The Fallacy of the Middle-Class: Overcoming Social Resentment (XXIII). What is the Fallacy of the Middle-Class?
At the beginning of this saga we defined its purpose, objective, philosophy, and rationale. By this time (2 months later) we have basically finished everything. All what we will do today is to land to the nucleus chapter that retells specifically the summary of our epic in a core message. The purpose of this saga is to overcome social resentment between people (high-middle-poor income classes) by understanding the overall situation of the Middle-Class.
It is like when you spend for several days watching a TV series, and all the key messages or the sub-answers are already in place, but the last episode just comes to give the big resolution to confirm the elements of the hypothesis that the author/producer has provided to you “petit a petit”. Authors and Visual Artists tend to offer all the replies to a problem through hints or subtle mental images, in their quest for you to discover the truth during the process beforehand. Well, if I were teaching this course to MBA students, I will leave this specific chapter as the final examination, but that is not the case.
If I ask you what is the middle-class fallacy? And I send you to read the last 22 episodes as the basic material to search for your response, I would love to get your reply written in a piece of paper, using a Times New Roman font, size 12. Using the writing freestyle that you wish, and in no more than 600 words or the maximum of words that can fit in one side of a letter size paper sheet. But I am not writing for the purpose of formal teaching, but sharing articles that can help us to think. So let’s proceed.
Let´s go back in time to check the key main messages of this saga.
The Middle-class is not well defined by those who have the duty to define it. It is not their fault either. And those who have outlined it, have used the wrong variable: only “income distribution”. We discover that defining the Middle Class in terms of a four-person household using a pppd indicator is not accurate (pppd means “per person per day”), and the range established doesn´t represent the minimum quality of life desired for the Middle-Class. Eleonora Escalante Strategy established a new range (using the pppd terms of the experts just to explain on the same page). The low threshold must be at least US$20 pppd (for a Four Person household) instead of US$ 11 pppd, and the upper limit has to be US$120 pppd. In addition Eleonora Escalante Strategy has adjusted the first variable to annual household income per year (not pppd). The good income range per Middle-Class household should be US$28,800/year up to $US 175,200/ year (income before taxes), regardless the country. We believe that the experts (consulting houses, the UN network, multilateral organizations, development financial institutions, cooperation agencies, banks, and economic research think tanks and entities) have to make a clear effort to define the middle class in an integral way, using multiple variables or indicators, in which the “income distribution is only one of the variables”.
Other variables that should be included in the definition of the Middle-Class should be beyond the demographic as profession-occupation, but also psycho-graphic as cultural cultivation (education and social behavior). We also have to consider the spending habits, influential tastes or variables of status that comes from a detailed budgeting analysis of wants, needs and savings statistical distribution. And finally, we also have to overcome all the aspects of multidimensional poverty that also abound in the Middle-Class.
It is of crucial reference to define the Middle-Class by understanding how does the Middle-Class live when making choices between their sources of funds and expenditures. When analyzing the sources of funds of the Middle-Class we land into different “modus vivendi” choices: those who are employees, those who have inheritances or live from the net profits of their assets (real-estate, patents, financial assets, and others), and those who live as entrepreneurs or owners of their own businesses.
Some people believe that there is no middle-class if we depend on a salary. This idea for me is too extreme, because you can be a Middle-Class based on education and income standards, or if you can live without the need to work for a year (12 months). For Eleonora Escalante Strategy, to work dignifies us, it doesn’t demerit us. But let´s see the Middle-Class definition (By Carlota Miranda, from Spain), so you can see another point of view.
Eleonora Escalante Strategy doesn´t agree entirely with the last video, but I wanted to share it, because there are a lot of people who perceive the message of Ms. Miranda as the total truth, and are twisting the message, utilizing it to go back in time, in a wrong way. The author of the video exposes a reality that may have something or a partial piece of reality, but that message is manipulated by others, using the Middle-Class lack of definition concept to make us believe that the capitalism doesn’t work, and that we should pursue violence and massive demonstrations to win our economic elevation. Some radicals are also washing the brains of the youngsters (Generation Z), to make them believe that to return back to the monarchies authoritarian economic models based on disruptive technologies as artificial intelligence and robots, virtual on-line learning is the solution to our problems. And that is not correct. We can´t go back, but to evolve to strengthen the fragile democracies of our countries!
Eleonora Escalante Strategy has also stated that the Middle-Class (all over the earth) is living under too much debt, and an ample majority has reached their life-style only through debt. There are many experts who will tell us to get debt, because in that way we will not pay taxes, but in reality, if your business or your income does not provide enough funds to pay for the debt monthly installments, it is crazy to be indebted. Debt should be reserved as “ACOT”, or as a cherry on top, when you know for sure that your free cash flows will be there to honor your bank.
So what is the Middle-Class Fallacy? The false belief of the Middle-Class is to believe that we are already defined as a concept, that we are well developed, installed in the social economic systems, or a strong core group of the global population. That is the fallacy. The Middle-Class is simply the new kid on the block, a baby social group that just has started to crawl on all fours. As a baby, the Middle-Class needs to be protected and groomed, to flourish and grow.
By exploring our monarchic authoritarian past path of more than 4,000 years of existence, if the Middle-Class only represents the 12% of the global population (according to Eleonora Escalante Strategy research calculations), the false belief of the Middle-Class is related to its core existence definition. The Middle-Class as the baby social group that emerged during the last century, is so vulnerable, because it is just a baby. If the Middle-Class has just started to crawl on all fours, then we are still trying to define ourselves. Many of us have believed wrongly that we are “middle-class”, but not even our income statement reflects it. Others believe that we are “middle-class” because of high-levels of superior education, but we are simply still poor citizens. If still 84% of the population is poor ( low level of the Middle-Class, or the low-working class or extreme poor citizens group), the Middle-Class is misconceived when we believe that we are all set, when in reality we are just starting our prosperity journey (in size, in quality, in definition of ourselves, and in our conscience to believe in our talent power).
The incipient infant “work in progress” Middle-Class can make a difference. Because there is no other group on earth (neither the high-end class nor the low class has our brain talent) that has the knowledge power in its brains. In consequence, it is the Middle-Class that is responsible and has to overcome its own state of a fallacy. The current Middle-Class (being a minority of 12% globally) is the ONLY ONE able to HELP TO CREATE INTEGRAL ECONOMIC AND BUSINESS FRAMEWORKS to ascend up, to elevate us, by helping the poor to leave that state of precariousness, and begin their journey to be a Middle-Class Citizens. It is in our hands to modify the current economic frameworks that have left the environment out. It is in the educated Middle-Class to help the capitalism to evolve and solve their current issues. It is in our brains, to stop doing inventions that are killing the ascendance of the poor to the middle-class, or to stop the conception that things only change by wars and violence manifestations in the streets. It is in our brains to write, to create books, to do public awareness, and new knowledge to provide new economic endeavors (entrepreneurship projects) that can create prosperous jobs for helping the poor to move up, and not machines to kill the limited existing wealth that we hold. It is in our hands to visualize an integral-balanced future that can make the capitalism more amiable, gentle and ethical with the low-class.
Ok!
See you next tuesday, with the episode number 17, “Moving Forward to Overcome Social Resentment”. This saga will finish before Christmas. Only the wrap-up final episode “Summary and Conclusions” will be given between the 25th – 31st of December. See you soon. Hugs for you!
Disclaimer: Illustrations in Watercolor are painted by Eleonora Escalante. Other types of illustrations or videos (which are not mine) are used for educational purposes ONLY. Nevertheless, the majority of the pictures, images, or videos shown on this blog are not mine. I do not own any of the lovely photos or images posted unless otherwise stated.
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