In an ideal society, everyone would be upper-class. The middle class should go extinct.

If you define class as adversarial, like the Occupy protestors do, this sounds crazy. From the adversarial perspective, social class is about who’s at the top – and by definition, only a few can be. Only 1% of Americans can be in the top 1%. Hence, it seems like the 1% and the 99% are intrinsically opposed: the 99% wants to become the 1%, and the 1% wants to keep them out.

However, I don’t think social class is about being in the top X%. Class is mostly about values, attitudes, human capital, and ways of life. From that point of view, we could all become upper class. Or we could all become lower class. (A big problem with many parts of Africa is that everyone is lower class.)

To illustrate this sort of shift, consider medieval Europe. Most medieval Europeans were in the peasant class. If you told a 12th-century scholar you thought no one should be a peasant, he’d probably laugh at you. A lord was someone who ruled over the peasants; how could everyone be a lord? They’d have no one to rule. They wouldn’t have the skills. And besides, if not for peasants, who would grow our food? Everyone has to eat. The whole idea is clearly absurd.

And yet, here we are, in a country with no peasants. (We also don’t depend on peasants in other countries – the US is a big food exporter, not importer.)

So, how can everyone be upper class? What is the upper class? From economics and sociology, it seems like the key characteristic of the upper class is that they’re the business-owning class. They own the factories, the mines, the grocery stores, the law firms… everything that sells goods and services. Of course, not every upper-class person owns a business. But owning businesses is a key part of upper-class culture. It permeates the air, like how health insurance and mortgages and layoffs permeate the middle-class air.

Even if you don’t own a business yourself, your family members do. Your friends do. You’ve owned them in the past. Or you’ll own them in the future. Starting a business is like getting married, having kids, or buying a house – it’s just an ordinary part of life. Everyone can’t own a business (if they did, who would work for them?), but business owning can be part of everyone’s shared cultural background.

Is that possible? Sure. The US used to be a lot more like that, before the Great Depression. In the 19th and early 20th centuries, there were very few big chain stores. Every business you visit now – the grocery store, the pharmacy, the restaurant, the hotel – was independently owned by entrepreneurs. Not everyone went into business on their own, but it was a pretty everyday thing.

An upper-class world is much more flexible. If you have the human and social capital to start a business, it means you don’t have to worry so much about money. You can just go start making more if you need it. And even if you don’t start a business, it’s much easier to find work. You don’t have to send your resume out to a million strangers; you can just go work for the businesses your friends and family own. (That also used to be a lot more common – it’s why many businesses are “Smith Brothers” or “Smith and Sons”.)

Why become upper class? We’d all like to be rich, of course, but I think we should all become upper class even with our current incomes. Some of the biggest reasons are:

– More freedom. In the middle-class world, you only ever have one source of income – your career track at the company you work for. You get some money, spend it, and then get more money two weeks later. If anything happens to that income stream, you’re screwed. Hence, a lot of people have to be very risk-averse, to protect that one income stream. They then can’t enter a new field, travel the world, take classes, or do any number of interesting things.

– More security. The middle class has a culture of spending most money as soon as you earn it. In contrast, since starting capital is so important to business, upper-class society encourages more saving. If you save 20% or 30% of income, you don’t have to worry nearly as much about random disasters. If your car breaks, or your window gets smashed in, or you need an operation, you can just write a check. (Those who say they couldn’t possibly live on 20% less seem to never notice millions at that income level doing perfectly fine. Even 19th century farmers saved much more of their income, despite being far poorer than any American today.)

– More friendship. Humans are social animals. If all your friends work for the same big company, that tends to make relationships adversarial – only a few people can be at the top, so my gain is your loss. By contrast, starting a business encourages cooperation. If everyone doesn’t cooperate and pitch in, the business will fail. (Failure of cooperation is common, as any founder can tell you, but at least it’s disincentivized instead of encouraged.)

– More human capital. The middle-class way to gain human capital is school. But who even remembers most things they learn in school? About 30% of people graduate college, and most graduate high school, but the average literacy level is seventh grade. Clearly, school isn’t working very well. Owning and managing companies builds a huge variety of skills and knowledge, from making better products to doing cost-benefit analysis.