American Revolutionaries were "ashamed of success"
Cross posted from Real Economics.
In response to President Obama’s rather inept explanation that nobody can build a successful business outside the supportive legal and physical environment created and funded by all the rest of us citizens of the republic, Mitt Romney declared that, “I’m convinced [the President] wants Americans to be ashamed of success.”
Well, that places Rmoney right in the very middle of a minefield full of historical pyrotechnics: from the beginning of our experiment in self-government, large accumulations of wealth have always attracted public suspicion, hostility, and censure. The issue is not really that someone is rich, but how they became rich.
In a 1973 book, The Foundations of American Economic Freedom: Government and Enterprise in the Age of Washington ( University of Minnesota Press), E.A.J. Johnson, explained that much of the Jeffersonian opposition to Hamilton’s proposals for encouraging and developing manufactures arose from fears that the new manufacturing interests that would be created would not be natural interests, but artificial and predatory ones. There was widespread fear that a new manufacturing interest, especially if it were organized as large corporations, would prove to be hostile and inimical to the interests of mechanics and craftsmen, and the republic in general. In his 1800 A Letter to the Citizens of Pennsylvania: On the Necessity of Promoting Agriculture, Manufactures, and the Useful Arts, George Logan, one of the first ten Senators to represent Pennsylvania, and founder of the Pennsylvania Society for the Promotion of Agriculture. warned of “a Manufacturing Capitalist [who will] fill his coffers by paring down the hard-earned wages of the laborious artists he employs.” If the union-busting and job outsourcing of the past few decades doesn’t reek of “paring down hard-earned wages,” I don’t know what does.
The concept of interests is one of the keys to understanding the political theorizing that created the Union. During America’s Revolutionary period, there were eight distinct interests that were recognized. Most importantly, five of these interests were seen to be “natural,” meaning that they were interests resulting from having a livelihood in a socially useful capacity. The five natural interests were: agriculture, commerce, manufacture, mechanic arts, and the professions.
For Jefferson and his followers, agriculture was the most important interest, because it was the purest and most virtuous. This idea was an echo of the political wisdom distilled from the history of the Roman republic, with Roman chroniclers such as Sallust, Plutarch and Cicero arguing that the enduring virtues of the Roman republic sprang from the private virtues of honesty, thrift, and hard work instilled in Roman farmers by a lifetime of honest tilling of the soil. "Cultivators of the earth are the most valuable citizens, Jefferson wrote to John Jay in 1785. “They are the most vigorous, the most independent, the most virtuous, and they are tied to their country and wedded to its liberty and interests by the most lasting bonds. As long, therefore, as they can find employment in this line, I would not convert them into mariners, artisans, or anything else." (Thomas Jefferson to John Jay, 1785. ME 5:94, Papers 8:426)
In opposition to the five natural interests were three interests viewed as “unnatural” and inherently venal, predatory, and corrupting. These were: financial, corporate, and foreign, the last being “a rather vague gather-all [which] reflected not only the age-old suspicion of aliens, but a particular hatred of British factors, merchants, and financiers.” (Johnson, page 45). In addition, political theorists sometimes referred to a “propertied interest” and a “consumers’ interest.” But these were not based on occupations, and it was recognized that these two interests necessarily overlapped entirely with the other interests.
Johnson explains that
“The democracy of American enterprise was much more than an experiment with Adam Smith’s “obvious and simple system of natural liberty”…. American economic liberalism in the 1790s represented an opposition to certain interests which not only were allegedly predatory and therefore unjust, but which also operated as restraining influences on the economic efficiency of the enterprise system. The blameworthy interests were both historical and emergent. Thus the British “landed interest” represented a historical exploitative agency as did the British factorage system. The “monied interest,” the “paper interest” or the “banking interest,” in contrast, represented new “factitious” interests; they were conceived to be recent perversions of an otherwise wholesome economic society. Democratic thought waged war, therefore, on two fronts: against the older propertied interests (which defended their privileges by a “political formula” which asserted that social stability required social stratification), and against the newer, “unnatural,” “factitious,” financial interests which threatened to create different forms of exploitation and to generate new forms of inefficiency within the enterprise system.” (pp 58-59)
The crucial question for the formation of the new government, then, was how to balance and blunt the competing claims of these various interests, especially the pernicious impact of the “unnatural” financial, corporate, and foreign interests. This is the basis of the most famous and celebrated of The Federalist Papers, Number 10, on factions, by James Madison:
But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination. A landed interest, a manufacturing interest, a mercantile interest, a moneyed interest, with many lesser interests, grow up of necessity in civilized nations, and divide them into different classes, actuated by different sentiments and views. The regulation of these various and interfering interests forms the principal task of modern legislation, and involves the spirit of party and faction in the necessary and ordinary operations of the government.
Especially important to note, as we consider the brash pronouncements of Rmoney, is that the effects of these “unnatural” interests were recognized as being not just economic and political, but cultural as well, directly impacting how the nature of the citizens would be shaped and molded. In his 1782 Notes on Virginia, Jefferson, fully invoking the idea that agriculturalists were the most virtuous and hence most valuable citizens, wrote:
Corruption of morals... is the mark set on those who, not looking up to heaven, to their own soil and industry, as does the husbandman, for their subsistence, depend for it on the casualties and caprice of customers. Dependence begets subservience and venality, suffocates the germ of virtue, and prepares fit tools for the designs of ambition. This, the natural progress and consequence of the arts, has sometimes, perhaps, been retarded by accidental circumstances; but generally speaking, the proportion which the aggregate of the other classes of citizens bears in any state to that of its husbandmen is the proportion of its unsound to its healthy parts, and is a good enough barometer whereby to measure its degree of corruption." --Thomas Jefferson: Notes on Virginia Q.XIX, 1782. ME 2:229
How ironic that wrong-wingers today have perverted Jefferson’s arguments to argue that it is “government handouts” that create a dependency of “subservience and venality” while ignoring entirely the corrupting influence of ill-begotten riches.
While opponents of Jefferson’s vision of a purely agrarian society and economy such as John Adams and Alexander Hamilton looked to the emergence of a politically powerful wealthy class, they at the same time warned against the calcification of this class into a new aristocratic ruling class. “Hence,” Johnson writes,
“although government should always protect and preserve property, it ought nevertheless temper the autocratic tendencies of the propertied classes.” Whenever government is weak, said the authors of The Federalist Number 62, the resulting economic and political instability will give an “unreasonable advantage” to “the sagacious, the enterprising, and the moneyed few” since “every new regulation … affecting the value of the different species of property, presents a new harvest to those who watch the change.” Thus, unless government referees a nation’s business, a state of things will emerge things in which it may be said with some truth that laws are made for the few, not for the many.”
Since every society is composed of interests, every government will constantly be under pressure to enact legislation advantageous to particular groups. If the general well-being of an entire nation is to be advanced, however, the government must be able to resist “the clamorous importunity of partial interests” and especially “the contemptible cunning of Financiers, who seldom possess any intention to promote the general welfare.” [George Logan, Five letters addressed to the yeomanry of the United States, p. 23] The object of all pressure groups is always the same: they are formed to bring about “a transfer of private or public property, or both, from individuals or nations, to orders, corporations, or to other individuals.” Because of the “depravity of human nature,” the love of money and property “possess[es] almost an unbounded influence over the human mind.” (p 61)
It was exactly accumulations of wealth - especially those acquired through “the contemptible cunning of Financiers” - that started republics down the road to ruin. In his 1969 book, The Creation of the American Republic 1776-1787, (University of North Carolina Press, Chapel Hill, NC) , Gordon S. Wood explains, that this problem of oligarchy, in “American thinking, transcended all particular trade or tax grievances: their very existence as a distinctive egalitarian people seemed at stake.” For years, resentment and distrust had grown over the increasingly aristocratic airs and tastes adopted by wealthy elites in the colonies, who were seen to be fawning sycophants of the crown, panting after royal offices, appointments, and preferments”.... It was this idea of a new oligarchy, arising in England on the basis of "unnatural" interests, and therefore corrupting and usurping the social compact of the unwritten English "constitution," that drove the American Revolutionaries to their break with England.
Wood quotes from some newspaper commentaries in 1775 and 1776:
These widely voiced fears for the fate of the English constitution… represented the rational and scientific conclusions of considered social analysis… When the American Whigs described the English nation and government as eaten away by “corruption,” they were in fact using a technical term of political science, rooted in the writings of classical antiquity, made famous by Machiavelli, developed by the classical republicans of seventeenth-century England, and carried into the eighteenth century by nearly everyone who laid claim to knowing anything about politics. And for England it was pervasive corruption, not only dissolving the original political principles by which the constitution was balanced, but, more alarming, sapping the very spirit of the people by which the constitution was ultimately sustained.…
“Empires,” declared one orator lecturing “On the Fall of Empires,” carry in them their own bane, and proceed, in fatal round, from virtuous industry and valour, to wealth and conquest,; next to luxury, then to foul corruption and bloated morals; and last of all, to sloth, anarchy, slavery, and political death.” History, as written by Sallust and Plutarch, only too grimly showed the fate of empires grown too fat with riches. While the Romans, for example, maintained their love of virtue, their simplicity of manners, their recognition of true merit, they raised their state to heights of glory. But they stretched their conquests too far and their Asiatic wars brought them luxuries they had never before known. “From a People accustomed to the Toils of War, and Agriculture, they became a People who no longer piqued themselves on any other Merit than a pretended fine Taste for all the Refinements of a voluptuous Life. They became obsessed with the “Grandeur and Magnificence in Buildings, of Sumptuousness and Delicacy in their Tables, of Richness and Pomp in their Dress, of Variety and Singularity in their Furniture.” That corruption “which always begins amongst the Rich and Great,” soon descended to the common people, leaving them “enfeebled and their souls depraved.” The gap between rich and poor widened and the society was torn by extortion and violence.” “It was no longer virtue that raised men up to the first employments of the state, but the chance of birth and the caprice of fortune.”
Hezekiah Niles, in his 1822 book, Principles and acts of the Revolution in America; or, An attempt to collect and preserve some of the speeches, orations, and proceedings, with sketches and remarks on men and things, and other fugitive or neglected pieces, belonging to the Revolutionary period in the United States, included an “Oration Delivered at Boston, March 5, 1779”, by William Tudor. A leading lawyer of Boston, Tudor joined Washington’s staff in Cambridge in 1775 and was appointed Judge Advocate of the Continental Army. He also served as Lieutenant-Colonel of Henley's Additional Continental Regiment, which was formed in January 1777 with volunteers from Massachusetts and New Hampshire. Tudor was speaking in Boston to mark the anniversary of the Boston Massacre. He does something Madison also does in the first point of section six of Madison's Notes on the Vices of the Political System of the United States - he assigns to accumulations of wealth the same dangerous antipathy to republicanism as a standing army:
Similar causes will forever operate like effects in the political moral and physical world those vices which ruined the illustrious republics of Greece and the mighty commonwealth of Rome and which are now ruining Great Britain so late the first kingdom of Europe must eventually overturn every state where their deleterious influence is suffered to prevail. Need I add that luxury, corruption, and standing armies are those destructive efficients?
Luxury, no sooner finds admittance into a state thin she becomes the parent of innumerable evils, public and domestic; her contagious influence is soon felt in society, and her baneful effects discovered by a general dissipation of manners, and a declension of private virtue, which begets effeminate habits, and by a natural gradation, a base pliability of spirit.
Luxury is ever the foe of independence, for at the same time that it creates artificial wants it precludes the means of satisfying them. It first makes men necessitous, and then dependent. It first unfits men for patriotic energies, and soon teaches them to consider public virtue as a public jest.
At such a period, corruption finds an easy access to men's hearts. To the promotion of interested Pursuits, and the gratification of voluptuous wishes, a ready sacrifice is made of the general good at the shrine of power. Then slumbers that virtuous jealousy of public men and public measures, which was wont to scrutinize not only actions but motives; then nods that active zeal, which, with eagle eye watched, and with nervous arm defended the constitution. Every day new inroads are made upon public liberty, while encroachments, like temptations, grow more frequent and more dangerous in proportion as the power of resistance decreases. Thus, before a nation is completely deprived of freedom, she must be fitted for slavery by her vices.
These ideas of different interests, and whether they are natural or predatory, continue to reverberate through American history, down to our day, however poorly reanimated they be in the debate now unfolding over Mitt Rmoney and how he made his fortune through the “the contemptible cunning of Financiers” at Bain. Being ashamed of success has a long and vital history in American political thought.
As Henry David Thoreau observed in Walden in 1854, “The luxury of one class is counterbalanced by the indigence of another.”