Welcome to the BigAppleSchool podcast. This is Mike.
And today we’re talking about the topic of redefining the concept of the middle class. So, I have a question for you John – what is the middle class in your mind?
Okay, right, so when I did a bit of sociology at university about 40 years ago, I learned that the middle class being defined as the clients or, if you like, the assistants to the bourgeoisie capitalists, the owners of the means of production.
So they would be like solicitors and the accountants whose interest were relying to the bourgeoisie though they weren’t actual owners of factories. As opposed to the working class who were the people who labored in the factories. But that’s of course is a very simple definition of the middle class. I think it’s somewhat outdated.
You know, it’s interesting that you say that, because the concept of that keeps changing. So what you were taught 40 years ago actually changed in my time when I was growing up, and it’s changing now again, and I have a very, much more simpler definition of middle class than that actually, what you learned at school.
For me, you know, middle class is essentially economic earning and spending bracket, so the middle class makes a certain range of money and has a spending habit of a certain class, yeah. So if you make a certain… So if you make money as a middle class, but you spend that out of the range of your spending habit, for example.
So, you make middle class income, but you spend money like an upper class – you are going to move a class, yeah. So you’re probably gonna drop down a class. So it’s much to do with really income-expense. To me it’s a certain type of income and a certain type of expense.
And that’s kinda how I define the middle class. So if you go back in time to, let’s say, 200 years and beyond, yeah, there were only two kinds of economic classes – the very rich and the very poor. So the very upper class and the very low class.
Then they say that the triumph of the 20th and the 21st century economics is really the rise of the middle class, this class in the middle. And this is said that the middle class can also now be divided into subsections, so, upper middle, lower middle, and vice versa.
The idea that there has been feudal times say 800-900 years, you had the King and the nobility, and you had a number of senior clerics, bishops, clergymen, and then you have peasants. You had tiny-tiny mercantile class of traders, but that, those traders, the numbers grew and grew, but there was still such a small number until the industrial revolution.
And it was only from the 18th century in Britain and Holland, and the rest of the Europe in the 19th century, and North America I think, that the middle class became significant in terms of numbers and of course in economic and then later in political power.
After all it was the rise of the middle class in terms of numbers that led to the changes in the British constitution which spread the vote from very few people to average spending franchise to the number of people who vote throughout the century, starting with the 1832 reformat.
Yeah, I mean, this is interesting cause we don’t really think what is the middle class, although the vast majority of us are born into that class, right. So for me, you know, going back to that history, to what you were saying - what would it be like living in a society where literally you’re either rich, very rich, or very poor.
And there is nothing in between, there’s no concept of social ability, you are locked kin that destiny. And that is the definition of antifreedom. And the freedom, the concept of freedom is actually very highly linked to the concept of class I think.
But, you know, before we get into that, the concept of those two, what actually are the traits of a middle class lifestyle and culture? What actually are those? What kind of housing, food, education and entertainment do the middle class buy and spend their time? This is the expense part.
And if you think about it, I think about myself for example – born into the 80s, you know, living in an apartment with two rooms, watching Ninja Turtles, eating pizza, wearing Nikes – these are all the traits, the spending habits of the middle class.
And these are all the products designed for the middle class. Because the upper class has enjoyed the different kind of entertainment. And the lower class is enjoying some of that, but they don’t have the luxury to get just those Nike shoes, in those times, right.
So I think it’s a sort of a… I think there’s like the social definition of what the middle class is, but I think it really comes down to the flow of money that comes in and what goes out. Yeah, it’s kinda routine kind of behavior of that.
So I just wanna know, I mean, you are… The question for me is of course what is middle class, what were middle class like when you were growing up in Britain in Bath.
Yeah, I would say middle class is more of a state of mind rather than actually the size of your bank balance. It’s to do with aspiration. In my case, my parents weren’t particularly well-off, I suppose we would be defined as very much lower middle class.
But there was an aspiration of my parents that I would go to university and they pushed me and pushed me and pushed me. Whereas most, not all, working class people don’t have that aspiration, they don’t read to their children. They send the children to school because the law tells them to.
And when the kids come home, they are put in front of the tv these days, you know. 40-50 years ago more people didn’t have televisions. But the lack of aspiration is perhaps is the difference for your offspring. It’s not universal, the case.
Many of my friends I went to university came very much from the working class background, but it was their parents who pushed them. So this aspirationalism – it trickled the classes if you like. But I think it’s perhaps, in Britain at least, it has been…
It has become frozen and as much as people who are the bottom of the social economic pile, very much the working class, do not have this aspiration anymore, and there is less social mobility than there was 30-40 years ago because of this.
So, you’re telling me that, we call this the middle class dream, and people aspiring, they put their time and effort in to reach this dream of the middle class, right.
Now, that’s interesting, I just wanna make a note here – you call them working class, right, so for you, when you were growing up, there was middle class, working class, and yes, the working class is kinda the politically correct way to define that, you know, that they’re lower than the middle class.
Right. The question I have for you is –a lot of people in this working class are not working, yes? They’re on what’s called social welfare, so how do you call them working class?
Yes, they call… Well Marx would describe them as the lumpenproletarian, people who keep the wages low because of the fear of unemployment. So the poor and the unemployed means that the working class are kept in their place as it were.
But of course we’ve moved away from that pure sociological definition of proletariat and bourgeoisie and factory owners. Today, yes, there is a large number of people who live their entire lives on welfare or the state or whatever, whatever you want to describe it as.
They are frequently lunged in with the working working class, but I said.. I perceive there is a progressing split between the two types of people – they both may have the same economic spending power if you like, about the state, the other provided by their own efforts, by their low-paid jobs.
But those who work despise the ones who do not. And often there is conflict there I believe, or the beginnings of. What do you think?
Ah, it’s interesting thing, because ironically, I’ve met people who are on welfare, the so-called unemployed class, because it’s actually cheaper than working. Yes. So after all the taxes and after all the breaks and all the benefits it actually is more profitable economically not to work and live off welfare than go and do low-paying jobs.
Yeah, low-paying waged jobs. I don’t know why there is that distinction, but the economics of that works. But like I said, for me yes, the basically you can have the middle class dream. But ultimately – dollars and cents is what defines the middle class dream.
For me. And I’ve seen the social mobility in a way that people form the basically the low working classes basically save up money to the point where they reach the idle class, and then going to the upper class. You know, people with like 3-4 million dollar properties, investments. And I’ve seen vice versa, where the upper class people spent so much money, yes, that they end up becoming middle class.
And I’ve seen that as well. So it’s all kinda movable, yes. The social mobility is there. But when it comes to the chronically unemployed, you might be right in the sense that they are lacking that middle class aspiration.
And therefore they.. Like in Australia we have three-generation poverty, yeah. If the grandfather was on the welfare, the father is on the welfare, the son is on welfare and the chain just goes on and on and on. Yeah, so, I think that it’s perhaps that… I would say that maybe Australia and Britain are slightly not hardcore capitalist countries, they’re slightly on the left-leaning I would say, more social benefit.
Yeah, there’s more social welfare provision in Britain and Australia than in, let’s say, in the United States. Or say, tiger economies of the Far East.
Well, these tiger economies tend to be more leftist. So a lot of centralized social benefits, a lot more centralized, sort of. So I mean, one of the things I think Australia kinda defines in the Australian life, middle class lifestyle, one of the benefits is having a car, owning a house, and then, you know, paying it off, the mortgage, for 30 years, 25 years, now 40 years, now.
To the point where you own it and you leave it to your children. So this was kinda the middle class life – the house with the lawn. Now that’s being replaced slowly, yeah. Because the housing prices have hyped up to the point where you can no longer even afford the 10% deposits to rent, to actually get the mortgage form the bank, right.
So what was considered a middle class life when I was little, a house and a yard and a car, and kids and whatnot, is changing. It’s actually getting less, smaller, more condensed. It might be an apartment, they now own an apartment with one or two rooms, maybe no car, maybe a scooter, maybe a bicycle.
So the income and the expense has actually changed, yes. The proportion of that and the potential of that income. And the expenses have actually changed. And this is redefining what means to be middle class in Australia. I don’t know if it’s the same case in Britain.
It is actually. Yes. The same thing is at the root of it. It’ the rising property prices that the people already own properties they are now sitting on a huge chunk of wealth, since the price has gone up. The people who don’t, the younger generation, are finding it increasingly difficult to actually buy a house.
As you say, to acquire the money to get a deposit, and then to buy a house is incredibly… Almost impossible in London! And this again is causing great …. This property-owning middle class is under threat, because people can’t own property, because it’s too damn expensive!
But the people own them, eventually they’re gonna die. And their property is gonna be passed on, and this of course has raised a huge debates – well, should they be allowed to pass it on to their own offspring or should that wealth be taken from them and spread out more evenly inheritance stacks we’re talking about now.
But is that communism. We’re not talking about going from a capitalism economy to one. Speaking about communism. I mean, if you take away I think Carl Marx’s literary work, ‘Das Kapital’, right. I think if you take away all the numbers – I think it’s a thick book filled up with just numbers from what I remember.
But if you take way the main message, he’s talking that richer will continue to get richer, and the poor will just stay there and be poor. I mean, that’s really his warning to the world.
Well ultimately there used to be a crisis in capitalism and then communism would come about, he never explain how that’ll happen, he certainly envisioned the revolution and the civil wars and how we, of course, didn’t see it, though it was tried.
But I think the concept of the middle class is definitely changing. And the idea that you and certainly I had is definitely changing, it’s becoming more difficult to maintain this aspirational middle class, affluent lifestyle with the house, the lawn, the car, the two foreign holidays a year.
Even with the education that I had, you know, university et cetera, 50% of people in Britain now go to university. Most of them, sorry, not most of them, but a good portion of them leave university and find themselves working as waitresses or waiters, or jobs that you certainly don’t need a degree for. And therefore their middle class dream has been cut off.
But isn’t this what Karl Marx talked about? The crisis. We’re slowly getting into the crisis where people are no longer happy, yes, and that… You were just talking about income taxes and whatnot, property taxes, to control that.
That’s kinda the communism coming back to control that. So it’s the cycle of capitalism leading to a crisis, and then some state effort to curb that. Yes, so you’re taking about this cycle. So it’s probably not the crisis that Karl Marx talked about in terms of civil wars and blood on the streets.
But we’re getting to maybe a subtle one. But that’s just repeat of capitalism goes unchecked, then something happens when people feel very discontent and then the government does something to curb that, like creates new recess laws to check that. So isn’t this cycle going on?
I firstly believe it’s actually to do with globalization, that a huge, there’s been a huge shift in terms of available job opportunities from the more developed world to the less developed world. Because the people and workers in the less developed world work for less, a simple example is the person on the end of the phone.
When your computer doesn’t work, you ring somebody up the helpline, help me my computer doesn’t work. Traditionally it would’ve been some middle class graduate who got a degree in computer science from Aberdeen university who takes the phone and tells you how to fix it.
Now your phone call is rearranged to Mumbai because the graduate who… an Indian guy is sitting in a call center in Mumbai is being paid a quarter of what the university graduate from Aberdeen would expect. And therefore the graduate from Aberdeen is actually working at Costa serving you coffee. And that is a problem.
Yeah, I mean, I have an example closer to home at the moment in Novosibirsk, I mean professionals. I mean, it’s interesting, when I first arrived here, I didn’t know this. But some of the student were IT professionals.
And the amount or salary they were telling me they were receiving was astronomical, it as like 4-5 times the kind of the average salary in Novosibirsk, which is like 30 thousand rubles a month. They were receiving like 150-200 thousand if they were seniors. And I was like- in this country, there’s no way an IT guy…
You throw a brick off the roof, you’re gonna hit the IT guy in the head. And that’s the joke, right. So I was thinking – why is that that they receive so much? And this has to do with the foreign investment, with the currency exchange, what you’re talking about. But obviously it’s amplified.
So, the IT professional here is kind of like what we would consider a middle class job where we’re form, in here is considered a middle upper class or upper class job here, right. I was actually flabbergasted by that. I was rather.
But then, if you do the currency exchange and if you do that, it sort of makes sense, the economics makes sense. You kinda see that global economy is in effect amongst the IT professionals here. So I was really-really interested.
And one of the thing is that these IT professionals have here in spirit compared to the others is that they feel more free, because they are receiving so much more paying. Is that there’s this sense of freedom associated with the salary that they make. That they can afford those holidays overseas. Not just Thailand or Turkey, but other countries – Japan, Korea, whatever. Right.
That they can afford to have investment apartments, plus one or plus two. So they live that middle class dream that we have back in our countries here. And it’s very important because the concept of freedom has always been related to the marketing and the propagation of the middle class I believe.
So that definition of freedom is that you can take the job that is right for your heart, that is in line with your heart, so that you don’t have to do hard labor in factories, sweating, you know, bleeding away your time. That’s the sense of freedom.
That’s the sense of freedom is that you can have a weekend and you can get away with your family and spend time and not worry about work or being fired. In a very tough environment – that’s the sense of freedom.
But what I began to see when I was growing up is that the definition of middle class was associated with the freedom – that started gone moving that essentially it was called financial freedom. And therefore to become free as a middle class now you have to be upper middle class, you have to own properties which gave you residual income, that gave you passive income.
Right. Now the definition of freedom became – you don’t have to work but you still make money, yes. The definition of the middle class and the upper class – that’s the public conception of that, but the reality was different, because the people usually worked harder. And longer.
But so to me, I saw as growing up that the class of the middle class began to shift. The middle class aspiration become the upper class aspiration. People were already part of that class. But now it seems a very different thing altogether. It seems that every…
There seems to be the culture of start-ups, this start-up business, let’s do a start up, let’s start a business, let’s make an app, let’s hit big and let’s hit millions and billions of dollars. And let’s be rich. There seems to be this aspiration for the kids growing up in the middle class to become super rich.
Like Elon Musk. And I was thinking – what was it like when you were growing up? Were there like icons of the super rich upper class that kids aspired to by doing start-ups and stuff like that.
Well you see, I’m so old that when I was growing old there weren’t such things as apps. Computers did exist but they were huge. And you certainly didn’t have your own. The only people who had them were people like NASA and the MET office.
So in order to become super rich when I as growing up you had to be like Richard Branson and start a record company. Or become a rock super star, so the quick way to rich those days was that. Or another way to become rich was becoming a footballer.
So things have changed, one of the problems with just moving out of the middle class is working class children aspiration is to become rich. Everyone wants, seems to want to become super rich, but the working class kids in Britain – their root is to become either a professional footballer or simply just become famous.
Like the Kardashians. How they are going to achieve that is never actually expressed or planned. It’s just dream. For most of them it won’t happen obviously. One thing I do think is that the traditional middle class occupations of lawyer, doctor, accountant et cetera -these are under threat.
These are definitely under threat, they could be hollowing the middle class caused by the advent of artificial intelligence. When those jobs can be done by a computer or a robot then those jobs can no longer be done by a middle class professionals.
You know what’s funny, I don’t know about the middle class professions, but I’ve seen this sort of working class professions replaced by those. So and then 6 months ago I was in Seoul for Christmas, and I went to McDonalds to buy my dad a coffee, he likes the coffee from there, americano, right.
And it was full of people, because it was at the train station, there was nothing open at the time, it was early morning. It was full of people. And literally people ordering on five one of those boots where you have self-order service.
The only guy at the counter was the manager. In that big counter where they actually bring up the food, only one guy was standing there, in his blue uniform. And his job was basically dispense. Dispense, dispense, dispense, take the ticket, dispense, take the ticket, dispense.
Right. It’s interesting because it reminded me of my day as a teenager 15 years old, 14 years old working at McDonalds right. Doing those kind of jobs, and then making the food inside. It almost feels like that job is now gone. Almost like there are no teenagers. There’s no need.
And then also supermarket check outs. In Australia almost gone only to that. So only 1 or 2 counters are open just in case somebody doesn’t have a credit card. But for the most part it’s self-service, it’s all sort of AI-driven. As long as you can operate the AI, and tell it what to do, you’re good.
That’s interesting actually, I suppose this thing at the supermarket, I’ll just digress slightly, it just shows you the effects of demand and supply. In Australia in all the supermarkets people either have been replaced by machines, In Britain that has begun, but there is a resistance to it. A lot of people don’t like using these self-service checkouts, I’m one of them, because this thing always stops.
Well, if you want my money, you’d better serve me.
But they are gradually being replaced. But in Russia that’s not the case. I think I know the reason why. Because the Australian minimum wage for shop workers is so much higher than the one in Britain, and the one in Britain it’s lot more higher than in Russia.
So therefore the first people to be replaced by machines s the people that cost the most. Which would be the Australian shop assistants, then the ones in Britain, and lastly the ones in Russia. Globalization if you’d like. Though some people say race to the bottom.
The end of flow of money. So I’ve always believed that. So you told me that you grew up in a lower middle class family. So what did your father do?
00:26:36 J: He was a local government officer, which means he was a functionary of the local authority.
I see, so he was a government worker.
I see. So, government jobs in Australia kind of highly valued, there’s a lot of competition getting them. And the reason is the benefits are good. And after a long service the salary actually becomes kind of good. So a lot of people compete to get into these jobs.
Of course my dad told me when I was little that if you end up working for the government you’re a loser. So I stayed clearly away from the government jobs. But now that I’m getting older I think it’s actually a viable way towards the middle class dream.
In fact, it’s probably the really the best way towards the middle class train. Because you ever heard of government firing people? They don’t lay off people, generally, so I thought that maybe the military or any sort of government jobs are maybe the most stable jobs around today.
That’s certainly the case in terms of your pension. Generally speaking it was always… It has always been perceived that in Britain if you work for the state, if you’ve got the government job, you’ll be paid slightly less but they’d look after you better and you get a better pension, that was the trade-off.
However, in recent years appears that the state employees are doing better than the private sector employees. In terms of wages they receive during their working lives not just the pension, they still have a secured pension, and this of course is causing yet more friction between the public sector and the private sector and it services frequently in political debates.
With the coronavirus running rampant throughout the world it has brought the sharp into focus because the public sector workers – the health service, the police, the fire, who stayed at work, they had to, yet it is the private sector workers are the ones who are actually gonna lose their jobs when the lockdown finishes
and the supporting of jobs finishes and the recession hits, it would be the public sector workers who will keep their jobs, keep their pension. So perhaps it’s just gonna get worse, the friction.
Yeah, we’ve definitely seen the flipping of the world in that way. So yeah, when I was little, I remember the government jobs were, you’re right, they were underpaid. However stable. Now it’s becoming sort of pretty well-paid, and yes, and because of coronavirus they are the ones who kept the money.
Yeah, so maybe if you’re somebody who’s selling the middle class dream - the housing, the the food, education, entertainment, the people who market to are the government workers, perhaps in the future. You know, this is the one question that’s been on my mind, I’ve been here for a year now.
Was there middle class in the USSR? What’s your… I’ve done my research on this, but what’s your research saying on this?
I would say there probably was. Your position was perhaps determined by, I mean, I may be wrong, but I think it might be determined by whether you had the party membership card or not. You know, if you behaved in the appropriate way and said the right things you become the factory manager rather than the factory floor sweeper.
And you’d keep that job and you’d have the job for life. And you’d get your two-bed apartment and your week on a Black sea coast and that’d be guaranteed. Am I wrong?
You know, for me it seems that the middle class dream, and I don’t know why, it might be an upper class dream, I’m not so sure, still, but there was a certain prestige of being related to Moscow. So in those days, for example, you say you graduated university, it was prestigious if you were positioned, so you were posted a job, were given some sort of a job, so you were told where to go, and if you were given a position in Moscow.
That was your ticket to the middle class. So, but if you were stationed off in Yakutia, all the way from, in the middle of nowhere, you would actually go down a class essentially. Because you’re in the middle on nowhere, you’re considered.
So for me, it seemed like location was such a big determiner on what it meant to be a middle class or not. And if you saw some of the soviet films, hat is portrayed as the middle class at the time were kind of all based in Moscow. Moscow life at the time.
And I think in some ways it’s still is like that here. I kinda see some remnants of that – to be able to go to Moscow and live there means that you somehow made it to the middle class Russian life. And if you haven’t made it there, it means you’re still somewhere under that.
So you’re saying that the rest of Russia is viewed as the backward compared to Moscow, and perhaps the lesser sense.
I you talk to the young people here at universities and below, most of them want to go to either Moscow or Leningrad. These are the places they wanna go and live in. They want their jobs there, and therefore it makes the market very competitive.
I don’t know if that’s the reality of it, because I’ve seen the opposite, I’ve seen the guys from, say, Leningrad come and take a position here for a higher salary. They trade that. And they find that job markets are too tough, even though the guys were born in those cities, moving here.
Wages are higher there, aren’t they? In St Petersburg and Moscow?
Yeah, but minus the rent…
Yeah. Even the metro fares are 3 time in Moscow that what they are here.
The food prices seem to be the same, but there is what kills them. The rent. Again, with the real estate – the middle class dream is associated with the real estate, where you live, so I’m trying to piece al these things together in my mind before I leave the city.
But yeah, I’ve found it quite… Because like in Australia nobody, not every teenager or aspiring young person wants to come live in Sydney or Melbourne which are the two premier cities.
It’s the same in London, in Britain though. What is it that I read the other day… Something like half of graduates from the Russell group universities, says Oxford, Cambridge, the better ones, half of them within a year of graduating are living in London.
Yeah, there you go. And even, so in fact, it’s actually often the other way around. People, especially the young families, they have a trend of moving out of the big cities. They go to the small towns actually. So downscaling, downsizing seems to be the more, it’s becoming more prevalent.
One day the coronavirus will have the effect on that.
You can socially distance a lot easier in the countryside than you can in, say, London, which is living on top of each other, like an ant tail isn’t it. Millions of people living on top of each other. Whereas in the countryside you’ve got space.
Yeah, and I think space is freedom. And so, in effects, middle class trying to leave the city urban life is actually trading away the freedom of space and maybe instinctively we’re realizing that and we’re moving out of the cities to get that freedom.
So again, middle class life freedom concept of that, I think, is really-really well associated with each other. Well, that has been an interesting chat, wouldn’t you say?
so that was the topic of redefining the concept of the middle class. This is BigAppleSchool podcast. Mike. And..
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