JOHN ASIJA

Poverty and Capital

A Schema for Thinking About Economic Life

18 March 2026 — Poverty & Capital: A Schema

"Poverty" describes both a child dying of hunger in Chad and a college graduate carrying student loan debt in Brooklyn. Both usages are serious. They cannot both be right, or if they can, the word is doing no useful work.

This is a post about vocabulary.

What follows is the working model of economic classes I use to think about the world. It is designed to describe the economic status of third-world subsistence farmers, urban beggars, and the fabulous plenty of Saudi oil princes and American business tycoons. As a consequence of attempting that breadth, it will not perfectly describe any single person's situation. That is a feature, not a failure. A schema that perfectly described every case would be too complicated to think with.

What the Schema Measures, and What It Does Not

The schema attempts to describe someone's economic status based on several elements: whether they can obtain the necessities of life; the value of their labor; their standard of living; whether they are accumulating capital; and whether they maintain their standard of living through labor or through capital income.

It does not attempt to describe social status. Some work is socially prestigious despite limited remuneration, and some highly remunerative work is looked down upon. The prestige of one's work is not a factor here. A tenured classics professor and a plumber may occupy the same position in this schema. A hedge fund manager and a small business owner may not.

I have also deliberately left the words "rich" and "poor" out of the schema. This is not because they are unimportant. It is because they carry more freight than the schema can support. In common use, "poor" can mean anything from dying of starvation to earning less than one's neighbors. "Rich" can mean having a paid-off house or owning a private jet. Neither word has a stable referent, and importing them would introduce ambiguity where I am trying to achieve precision.

They also carry social and theological weight I am not yet prepared to deploy. When Christ says "the poor you will always have with you," he may or may not be making a point about income distribution. When he says it is easier for a camel to pass through the eye of a needle than for a rich man to enter the kingdom of God, he is probably not issuing a tax policy. I do not want my schema to pre-answer those questions by attaching his words to specific rungs of an economic ladder. The schema does not use them. Readers who find the omission frustrating are welcome to note which of my categories maps to what Jesus, or their senator, or their conscience, means when they reach for those words. That exercise may itself be instructive.

All Positions Are Relative

One last preliminary before the schema: every position in it is defined relative to a median, not against a fixed number. There is no dollar amount that permanently places a person in any category.

This is not an evasion. A median standard of living in Manhattan in 2025 requires a different income than a median standard of living in rural Mississippi in 1975. The question is not "how much do you earn" but "what can you do with it relative to those around you."

The practical consequence is that a person's position can change without their income or behavior changing at all. If everyone around you increases their consumption, you can slide down the ladder without spending a dollar more.

The Schema

All nine categories plotted. No groupings highlighted.

The nine categories, in order:

Something shifts before the end of the list. The first three categories, poverty, working-class, consumption class, are defined entirely by what labor income can or cannot accomplish. The last three, wealthy, super-wealthy, ultra-wealthy, are defined entirely by what capital income accomplishes without labor. Something changes in the middle that income alone does not capture.

The Cliff, and the Threshold

Two structural features warrant naming before the diagrams that follow.

The first is the boundary between misery and poverty. Every other transition in the schema is a matter of degree. Moving from poverty to working-class means earning more. Moving from working-class to middle-class means earning enough to save. These are real differences, but they exist on a continuum. The boundary between misery and poverty is different in kind. A person in misery cannot obtain the necessities of life. A person in poverty can. That difference is not a gap in income, it is the difference between whether a person survives.

Much of what I will argue in later posts turns on treating this boundary as a cliff, not a slope. Policies that move people from misery to poverty are achieving something categorically different from policies that move people from poverty to working-class. Both are genuine goods. They are not the same good.

This is what makes policy aimed at crossing the Cliff categorically different from policy aimed at any other movement in the schema. The mechanism required is different. The urgency is different. The moral weight is different.

The second structural feature is the threshold between working-class and middle-class. A working-class person and a middle-class person may have identical standards of living. They may live in similar houses, drive similar cars, send their children to similar schools. The difference is that the middle-class person is accumulating capital, slowly, perhaps, but persistently, and the working-class person is not.

This threshold is the structural spine of the schema. It is not a threshold of income. It is a threshold of economic trajectory. Over a working life, and across generations, that difference compounds in ways that dwarf any difference in annual income. The x-axis of the diagrams below makes this visible: moving left to right does not mean earning more, it means that an increasing share of one's economic position is sustained by capital rather than labor. This direction of movement is what I will call prosperity. The vertical line marks the threshold. Everything to its left is the labor economy. Everything to its right is the capital economy.

The Labor Class

Poverty, working-class, and consumption class share a common feature: income from labor is the only mechanism sustaining their economic position. I will call them, collectively, the labor class.

Labor class highlighted: Poverty, Working Class, Consumption Class.

Note what the diagram makes visible: misery sits just outside the labor class enclosure, below it. This is correct. A person in misery is not a member of the labor class, they cannot yet sell their labor sufficiently to sustain themselves. The labor class begins at poverty, the first rung at which labor income covers necessities. Misery is categorically prior to the labor class, not a lower level of it.

Note also that the consumption class sits inside the labor class but above the median line. These are people whose labor income is sufficient to accumulate capital, but who are not doing so. The distinction between consumption class and middle-class is not income. It is choice, or habit, or circumstance. Both are in the labor class. One is stationary relative to the capital threshold. The other could cross it and has not.

The Capital Class

At the far right of the diagram, the relationship between labor and income inverts. Wealthy, super-wealthy, and ultra-wealthy are all positions in which capital income, not labor, sustains or grows the person's economic position. I will call them the capital class.

Capital class highlighted: Wealthy, Super-wealthy, Ultra-wealthy.

The threshold the capital class has crossed is not merely quantitative. It is structural. A wealthy person could stop working tomorrow and maintain a median standard of living indefinitely. A working-class person who stops working tomorrow has, at most, weeks. The capital class is not simply "richer" than the labor class, it operates by a different mechanism entirely.

Labor income stops when work stops. Capital income does not. These are not points on a continuum. They are different kinds of economic existence.

The clearest way to see this: ask what prevents things that should exist from existing. In most cases the answer is not missing knowledge and not missing labor. Both are often present in abundance. The missing ingredient is capital, the mechanism that converts knowledge and labor into outcomes. Everything to the left of the threshold is a world in which a person depends on that mechanism without participating in it.

The Transitional Class

Between the labor class and the capital class sit middle-class and aspirational-class. Both are accumulating capital. Neither has yet crossed the threshold at which capital fully sustains them without labor. I will call them the transitional class.

Transitional class highlighted: Middle Class, Aspirational Class.

The transitional class is defined by movement, not by arrival. These are people who have crossed the capital threshold in the sense that they are building ownership, but who would lose their standard of living if their labor income stopped. They are in the capital economy in direction, but not yet in fact.

Note where the capital threshold line falls on this diagram: it sits between the transitional class and the capital class. Both middle-class and aspirational-class sit to the left of it. Both still earn their income entirely from labor. They are accumulating capital, building toward the threshold, but they have not yet crossed it. The threshold is not behind them. They are still approaching it.

Precarious Prosperity

There is one more grouping worth naming, and it cuts across the threshold line rather than stopping at it.

Consumption class and aspirational class share the same y-axis height in the diagram, both have above-median standards of living. From the outside, they look similar. A consumption-class household and an aspirational-class household may live in the same neighborhood, drive similar cars, take similar vacations. The difference is invisible: one is accumulating capital and one is not.

I will call this grouping precarious prosperity.

Precarious prosperity enclosure around Consumption Class and Aspirational Class.

The precarious prosperity box straddles the capital threshold. That is not an accident of the diagram, it is the argument. These two categories share a living standard but not a trajectory. The consumption-class household is one job loss from a structural decline in its position. The aspirational-class household has begun to build a buffer, but has not yet completed it. Both are more exposed than their visible prosperity suggests.

With this schema established, the questions that follow concern moving across the Cliff and across the Threshold. These questions will force us to confront our ideas of mercy, justice, pity, greed, and jealousy. As we confront these virtues and demons, I intend to rely on my Catholic faith and its social teaching to guide me.

Next: Am I a Marxist, and other questions asked by people who only skimmed the article.