At the end of June, I posted a video here called Getting Serious about Climate Change. I was hoping for feedback and I got some. Some things were easy to fix like my mispronunciation of Arrhenius. Some things could not be fixed so easily without crippling my basic point. I traced the problem back to my over-flippant use of the term Institutionalism. My fascination with this line of thinking is largely due to my interest in its class analysis. So I have written the following in the hope that it will explain the reasoning behind that video.

Cross Posted at Real Economics

In 1899, Thorstein Veblen would publish perhaps the most interesting, and misunderstood, book ever. It was called The Theory of the Leisure Class. Many, perhaps most, of the readers of this scintillating tome consider it a wonderful work of satire that highlights the foibles of the idle rich, and those who would emulate their lifestyles. And while I would agree that many parts of Veblen’s analysis are screamingly funny, we miss the point if we assume that Veblen was merely trying to entertain. Because beneath the chuckles, there is a deadly serious class analysis that goes a very long way towards explaining why a problem like climate change doesn’t get treated as seriously as it should be.

In Veblen’s world, there are two basic classes. The Industrial Class organizes the community’s necessary work. The Leisure Classes fasten themselves on the backs of the industrial classes “through force and fraud” in the often successful attempt at getting something for nothing. The Marxists then ask, “Aren’t your industrial classes merely another name for the proletariat?” This is important—the answer is NO.

Back in the day when Marxists preached that they were the friends, advocates, and only true representatives of the Proletariat, there was always something demeaning in their analysis. When someone picks strawberries all day in the hot sun, the Marxist description of the Proletariat and their troubles is still surprisingly accurate. But what do you call an farmer with 2500 acres under cultivation, or an engineer, or a big building contractor, or any number of important and often high paying occupations? They are obviously Industrial Class jobs but they all come with very different problems than face someone doing stoop labor. Obviously, there is an incredible amount of stratification within the occupations that can be found under the heading of “organizing and performing the community’s necessary tasks.”

Just as the Industrial Classes are stratified, so are the Leisure Classes. There is a large gap in income and status between a pickpocket and a hedge fund manager. But while there are hundreds of differences between the two major classes, many quite profound, the most telling is that when the Leisure Classes engage in conspicuous consumption and waste, their highest calling is uselessness. On the other hand, the goal of the Industrial Class is to be useful.

This class analysis is almost universally despised by the academic idea police. The right wing hates it because so many of their elites are little more than well-dressed thieves. The “left” (especially the Marxist varieties) hates it because it opens the possibility that there are enlightened, imaginative, and quite necessary “capitalists.” But it continues to be relevant because it describes the existing social order so much better than probably all the competing class descriptions combined.

The most amazing manifestation of Veblen’s analysis is that while almost everything created by humans demonstrates the existence of an Industrial Class, they are culturally nearly invisible. They almost never appear on television or literature. They are often dismissed as weirdos being called geeks or worse. Their occupations are dismissed or demeaned (usually because they are useful.)

While the Leisure Classes treat the Industrial Classes with contempt and slander—often as part of an ongoing strategy to defraud—the Industrial Classes do a wonderful job of returning those emotions. I know a radiation oncologist who claimed that as an undergraduate physics major at the University of Tulsa, he was part of a group that decided to explore the liberal arts side of his campus in a search for intelligent life. He reported that the search had turned up nothing. I told him that I knew a plumber in a college town who felt the same way about the professors at the local exclusive liberal arts colleges claiming, “Those guys are so stupid, they couldn’t poor piss out of a boot with the instructions written on the heel.”

So the distinctions between the Industrial and Leisure classes are real and generally hostile. But this class analysis is especially helpful when it comes to the problems caused by climate change. Here’s why. The reason that most of us live in societies that require large amounts of fossil fuels to keep running is because that is how the Industrial classes built them. Those streets, and electric grids, and houses, and food bought from a cooler did not fall from heaven—they were built on purpose by people who had every reason to believe they were doing the community’s necessary work.

The Leisure Classes are hardly innocent in this matter. The Industrial Classes can build almost anything. The reason there is so much third-rate building in USA is because the agents of greed insist on doubling the price of everything with the real estate fees and usurious financial arrangements. So the net effect is that almost everything gets built on the cheap, corners are cut—especially in areas of energy conservation. The result is that at least 3/4 of the housing stock cannot be fixed for less than the cost of a complete replacement.

Even worse, since the early 1970s, the Leisure Classes have systematically destroyed much Industrial Class capability. In USA, we call that process deindustrialization. They close down a productive facility and throw the accumulated expertise to the winds. What this means is that we cannot simply give the Industrial Classes new job assignments, we must rebuild much of their institutional capabilities from scratch—which is at least 10 times more difficult and expensive

But nothing is quite as instructive as the difference between the Leisure Class and Industrial Classes in their approach to the climate crises. The Leisure Class approach is to raise awareness, hold conferences, lobby for carbon taxes, and market modern-day indulgences called carbon offsets—if you can afford it, you can continue to sin.

The Industrial Classes don’t need their awareness raised because they believe that climate change is real, the only meaningful solution involves replacing the infrastructure with a zero-carbon alternatives, that this will involve 100s of thousand new parts and devices, and they want to build some of those parts. The folks who figured out how to make solar cells for $0.75 a watt were not the sort who sit around planning the next symbolic gesture.

While it has not been a good time to talk about reindustrialization for at least 40 years, the fact is, the Industrial classes have made real progress in that time-frame—LED lighting, cool electric cars, better batteries, net-zero housing, etc. But because we allowed the economy to be run by thieves, these breakthroughs were markedly more difficult than they needed to be. And IF folks finally decide that they want to accelerate the kinds of progress that the Industrial Classes have made since the wake-up call of Oil Shock #1 in 1973-4, the first order of business is to institute an economics that is geared towards honest enterprise. It’s quite simple—crooks cannot pull the financial levers of any new green society.

See also:
A longer version of this class analysis
The major differences between the two classes