(Non-economists beware. This is so dry, it may require a couple bottles of water to get to the finish).
In order for our economic system to work and thrive, it requires an under-educated poor and underclass of workers. First of all the rich need a serving underclass to help them maintain their leisure activities, from the trimmed grass on the golf course to the washed glasses and dishes in the bar and restaurants.
In addition for the workers to clean and maintain homes and condos, the upper classes also need low income workers for manning their businesses and factories that require uneducated workers for these economic duties. Educated under class tend to over expand the middle class.
But most importantly, low paid workers spend most of their earnings in order to maintain a bare existence and therefore they are necessary to keep the under belly of a consuming economy going. The rich also need the poor to help them spend their money in providing their everyday needs
Therefore, low-income workers are required for all sorts of factory work and menial tasks.
We cannot have a basking rich class without an earning lower class. Therefore the economy's primary function is to keep a lower class in an earning capacity. Their spending keeps the economy functioning and they are able to keep the upper class operative in their spending by being able to serve them in this task but the workers are also useful in production and in their required consumption.
In a sense, upper and lower classes are symbiotic. One can not exist without the other. An expanding middle class however tends to draw down the lower class numbers so that they cannot fulfill their consuming and servicing function. Therefore, the middle class becomes too costly even though it serves the upper class in many ways. Care must be taken not over expand the middle class.
One of the main justifications of the middle class function in this new economy is to become part of and supporter of the small business base that also supplies the lower classes with work but at lower earnings than the upper classes could afford or willing to pay, therefore, placing a real ceiling on the worth of the working class.
Although unions can justify their existence when pitted against large corporations, small business does not function as a good opponent. Therefore, the middle class's opposition to labor unions helps it to perform its function of restricting the growth of labor unions and serves to justify paying lower wages to the underclasses.
These premises have been proved in the past and in our present recession. When workers cannot spend, our present economy based on consumption falters. The middle class, more closely associated with the working class and more dependent on their services and spending also begins to falter.
Although the upper class would ordinarily be able to wait out the economic depression, it has few places to store its money because both lower and middle classes have weakened the banks by not being able to pay the usually high interest rates charged them nor pay back their loans.
Therefore, the upper classes have to see to it that the working class have money in their pockets through government programs to be paid later by the lower and middle class when the economy begins to recover again. The upper class will always succeed in paying proportionately less taxes by artfully and politically resisting the payment of taxes at a later date.
In order to keep this system operative, the upper classes must accept temporary government spending while appearing to be opposed to it, so that the lower classes see this as a process of redistributing the wealth rather than as a process of keeping the wealthy wealthy.
This new economy has yet to find the means for controlling the housing and stock markets as the economy reaches the upper levels. The control of these two markets is essential and perhaps this can be accomplished within the new economy by bank control.
The question of who is going to control the banks must also be resolved. It might become an open obligation of the upper classes to bring about this stabilizing system sometime in the future.