Charles Hugh Smith – The decline of middle class capital is partly self-inflicted.

Conventional explorations of why the middle class is shrinking focus on economic issues such as the decline of unions and manufacturing, the increasing premiums paid to the highest-paid workers and the rising costs of higher education and healthcare.

All of these factors have a role, but few comment on the non-economic factors, specifically the values that underpin the accumulation of capital that is the one essential project of middle class households.

Daniel Bell’s landmark 1976 book The Cultural Contradictions of Capitalism held that”capitalism–and the culture it creates–harbors the seeds of its own downfall by creating a need among successful people for personal gratification–a need that corrodes the work ethic that led to their success in the first place.”

I would phrase this in the language of values and capital:

The primary cultural contradiction of the Great American Middle Class is the disconnect between the values needed to build capital and those of gratification via debt-based consumption.

Accumulating capital–not just financial capital but human and social capital– requires a distinct set of values and soft skills: Continue reading →