Proletarianization and the petit-bourgeoisie

[Lyev]

This discussion reared its head up a while ago in another thread in learning, that I borrow a few quotes from. In my eyes, the petit-bourgeoisie are a forever dwindling population, at least in the first world, because they're stamped out by bigger capitalists -- in other words, the bourgeoisie -- that have a monopoly on a particular market, be that the fishmonger, butcher, carpenter, weaver. Whilst wondering around Sainburys today (a UK supermarket, for any non-UK comrades), the most obvious example of proletarianization of the petit-bourgeois hit me. Big supermarkets like Sainsburys, Asda, Tesco etc. own the market for pretty much most products these days, especially food items. But they now sell furniture, toiletries, clothes and such. 50 years ago, 100 years ago, no such big supermarkets existed, at least on the scale they exist today, so you had to go to the butchers for your meat, the farmer for your milk and the grocers for your veg, but this idyllic way of life no longer exists. I would wager in the vast majority of cases it's much cheaper, not to mention how much more convenient it is, to go to one shop, rather than four or five separate shops, for all your weekly necessities, such as food and toiletries. Competition has eradicated the petit-bourgeoisie in the first world. Is this a fair statement to make? Here's a few quotes just to stimulate discussion/debate.
This group has been disappearing since the industrial revolution, as large factories or retail outlets can produce and distribute commodities faster, better, and for a cheaper price than the small proprietors. While this class is most abundant in the least industrialized regions of the world, only dwindling remnants remain in more industrialized areas.

These people are the foundation of the capitalist dream (aka “the American dream”): to start a small buisness and expand it into an empire. Much of capitalist growth and development comes from these people, while at the same time capitalism stamps out these people more and more with bigger and better industries that no small proprieter can compete against. Thus for the past few decades in the U.S., petty-bourgeois are given an enourmous variety of incentives, tax breaks, grants, loans, and ways to escape unscathed from a failed business.And also from the thread that originally sparked this inquiry:

I'll quote Marx on this one. All this is from the communist manifesto.

Finally, in times when the class struggle nears the decisive hour, the progress of dissolution going on within the ruling class, in fact within the whole range of old society, assumes such a violent, glaring character, that a small section of the ruling class cuts itself adrift, and joins the revolutionary class, the class that holds the future in its hands. Just as, therefore, at an earlier period, a section of the nobility went over to the bourgeoisie, so now a portion of the bourgeoisie goes over to the proletariat, and in particular, a portion of the bourgeois ideologists, who have raised themselves to the level of comprehending theoretically the historical movement as a whole.

[...]

The lower middle class, the small manufacturer, the shopkeeper, the artisan, the peasant, all these fight against the bourgeoisie, to save from extinction their existence as fractions of the middle class. They are therefore not revolutionary, but conservative. Nay more, they are reactionary, for they try to roll back the wheel of history. If by chance, they are revolutionary, they are only so in view of their impending transfer into the proletariat; they thus defend not their present, but their future interests, they desert their own standpoint to place themselves at that of the proletariat. He goes onto to talk about their "impending transfer" into the proletariat, which is basically what competition and monopoly capitalism increasingly does. Small businesses shut down because they can't cope with Wal-Mart, Nike, Tesco's etc. or they are bought out. There's also this:
The lower strata of the middle class — the small tradespeople, shopkeepers, and retired tradesmen generally, the handicraftsmen and peasants — all these sink gradually into the proletariat, partly because their diminutive capital does not suffice for the scale on which Modern Industry is carried on, and is swamped in the competition with the large capitalists, partly because their specialised skill is rendered worthless by new methods of production. Thus the proletariat is recruited from all classes of the population.and I quite like this:
The bourgeoisie has stripped of its halo every occupation hitherto honoured and looked up to with reverent awe. It has converted the physician, the lawyer, the priest, the poet, the man of science, into its paid wage labourers.The point I am trying to make is that as the capitalists grip and grows and grows, and as he becomes more successful, and the more people he employs, and the more small business he buys out, the more the petit-bourgeois is driven into the proletariat.
Except dozens of Marxists have been saying that the petit-bourgeoisie would be pushed down to the level of the proletariat since the 1840's and my local fish and chips shop and the pets store down the road would seem to suggest that it hasn't actually happened. In fact I don't the capitalists ever will let it happen because a whole new mass of people entering the ranks of the proletariat would create immense problems for them. Hence why the state has to continously pass anti-trust and anti-monopoly legislation to ensure that they don't step on the toes of any small business owners.
Except that one single example about your local fish and chip doesn't represent the plight of the petit-bourgeois as a whole. I can give you an example of a town near me where recently about 5 shops have closed within the space of about a a month. This anecdotal evidence is true, yet it means or proves nothing. What we really need is some concise statistics showing how big corporations have grown in relation to small businesses, in the aggregate. I'll try and research the subject, then we can debate the "proletariatization" of the middle-class properly.
I don't deny that there are forces that push the petit-bourgeois down into the proletariat but there are also upward forces (coming mostly in the form of state legislation) which keep them out. Otherwise you'd think that two hundred years of industrial capitalism in england would've wiped all of them out. Also we are in the middle of a recession so the five shops closing in a month isn't exactly shocking.

Anyway, I look forward to your coming up with statistics so we can see what's really going on.

This anecdotal evidence is true, yet it means or proves nothing. What we really need is some concise statistics showing how big corporations have grown in relation to small businesses, in the aggregate. I'll try and research the subject, then we can debate the "proletariatization" of the middle-class properly.

This should imply that the number of small business owners aren't decreasing. I don't know any stats for longer periods of time, as those increase doesn't necessarily be a trend over longer periods of time.


Norwegian business and industry is made up of 300 000 private sector enterprises (including publicly-owned enterprises, excluding the primary industries). There has been a steady increase in the number of enterprises since these statistics were first published in 2001.

Two out of three Norwegian enterprises are small enterprises in which the owner is the sole employee Source (http://www.ssb.no/english/subjects/10/01/naeringsliv_en/)

This should imply that the number of small business owners aren't decreasing. I don't know any stats for longer periods of time, as those increase doesn't necessarily be a trend over longer periods of time. It also doesn't say if the enterprises are the main source of income for the owners.
...despite the fact that capitalism has proven remarkably good at sustaining itself, the historical predisposition of ruined petty-bourgeois to fascism in times of depression makes it doubly important for even five pauperized shopkeepers to understand that the same big capitalists as oppress the workers are to blame for their misfortunes.
I have definitely found some statistics, but interpreting them is a different matter entirely. I'll need some help. I think, from what I can understand, is that the amount of private business registering their VAT has pretty much steadily gone up since 1994 (this was a the furthest back I could find). The amount of de-registrations has a less definite patten, in fact it's been pretty sporadic. In '94 and '95 it was fairly high, with '94 having the highest year for companies de-registering. Then it wavers for the next 12 years or so. Here's the table:

Edit: all of this data is referring to the UK only.

http://img42.imageshack.us/img42/2210/vatregdereg.jpg (http://img42.imageshack.us/i/vatregdereg.jpg/)

Now this needs to be put into comparison with some data that inquires into mergers and acquisitions; who has been bought what companies where. Here's what I found for this:
http://img231.imageshack.us/img231/2631/noofmergacqu0708.jpg (http://img231.imageshack.us/i/noofmergacqu0708.jpg/)
I can also find data about mergers and acquisitions from 2009, but the data I have found for closing and starting of businesses only goes up to 2008. I'm not sure records for mergers and acquisitions have been kept for as far back 1994. Anyway, it would seem as if my original assertion has been proved quite erroneous. It's strange though, because you would expect competition to consistently buy-out or eradicate smaller business, as they're soaked up into bigger ones. Maybe I am looking at the wrong sort of statistics or interpreting them wrong. Anyway, thanks in advance for your replies comrades.As I mentioned, I'm not sure of the relevance of my statistics. Maybe someone else can make more sense of them. And, my original assertion, after re-reading all this other info, could be slightly wrong in places. Anyway, thanks comrades.

EDIT: here's a link to the original thread that I've got all these quotes from: http://www.revleft.com/vb/sympathy-petit-bourgeois-t136246/index.html?t=136246

[Dave B]

I think you have to be wary of statistics on small companies were the owner is the sole worker.

I don’t know about Norway but in the UK there is quite a lot of this kind of thing called "contracting" and it is common in the computing and IT industry.


However these people are in fact just workers or ‘disguised employees’ as the Inland Revenue and the government describes them. Taking advantage of the difference between capital gains tax paid on dividends and income tax/national insurance.


Basically they set themselves up as a one person company and that ‘company’ or person offers themselves up to work for a big ‘corporation’ or proper capitalist. The corporation or de-facto employer pays the one man company the fee, and the one person company pays themselves the minimum wage and they therefore have to pay a minimal amount of income tax.


However the one person company due to its low wage policy makes a handsome profit which the owner collects in dividends which is subject to a lower taxation rate than ordinary income taxes. eg

http://en.wikipedia.org/wiki/IR35


There are probably also benefits to the de facto employer eg sick pay, maternity leave and summary termination of employment or whatever.

These contractors can end up working for the same ‘corporation’ or capitalist employer for years on end. There have been some legal test cases in the UK to try and stamp it out and recover the lost tax revenue due to income tax.


The computer programmers in particular have set up their own organisation to legally fight the governments attempt to get their tax back and it is called the Professional Contractors Group but I also believe it includes ‘workers’ in the oil and construction industry.


I think the idea that there is a general trend whereby due to economies of scale and the requirements of expensive start up capital for competitive production is valid. And that carves out or eliminates small business’s or the petty bourgeoisie.

However there can be products and services which by their ‘technical’ nature don’t require large amounts of capital and for that matter new types of products that don’t either.



Eg domestic plumbers, car mechanics.


And that allows some economic space for the 'petty bourgeoisie' to operate in.

Small independent producers like small farmers or peasants can also be at mercy of the merchant class and can become just de-facto piece workers for them. And they can in fact recognise that to some extent when they engage in ‘industrial action’ against the supermarkets etc.

Anyway from volume III





The manufacturer in the French silk industry and in the English hosiery and lace industries, for example, was thus mostly but nominally a manufacturer until the middle of the 19th century. In point of fact, he was merely a merchant, who let the weavers carry on in their old unorganised way and exerted only a merchant's control, for that was for whom they really worked.[8] (http://www.revleft.com/vb/newreply.php?do=newreply&noquote=1&p=1792768#8)

This system presents everywhere an obstacle to the real capitalist mode of production and goes under with its development. Without revolutionising the mode of production, it only worsens the condition of the direct producers, turns them into mere wage-workers and proletarians under conditions worse than those under the immediate control of capital, and appropriates their surplus-labour on the basis of the old mode of production. The same conditions exist in somewhat modified form in part of the London handicraft furniture industry.

It is practised notably in the Tower Hamlets on a very large scale. The whole production is divided into very numerous separate branches of business independent of one another. One establishment makes only chairs, another only tables, a third only bureaus, etc. But these establishments themselves are run more or less like handicrafts by a single minor master and a few journeymen. Nevertheless, production is too large to work directly for private persons. The buyers are the owners of furniture stores.

On Saturdays the master visits them and sells his product, the transaction being closed with as much haggling as in a pawnshop over a loan. The masters depend on this weekly sale, if for no other reason than to be able to buy raw materials for the following week and to pay out wages. Under these circumstances, they are really only middlemen between the merchant and their own labourers.

The merchant is the actual capitalist who pockets the lion's share of the surplus-value.[9] (http://www.revleft.com/vb/newreply.php?do=newreply&noquote=1&p=1792768#9) Almost the same applies in the transition to manufacture of branches formerly carried on as handicrafts or side lines to rural industries. The transition to large-scale industry depends on the technical development of these small owner-operated establishments — wherever they employ machinery that admits of a handicraft-like operation. The machine is driven by steam, instead of by hand. This is of late the case, for instance, in the English hosiery industry.



http://www.marxists.org/archive/marx/works/1894-c3/ch20.htm (http://www.marxists.org/archive/marx/works/1894-c3/ch20.htm)


When it comes to the anti trusts laws etc the big capitalists are opposed to this as well. Because it means a particular branch of industry can command a monopoly price and can sell its product above is value.



If it is raw material for other capitalists or other 'commodity-producers' in general then the extra costs in effect comes out of their own portion of surplus value.


If the monopoly priced commodity is consumed by the workers then the other capitalistsor other 'commodity-producers' will have to pay their workers higher wages than would be otherwise possible and that in effect comes out of their own portion of surplus value.

As was the case in the corn laws in the UK in the 19th century.



Moreover, there were plenty to be met who did not even try to disguise their opinion that cheap bread was wanted simply to bring down the money rate of wages, and thus knock foreign competition on the head. And that this, in reality, was the end and aim of the bulk of the manufacturers and merchants forming the great body of the League, it was not so very difficult to make out for any one in the habit of dealing with commercial men, and therefore in the habit of not always taking their word for gospel.

This is what we said and we repeat it. Of the official doctrine of the League we did not say a word. It was economically a "fallacy", and practically a mere cloak for interested purposes, though some of the leaders may have repeated it often enough to believe it finally themselves.


http://www.marxists.org/archive/marx/works/1881/07/09.htm (http://www.marxists.org/archive/marx/works/1881/07/09.htm)

And;



The monopoly price of certain commodities would merely transfer a portion of the profit of the other commodity-producers to the commodities having the monopoly price. A local disturbance in the distribution of the surplus-value among the various spheres of production would indirectly take place, but it would leave the limit of this surplus-value itself unaltered.

Should the commodity having the monopoly price enter into the necessary consumption of the labourer, it would increase the wage and thereby reduce the surplus-value, assuming the labourer receives the value of his labour-power as before.

It could depress wages below the value of labour-power, but only to the extent that the former exceed the limit of their physical minimum. In this case the monopoly price would be paid by a deduction from real wages (i.e.. the quantity of use-values received by the labourer for the same quantity of labour) and from the profit of the other capitalists.


http://www.marxists.org/archive/marx/works/1894-c3/ch50.htm (http://www.marxists.org/archive/marx/works/1894-c3/ch50.htm)