
In its simplest form, the ‘post-capitalist’ thesis postulates a continuous tendency towards the reduction of inequalities in the distribution of income and wealth. In particular, it is pointed out, incomes as recorded in the reports of tax authorities and official surveys have shown a fairly marked convergence towards the middle ranges since the late 1930’s. This argument can be challenged on two major scores. The first, as critics both in Britain and in the United States have emphasized, is that in part at least the reduction in measured income inequality merely reflects an increased use of devices to reduce the heavier tax liabilities of the wartime and post-war period. Such devices involve the conversion of real income into forms which escape normal rates of income tax—and which do not appear as income in the usual sources of information. There are no means of assessing the full amount of income which thus goes unrecorded. But since such devices are more readily available to those with relatively high incomes in general, and to private business in particular, the net result is an understatement of income inequality in current data. In fact, the few attempts made to adjust the data, in such a way as to make allowance for some of the distortions resulting from tax evasive devices, have indicated a much milder redistribution of effective income than usually assumed—and one confined largely or exclusively to the 1940’s.
The second objection relates to this last point. Even when no allowance is made for the effects of tax evasion, such reduction in the inequality of incomes as can be traced in both British and American analyses is in the main a phenomenon of the second world war and the years immediately around it. Signs of any consistent narrowing of income disparities in
There are factors, it is true, which might be expected to make for a general, longer-term trend towards income equalization: the decreased proportion of unskilled and casual workers in the labour force, as well as other changes in occupational structure; diminished pay differentials of skill, sex and age; an increased progression in the rates of income tax. In the latter case, however, the redistributive effects are limited by the continued importance of non-progressive forms of taxation, by the regressive operation of income tax allowances, and by the adoption of tax evasive devices. In general, moreover, except in the 1940’s the redistributive effects of these and other factors seem not to have been sufficient substantially to outweigh other long-run factors working in the opposite direction: among these, in particular, the increased proportion of old and retired people in the population, coupled with the fact that—at least in Britain—the incomes of retired people dependent on public support have not kept up with general increases in income. This might seem to suggest a shift in the nature of income inequality—from disparities between classes and occupations to disparities between age groups. Indeed, such an interpretation is frequently implied, and fits in with the general thesis of a dissolving class structure. But it is essentially misleading. Poverty in old age is not a general phenomenon of the retired—but of those who in retirement have neither property income nor the proceeds of private (though tax-supported) pension schemes to rely on. The burden of poverty—on a contemporary definition of the term—has been shifted progressively into the tail-end of working class and lower middle class life; but it remains a problem of those classes.