by Nathan Smith

After consulting the Oracle, doing a Ctrl+F search in the Sibylline Books, and comparing last week’s Lotto numbers with the positions of the stars in the year 1856, I’ve decided that the main theme of the current election is the cost of living.

I know, big claim. Massive insight. That’s why they pay me the big bucks, etc. But it does seem like every party has picked fixing the so-called “cost of living crisis” as their central plank. Which is strange, because there is no crisis. Or, more precisely, some groups are struggling, and others simply aren’t, while the politicians pretend that there are no groups and we’re all struggling together. That’s simply not true.

The older I get, the more I realise that most things are about money. Money is the best general-purpose tool in the world. Money can make people do things they otherwise wouldn’t want to do. Communists like to talk about taking money from the elites as if it’s sitting around in bank accounts. In reality, money is always in play; it’s everywhere and in everything. And either you know how to think about money, or you don’t. How you think about the “cost of living” is a class thing, really.

Money and class are not the same thing, but they are closely related. The classes spend money differently, save money differently and think about debt differently. These wildly different understandings of money tend to bleed over into how these groups vote and which politics they support. This sort of analysis can be highly useful for parsing modern politics.

For the lower classes (proles), money is mainly a means of consumption. They convert their cash into goods or services and then consume them. At the bottom of the social heap, this kind of consumption is mostly for survival. But it might surprise you that many in the lower classes often enjoy expensive luxury goods, such as jet skis, Mercedes cars and boats. Why do they spend what little money they have on luxuries when they could save it? Well, a jet ski might be expensive, but it is still “cheap” compared to the cost of saving money, since you can’t guarantee an income tomorrow.

This “spend it while you can” mindset also affects the lower classes’ relationship with debt. Simply put, they have no idea how to think about it. The people in this group often encounter payday lenders charging hundreds of percent in annual interest, credit cards loaded with fees and rent-to-own schemes offering all types of jet skis. For them, money can disappear as quickly as it arrives, and debt can make a bad situation much worse. So, when politicians start talking about “paying down” government debt, all the lower classes hear is “smaller welfare checks.” They will vote for anyone who promises to keep the money moving, because their cost of living changes every day.

Incomes are not necessarily higher among the middle classes. They may even be lower. But the way they think about money is different. The goal of the middle class is to be “comfortable”. They have enough income not to worry about starvation, which creates a little more room between daily life and disaster and allows them to both build a capital buffer and use spare cash for keeping up with the Joneses. That’s why the biggest consumers are the middle classes, not the lower classes. They will spend extraordinary amounts on trends in the hope that it will demonstrate they belong. As such, the main asset of the middle class is the home, which means a respectable neighbourhood is tied to their net worth. That’s why the middle classes tend to vote for anyone defending the boundaries of acceptable behaviour and pushing back against things like transgenderism and immigration. Those are bad for house prices.

The way the middle-class approaches debt also reflects its concern for comfort. While the lower classes may swing between costly borrowing and avoiding debt entirely, the middle classes separate their debt into good and bad debt. For example, house debt is good debt, as is student debt. Car debt can also be acceptable. However, debt for frivolous purchases is bad debt, and credit card debt is definitely bad debt. The middle classes want debt, but only for the right purposes: to help establish or maintain comfort. So, when the government prints money for infrastructure, that attracts the middle-class vote. But printing money for the “black hole” of welfare? No thanks.

The middle class is very different to the upper middle class. With upper-middle-class incomes, income rises substantially, but paradoxically, many living expenses can fall because they don’t have to follow the same expensive trends or “conform” to the same social codes. The result is they have a perpetual surplus of money, allowing them to accumulate a neat thing called capital.

Economically speaking, “capital” is all the durable stuff we use to produce all the things that we want. It’s anything that lasts for a significant time after it was created, and which can be used to produce goods and services. Money only becomes capital if you use it; otherwise, it’s hoarding. Note that I didn’t say “spend.” The upper middle classes know that the purpose of money is to solve problems.

As such, the upper-middle classes do not go into debt on the same terms as other classes. Like many things, it is cheaper to be rich. For the upper-middle classes, money and debt become part of a single pool called liquidity. What matters to them is the cost of using their money, how available it will be in a crisis and how much is needed at any given time to live. In that sense, debt becomes part of a general pattern of deploying money to make assets work more efficiently. Money is a tool. And the best way to use this tool is to create power because power allows you to solve problems.

This is why the upper middle classes are always and everywhere the core of communism. Have you noticed that when you criticise communism, it is the wealthy, trust fund kids that attack you? It’s never the working class. Why is that? Well, if you dig into the origin of most of the communists, you will find a rather… blue-blooded origin. Did you know that Che Guevara’s family had a castle in Ireland for a thousand years?

Since money is a tool, the most useful thing to buy with it is human souls. Funding a political movement that promises to upend the status quo and shift the pieces on the chessboard can be a great way to advance the self. Philanthropy is the gateway to power. All you have to do is invest in the right people, get them worked up, point them in the right direction and then pick up the gold that falls out of the shattered order. The upper-middle classes, therefore, will vote for anyone who promises to create more opportunities for capital accumulation. Their cost-of-living is irrelevant, since their money is debt and their debt is money.

The most interesting and terrifying cost-of-living dynamic occurs at the upper classes. In many ways, the upper class is the most alien class of all. Wealthy people can appear not to understand money while being remarkably frugal. An upper-middle-class person may not know or care what a banana costs yet be shrewd when haggling over the purchase of a house. Whereas an upper-class person may know the price of the banana down to the cent but have no clue about the price of a car. The upper-middle classes may still have jobs – like lawyers, doctors or financiers. The upper class, however, is beyond making money. They were born into a fortune. For them, money is always there, like water from a tap.

How do the upper classes vote? Haha. They don’t need to. They already own the souls and the capital. More than anything, their primary goal in life is preserving the principal. It must be treated carefully, because one day it might go away and never return. For the upper classes, keeping up with the Joneses is a guaranteed path to devour their fortune and return the family to the upper middle class from whence it came. To them, debt is not a tool, but rather a danger to be avoided. The need to take on debt is a signal to the upper classes that their cost of living is about to enter a real crisis.

Why would the upper class, which has money for everything, need debt? Generally, it doesn’t. The great families tend to hold wealth for centuries. But there are exceptions. When the status quo changes too much or too quickly, a wealthy family begins to decline. At this point, it will need to maintain its philanthropic efforts, since influence is the only skill the family has. The upper-class estate then begins taking on debt. As those debts grow, the family starts to get nervous.

But they don’t vote. They don’t need to. They are far beyond that. When the upper classes start to take politics seriously, there won’t even be a ballot box for you. They might not even think democracy is all that useful anymore.

As the old Chinese saying goes, “when elephants fight, the grass suffers.” You should get on your knees and pray that the upper classes do not think they are about to enter a cost-of-living crisis, because you will be the grass.

Originally published on The Good Oil.