I'm pretty red and sometimes a socialist (other times a consensualist, which might be more or less left of socialism, or maybe orthogonal to the whole business, I dunno). I'm also not a terribly quick thinker in the sense that it can take me to really long time to understand things that are set out right in front of me
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But I'm pretty sure that Marx and Engels were definitely talking about small shop owners as being part of the middle class - they even had a specific term about guys like shopowners, y'know, the petite bourgeoisie. Marx and Engels pretty specifically considered those cats to be the middle class.
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Similarly, 'proletariat' has a pretty specific meaning, ie the industrial working class under capitalism.
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I would define the middle class, these days, as petit-bourgeois. That is, caught between the bourgeoisie and the proletariat. Small business is the obvious example. As autopope says above, a lot of people are persuaded that they're middle class when they're actually labour.
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But the words that Marx used, and have become standard in socialist discussion and practice, are high sounding words from a fancy college educated philosopher who's dad was a lawyer. I believe that the use of those words is an example of the very cultural imperialism by the middle class that socialism is supposed to fight.
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~M~
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~M~
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I hope that you're right, of course, and while unpleasant we won't be crushed with all manner of horrors - but part of my mind knows that some fool with more power than wit will conceive a final solution for excess labor in the post-labor economy. While all of this might lead to a paradise, and I sincerely hope it does, and sooner rather than later, I don't think it's inevitably so.
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