Sunday, December 11, 2011

Yes, the Walmart Fortune Endangers Democracy

You’ve probably seen by now the report from the Center on Wage and Employment Dynamics, picked up by the Huffington Post, that the The Walmart Heirs Have The Same Net Worth As The Bottom 30 Percent Of Americans

LinkIt is good that such odious examples of wealth inequality reach a wide audience, but I really would like to see more of national discussion of just how dangerous such inequalities are to our republican form of self-governing democracy. People who gravitate to progressive blogs like this of course have an innate sense of how massive accumulations of wealth have been working to undermine and corrupt our political system: the widespread outrage over the Citizens United decision and the incessant (and well deserved) exposes of how the Koch brothers are funding wrong-wing political organizing including the Tea Party, are evidences of that.

But I want it made even more explicit and more clear that the conservative and wrong-wing defenses of these wealth and income inequalities are completely at odds with the thinking on political economy that created our country. This past year, I've concentrated much of my reading on the formative thinking that resulted in the American Revolution and the creation of the Constitution and federal government. What I have learned strengthened my belief that the conservative belief in "neo-liberal" a.k.a “free market” a.k.a shock doctrine economics is not just alien and un-American, but downright seditious.

In April 2006, Public Citizen and United for a Fair Economy released a report on how just 18 of the richest families in America, including the Kochs, the Waltons (WalMart), Dorrances (Campbell’s soup), and Mars (Mars candy), spent $490 million to secure passage of George W, Bush’s 2001 tax bill which reduced the estate tax and included the one-year repeal of the estate tax in 2010). Bush’s tax giveaway would save just these 18 families an $71.6 billion.

Conservatives, libertarians and Republicans today argue against higher taxes, and even for elimination of the estate tax, which anti-tax ideologue Grover Norquist cleverly rebranded as a “death tax.” But the thinking and arguments of such as Norquist are completely alien to the ideas that created America. In October 1787, Noah Webster – who two decades later would publish his famous dictionary – issued a pamphlet entitled, Examination of the Leading Principles of the Federal Constitution, which was probably the second most influential tract, after the Federalist Papers, arguing in favor of ratifying the Constitution.

Wherever we cast our eyes, we see this truth, that property is the basis of power; and this, being established as a cardinal point, directs us to the means of preserving our freedom. Make laws, irrevocable laws in every state, destroying and barring entailments; leave real estates to revolve from hand to hand, as time and accident may direct; and no family influence can be acquired and established for a series of generations--no man can obtain dominion over a large territory--the laborious and saving, who are generally the best citizens, will possess each his share of property and power, and thus the balance of wealth and power will continue where it is, in the body of the people.

A general and tolerably equal distribution of landed property is the whole basis of national freedom: The system of the great Montesquieu will ever be erroneous, till the words property or lands in fee simple are substituted for virtue, throughout his Spirit of Laws.

Virtue, patriotism, or love of country, never was and never will be, till mens' natures are changed, a fixed, permanent principle and support of government… An equality of property, with a necessity of alienation, constantly operating to destroy combinations of powerful families, is the very soul of a republic--While this continues, the people will inevitably possess both power and freedom; when this is lost, power departs, liberty expires, and a commonwealth will inevitably assume some other form.
Now, you may not know what primogeniture or entailments are, and you may thank Webster and the American legislators who heeded him for having excised from the corpus of our national jurisprudence and from our national experience these terribly oligarchical and aristocratical principles.

Less than two weeks after the Declaration of Independence, a General Convention of the Commonwealth (interesting term) of Pennsylvania began working on a new state constitution. Section 37 of that first state Constitution ordered that “The future legislature of this state shall regulate entails in such manner as to prevent perpetuities.”

In October 1776, Virginia burgess Thomas Jefferson stirred up quite a ruckus in that commonwealth when he sought to introduce a law that would forbid entails, and force estates to be broken up and given to all children of a deceased, not just the oldest male heir. Remember, at this time, the long-established custom was primogeniture, which of course was crucial in perpetuating the Crown and the aristocracy in England. So, the idea was quite revolutionary indeed.

While we’re on the subject of Thomas Jefferson, let me throw in some quotes from him when he was our third President, in which he argued that the rich ought to pay ALL the taxes. Using these quotes should help you make wrong-wingers’ head explode.
"The rich alone use imported articles, and on these alone the whole taxes of the General Government are levied. ... Our revenues liberated by the discharge of the public debt, and its surplus applied to canals, roads, schools, etc., the farmer will see his government supported, his children educated, and the face of his country made a paradise by the contributions of the rich alone, without his being called on to spend a cent from his earnings." --Thomas Jefferson to Thaddeus Kosciusko, 1811. ME 13:41
"The great mass of the articles on which impost is paid is foreign luxuries, purchased by those only who are rich enough to afford themselves the use of them. Their patriotism would certainly prefer its continuance and application to the great purposes of the public education, roads, rivers, canals, and such other objects of public improvement as it may be thought proper to add to the constitutional enumeration of federal powers." --Thomas Jefferson: 6th Annual Message, 1806. ME 3:423
"We are all the more reconciled to the tax on importations, because it falls exclusively on the rich, and with the equal partition of intestate's estates, constitutes the best agrarian law. In fact, the poor man in this country who uses nothing but what is made within his own farm or family, or within the United States, pays not a farthing of tax to the General Government, but on his salt; and should we go into that manufacture as we ought to do, he will pay not one cent." --Thomas Jefferson to Pierre Samuel Dupont de Nemours, 1811. ME 13:39
By 1791, all the states had laws that prohibited or strictly curtailed primogeniture and entails. Ominously, South Carolina was the last state to enact these statutes so important to the maintenance of republican self-government and democracy. I think it was no coincidence that the fight to expand suffrage beyond property owners gained strength and succeeded within a decade or two after these measures to break up hereditary fortunes. By 1822, only three states continued to restrict the vote only to property owners: North Carolina, Virginia, and Rhode Island.

Unfortunately, the great industrial boom after the Civil War (which – let me interject a personal pet theory of history here – occurred only because the national opposition to progressive projects like a continental railroad and the use of public lands to create and fund state university systems was removed, physically, with the conservatives of that time, the southern planter aristocracy, removing themselves and their representatives and Senators from our Congress during the Civil War) led to the creation of new, massive family fortunes that began to subvert and corrupt the American system of government. In the 1890s, in New York City, a young progressive journalist and historian, and member of the People's Party (commonly known as the "Populists"), named Gustavus Myers was studying the political powers that be, the New York City political machine known as Tammany Hall. Myers would go on to research and chronicle the rise of the richest families in America, because, as he wrote in the Preface to the 1936 edition of his History of the Great American Fortunes, his research on Tammany Hall uncovered “some documentary facts which severely shattered the inculcated conception that, with an exception here and there, the great private fortunes were unquestionably the result of thrift and sagacious ability.” In other words, America’s rich got rich not because they were brilliant businessmen, but because they, were, well, greedy and unprincipled SOBs able to pass on their ill-gotten riches to their spoiled brat kids.

Myers wrote his three-volume History of the Great American Fortunes in 1909 through 1910. In 1939, he published a book entitled The Ending of Hereditary American Fortunes. I find it especially interesting given our current debate over taxing the rich – and because this rich tradition, stretching back to the very first days of the republic – is apparently not known to progressivne and liberals today.
Hereditary transmission of wealth inflicts more injustices upon the community than inequality of opportunity. Removal of this is essential. But there are other consequential even if apparently intangible aspects. In a country which extended human rights to the point of abolishing all other kinds of inequality ordained by law appertaining to accident of birth, the passing on of great wealth to heirs is one extant survival. Wealth thus has a special and sacred power founded neither upon reason nor right, but wholly upon the artificial mandate of law.

The man or woman who has spent a lifetime cultivating skill, knowledge and character or acquiring prestige can not transmit these attainments to children, who must, if they be so inclined, laboriously reap them for themselves. In these precious respects nothing whatever is guaranteed to the offspring, unless it is the parental pattern. But no matter how ignobly obtained, whatever the puerile, trifling and parasitical careers of those, or many, who inherit it, wealth goes on from heir to heir in certainty of succession. They have neither striven nor earned, yet they are endowed with material abundance, and are spared the care which racks so many of their fellow beings in the strenuous effort to get a mere livelihood.

Furthermore, great hereditary wealth is a license to social irresponsibility. All others must regulate their lives as responsible members of the community, with definite duties to be performed and obligations in common to be met. But very rich inheritors are held by no limitations. Their wealth allows them the privileged latitude to do as they please and they usually do it to excess. Not only in addiction to vagaries and self-indulgence but all too often in affront of manners and wantonness of conduct. If, let us say, there are those among the non-rich who by nature may be disposed to arrogance, it is tempered, perhaps corrected, by the circumstances of their life and the force of surroundings. But what are the constraints upon the possessors of wealth ? They know none and acknowledge none. Wealth is their passport to arrogance and snobbishness, and if the way of expressing these varies from the open and crude to the invidious these manifestations are in obnoxious evidence, nevertheless.

Here and there, the claim may be made, are those among the extremely rich some who do recognize a sense of social responsibility and seek to conform thereto. Yet in no degree is this entailed upon them as a necessity or duty. It is purely an arbitrary choice or concession, and the same wealth which afforded them an opportunity to exhibit it gives them the equal power of turning about and, should they choose, becoming votaries of complete irresponsibility. We recently were confronted with a noteworthy case of how vicarious social responsibility can be made. Announcing that it was making a great innovation in the line of service to the public, one of the largest corporations brought into its managerial fold an educator as an adviser on matters of social responsibility. Yet at that very time a principal adult heir to a great fortune flowing from that corporation was being exposed in the newspapers as a notorious and thoroughly irresponsible rounder who had no actuating idea except that of prodigal living.
Transcending equality of opportunity is the need of establishing that inherent equality of standing which is in nowise determined by gauge of wealth. This course is a requisite of the spirit of American life and the conclusion of a series of steps thus far taken in American progress. So long as caste of money, adventitiously perpetuated by heredity persists, the finale remains strangely incomplete. All other kinds of caste have been disposed of, but this has adhered, and if its resources have been weakened by taxation the malign workings are still in effectual execution.

And they are unmistakably malign. They subvert what should be the civilized and proper order of valuing those genuine human qualities which alone can give character. The inherent dignity and all of the other essentials which make real manhood and womanhood are obscured, perhaps depreciated. A premium is put upon the purely exterior thing of wealth. This and nothing but this demarcates its line of possessors from the rest of the community and allows them to thrust themselves into a special and dominating position. Not only in vested command of economic power, assured security, luxurious surroundings, and service of retinues to minister to their wants and moods ; as wealth descends from generation to generation an aura of high prestige is fabricated for the benefit of the lineage. The inheritors exalt themselves, or are exalted by a procession of subservient eulogists, into a rarefied zone of “distinguished families.”
Wrong-wingers and Republicans today argue that much of the “good works” in our society comes from the munificence of the rich (including the creation of jobs, which which I find most grating because it is the exact opposite of what national statistics show). Who will fund our municipal orchestras and endow our colleges, and build new, dreadfully ugly new buildings for our universities, if not the rich? I just love Myers’ reply:

The terrific inequalities arising from the aggrandizement of great wealth and from the arbitrary power to direct and bestow that wealth are noxiously antagonistic to the elemental principles of democracy.

And since when, forsooth, was democracy dependent upon the bounty of the rich for its advancement culturally or otherwise ? From the community came the sponsoring of the arts which attained so flourishing a state in the ancient democracies of Greece and Rome. And at a later time in Florence. When America was still largely wilderness, the settlers, from New England to South Carolina, were proclaiming education a public necessity and establishing schools. This aim was greatly enlarged after the Revolution. Democracy endowed itself with the equivalent of enormous funds for cultural needs. “Schools and the means of education shall be forever encouraged.” Thus resolved the Continental Congress, in 1783, and its ordinance of 1785, followed by another of 1789, perpetually reserved an area of public lands, ultimately reaching more than 116,000,000 acres, for the establishment and support of schools, colleges and universities. In addition to this great gift, States granted the net proceeds of lands owned by them for the same purpose. America’s vast educational system of today, defrayed at public expense, is democracy’s own creation and development.

And, at a time when libraries in Europe were collegiate or caste, it was American democracy which provided thousands of public libraries throughout a great extent of the country.2 Rich men who gave or bequeathed the sums for public libraries and other institutions were merely falling in line with the American democratic standards. That their object was to gain applause and enhancement of name, either in life or in posterity, or both, was fully recognized in critical magazine articles and other comments of the mid-nineteenth century.

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