5 Reasons America Should Fear the Global Middle Class

The rise of the global middle class could prove to be even more harmful than climate change...

In his last State of the Union address, President Obama made a pitch for “middle class economics” to help America’s beleaguered middle class, which continues to face stagnant wages, job displacement and soaring college costs and debt. His stated goal was to provide Americans with the requisite tools to get ahead in a fast-paced, constantly changing global economy. Of course, the United States middle class is not alone. Those in other advanced industrial countries are suffering similar or worse fates.

Meanwhile, an opposing trend is sweeping the developing world. Both the size and spending of the middle class in emerging market and developing countries are surging, particularly in China and India. By 2030, Asia-Pacific countries will comprise nearly two-thirds of the global middle class, dwarfing the projected one-fifth for Europe and North America combined. Seized by the dramatic eastward shift of global consumption, a growing number of analysts are examining the potential economic and political consequences of the rising global middle class.

U.S. officials understandably are focused on America’s middle class, but they should also pay closer attention to the ways in which the growing global middle class may undermine American interests, beyond its acknowledged effects on climate change and resource scarcity. Policy makers generally laud the rising global middle class’s long-term benefits, such as economic growth and development, democratization, rule of law and political moderation. Unfortunately, the disruptive and destabilizing nature of middle-class expansion in the short-to-medium term, exacerbated by globalization and the digital revolution, has been relatively overlooked.

It is time to adopt a less optimistic and more balanced perspective on the rising global middle class and to broaden the dialogue to include its implications for U.S. national security. The Atlantic Council’s Mathew Burrows recently highlighted some negative consequences. Here are five additional ways in which middle-class growth may contribute to one of the principal foreign-policy challenges facing U.S. officials—the relative decline of U.S. power and influence:

1. It could reinforce and prolong the global “democratic recession.”

Using Freedom House data, Larry Diamond demonstrated that the world has experienced a decline in democracy for nine consecutive years, beginning in 2006. Not coincidentally, many countries that regress, such as Thailand and Nigeria, also experience strong middle-class growth as large population segments are lifted out of poverty into the “vulnerable” middle class. The problem is that the lower middle class is susceptible to the appeals of populist leaders who are intent on weakening or preventing the emergence of democratic institutions as they pursue redistributive policies that benefit the lower classes and alienate the others. In addition, the rising material expectations of the growing middle class increase dissatisfaction when those expectations are not met, especially when the global economy slows, fueling street protests and increasing pressure on weak and stable democracies alike. As the late Samuel Huntington emphasized, frustration-fueled street politics and the revolutionary fervor of the middle class are not always good for the health of democracies.

The Obama administration has focused less on the promotion of worldwide democracy than its predecessor, but democratic norms and institutions nonetheless remain a core element of U.S. soft power, which the global democratic recession is undermining. Public dissatisfaction with democracy is on the rise around the world. When forced to choose, many survey respondents have favored economic performance over democratic institutions. If middle-class individuals continue to support leaders with questionable or no democratic credentials because they believe those leaders will maintain redistributive policies, then we may find ourselves in a period similar to the 1930s, which was marked by heightened ideological tensions and authoritarianism.

2. State capitalism may become a formidable rival to liberal capitalism.

China’s impressive economic growth strengthened the appeal of state capitalism, which Beijing practices under the leadership of the Chinese Communist Party. The Party’s manipulation of markets for political ends (its own survival) has produced years of double-digit economic growth and rapid economic development. Although China’s economy is slowing, it still has the fastest-growing economy in the G20 group of countries. China’s progress has occurred at the same time that the United States, individual Western European countries and the European Union have faced daunting political and economic challenges. Indeed, the Eurozone crisis, economic recession, empowered far-right parties, executive-legislative deadlock and wage stagnation have raised questions about the viability of liberal capitalism in the twenty-first century.