"To the workers the means of production," goes the old Marxist rallying cry. To which any good capitalist these days can only say, "Amen -- and the sooner the better." During the past two decades, America has undergone a revolution, as ordinary workers have become the owners of "the means of production" through mass stock ownership. The rise of this "investor class" will help define politics in 2004 and beyond, undercutting the premises of the New Deal and contributing to a free-market-friendly culture of self-reliance.
Kansas City, Mo.-based journalist/provocateur Richard Nadler has been heralding the advent of the investor class for years, and the broader political culture has finally begun to take notice. In a recent speech at an investor-class conference sponsored by the New America Foundation, Nadler surveyed the data. In 1983, when the explosion in stock ownership began, 19 percent of U.S. households owned equities -- stocks or mutual funds. By 1995, the number had risen to 41 percent. By 2002, 52 percent of households owned equities.
In 1983, the median value of the equity holdings was $10,912. By 2001, the median value was $34,300. As Nadler says, "In other words, while the size of the investor class increased 173 percent, the median holding of that class rose 214 percent -- a revolution in both breadth and depth." A recent survey by the Securities Industry Association found that 29 percent of shareholders own stocks and mutual funds worth $100,000 or more. Meanwhile, in 1983, 24 percent of households benefited from "defined contribution" retirement plans -- 401(k)s and the like. By 2001, 52 percent of households had such plans.
What does this mean? Fundamentally, that the age-old opposition between capital and labor begins to abate. Worker-investors become much more favorably disposed to policies likely to increase corporate profits, since they will share them. As Nadler puts it, "A mass class of wage-earning capitalists regards corporate America not as a competitor for resources, but as a partner." According to Nadler, the rise of mass investment "arguably explains the rightward drift of the U.S. electorate over the past generation -- a drift that elected a Republican Congress in 1994, and that has kept it there ever since."