Decline of middle class bodes ill for nation

Karl Marx had said that the society is divided on the basis of income into the rich and the poor and that the latter will get together and get rid of the rich. That did not happen, for Marx had not reckoned the influence of the middle class which stood as a buffer between the rich and the poor. A healthy middle class is essential for a healthy society in this weird world of disparity and inequity. It is more importantly so for developing countries like Sri Lanka. The critical importance of the middle class in the global context too cannot be overemphasised. It is in decline in the US and this could have global repercussion.

The middle class is crucial for the growth of the economy. The trained brain necessary for economic growth comes mainly from the middle class. The economists, the accountants, the managers, the planners, the IT specialists, the technocrats, etc., are produced and supplied mainly by the middle class. Consumption which is vital for the capitalist economy depends mainly on the spending capacity of the middle class. Further the spending capacity of the middle class will impact quite significantly on the income levels of the poor class. The micro, small and medium enterprises which account for 70% of the GDP cannot survive if the middle-class collapses.

The middle class must perform as a vibrant component of the society for political stability. It could remain politically alert and active only if its economy and education are sound. It is the group which supplies political philosophy, ideology, movements, guidance and leaders for the rest of the society. The birth of the SLFP in 1956 which was the response of the people to the state of being ruled by a class that was virtually alien to them was due to the activities of the middle class. The poor who are the majority need the political wisdom and leadership of the middle class to decide on the exercise of their political rights. Sense of democracy, equality, justice are nurtured, expressed and disseminated by the educated middle class.

Further the middla class is the font of culture, creativity, literature, art and music. Thinkers, writers, artistes, musicians are fostered by the middle class. They cannot survive without the support and participation of this group. Cultural activity of the middle class could pervade down to the poor groups and have an effect on their cultural development as well. Similarly education of a country depends on how educated is the middle class. It is the responsibility of the middle class to provide education to the poor people. Teachers are mainly produced by this group.

Protective nationalism which is crucial for poor countries resides in the collective consciousness of the middle class. It is they who rise up and give leadership to the people to rally against threats to their country, religion and culture. It has happened in the distant past as well as recent times with great success. If this group emotion is allowed to weaken our existence as a nation would be in peril. Sri Lankans with their historical experience of foreign invasions harbour this national consciousness and it is the middle class which is alert and foresee the peril and has the ability to mobilise the people against the adversary.

Thus, the maintenance of a healthy middle class is of existential importance. Growth and development of the national economy, education, culture and national security would depend on the growth and development of the middle class. Economic development is not possible without the presence of a vibrant middle class. And also the middle class cannot be sustained without a healthy economy and these are mutually interdependent.

Middle class in Sri Lanka has been growing since 1977 and in 2016 it comprised about 20% of the population. This was mainly due to the economic growth which was possible after the economic liberalisation. But this growth anyway would not have been sustainable due to the neo-liberalism which practised an exploitatory market policies and local excessive expenditure on luxury items resulting in a negative foreign balance-of-payment situation which had to be settled with more borrowings. This situation was made worse by Covid pandemic, government blunders, corruption and an adverse global economy. In 2021 the middle class had dwindled to 15% of the total population. This reduction is accompanied by a parallel increase in the number of poor people. And some of the poor may have fallen below international poverty line. In a good economy there is an upward social mobility with the poor reaching the lower middle class level and the latter moving into the upper middle class. This process seems to be at present on the reverse direction.

In the developed countries also a similar phenomenon has been observed. In the US for instance the middle class fell from 61% in 1971 to 50% in 2021. However this was due to movement upwards into the rich class as well as downwards into the poor class (Pew Research Center, 2021). Developed countries can afford such changes in the composition of the middle class but developing countries like Sri Lanka can ill afford the loss. However sociologists have different opinion on this, some wellcome the upward mobility of the middle class while others who believe in the essential role the middle class has to play for the stability and goodness of society fear the possible disappearence of the middle class due to this shifting in both directions. Particularly it is the education and culture of the country as a whole which suffers due to loss of the middle class. Further the middle class in these countries produce thinkers and philosophers and even economists who have a sympathetic understanding of the plight of the poor countries and a knowledge of the negative effect of neo-liberal policies on poor countries. These thinkers may contribute to the development of government policies that are economically friendly towards poor countries.

Worsening of the situation in Sri Lanka could be expected in the coming months with the economy predicted to contract by about 7%. Loss of employment and reduction in the purchasing power due to inflation would be the main reasons for the worsening situation. Government may have to take necessary steps to minimise the adverse effects as far as possible.

N.A.de S. Amaratunga