"Real America's" Ruling Class
Conservative Class Politics and Cultural Resentment
A recent New York Times op-ed “revealed” perhaps the least surprising thing ever: the key to riches is to own stuff rather than work for wages. “Among members of the top 0.1 percent, the researchers found, about three times as many make the majority of their income from owning a business as from being paid a wage. Salaries don’t make people rich nearly as often as equity does.” And, according to the piece, the rich “aren’t who think they are.”
The article refers to a study entitled “Capitalists in the 21st Century that showed the vast majority of wealthy people—the top 0.1%—in the United States own what the author called “unsexy businesses:” “The researchers found that the typical rich American is, in their words, the owner of a ‘regional business,’ such as an ‘auto dealer’ or a ‘beverage distributor.’” In the words of the study itself: “A typical firm owned by the top 0.1% might be a regional business with $20M in sales and 100 employees, such as an auto dealer, beverage distributor, or a large law firm.” The study shows the most profitable businesses are concentrated in the “pass-through company” tax bracket not subject to corporate taxes—”closely held, undiversified in ownership, and mid-market in size”—meaning they are likely to be sole proprietorships or family businesses.
As Patrick Wyman pointed out in his essay for the Atlantic, “Trump and the American Gentry,” it’s this class of “local elites” that forms the backbone of the MAGA coalition, much more than the vaunted “white working class” we heard so much about after 2016. A 2020 Bloomberg study of political donors shows that workers in “blue collar”-type trades—along with those identified just as “business owners”—did contribute more often to Trump than Biden, but these are most likely to be in sectors where the workers own their own assets, like HVAC professionals, electricians, and contractors. And as exit polling showed, the only income demographic group that a majority of voted for Trump was the one making over $100,000.
In her essay for Dissent, Melinda Cooper described the Trump coalition as an alliance of private, closely-held businesses, from big to small: “The family-based capitalism that stormed the White House along with Trump stretches from the smallest of family businesses to the most rambling of dynasties, and crucially depends on the alliance between the two.” She elaborates:
It is no accident that Trump’s most significant donors hail from the same world of privately held, unincorporated, and family-based capitalism as he does. In 2020, Forbes named Koch Industries as the largest privately held company in the United States. The Mercers, who did so much to underwrite Trump’s rise to power, owe their wealth to Renaissance Technologies, a privately held hedge fund that was subject to the so-called “small business” tax on pass-through income. Trump’s education secretary, Betsy DeVos, was born into a business dynasty that made its fortune through the privately held Prince Corporation. When she married Dick DeVos in 1979, she sealed an alliance between the Prince family and Amway, still one of the largest private companies in the country. Most of Betsy DeVos’s personal income derives from pass-through entities like LLCs and limited partnerships, which means that the Trump tax cuts would have saved her tens of millions of dollars. Amway itself is structured as an S-corporation, a type of pass-through that also would have qualified for Trump’s 40 percent marginal tax cut to small business.
This class has a complicated relationship to the state. On the one hand, they often count on favorable tax arrangements and legal cut outs that favor their types of businesses. For instance, as the New York Times op-ed writer points out, “Auto dealerships have legal protections; state franchising laws often give auto dealers exclusive rights to sell cars in a territory. Same for many beverage distributors, which act as middlemen between alcohol companies and stores and supermarkets. Beverage distributors have long been protected by a system set up after prohibition that prevents beverage companies from distributing their products themselves.” On the other hand, this class is likely to find regulation, the threats of worker organization and class-action litigation to be onerous burdens. To them, the administrative state, armed with its alphabet soup of New Deal-era agencies regulating business and the Civil Rights Acts’ demand for close scrutiny of hiring and contract-awarding practices, is the enemy. Not for nothing was the main plaintiff in the Supreme Court case against the OSHA vaccine mandate the National Federation of Independent Businesses, an association of small businesses that gives 97% of its donations to Republicans. And in fact, this class may be very close to “smashing the administrative state” as Steve Bannon once outlined as a goal for the Trump administration: Conservative justices on the Fifth Circuit just ruled against the ability of the SEC to enforce securities fraud law, in favor of one of those “small businesses,” in this case a hedge fund, which rely on the pass-through tax structure.
(It’s worth noting here that the “S-corporation class” is not without its political differences and those differences are often mediated by the relationship to the state. For instance, Republicans consistently pushed for more business liability protections with COVID bills, while Democrats wanted fewer. This reflects the wishes of major constituencies: business-owners for the GOP, and unions but especially lawyers for the Dems. Doctors have traditionally been reliable Republican voters and donors, but younger ones are less likely to be, and the American Medical Association filed an amicus brief on the side of OSHA.)
None of this is really new. This class has long been at the core of the Republican Party and the Conservative Movement , which always served the grandees of the closely-held business world. Mid-sized and closely-held businesses organized themselves in groups like the United States Business and Industrial Council to oppose the New Deal. The CEO of the family-owned Milliken & Co., Roger Milliken,—at one point the head of the USBIC—was one of the main backers of Barry Goldwater, National Review, the Heritage Foundation, and the campaigns of Pat Buchanan, when conservative orthodoxy on free trade didn’t suit his needs anymore. As Nicole Hemmer describes in her book Messengers on the Right, Herbert Kohler, the owner of Kohler Co., manufacturer of plumbing products who was locked in a bitter, long-term struggle with the United Auto Workers, entered into a symbiotic relationship with conservative media:
In its very first issue, National Review lauded Kohler’s resistance to calls for a union shop and continued to beat that drum throughout the strike. When the UAW launched a boycott against Kohler in 1956, the magazine encouraged readers to buy as many Kohler products as they could. “We don’t need a new wash basin, Lord knows, but tomorrow we’re going out to get one. . . . And if Kohler starts producing peanut butter, we’ll eat Kohler Peanut Butter till it comes out of our ears. So help us God, we will.” Readers wrote in to share stories of their Kohler-studded remodeling projects. “You can count me in as a charter member of the Buy Kohler Club,” one enthusiastic supporter wrote. Kohler responded in turn by buying a slew of advertising pages.
It’s the most precarious and déclassé members of this group that form the most radical shock troops of the MAGA army, like QAnon or the mob that showed up on January 6. A study revealed the Jan 6 rioters to be heavily drawn from the middle-class of business-owners and professionals, albeit ones facing personal financial difficulty, like bankruptcies, foreclosures, and tax liens. But, as Gabriel Winant and Patrick Wyman both have pointed out, this class has more effective and stable redoubts of political power than rowdies in the street or even movements like the Tea Party: civil society organizations like churches, homeowners’ associations, chambers of commerce, country clubs, small-scale industrial consortia, police charities, etc. And it’s here, in more everyday and less-visible ways than in the horrors of the lynch mob or the domestic terrorist attack, that explicitly racist politics are often made manifest, with this class jealously guarding their property values.
The class I’ve been describing is pretty much exactly what Marxists classically called the bourgeoisie, the ownership class, ranging from petit to moyenne to haute, in the case of the Kochs and Mercers. They control vast amounts of wealth and political power in this country. Supreme Court justices, Senators, federal, state, and local legislators essentially do their bidding. But through an incredible sleight-of-hand we’re constantly told that they do not have “real” power. They get dressed up in the media as proletarians even when they have millions. Needless to say, this distinction, is often racial and gendered: a guy who owns a successful contracting company but drives a big truck gets to be “working class,” lauded as a heroic producer, but economically-struggling Blacks or single women with children are part of the “underclass,” undeserving parasites rife with “cultural pathologies.”
This is all accomplished through an impressive form of identity politics that presents this class as the real victims of society because of “culture.” A recent example came up again in light of the discussion of the Times op-ed, Nate Hochman’s September 2021 National Review article, “Why Progressives Won’t Admit They Hold the Reins of Power.” Channeling the classical theory of conservative cultural dispossession from writers like Sam Francis and James Burnham, Hochman admits that MAGA may be wealthy and they may have political power, but somehow none of that really matters: “The truth is that the gentry’s relative wealth — the main metric that elite progressives use to tell the story of Trump voters and their supposed privilege — has little bearing on their actual power in 21st- century America.”
Hochman writes, “In fact, even within these increasingly alienated swaths of America, the relatively conservative class of small-business owners and local philanthropists is being crowded out by economic centralization.” First of all, this is not really true. Melinda Cooper points out the great public corporations of the Fordist-era have actually been partly eclipsed, “dismantled into networks of private contractual relations” that have helped undermine union power. Today, their organizations are more likely to dictate the GOP policy agenda than corporate groups like the Business Roundtable: “The newly ascendant organizations would like to convince us that theirs is the voice of small family business ranged against the vested power of the corporate and bureaucratic elite. More plausibly, however, they represent a shift in the center of gravity of American capitalism, which has elevated the once marginal figure of the family-owned business to a central place in economic life at every scale.”
Here is the crux of Hochman’s argument:
Wealthy or not, rural and exurban America is alienated from the places where most of the nation’s important decisions are made. These urban centers are full of the financially affluent, but that is not what truly makes them the elite. The primary source of their power is their control of American identity — the narratives, symbols, cultural shibboleths and taboos, and social arrangements that define our self-understanding and the structure of our shared political life. A New York Times writer may not be able to buy a multimillion-dollar house in Palm Beach, but he is infinitely more able to imprint in the halls of American power his vision of how the world should be. A well-placed federal bureaucrat may not have immediate access to the capital to build a successful construction company in Little Rock, Ark., or Lubbock, Texas, but he can shape the conditions in which others do so.
It is proximity to these organs of central power — not wealth or control of assets in small-town Idaho or rural Nebraska — that is the basis of status and privilege.
This is also a sentiment that’s been echoed recently by venture capitalist Marc Andreesen, who, of course, is fantastically rich. Urban liberals may not have all the money or political power, but they have some supposedly world-shaping power over consciousness, which we’re meant to believe is vastly more consequential than actual cash or political offices. As Hochman writes, Identity is the real thing that matters, which is funny to hear from people who otherwise constantly bitch about “identity politics.” The fact of the matter is that this is just the class consciousness of the conservative intelligentsia speaking: They are likely to live in the big cities like D.C. or New York but not be of them. They are the self-appointed representatives of the “country party” that find themselves in the metropolis on business. They are the ones that truly feel “culturally alienated” from the “organs of power,” and enviously regard the supposedly soul-shaping power of their colleagues across the aisle, who also might happen to work for more traditionally prestigious organizations. They also tend to spend an enormous amount of time on social media where they have to see what their liberal colleagues think and say. They come to think these sorts of things are very important. So what we have here is really the mentality of those that feel shut out from the offices and status that rightly should belong to them and that thereby they invest with greater power than they actually have.
What these people are constantly grasping at—and overvaluing—is what the sociologist Pierre Bourdieu called “cultural capital,” which they perceive themselves and those speak on whose behalf they speak of lacking. It’s this same precious commodity that the conservative intelligentsia is hunting when they try make usually pretty pathetic efforts to set themselves up as, or associate themselves with, avant-garde bohemia. But cultural capital is not very fungible, and I doubt anyone in their right mind would want to trade their car dealership to be big on Twitter.
Suffice it to say, this wounded sense of self is very valuable for politics: it fuels a sense of anger, resentment and grievance, a sense of “anti-elite” and “anti-system” energy that’s probably indispensable for motivating the cadre of a self-conscious political movement. They lend out this alienation out at a relatively modest and affordable rate. And it makes them hungry for offices, honors, and distinctions. It’s a desire that’s never sated. Even on top, they are sore winners: they don’t get the recognition of the respectable liberal establishment they crave, and get more and more frustrated.
They may belong to a dominated section of the dominant class in culture, but they work for the dominant section of the dominant class in politics. And their sense of their own dispossession reflects their ultimately subordinate role in the social structure. All intellectuals regardless of political disposition feel themselves to be “alienated” because of their paradoxical role of both not really being the system’s authors, but also having an inflated sense of their role in its reproduction and perpetuation. All the fellowships and sinecures in the world won’t help with that.