The Global Middle Class: The Scary New Rich

the global middle class the scary new rich photo

Now, with the Western middle classes sinking into debt and distress, many economists look to a new emerging-market middle class as the potential foundation for a new age of global safety and prosperity. With time and wealth, “they” would become just like “us.”. As China, Brazil, Russia, Turkey, India, Indonesia, and other large developing nations became more prosperous, it was always assumed that they would become more like the suburbs of Washington or Londonliberal, democratic, market-friendly bastions not only of Western-style consumerism but also of political liberty. They have also been the engines of economic growth, setting the stage centuries ago for the expansion of capitalism and global trade, and continuing through the ages to snap up every new gadget or service in sight. Aristotle believed they were democracy’s secret weaponthe protectors of social values, the moderators of political extremism, ramparts of reason over fiat, and believers in a society run by laws instead of by strongmen. The middle classes have always been the bulwark of society.


What, then, to make of recent news events like the Brazilian middle class applauding more state control of the oil industry to keep out greedy foreign firms, or the continuing popularity of Russian autocrat Vladimir Putin among the Russian middle class, now 78 percent of the total population? Then there’s the middle-class support for the rise of conservative Islam in Indonesia, which has pushed through a new anti-pornography law and may soon create halal cities, where all food must be served according to strict Islamic rules. These new spins on middle-class values mix, in many places, with distinctly anti-Western forms of nationalism. The increasing patriotism of affluent young Chinese has created an industry for popular books like “The China Dream.” which urges China to launch a military buildup in preparation for a coming conflict with the U.S.

The Chinese bought more cars than Americans did last year, and India has as many Internet users as the U.S. does. Already, emerging markets are bolstering the balance sheets of many Western firms. Coca-Cola recently forecast a doubling of worldwide revenues to $200 billion over the next decade, thanks to another 1 billion people expected to join the middle class by 2020. They have become “the story of the decade,” says Goldman Sachs’s chief economist Jim O’Neill, and will surpass their Western peers in global spending power within two decades. The truth is that “they” are not becoming just like “us.” The global middle class is rising faster than expected, in numbers and in wealth. By 2030, more than nine of every 10 mobile phones will be owned by people in the developing world, with India and China leading the way. Last year 70 million people joined the emerging-market middle class, with incomes between $6,000 and $30,000. Morgan Stanley Asia chair Stephen Roach believes that in five to 10 years, the emerging-market middle class in Asia alone could pick up the slack left by overspent American consumers.

And command-and-control states, like China, are now doing that better than suburban America. A 2009 Pew study on the global middle class found that its members are generally supportive of democratic ideas like free speech and competitive elections. And in China, rural people who still see little benefit from their nation’s economic boom are more likely to support democracy than the urban middle classes, who now make up three quarters of the Communist Party cadres. In Brazil and Russia, the middle classes are more worried about freedom from hunger than freedom of speech, and distrust virtually all democratic institutions. Many of the aspiring elite seem willing to let the powers that bewhether authoritarian governments or elected onescall the shots as long as they deliver the spoils of growth. The emerging bourgeoisie is a patchwork of contradictions: clamorous but rarely confrontational politically, supporters of globalization yet highly nationalistic, proud of their nations’ upward mobility yet insecure and fearful they will fall back, fiercely individualistic but reliant on government subsidies, and often socially conservative. Yet experts at Pew and elsewhere say they are often willing to sacrifice those ideals for prosperity. Even in countries that are democratic, the newly prosperous may look quite different from their Western peers. But converging incomes are not yielding shared values. In Turkey and Indonesia, much of the middle class consists of devout Muslims who do choose to voteand to wear Islamic headscarves. Newly unfettered from poverty, they are also unwilling to take on much political risk.

More Russians today support “a strong leader” over “democracy” than did 10 years agono wonder, given the plunge in living standards that followed the collapse of the Soviet empire. As the West declines in economic and political clout, and Eastern models begin to deliver prosperity and stability, the link is fraying. Russia’s new middle class is among the staunchest supporters of the Vladimir PutinDmitry Medvedev continuum, for the simple reason that they have the most to lose. “Like the rest of society, the middle class have accepted the paternalism of Vladimir Putin’s government and remained apolitical and apathetic,” says Masha Lipman of the Moscow Carnegie Center. In the last 10 years, the Western idea that political freedom is a prerequisite for economic freedom has lost credibility in the East.

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