We recently read The Middle-Class Squeeze, an article that reminds us why we do what we do. The 2,500-word piece by British journalist Charles Moore appeared in the Wall Street Journal on September 25, as its “Saturday Essay,” a remarkable fact given that the article touches on issues that are antithetical to what the publication covers.
The article takes seriously a few of the prognostications of political philosopher Karl Marx. You don’t need to be a regular reader of the Wall Street Journal or even know much about economics to know that the name Karl Marx is most notable by its absence in mainstream economic discourse. Indeed, mainstream economic thinkers have spent the better part of the past century refuting, debunking, and otherwise turning Marx into the great bugaboo of global capitalism. Mr. Moore himself gets on the bandwagon, saying that Marx’s prescriptions were mostly wrong, and that Marx did not understand markets or respect political institutions. But, unlike some other economic commentators, Mr. Moore differentiates himself by his more tolerant views of Marx, and in this article draws upon the thinking of Marx to explain the predicament of a middle class that is rapidly losing ground against prosperity and stability indicators, resulting in a radically unequal society of “haves,” “have lesses,” and “have nots.”
While we at Cutting Edge Capital wouldn’t call ourselves Marxists, we certainly agree with a few of Mr. Moore’s points about “the disproportionate power of the ownership of capital,” as he puts it. Yes, the owners of capital decide where money goes, at the policy-making level and on the level of our public and private capital markets. The people who sell only their labor, or their idea in the case of entrepreneurs, lack that power, making it hard for society to be shaped by their interests. We do also agree with his call to put this balance right to avoid becoming the worst kind of society imagined by Marx, one in which the modern state becomes “but a committee for managing the common affairs of the bourgeoisie,” or, more commonly, the 1 percent.
The subtitle of Mr. Moore’s article reads: “If Western countries want to disprove the dire forecasts of Karl Marx, we must think creatively about how to make the middle class more prosperous and secure.” We take pride in knowing that our work is one part of the solution—a capital market that provides the ability for a business or nonprofit to raise investment capital from all of its stakeholders, from friends and family to customers and supporters, wealthy or not, and for those individuals to become empowered through ownership in a just and democratic new economy.