“Class War” and the Lessons of History

One aspect of our re-ignited American Civil War is getting a lot of air-play. It is so-called “class war.”

That’s the tag-line ordered up by Roger Ailes. The notion: that any talk of returning to 1990s tax rates – way back when the U.S. was healthy. wealthy, vibrantly entrepreneurial and world-competitive, generating millionaires at the fastest pace in human history – is somehow akin to Robespierre chopping heads in the French Revolution’s reign of terror.

That parallel is actually rather thought-provoking! Indeed, can you hang with me for a few minutes? After setting the stage with some American history, I want to get back to the way things got out of hand during that earlier 1793 class war in France.  There are some really interesting aspects I’ll bet you never knew.

But in fact, “class war” has always been with us. If you ever actually sit down to read what people wrote in times past – for example Adam Smith in Wealth of Nations, or even the Bible – then you know struggle and resentment between social castes was the normal state of human affairs for 6000 years, or much longer.  Seriously, randomly choose (or “roll-up”) a decade and locale from across the last few millenia! Tell me who oppressed freedom and competitive markets in that time and place. I’ll wait.

In fact, today’s American perspective that there is no-such-thing as class – so blithely exploited by Fox – seems rather quirky and charmingly innocent.  Baby Boomers, especially, were raised under  unusual circumstances — perhaps the only stretch of time in which a great nation experienced a (fairly) flat social order.

Now this calls for simplifying – so let’s set aside the battles over racial and sexual equality, etc. – but squint with me here, for a minute.  It’s fairly obvious that the period following the Second World War was (for white U.S. males) the least class-ridden of all time.  Disparities of wealth were at an all-time low and the middle class, flush with WWII savings, good wages and GI Bill-fostered competitiveness, experienced a generation of utter dominance over the American experience. A confident dominance that got woven into popular culture through TV and all other media.

= Pyramids and diamonds =

Instead of the classic human social pattern — pyramid-shaped with a tiny, fierce nobility lording it over peasant multitudes — ours was diamond-shaped with a well-off middle that actually outnumbered the poor! A miracle nobody in all the past ever foresaw. Except perhaps Smith. Certainly not Karl Marx! In fact, nothing so undermined the honey-seductive mantras of Marxism so much as the living example of the U.S. middle class. Which the whole world wanted to join.

And now the penultimate point (before getting back to 1793 France). Our post-WWII flattened-diamond pattern did not quash or undermine competitive capitalism!  Not at all. In fact, never before or since has there been such fecund, vigorous entrepreneurialism as during the flattest and most “level” social order the world ever saw.

Those who proclaim these two things – social flatness and vigorous market competitiveness – to be inherent opposites, in perpetual conflict, are simply fools or historical ignoramuses — or outright liars. They are pushing the sick illogic of the zero sum game.  Indeed, Adam Smith himself contended, in both Wealth of Nations and The Theory of Moral Sentiments, that a relatively flat social order — combined with lots of opportunities for the poor to get education, so the total number of competitors is maximized — can vastly increase the total number of people who get rich in the best way, by delivering innovative goods and services.

(Smith held less truck with inherited wealth or dividend-clipping “rents” – the kind of income with the very lowest tax rates, nowadays. In fact, Smith strongly implies that some kind of upper limit to the meaning of “rich” might be called for. But more on that another time.)

= A burden of proof on FDR-bashers =

The final pre-point I want to make here – before tooling off to France in 1789 – is more in the form of a question.  How did we get into a situation where Franklin Delano Roosevelt is portrayed as Satan incarnate?

Yes, yes.  I spend a lot of time around libertarians and I know that their current version is all about hating government.  No other agenda or priority.  See my earlier challenge (two postings back) daring libertarians and decent conservatives to consider taking on a positive goal instead of a purely negative one – fostering competitive enterprise and not just reflexively hating all civil servants, under all circumstances, all the time, while ignoring every other threat to freedom. That may by Ayn Rand, but it sure ain’t Adam Smith.

If government is always and automatically evil, then yes, Franklin Roosevelt was the antichrist, because he sure expanded its reach.  If, on the other hand, you judge by outcomes… defeating Hitler, ending the Great Depression, starting the process of racial justice and – above all – engendering a society that both fostered vast amounts of competitive enterprise and kept the social order flat, then maybe we should consider cutting the man some slack.  (Wasn’t he admired by the “greatest generation”?)  I’d like to see you — or any ruler/leader across all of human time — do better.

Sure, some of FDR’s bureaucracy got cloying. Or else it got “captured” and stifled competition.  Democrats themselves axed many New Deal and Progressive agencies – the Interstate Commerce Commission, the Civil Aeronautics Board, for example, had to go!  Others needed trimming and so did the pre-1960 tax rates that JFK slashed.  Indeed, about half of the Reagan-era government prunings seem pretty much called for… a process culminating in the Clinton-Gingrich Welfare Reform, another time that the moderate-right had a strong point. And was listened-to.

But outcomes comparison is not kind to those who gutted Glass-Steagel and other bank regulations, opening the door to abuses that helped bring our Second Depression.  And since every single prediction ever made by Supply Side Economics proved wrong, well, we can understand why science and outcomes comparison are the Big Enemy, attacked by Fox 24 hours a day.  If facts are inconvenient, well, damn those who live and work with facts.

= Okay, back to France =

All the shouts about “class war” bring to mind images of rabid Jacobin mobs in 1793 hauling brave nobles and gentlemen to the guillotine. But if Rupert & co. really want us pondering that image, we owe it to ourselves to leaf back just a few pages to 1789, when the revolution began as a much more moderate thing, inspired by events across the ocean, in America.

France was broke.  Louis XVI and his ministers were incompetents who deliberately squelched commerce with internal tariffs and policies that crushed innovation. The church owned much of the productive land, tax-free. So did the feudal aristocracy. Top merchants and corporations managed to wrangle exemptions too. After years of quagmire wars, poor tax revenue, bank collapses and mismanagement, Louis needed more money to stave off bankruptcy and save the country. So he summoned the Estates General.

That was the rough French equivalent of the British Parliament, but with much less authority.  In fact, it had last met in 1614. But Louis was desperate. What he needed was for the first and second “estates” — the clergy and  nobles — to vote themselves a temporary levy and join the third estate (the people) in paying their fair share.

That’s how it all started.  The country’s leader asking oligarchs and aristocrats to pay the same rates as common folk, for a while, especially since they already owned damn near everything.  The answer given by the dukes and bishops and marquiseseses?  Heck no! We’re the ones keeping it all together. The managers and investors and owners and job-makers. The government can damn well keep its mitts out of our pockets. It’s our money, not the state’s.

Now you can see where I’m going with this. So I won’t spell out what happened next. (Though a little reading might be in order?  After the last assignment, to learn what the founder of modern market-capitalism, Adam Smith actually said. I promise surprises!) 

And no, I am not predicting tumbrels rolling through American streets, with billionaires holding their chins high as rabid mobs taunt them on their way to chopping blocks! 

What I am telling you is that “class war” has a whole lot more to it than they are telling you with their blithe, two-word nostrums, over at Fox.  As Warren Buffett said: “my side – the rich – have been winning class war for some time, and it won’t end well.”  

= The American Difference =

Across the sea, in America, a different experiment was being tried. The aristocracy over here — like Washington and Jefferson — certainly enjoyed being rich, and wanted opportunities to stay that way! But they also knew the frontier virtue satiability — the notion that getting rich is great! Economic success can both entice and propel innovation, hard work, enterprise, competitive creativity and philanthropy. But that (as Adam Smith proclaimed in the miracle year 1776) there comes a point where enough is enough… and sometimes even too much.

Hold onto your seat, because I’m about to tell you something about Washington and the others that you never knew… that they were “levellers.”

The founders started by banning primogeniture, so no family fortune could sit and accumulate, undivided, as a lordly demesne at the pyramid’s peak. Instead, they would get divided among the large numbers of children that folks had then — an intentional act of “social engineering” and outright “levelling” and don’t you for a moment think otherwise!  They also seized the assets of the Tory lords and even neutral absentees and distributed them to the masses. And they made homesteading easy, with laws that favored Yeoman citizens. (All right, some of the lands they seized belonged to native American tribes – I never called these guys perfect, just smart, with a goal of not repeating the historical mistakes they loathed. Sure, they proceeded to make others.)

Never heard of these “levelling” acts by the founders? Heck, even liberals have forgotten them. Or they’ve become used to simply ceding Washington and Adam Smith to the blustering right, without even putting up a fight.  Stupid-lame liberals.

The point is that we never had the kind of violent class war that erupted in France, because our elites were smart enough to avoid it! After the primogeniture and distribution and land grant tricks started to fade along with the frontier, we entered a dangerous Gilded Age when the pyramid shape began re-emerging and Marx rubbed his hands over the growing urban proletariat….

…but even among the titans of the 1890s, there were men who could see. “I would rather leave my son a curse than the almighty dollar,” quoth Andrew Carnegie, who was the Warren Buffett of his day.  And our agile nation came up with moderate, progressivist solutions like anti-trust laws, that staunched class war without ruining capitalist enterprise.  That kept the goose alive, to keep laying golden eggs.

I’ve already discussed FDR. But now you can see the context of it all!  It is the context of the positive sum game. (Look it up!) The notion that we can get all the benefits of an enterprise-market system — using the allure of wealth to reward innovators and vigorous competition — while somehow preventing the toxic side effect of wealth… the poison called oligarchy.  The same poison that ruined markets and freedom in every culture other than ours, in every other era than ours.

= A wake-up call =

So what now? Well, for one thing, it’s time to rouse yourself from propaganda hypnosis.  History repeats itself. And the last thing that the New Oligarchs want you to do is study history.

After a full generation of innocence, since the Second World War, in which we took for granted some highly unusual circumstances, we seem now to be plunging back toward the norm for human societies. And you – yes, you – need to start asking questions:

— like what degree of wealth disparity would you find discomforting?  Today, unlike 1945 or 1980 or 1999, the top 400 U.S. families own more than the the bottom 50% of Americans. Please, please, please pause a minute and picture that in your mind.  If you can somehow manage to shrug that off, is there some level of disparity that would worry you?

When it’s 75%? Or when it’s 90%? Admit that there is some level that would make even you call yourself the victim of class war. One that’s gone on (with a slight break) for 6000 years.

— or ask what it means when Fox says the top families do pay a lot of money in taxes, despite paying at very low rates.  Can you do the simple algebra in your head, divide and put in an equal sign and draw the obvious conclusion?  If they pay vast amounts, even at tiny rates… doesn’t that mean they are getting most of the money in the first place?  And that’s supposedly a reason for you to… shrug?

— or ask who is financing the propaganda that you watch? When simplistic tag lines are ordered up at Fox News by Rupert Murdoch, Roger Ailes and Prince Waleed, and they are parroted within hours by every politician and talking head on the right, is it time to ask “is this the “conservatism of Barry Goldwater and William F. Buckley, any longer?” What do these New Lords get out of teaching you to hate every American elite of science, intellect or skill… while demanding that you ignore the one elite that threatens everything we love?  Theirs?

— for the first time in American history, we went to war and the rich refused to help pay for it. Isn’t patriotism an issue all the time, and not just when you (or Glenn Beck) pick or choose?

More important: doesn’t this start sounding a whole lot like what the nobles did on the east side of the Atlantic in 1789… and not at all like the smarter elites did in the west?

— is history really so boring to you that you find it completely irrelevant? So much so that you’ll ignore the patterns of 6,000 years?  If so, wow, FDR sure did make a different world that Baby Boomers ignorantly take for granted.

But the Gen-Xers and Gen-Y and Millennials won’t.  As I foresaw in EARTH, they are waking up. So don’t fret, Boomers. Your children will rescue America.  Not with violent class war… what are we, French? But with the kind of tweaking we saw from Washington and Lincoln and Carnegie and Teddy Roosevelt and FDR.  The kind that restores that flattened diamond… while continuing the miracle of competitive markets and freedom.



Filed under economy, society

18 responses to ““Class War” and the Lessons of History

  1. SFAIK, Buffet didn’t say quite that. The New York Times, November 26, 2006 quotes Warren Buffet, “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”
    Waiting for the sane children to grow up, seems like a dangerously dubious and delayed strategy.

  2. Like many people who talk a lot, Buffett says the same thing many ways. and many times. My source isn’t the standard one, so?


  3. Keep in mind that propaganda and talking points are very well funded by oligarchs on BOTH side of the current political spectrum.

    I am not convinced your various analyses are correct since I question the causal directions of the phenomena you describe. For instance, was our class pyramid shape a result of hyper-vigorous economy, or political policy, or both? I also don’t know what it might be like to live in a world where oligaechies exist, but are increasingly short lived. I am also not sure if our recent wealth concentrations are a symptom of the end of Industrialism and the death of state managed money. In short, I am not convinced that cause and effect can be so easily teased out as you make it seem.

    In the end, perhaps, the health of economies and societies are dependant upon so many factors that it remains folly to try to express what we ought to do under any particular historical circumstance. Maybe the intense war of ideas we currently have is the best we can hope for. Perhaps ANY plan stales after awhile, becomes booring, anti-motivational, and ultimately destructive. Perhaps the future could be one where EVERYONE is correct for a day, EVERYONE is rich for a day, president for a day, dictator for a day, famous for fifteen minutes, and so on. Perhaps, David, WHAT you say is not AS important as the fact you are alive today to articulate your point and convert a policy maker or two, for a day.

    Keep up the good work!

    • “Keep in mind that propaganda and talking points are very well funded by oligarchs on BOTH side of the current political spectrum.”
      No. The rich, by definition, have more money… and more and more, year by year.

      • Dave Eave

        And they are at the top of both ( if you believe them to be separate) political parties. The Soros’ and Buffet’s of the world are still pulling for their exemptions from the policies they are pushing.

        Buffet is fighting billions in taxes the IRS says he owes. If you can rationalize that with the tripe above, go right ahead.

  4. You have a lively mind and ask many cool questions, Nicole. But you miss the whole point.

    When an attractor state as strong as oligarchy has dominated 99% of human societies AND that state has always led to decreases in competitive enterprise of the health of freedom and markets…

    …AND I’ve shown that every generation of smart American leaders instituted deliberate and careful programs to prevent oligarchy from doing the same thing here that it did in France and 99% of societies for 6000 years…

    …AND oligarchy is inarguably coing back in America…

    does that not suggest that smart American leaders ought to institute deliberate and careful programs to prevent oligarchy from doing the same thing here that it did in France and 99% of societies for 6000 years?


    • Dave Eave

      But the parroted talking points happen on both sides of the equation. Their are demagogues and oligarchs owning both sides of the conversation.

      To pretend that one side or the other (R or D) is on the side of the people is just madness.

  5. David! As a Gen Xer I think you hit the nail on the head. Logic doesn’t seem to be making a dent today though. I think if more people applied it to their situation instead of buying the propaganda the diamond would take shape again. Thanks for the article and I’ll be sure to spread it as best I can to get the word out!

  6. Terry Phipps

    Seriously? Ever heard of the two “great” socialists Hitler and Stalin? Germany and Russia? 1930’s to 1990″s? Anything?

  7. Terry Phipps

    Pol Pot’s agrarian society and killing fields? Mao’s Cultural Revolution and “re-education camps”? Most of the 20th Century? Ring a bell? It wasn’t that long ago. Also, I can’t recall any of the great Class Warfare struggles of the Bible you talk about. But do not worry, I’m sure most of your readers have not read it.

    • Terry, you seem not to have read Brin’s post?

    • NorCal!!!

      Obviously you have no logical background knowledge of biblical studies or life in general. Ever hear of the class struggles regarding the status of women in the bible? Gentiles? When God instructed Samuel, who later instructed Saul to commit genocide against another people group? Or maybe you just selectively incorporated these things out of your absurd analogy. Anyone can throw around ridiculous right wing ideology and facts. However, time and time again shows what a mockery of intelligence those various ideologies and skewed facts contain. A nice little saying “Figures don’t lie, but liars and figure”

  8. I get the sense that Terry Phipps just skimmed David’s article, at best. Indignation seems to have trumped analysis.

  9. As someone living in a former nominally marxist/socialist country ( I would rather classify it as as terribly inefficient authoritarian state capitalism) and totally opposed to marxism I would say that the way things look like to me is that (regarding the never-ending crisis cycles and the growth of oligarchies and monopolies) this is what Marx predicted. The period of growth and happiness (diamond shape) was exception, not the rule. The rule is what is happening right now (the pyramid).
    But at the same time I feel that the chaos which is an inherently part of capitalism is the one strain which keeps it on it’s toes and balancing with many problems we face today. Will this be enough in the near future? I don’t think so. I think we will have a societal tsunami (or a perfect storm) coming ahead in the future on the global level. Last event of such magnitude has caused the ww2 and cold war.

  10. You are using the en dash (a dash the width of the letter ‘n’), which looks like this – , incorrectly. In typography, the en dash is used for showing a span of time, like this: 11 June 2001 – 12 June 2001, being the span of one day. There is a stylistic option of whether or not to add a space before or after the en dash in this appropriate use, in which case either choice is acceptable depending on how the designer (or writer in many cases) wants his/her copy to look.

    The correct mark to make for your particular kind of use is the em dash (similar looking to the en dash, but the width of a standard letter ‘m’), which looks like this—and isn’t every given spaces before and after. Usually, it’s used only when, for example, a sentence has a large number, or, in some cases, ridiculous amounts, of commas—such as this sentence you just read, which, believe it or not, is technically still grammatically correct.

    The ordinary hyphen is only used to link words which are normally separate, or to break words at the end of a line. Words to link with a hyphen would be double adjectives like blue-green or a word with two or more different parts like family-friendly.

    Thanks for the article, and I hope this info helps your writing and the visual quality of your copy!

  11. Dave Eave

    The ultimate problem is, the “levellers” have already gone to work supplanting the initial phase ( get the money) with the marching orders “Not to waste a good crisis”.

    There is no doubt government needs to step in a some point, but the money in question has already been spent under the guise of green energy and social projects ( not to mention grand social and resource engineering projects disguised as war) that neither side seems to be against ( in voice perhaps, but certainly not the vote). Bankruptcy after bankruptcy has revealed these to not be good investments but kickbacks.

    The grand social order has been obfuscated, not just by the robber-baron patrons of the favorite propaganda target but by the dis-proportioned beneficiaries of any mandated social construct.

    The Tartans of Telepromters exist defending every social program that have far outlived their usefulness. You can just as easily say the inequalities are a direct result of the Government meddling, as the scope-creep of FDR never stopped.

    The illusion of the 1% is simply that pie of printed money or “Wealth” is controlled by institutions protected by, but not regulated by, the Government. The “leveling” argument is only valid if there is a benevolent dictator in charge. Both sides (R and D) have redistributed the wealth back up. (The free-market solved the irresponsible business practice problem) Both hand out exemptions and kickbacks to subvert the order that was in place. Spending has exceeding any kind of taxation solution.

    To defend Buffet in his twist of fact is to lend credence to the Paul Krugmans of the world. Who continue to push this Fiscal Heresy as necessity. FDR only ended the depression if you ignore the effects of the War on commerce and fiscal polices. Revenues went up under the 00’s tax cuts, look at the disproportionate spending that continues to out pace any increases ( even last year).

    Your argument for a positive sum game, also has as Zero-sum assumption that ignores a great part of conservative truths.

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