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Labor aristocracy (also aristocracy of labor) is a concept in Marxist discourse that describes a section of the working class (labor) who is bought-off by the bosses in order to stave off their revolutionary fervor.
While this tendency can occur on a small scale (for example, bosses paying white workers better than their Black counterparts in order to foment racial disunity and discontent) the term is most useful in the Leninist analysis of imperialism, where workers of the high-income economies are paid-off to weaken solidarity with their fellow proletarians in the low-income economies.
Initial concept
According to Lenin's 1917 Imperialism, the Highest Stage of Capitalism, the bourgeoisie in the developed world exploit workers in the developing world where wages are much lower.
The increased profits enable these companies to pay higher wages to their employees "at home" (that is, in the developed world), thus creating a working class satisfied with their standard of living and not inclined to proletarian revolution.
The Labor aristocracy can be said to correlate with the popular notion of a "middle class" which is not a Marxist concept. Rather, the concept of a "middle class" is a deception by the ruling class to make the proletariat feel like they're also wealthy land-owners.[1]
Particularly in the United States, this high standard of living was achieved not only by comparatively high wages, but also through the expansion of consumer spending debt. This allowed workers purchase nice homes and cars, while deepening the power of the banks and monopolists who sold them the debt.[2]
The decline of the labor aristocracy in The West
In the developed capitalist economies (mostly the Western world) living standards of the working class have considerably declined thanks to stagnant wages and rising cost of living, which includes inflation in prices of necessary items such as housing, education, and medical care.
This decline of "middle class" prosperity has led to the resurgence of populist movements, as seen with left-wing social-democratic populism Bernie Sanders in the US and Jeremy Corbyn in the UK, as well as the right-wing populism of Donald Trump in the US.