“Pain” Reaches the Overclass

One way to understand the connection between corporate capitalism and social classes is to think of it in terms of the “last hired, first fired” problem faced by victims of racism. In reality, the racial version of the first/last process is part of a larger class patterning, in which the prior possession of money, education, and other assets places people in different places in the social line-up.

Corporate capitalism, of course, exists to enrich corporate shareholders. In practice, because the ownership of corporate shares and claims is so radically concentrated at the top, the normal operation of the system primarily* serves those who are already established, rich and mega-rich “major” investors.

But the inequality of wealth and income is not the whole story. There is also a huge inequality of timing that occurs: As big business performs its core function of further enriching the already rich, it also generates powerful differences in peoples’ first/last situations.

For the working class — those who have little or no accumulated wealth, and therefore have no choice but to seek paid work in order to survive — corporate capitalism ensures that the pain of bad economic times will hit first and hardest. Lay-offs, pay cuts, debt collectors, eviction notices, shrinking government programs, suffering schools — such is the stuff of recession for most people. In other words, the class of those who must find a job, any job, is always the first to suffer, and the last to “prosper.” (Note the parentheses.)

So how do things go at the top of the social pyramid, where major investors own a huge chunk of the nation’s income-generating assets and only work when they choose to do so? Well, check out this story from today’ s New York Times. In a story titled “In Rare Miss, G.E. Profits Fall Short,” the Times reports the tragic facts of recession at the top:

General Electric reported a 5.8 percent decline in first-quarter profit on Friday, falling far short of expectations and stunning investors who consider the company one of the nation’s most reliable earners….a company known for rarely missing its estimates,.

The company reported net income of $4.3 billion for the quarter, or 43 cents a share, down from $4.57 billion, or 44 cents a share, in the period a year earlier. Analysts had been expecting about 51 cents a share in net earnings, and the company had projected earnings of 50 to 53 cents a share.

As he fielded questions from disgruntled analysts on a conference call Friday morning, Mr. Immelt insisted that “the core business remains solid.” But he acknowledged that recent financial developments, including the collapse of Bear Stearns, took a severe toll. Earnings at the company’s financial services operation plummeted 19 percent for the quarter.

Mr. Immelt said he regretted the poor performance. “We hate missing our numbers,” he said.

Months and months after hiring has halted and the must-workers have lost jobs and homes at an accelrating pace, the overclass starts to receive (perhaps) a shade less property income from one of its Old Faithfuls.

In other words, the first to prosper are the last to “suffer.” (Note well the parentheses.)

*In his generally apologetic Pulitzer Prize-winning 1977 book, The Visible Hand: The Managerial Revolution in American Business, Harvard business historian Alfred D. Chandler admitted that the super-rich “remain the primary beneficiaries” of corporate enterprise.

An Institutional Problem

Capitalism’s apologists have always portrayed their system as “the end of history,” the best of all possible ways of setting social priorities.

The classic statement of this claim came, of course,

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