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.
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.