The Looming Peasant State
The disappearance of the middle class
is the erosion of an American ideal
November 8, 2021
The ideal of an independent middle class, originally agrarian, rather than a subservient peasantry was the American ideal, at least until recently. All politicians still praise the middle class, but few have sought or found ways to preserve it in a radically changing globalized world.
The result is the emergence of a new American peasantry, of millions of Americans who own little or no property. The new majority has scant, if any, savings. Fifty-eight percent of Americans have less than $1,000 in the bank. A missed paycheck renders them destitute, completely unable to service sizable debt. Most of what they buy, from cars to electronic appurtenances, they charge on credit cards. The credit card indebtedness is over $8,000 per household and over $2,000 per individual — paid through monthly installments at average annual interest rates of between 15% and 19%, at a time when most home mortgages are usually below 4%.
Such short-term debt is often roughly commensurate with the payments and share-cropping arrangements that premodern peasants once entered with lords and made it impossible for the serf to exercise political independence or hope for upward mobility. The chief contemporary difference, of course, is that the modern American peasant is the beneficiary of a sophisticated technological society that allows him instant communications, advanced health care, televised and computer-driven entertainment, inexpensive food, and a social welfare state. These material blessings often mask an otherwise shrinking middle class without confidence that it is in control of its own destiny.
A fifth of America receives direct government public assistance. Well over half the country depends on some sort of state subsidy or government transfer money, explaining why about 60% of Americans collect more payments from the government than they pay out in federal income taxes, in health care entitlements, tax credits and exemptions, federally backed student and commercial loans, housing supplements, food subsidies, disability and unemployment assistance, and legal help.
Such social insulation, along with science fueled by free market capitalism, has succeeded in ending starvation, dying in one’s 30s and 40s and, for the most part, chronic malnourishment, as well as ensured access to a wealth of material appurtenances.
But otherwise, 21st century American “peasants” — currently perhaps about 46% of the population — usually die with a net worth of less than $10,000, both receiving and bequeathing little, if any, inheritance.
Drive on El Camino Real on the perimeter of Stanford University’s elite campus and witness hundreds living in curbside trailers in the manner of the poor of Cairo or visit the side streets near the Google headquarters in nearby Mountain View where thousands live in their cars, or walk among the homeless on tony University Avenue in Palo Alto. Then juxtapose their lifestyles with estates in nearby Woodside, Atherton or Portola Valley, and the Mercedes-Benzes and BMWs of those in their early 20s parked in the student lots at Stanford University.
The natural historical referent for this dichotomy is certainly not the booming middle classes emerging following World War II. Instead, the image is one of the manors and keeps of medieval Europe amid peasant huts outside the walls.
For all practical purposes, it is almost impossible for young families to buy a home anywhere in California’s 500-mile progressive coastal corridor from San Diego to Berkeley or in the greater Portland and Seattle areas. The same is largely true in the metropolitan and suburban areas from Boston to Washington, D.C. Whatever this bifurcated new culture is — and it is new and different from that of a half-century ago — it is not so conducive anymore to classical citizenship.
Even those of the middle class who can be thrifty, who save some of their income and develop modest passbook savings accounts, are now targeted by institutionalized cheap interest. The result of massive and chronic trillion-dollar annual budget deficits — the national debt is now near $30 trillion — and the zero interest rates of the often jittery Federal Reserve is the destruction of any interest income on savings accounts.
The modest, middle-class citizen saver thus faces daunting options just to preserve the value of his money. He can engage in risky real estate speculation or invest in a booming stock market, fueled not by business performance, per se, but often by those who have nowhere else to park their money. So middle-class families, to be safe, often keep their modest savings in passbook accounts or buy federal bonds, where interest payouts below 1% do not cover the erosion in value of their principal due to annual inflation.
Yet American citizenship always differed even from the Western tradition found in the Europe of the last three centuries. The founding of America saw an entire array of newly expanded rights, responsibilities, and privileges for the vast majority of the resident population. This late-18th century new birth of citizenship arose in part because of an almost limitless supply of land, in part because colonial America lacked many of the European mainland’s traditions of class distinctions, primogeniture, peasantry and serfdom, in part because of the parliamentary traditions that Britain had implanted in North America, and in part because of the protections of the Constitution of the newly formed United States. America would soon become the freest and most egalitarian society in the history of civilization.
The point is not that late-18th century America was perfect at birth or could even approach what we now enshrine as 21st century moral values. Rather, the new United States was unlike, or rather superior to, most contemporary nations. Indeed, almost alone of governments, America had hit upon a mechanism that would allow constant self-criticism, legal amendments to its founding documents and moral improvement. Such change came without the necessity of collective suicide or permanent revolution — and yet within the boundaries of constitutional absolutes that transcended time and space, and all made possible only by an empowered and autonomous middle class.