Episode 078 - No more “middle class” for you

Words matter. I hear that a lot. But few people realize that removing words from our conversations matter as well. And one term that I think has run its course is ‘middle class’. In this episode I want to explore what the middle class is, its hey day, its demise and why it is an impediment to anyone looking to live an unconstrained lifestyle. But also what you should be focusing on to thrive in the future.

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Show Notes

I was watching an interview this morning with the head of the United Auto Worker’s Union, and it was sad.  It was sad because it was clear that organized labor in the auto industry was weak.  When confronted with the UAW’s challenge of automated and robot manufacturing, they had no strategy to deal with the inevitable loss of labor jobs due to it.  When confronted with global outsourcing of labor, again – no strategy.  In fact when the discussion emerged about the merger of Fiat & Peugot into the new Stellantis company, the UAW embraced it, saying that it would bring 5,000 new jobs in electric car manufacturing to Detroit.  5,000 jobs isn’t a bad thing, but in an industry that has lost hundreds of thousands of jobs, it is pretty irrelevant.

Rather than starting off this episode on a negative, I wanted to step back and look at this phenomenon and include it in a more generalized discussion of “the middle class” and why this term in the public subconcious of America (and other western countries) has been considered a goal, that we must understand this is not helping at all.

The worst example of this is that we blindly put 18 year olds in front of a student loan debt contract to go to college to get the permission slip of a Bachelor’s degree to “enter the middle class” in which, in truth, there isn’t any middle class left, and all that comes from this is a massive debt load that the student cannot easily eliminate, a loss of time and opportunity and a poorly prepared young adult faced to enter a world in which all they were told is no longer true and relevant, and the graduate finds themselves in a process of reconciliation and pivoting from day one of their working life.

Clearly we need a better way to discuss the future, and the world as it might have looked for the parents of said student isn’t the same world in the 21st century and filtering all options for that world cannot be done successfully if looked at with a 20th century mindset.  One must project forward a vision for what they think the world WILL look like, and not what the world HAS looked like, because that clearly isn’t working.

Let’s first define the term “Middle Class”

Middle class means different things to different people.  Clearly it is a measurement of social hierarchy.  It affects education, occupation, income or social status.  Often many of these together.  Since the dawn of the age of television, which came out at the peak of the middle class, Hollywood has portrayed it as families where the husband worked, the wife stayed at home, 2 kids, 2 cars, one house, picket fence, in the suburbs, etc.  

We have embraced this as some sort of goal for young adults.  They too can enter the middle class – they too can have all of this.  But when each is broken down, the same demographic rejects most of this.  Women don’t want to be stuck at home, unable to have the same right of self-fulfilment and contribution to men.  Houses have become 30 year mortgages (death contracts) with banks, rather than dwellings built to last the test of time.  Cars are designed to be throw away commodities after 5 years, so that the car manufacturers can churn more customers through newer models aligned with the same bankster backing that the house is.  78% of those families are living pay check to pay check, relying on credit cards to bridge the gap between consumption vs. production, forcing all members of the family to work, often in multiple jobs, gig or freelancer jobs, etc. just to meet the expense and cashflow needs of living.

And with many carrying the burden of non-dischargable debt from student loans that gave them a degree that only about 35% of graduates end up working in that field.

If this is what the middle class represents, I’m surprised that society doesn’t reject it out of place.  But they don’t because of one thing – fear.

Fear of not being able to have any counter party back them when things get tough.  They look to the employer to provide them with health care (through insurance), they look to the employer to provide them with retirement (through employment subsidized or provided 401K or IRA investments), they look to the employer to pay them when they get sick (through sick pay), they look to the employer to pay them to have a vacation, and many even look to the employer to provide them with food for at least 1 of the 3 normal meals per day through subsidized cafes.  Many even look to the employer to provide them with gyms and other preventative health care options.

It becomes an entanglement to the employer, where the employee can’t afford to detach from employment, giving up all of their power and self control to the counter party – in this case the employer, and hoping that the employer doesn’t hold them to ransom for these things.  Their income is capped at what the employer (or cartel of employers) will pay, as the world of free market economics disappears by way of the fewer employer options, as those very employers who become wealthy by the labor provided by the employees, consolidate and buy out their competition and make it increasingly more difficult for new competitors to emerge.  The very same employers who are doing this, are also investing in robotic and automated replacements for their workforce that doesn’t demand all of the requirements of human existence, can work 24/7, and to bridge the eventual path to a 100% automated work force generating the employee smart income, they will use cheaper labor in impoverished regions of the world to outside work for limited periods of time while they gear up for the ultimate betrayal of the work force – the robot that will eventually take the job of the employee.

And our society meanwhile embraces this.  We line up for hours, some times days, to buy the latest iPhone or the latest Tesla, thinking that this gives us a better life experience and better status, meanwhile those very same products were not manufactured by human hands.  The psychology of this serves the corporation, and doesn’t serve humanity.  Yet this practice is embraced by 99% of society.  It seems that what is obviously not self-serving has been a successful mass-hypnosis of society, and yet we blindly accept this as “normal”.

The problem is that the middle class isn’t just an American thing.  Sure, it was born of the America of the 1950s & 1960s – a country that had just pulled the world out of turmoil in WW1 and WW2, and to the victor went the spoils.  It was clear that the Allies would prevail in WW2, which led to the USA taking the opportunity of creating a further economic alliance in the world in 1944 at the now infamous Bretton Woods Conference in New Hampshire, in which the post WW2 international monetary system was crafted – clearly controlled by the USA.  And why not.  To further underline why the rest of the world needed to embrace this, the USA dropped two hydrogen nuclear bombs on Japan to prove its world dominance, and the result was that 80% of the rest of the world embraced the USA dominance, defining that the fair faith & credit of the US dollar should be the underlying measurement stick of the value of things.  When you have this power, you can use it like a weapon and (again) to the victor goes the spoils.

Those spoils, combined with the new engineering technologies of the day, gave more wealth to a sector of society that had become educated in fields that were in high demand.  The dominance of manufacturing of quality products meant that US workers enjoyed high standards of living, and most of this was gifted to them by organized labor unions that had the power to demand conditions for workers that were luxurious.  All the many things that we take for granted today, from the 40 hour work week to sick pay to holiday leave to pensions, etc. were the result of the hard negotiating power of trade unions.  When labor mattered, they could ask for anything and the corporations would be forced to concede.  

This concept that moved wealth from the rich to the poor by organic natural migration, due to the power of labor, built the richest country in the world – the USA.  But when labor declines in one region and yet the beacon on the hill showed the rest of the world not only that it should fear it, but by copying its ideology they too could have dominance, then the power shift moved from one region to another.  The USA attempted to curb this by controlling the IMF and the World Bank, and even bringing the United Nations to New York City to keep watch over it.  But the demise of the American middle class has meant that other countries will take the lessons of the past 80 or so years, and adapt it to their purposes.  Hence we see the rise of China and India at the decline of the American empire.  It seems that these countries with their greater than 1 billion population of hard labor workers believe that they too should be recipients of the spoils of the victor.

Yet this won’t work in 10 or 20 years, because by then all labor will be replaced with automation.  The number of jobs left will be subservient to the robots anyway, so unless you own the means of production (the robots), you will be left out of the game.  The rich have already been gaining in power (the 1% as often defined) at the expense of “the middle class” as if the middle class actually matter and as if the middle class is still a thing in the 21st century.

We know this to be fact.  It might sound depressing, but it is reality.  Putting your fingers in your ears and pretending it away, doesn’t make it change.  It won’t, and you are witnessing change at a level never seen before.  That change comes with it the anxiety of winners & losers, haves and have nots, and the rise of any political leader that can promise it away – whereas our society knows for a fact they can’t.  Yet we prefer to elect popular leaders until we realize they didn’t help or solve anything.  Because they can’t.  The demise of the middle class is our problem, and it is on us to do something about it.

The solution for us

Our universe, and our planet, has always existed by the laws of the jungle.  The ability for one species to exist and thrive comes at the existence of an available and abundant food source.  If they can be well fed, with ample ongoing supply of nutrition, the species can thrive.  If they are the food source, then they won’t dominate.  Humans were never the apex predator, but we had one skill that separated us from the carnivore predators of humans – we have the ability to create tools.  Tools from the mastery of fire, the mastery of the wheel, to eventually communication of these skills by way of language and the printing press, to creating weapons such as the invention of gun powder, to eventually the steam engine, then the combustion engine, to eventually the digital revolution, it has been all part of the rise of humanity.  We created ourselves as the apex predator, and no longer do we fear the jungle.  In fact, in many cases, we destroy it for some short term gain.

Now who are the apex predators?  Well they are us.  We are our own apex predator.  The strongest of us will destroy the weakest, and strength doesn’t mean physical attributes.  Just as the strongest human being can never beat an elephant or a lion or a tiger in battle without being armed first, our strongest humans are not the dominant ones that control the rest of humanity.  The bully in the school yard that demonstrated their will on the lesser “noobs” doesn’t retain power when the noobs get technology to defend themselves.  In fact, often it is the very same nerds that become the dominant predators.  We have seen that in the dawn of the Internet.

This change in dynamics is normal.  Those that are smart tend to be the victors in the 21st century.  The problem is that smart isn’t enough.  If you want to have some control over your future, you need more than smart.  You need one thing that isn’t taught in college.  You need wisdom.

Since we are the apex predator, our success has to come from looking to humanity and the needs of humanity to find a place of independent and power.  Humans don’t give you the right to thrive without you demanding it.  It is that simple.  In the same way that the trade unions that created the middle class that no longer exist did it by demanding it, you must demand it.

You are your own trade union.  You get what you ask for.  It is that simple.  And since you must ask of other humans for those things, you have to be smart in how you ask for things, you have to think 3 moves ahead of the rest of society and you have to find a position for yourself in which you have the power in which to demand what you want – in the same way that the trade unions did that in the past.  They recognized that organized labor had power – you must find something you do that has the same power and then have the courage to demand what you want from that thing.

So it is a combination of things – one to have a skill that people want, and two – to have the courage to demand payment for that skill.  In order to be able to do this, it isn’t just about the skill because that can be learned by education.  And the optimization of your seniority with the skill can be found by employment.  But in the end the employment itself is not the goal.  The goal is the enhancement of the skill by doing.  So great – if you have a skill and let’s say 10 years of experience in honing it, now you have something to offer.

But if you lack the courage to demand payment for it, it is useless.  You are just another pawn on someone else’s chess board.  You are just another human labor provider, eventually to be replaced by either global outsourcing or a robot.  

But this is the concept of career that education and parenting teach us is the way.  I don’t buy it.  I believe that the world is abundant in opportunity if you have the vision and wisdom to simply recognize it.  Yet the very same institutions that we embrace (universities and employment) are enemies of this.  They create a comfort zone in which the human never actually exercises their natural skills to see opportunities.  They eventually fear going to the opportunities because it comes at a price of giving up the creature comforts that come from their existing achievements in this mythical world of “the middle class”.

So the corporations get bigger, labor becomes less relevant and eventually we rely on other third parties to protect us.  Entities that are often more toxic than the employer – the government.

If there was ever an entity that embraced existence by extortion, it is our elected government.  They define the ultimate concept of power.  They are the very same entities that dropped those hydrogen bombs on Japan, won the wars and created the wealth for the people.  But the governments are less and less effective, the bigger they become.  Workers employed by the government are often unsatisfied with their ability to become fulfilled, yet remain in those positions due to the promise of pensions, benefits, etc. and not because they are attempting to become wealthy.  Who becomes wealthy in government?  It is those that succeed in gaining power, and then use that power as a tool in concert with private corporations that will pay to have said power person as an ally to further provide them weaponry to prop up the corporation.

This unholy alliance is called oligarchy and it is commonly found in the world.  It is the cartel alliance of such countries like Russia, tin-pot dictatorships, even nations like China use the power of their communist party to control and infiltrate private corporations, so that the very same corporations that we buy the cheap goods from are proxy arms of the CCP.  Yet we still search for “deals” on Amazon, even though a human in our own country didn’t touch the product manufacture and probably just pushed a box containing it to an automated warehouse or even the goal of an automated delivery system.

So I return to the question of what an individual can do to ensure that they are not constrained by this “system” that humans have created to dominate over other humans.

Let me tell you what I believe will NOT work:

1.    Skills based on human labor

Let’s fact it.  Human labor doesn’t work.  We are tool makers.  If you don’t have the skills to build and use the tools that makes wealth, then you will be limited in what you can make.  Maybe you can manipulate others that hold those tools to do your bidding and scam them to make money (ie. Have a CEO position in a company you didn’t create), but it won’t last long.  And even with that the ceilings on what you can make are defined by others around you.

The human labor power has left the building.  It has moved to China, India and Brazil because they have more of it.  As they become more valuable through education, they will demand more for it.  Prices go up, availability goes down.  You become less important to them than their own domestic agenda.  So yes, forget human labor.

And if you think that there is still a chance that your abilities as a human labor servant in your country will make you wealthy, then the robots are coming.  That’s all I can say.  The skills that people are looking to learn are filtered by the prediction of “What will be left in 10 or 20 years when the robots come?”.  

2.    Lack of the ability to demand payment for what you have

Nice guys finish last.  Sorry, that’s the truth.  If you own the means of production or someone else’s security, then you have the power.  If you abuse that position by begin submissive to others, you won’t hold it for very long.  It will be seized from you, like the school yard bully will steal your lunch.  You must have the courage and confidence in who you are and forever demonstrate that to those around you by telling them of your confidence.  That can be done subconsciously (often people buy cars to show it off, or they wear nice suits, etc.) but more important is how you carry yourself in society.

With that non-toxic assertive nature, you can easily expect to be paid for what you have.  If you don’t have it yet, that skill let’s you learn how to bluff for it.  But more important know that you must learn the art of human psychology if you want to get from humans what you need for your survival.  There is nothing illegitimate, unethical or morally wrong here.  You are human, and you must embrace what being a dominant human is.  That doesn’t mean you have to be physically large.  It means you have to be psychologically large.  Not toxic, but well defined and assertive.

If you have fear of asking for what you are worth, you will get nothing.  Period.  You can be the smartest scientist, smartest economist, smartest doctor, but if you have fear, it is all for nothing.


What will work?

Owning the assets.  I call this Smart Income.  But it comes down to understanding what humans need at a physiological need first, and owning those things.  We all need food, shelter & clothing at the first level of Maslow’s hierarchy.  So own those things.

Food & clothing have been automated these days.  Agronomics create food on a massive scale, so food is abundant and available.  Clothing is now made by robots (ie. Sewing machines) and the labor that control the machines are in impoverished regions like Bangladesh, Indonesia, etc.   What we would refer to as “slum clothing manufacturing”.  Are they going away?  Well we might shine a light on some loved celebrity who elects to create a clothing brand using slave labor to make it, but whereas they might stop doing it, the opportunity just shifts to another human to run the show.  Meanwhile we still keep buying the clothing.

What is left?   Shelter.  Real estate.  We all need a roof over our heads and the barrier to entry here is money.  The cost of the building & land is so high that most cannot afford it.  Clearly those already shouldering the debt level of student loans, credit card bills, etc. are less attractive to the banks to get access to credit facilities to buy the real estate, so with this fact they are doomed to be renters.  Those renters pay you to pay off the debt willingly.  Eventually you own the means of production and the sooner you get to that place, the faster you can generate income without having to exert labor to do it.

But what also works is to use the inevitable shift towards automation to your advantage.  And that means owning the robots.  Whereas most (and I will say “lazy”) advisors will tell you about tried and true means of creating wealth – investing in the stock market, buying real estate, buying gold or Forex, etc., these are often fear based recommendations.  No one wants to tell you to buy something because if it doesn’t work, then they wear the responsibility.  Yet they often won’t tell you about robots or “robot compatible” forms of income.

Look, the future is clear – human labor is going away.  The power and ability for you to demand what you are worth comes down not to what you can do, but what you own.  If you own the robots, you can demand anything.  So know that.  Own the robots.

Since the robots are not yet often invented, then learn the art of creating them.  Create them in software, create them in hardware.  But never build anything that won’t operate autonomously for itself.  Most of the rich people that I work with, have known or partner with are rich because we share something in common – they understand automation and how to use it to gain wealth.  And that I demand that if I am a participant in their endeavors, I demand to be paid for that participation.  Because I know what value it brings.

Better I be paid in some equity or some guaranteed long term income stream from it, because as society realizes that automation is the future, then I want to be firmly inserted in that supply chain and not a spectator to it.

I firmly believe that the embracement of Bitcoin and other blockchain endeavors is exactly this – this is a relatively low barrier to entry pathway to owning & controlling automation.  Whether you are inserted as an owner of the currency, or a controller of the robots, it has the greatest upside benefits when the rest of society is collapsing due to the lack of human labor fields.

Sure, the world will need solar panels, automated cars, automated manufacturing.  But once all of that is created and the robots are left to do their work, and improve on the level of manufacturing that will be inevitable as one brand attempts to usurp another, what is left for humanity?

There will always be physiological needs of humanity.  Buying the assets that serve those needs is never a bad thing.  I 100% recommend you do that, and do it as early as you can.  In times of wealth or times of poverty, people will will pay dearly for a roof over their heads.

But if you want to make mega-wealth, then own, control or benefit from the robots.  Automation is here to stay and over the next 50 years it will grow and grow.  Those that are victims to it, will rise up and demand to be heard.  They will revolt on government – they will take up arms, etc.  But it will be to no avail because it isn’t the government that will save them.  When they need their things and a robot makes and delivers it to them, and they pay for it with digital currency, then they don’t need governments.  The illusion that governments are here to help society is just that – a psyop concocted by those in power to retain power, and yet the true power is the robots that will eventually make governments (like all other forms of labor) redundant and pointless.  Just as the trade unions have been deemed irrelevant, so to will eventually the same power brokers in governance.  

I think it is just a matter of acceptance and not to blindly show allegiance to one form of power control over another.  The ultimate allegiance you must show is to you and your family.  At the local level, once all the needs of society are provided by automation, then local socialization will matter.  After all, we humans crave socialization.  But we don’t need to crave being dominated.

To be truly unconstrained and be free is to transcend being dominated by any party and to be your own sovereign individual.  Your relationships with others are mutually beneficial partnerships based on recognition of what you have to offer and what they have to offer.  And a willing win-win negotiation that comes to join forces.  Much like how the trade unions did it when labor mattered and there was such a thing as “the middle class”.