An intermediate stratum of capitalist society that participates in the exploitation of labor but permanently faces the effects of the concentration of capital, trying to avoid its own proletarianization.
The precarious nature of the petty bourgeoisie
The role of small capitals within the great framework of capitalist accumulation is subtler and more complex than is usually thought, but no less precarious or unsustainable in the medium term for that. With each technological change, small and medium-sized capitals will take advantage of the reduction in scale brought about by the increase in the productivity of labor to establish themselves. In doing so they will open up a new branch, a new world of investment outlets for big capital, which will end up displacing or absorbing the small pioneering capitals.
According to Marx, the mission of small capitals in the general march of capitalist development is to be the pioneers of technical progress, and this in two senses: by introducing new methods of production into already well-established branches of production, and by creating new branches not yet exploited by big capital. It is completely false to believe that the history of the medium-sized capitalist enterprise is a straight line towards its gradual disappearance. On the contrary, the real course of its development is purely dialectical and moves constantly among contradictions. The capitalist middle strata, like the working class, are under the influence of two opposing tendencies, one tending to raise them and the other tending to sink them.
The downward tendency is the continuous increase in the scale of production, which periodically exceeds the dimensions of medium-sized capitals, repeatedly expelling them from the arena of world competition. The upward tendency is the periodic depreciation of existing capitals, which for a certain time lowers the scale of production, in proportion to the value of the minimum amount of capital necessary, and also temporarily halts the penetration of capitalist production into new spheres.
The struggle between medium-sized enterprise and big capital should not be imagined as a periodic battle in which the weaker side sees the number of its troops directly dwindle more and more, but rather as a periodic mowing down of small enterprises, which rapidly spring up again only to be mown down once more by the scythe of big industry. The two tendencies play ball with the capitalist middle strata, but in the end it is the downward tendency that triumphs, unlike what happens with the proletariat.
Rosa Luxemburg. Reform or Revolution, 1899
The more precarious the situation of small and medium-sized capitals in their competition against the capacities of large-scale production, the greater the force with which the petty bourgeoisie must offset the advantage of big capital in the only possible way: by increasing absolute surplus value.
The reactionary aspirations of the petty bourgeoisie
The "dual" confrontation of the petty bourgeoisie, at once against big capital ("those at the top", the "financial aristocracy", the "1%", etc.) and to regiment the workers into the "people" and increase their exploitation, is part of the everyday reality of social conflict. Shopkeepers fight against the opening of supermarkets and large stores, and against the existing ones being allowed to open at weekends, because the concentration of capital in them pushes them out of price competition.
They fight against their proletarianization while denying their employees the basic conditions of the proletarian of any chain store. Just as the owners of taxi licences demand protection against Uber while paying their wage earners by the piece, or the farmer demands guaranteed prices and protests against his dependence on the seed and fertilizer companies while exploiting immigrant workers, with and without papers, in the worst conditions.
It is that dual relationship, confronting at the same time "its" proletariat and big capital, that leads it again and again to look backwards and demand the return of previous conditions, that the accumulation of capital respect and preserve its status, and a return to a supposed class harmony within the undifferentiated magma of the people.
It is a phenomenon present in capitalism since its dawn. While from the artisans, today practically non-existent, one could hope that they would defend "not their present, but their future interests", that "they desert their own standpoint to place themselves at that of the proletariat", what politically defines the industrial, commercial or peasant petty bourgeoisie is that its panic at proletarianization ends up translating into a necessarily reactionary position even under rising capitalism.
The lower middle class, the small manufacturer, the shopkeeper, the artisan, the peasant, all these fight against the bourgeoisie, to save from extinction their existence as fractions of the middle class. They are therefore not revolutionary, but conservative. Nay more, they are reactionary, for they try to roll back the wheel of history.
Manifesto of the Communist Party. Karl Marx and Frederick Engels, 1848.
The petty bourgeoisie under state capitalism
When extra-capitalist markets begin to be insufficient for the realization of all the surplus value produced, capitalism enters its imperialist phase, which among other things brutally accelerates the tendency of the rate of profit to fall, proportionally accelerating the concentration of capital until the individual capitalist is socialized... it is a real Armageddon for the petty bourgeoisie, which finds itself expelled from fields of production and sectors that until then had constituted an apparently unquestionable base for it.
The triumph of the downward tendency will not necessarily appear as an absolute numerical decrease of medium-sized enterprises. It must appear, first, as a progressive increase in the minimum capital indispensable for the functioning of enterprises in the old branches of production; secondly, as the constant shortening of the interval of time during which small capitalists have the opportunity of exploiting the new branches of production.
The result, as far as the small capitalist is concerned, is an ever shorter duration of his stay in the new industry and an ever more rapid change in the methods of production as a field for investment. For the medium-sized capitalist strata as a whole there is an ever more rapid process of social assimilation and dissimilation.
Rosa Luxemburg. Reform or Revolution, 1899
The socialization of the figure of the capitalist that begins with the joint-stock company and becomes a reality under imperialism reaches its paroxysm with the universalization of state capitalism, a true socialization of the bourgeoisie as a whole around the state. This concentration, which begins with the century, also transforms a good part of the petty bourgeoisie. A not insignificant part will be absorbed by the big companies, organizing workshops or administration. Another will have to reconvert itself into a "managing class", a "professional" class... and a civil service, taking advantage of the next step forward in that socialization of the capitalist as a class which is state capitalism.
But even this part has suffered and still suffers brutally from proletarianization with each advance in the concentration of capitals and the kind of technological innovation they feed. Legions of "managers" are not needed to run a robotized factory. The irruption of financial businesses like Uber into sectors as marginal in volume as the taxi scratches at and threatens the apparently most solid strongholds of the petty bourgeoisie.
Even in its street-level version, the petty bourgeoisie will be torn from its most characteristic grounds -such as neighbourhood retail- with ferocity by over-accumulated capitals in need of profitable outlets, even if only in "niches".
Although it will be reborn again and again with each technological innovation... it will be irremediably mown down like grass by the scythe of big capital. And what is more important: this will happen ever earlier, ever closer to the start. That is the meaning of the institutionalization of "venture capital" and of the "start-up" creation industry. The point at which the "entrepreneur" turns from owner-producer of his own company into functionary-manager of an investment outlet for surplus financial capital, ready to speculate with the company as a whole, is now located at what the "entrepreneurship" manuals call the step "from business idea to reality".
In other words, the passage from "captain of industry" to "manager", from proud owner to "small shareholder", from small rural property to the civil servant's or university professor's "tenured post", from captain of industry to "startupper", does not offer permanent protection either -especially across generations- against proletarianization. So the fear, and with it petty-bourgeois discourse, do not change in substance.
The petty bourgeoisie will become an ever more active centrifugal element within the state. That is why the reactionary character of its ideologies soars under capitalist decadence to the point of becoming dysfunctional even for the bourgeoisie as a whole. Let us not forget that beyond shopkeepers and small industrialists, the petty bourgeoisie is the "intellectual class" par excellence, manufacturer of ideologies à la carte, the sauce and spirit of all cultural movements.
The images it makes of itself as a class express its resistance, but also its inability to go beyond capitalism. The petty bourgeoisie expresses itself in forms as sophisticated as they are, at times, eccentric. In all of them the idea of the impossible step backwards appears again and again, the "return" to an impossible conciliation of classes -under a more or less popular nationalism or the imagining of a commodified world in which accumulation had never existed.
In other words, it will oscillate between the thousand flavours of a national liberation that can now only be reactionary, and proposing that we "degrow" towards a society that, instead of unleashing the gigantic productive forces and knowledge that capitalism has bequeathed to us, pacifies them... through immense sacrifices by the immense majority.