Isaac Chan’s Reviews > The Communist Manifesto > Status Update

Note 2/2:
cannot compete with the monopolies. This is a familiar claim - progressives today hate Amazon because it drives small shops out of business. Furthermore, it is anecdotally clear that many small business owners, although they are technically capitalists, only earn as much as a regular high-wage employee (the median small business owner probably only earns as much). (I do not have any data on this claim, but as a commercial banking RM, I have seen the financials of enough small business owners to be able to make this tentative claim myself.)

ii) Piketty's claim of the Great Convergence post-World Wars: that a robust middle class only emerged during this time. Hence, the middle class may have been an alien concept to M&E.


My point is that I am not satisfied with a naive distinction between the proletariat and the bourgeoisie. Small business owners, technically the bourgeoisie, do not earn tremendous amounts; superstar employees at the top tech firms, hedge funds or white-shoe law firms, technically the proletariat because they are still wage-earners, earn (way) more than the median business owner. For example, Zuck's insane $100M signing bonus offers to top AI researchers from OpenAI, in June 2025.

Hell, in modern corporate governance, the top executives of the largest companies are still the proletariat, because they are professional managers, not the owners of the firm!

Perhaps M&E later address these nuances, or maybe Marx addresses them in Das Kapital. But for now, the narrative is incomplete.

I have come to believe that capital is extremely heterogeneous. The fact that the median small business owner earns modest amounts (an extremely unscientific research attempt, i.e. a cursory Google search, says that the median small business owner's salary in Kuala Lumpur is RM69k a year) tells me that owners of TRADITIONAL capital have lagged behind top employees at large firms.

According to the Fed's Survey of Consumer Finances ('SCF') and Financial Accounts of the US (I read the 2021:Q1 report a while back), they write: 'there is a clear ordering in the exposure of equity holdings among the (income) groups'. The top 1% hold nearly half of their portfolio in corporate equities and mutual funds (btw, I would presume this means INDEX mutual funds, but I don't know). The bottom 50% hold half their portfolio in real estate (but of course, this is just a mathematical truism - the poorer you are, the larger your house is as a proportion of your total wealth).

My point is that we cannot divide people into owners of capital vs non-owners of capital. Different types of capital have earned vastly different historical rates of return - the suckers who held real estate instead of corporate equities, became so much poorer ...

The financialization of the world economy also jacked up the returns on financial assets so much compared to traditional capital.

Thus, I am now interested in Bourdieu's work on the forms of capital.

Only by considering the nuanced forms of capital (and their differing rates of return, which is an aspect that I doubt Bourdieu considered, or at least, quantified), can one have a better understanding of the motions of capitalism.

Of course, one could explain away the phenomenon that highly skilled WORKERS today earn more than the median business owner by positing that said workers own copious amounts of 'human capital'. Or one could go as far as to posit other forms of intangible capital, like 'social capital', 'cultural capital', etc, and thus arguing that these skilled workers who may not own much (or any at all) physical or financial capital, are the bourgeoisie as well.

But this approach can be pretty wishy-washy: it just results in the 'capital zoo', like the factor zoo in financial economics. It leads to a form of nihilism, where labour market outcomes can always be explained away by positing more and more abstract forms of capital, like how nearly all alpha has been explained away by alternative beta.

Thus, I think now that the Bourdeiu-ian analysis is the start of a slippery slope.

I suddenly recall that Aristotle in his 'Politics', I believe, argued that a robust middle class was necessary to maintain political order and harmony. So the concept of the middle class has been around since antiquity.