The richest few don't need the rest of us as markets, soldiers or police
anymore. Maybe we should all emigrate
By Michael Lind

SalonHave the American people outlived their usefulness to the rich minority
in the United States? A number of trends suggest that the answer may be yes.

In every industrial democracy since the end of World War II, there has been
a social contract between the few and the many. In return for receiving a
disproportionate amount of the gains from economic growth in a capitalist
economy, the rich paid a disproportionate percentage of the taxes needed for
public goods and a safety net for the majority.

In North America and Europe, the economic elite agreed to this bargain
because they needed ordinary people as consumers and soldiers. Without mass
consumption, the factories in which the rich invested would grind to a halt.
Without universal conscription in the world wars, and selective conscription
during the Cold War, the U.S. and its allies might have failed to defeat
totalitarian empires that would have created a world order hostile to a
market economy.

Globalization has eliminated the first reason for the rich to continue
supporting this bargain at the nation-state level, while the privatization
of the military threatens the other rationale.

The offshoring of industrial production means that many American investors
and corporate managers no longer need an American workforce in order to
prosper. They can enjoy their stream of profits from factories in China
while shutting down factories in the U.S. And if Chinese workers have the
impertinence to demand higher wages, American corporations can find low-wage
labor in other countries.

This marks a historic change in the relationship between capital and labor
in the U.S. The robber barons of the late 19th century generally lived near
the American working class and could be threatened by strikes and frightened
by the prospect of revolution. But rioting Chinese workers are not going to
burn down New York City or march on the Hamptons.

What about markets? Many U.S. multinationals that have transferred
production to other countries continue to depend on an American mass market.
But that, too, may be changing. American consumers are tapped out, and as
long as they are paying down their debts from the bubble years, private
household demand for goods and services will grow slowly at best in the
United States. In the long run, the fastest-growing consumer markets, like
the fastest-growing labor markets, may be found in China, India and other
developing countries.

This, too, marks a dramatic change. As bad as they were, the robber barons
depended on the continental U.S. market for their incomes. The financier
J.P. Morgan was not so much an international banker as a kind of industrial
capitalist, organizing American industrial corporations that depended on
predominantly domestic markets. He didn't make most of his money from
investing in other countries.

In contrast, many of the highest-paid individuals on Wall Street have grown
rich through activities that have little or no connection with the American
economy. They can flourish even if the U.S. declines, as long as they can
tap into growth in other regions of the world.

Thanks to deindustrialization, which is caused both by productivity growth
and by corporate offshoring, the overwhelming majority of Americans now work
in the non-traded domestic service sector. The jobs that have the greatest
growth in numbers are concentrated in sectors like medical care and
childcare.

Even here, the rich have options other than hiring American citizens.
Wealthy liberals and wealthy conservatives agree on one thing: the need for
more unskilled immigration to the U.S. This is hardly surprising, as the
rich are far more dependent on immigrant servants than middle-class and
working-class Americans are.

The late Patricia Buckley, the socialite wife of the late William F. Buckley
Jr., once told me, "One simply can't live in Manhattan without at least
three servants -- a cook and at least two maids." She had a British cook and
Spanish-speaking maids. New York Mayor Michael Bloomberg recently revealed
the plutocratic perspective on immigration when he defended illegal
immigration by asking, "Who takes care of the greens and the fairways in
your golf course?"

The point is that, just as much of America's elite is willing to shut down
every factory in the country if it is possible to open cheaper factories in
countries like China, so much of the American ruling class would prefer not
to hire their fellow Americans, even for jobs done on American soil, if less
expensive and more deferential foreign nationals with fewer legal rights can
be imported. Small wonder that proposals for "guest worker" programs are so
popular in the U.S. establishment. Foreign "guest workers" laboring on
American soil like H1Bs and H2Bs -- those with non-immigrant visas allowing
technical or non-agriculture seasonal workers to be employed in the U.S. --
are latter-day coolies who do not have the right to vote.

If much of America's investor class no longer needs Americans either as
workers or consumers, elite Americans might still depend on ordinary
Americans to protect them, by serving in the military or police forces.
Increasingly, however, America's professional army is being supplemented by
contractors -- that is, mercenaries. And the elite press periodically
publishes proposals to sell citizenship to foreigners who serve as soldiers
in an American Foreign Legion. It is probably only a matter of time before
some earnest pundit proposes to replace American police officers with
foreign guest-worker mercenaries as well.

Offshoring and immigration, then, are severing the link between the fate of
most Americans and the fate of the American rich. A member of the elite can
make money from factories in China that sell to consumers in India, while
relying entirely or almost entirely on immigrant servants at one of several
homes around the country. With a foreign workforce for the corporations
policed by brutal autocracies and non-voting immigrant servants in the U.S.,
the only thing missing is a non-voting immigrant mercenary army, whose
legions can be deployed in foreign wars without creating grieving parents,
widows and children who vote in American elections.

If the American rich increasingly do not depend for their wealth on American
workers and American consumers or for their safety on American soldiers or
police officers, then it is hardly surprising that so many of them should be
so hostile to paying taxes to support the infrastructure and the social
programs that help the majority of the American people. The rich don't need
the rest anymore.

To be sure, wealthy humanitarians might take pity on their economically
obsolescent fellow citizens. But they no longer have any personal economic
incentive to do so. Besides, philanthropists may be inclined to devote most
of their charity to the desperate and destitute of other countries rather
than to their fellow Americans.

If most Americans are no longer needed by the American rich, then perhaps
the United States should consider a policy adopted by the aristocracies and
oligarchies of many countries with surplus populations in the past: the
promotion of emigration. The rich might consent to a one-time tax to bribe
middle-class and working-class Americans into departing the U.S. for other
lands, and bribing foreign countries to accept them, in order to be
alleviated from a high tax burden in the long run.

Where would a few hundred million ex-Americans go? The answer is obvious: to
the emerging markets where the work and investment are found. That will show
all those American union members who complain that their jobs have been
outsourced to China. Let them move to China themselves and compete, instead
of complaining!

Needless to say, the Chinese and Indians might resist the idea of an influx
of vast numbers of downwardly mobile North American workers. But like
American capitalists, Chinese and Indian capitalists might learn that ethnic
diversity impedes unionization, while the mass immigration of North
Americans to East and South Asia would keep wages in those regions
competitively low for another few decades at least.

Once emptied of superfluous citizens, the U.S. could become a kind of giant
Aspen for the small population of the super-rich and their non-voting
immigrant retainers. Many environmentalists might approve of the
depopulation of North America, because sprawling suburbs would soon be
reclaimed by the wilderness. And deficit hawks would be pleased as well. The
middle-class masses dependent on Social Security and Medicare would have
departed the country, leaving only the self-sufficient rich and foreign
guest workers without any benefits, other than the charity of their
employers.

Of course there are alternative options, which would not require the
departure of most Americans from America for new lives on distant shores.
One would be a new social contract, in which the American people, through
representatives whom they actually control, would ordain that American
corporations are chartered to create jobs in the U.S. for American workers,
and if that does not interest their shareholders and managers then they can
do without legal privileges granted by the sovereign people, like limited
liability.

The American people also could put a stop to any thought of an American
Foreign Legion and declare, through their representatives, that a nation of
citizen-workers will be protected by citizen-soldiers, whether professionals
or, in emergencies, conscripts. The American people, in other words, could
insist that the United States will be a democratic republican nation-state,
not a post-national rentier oligarchy.

But restoring democratic nationalism in the U.S. would inconvenience
America's affluent minority. So instead of making trouble, maybe most
Americans should just find a new continent to call home.

Michael Lind is policy director of the Economic Growth Program at the New
America Foundation. More Michael Lind




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