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Tuesday, March 31, 2015

The Achilles Heel of Conservative Economics Is Interdependencies

I believe that it was the last presidential election when the Republican answer to an alleged faux-pas made by Obama when he claimed that the government deserves credit for the internet and other American accomplishments: 'We built that.' The 'that' in the statement referred to the businesses and accomplishments made by many business owners such as the internet. And the issue raised by the statement is this: What right does the government have in interfering with a business owner's private property? This interfering with private property involves government's taxes and regulations on private property. We should note here that property refers to more than just land, it refers to all of the wealth a business owner has accumulated through his/her business or other endeavors.

Note that America's Constitution was written because of a then perceived threat on private property--that is the private property of the wealthy only. The threat then was being posed by other individuals, not the government. Note the following from Henry Knox's letter to George Washington (click here):
Men at a distance, who have admired our systems of government, unfounded in nature, are apt to accuse the rulers, and say that taxes have been assessed coo high and collected coo rigidly…The people who are the insurgents have never paid any, or but very little taxes—But they see the weakness of government; They feel at once their own poverty, compared with the opulent, and their own force, and they are determined to make use of the latter, in order to remedy the former. Their creed is "That the property of the United States has been protected from the confiscations of Britain by the joint exertions of all, and therefore ought to be the common property of all. And he that attempts opposition to this creed is an enemy to equity and justice, and ought to be swept off the face of the earth." In a word they are determined to annihilate all debts public and private and have agrarian Laws which are easily effected by the means of unfunded paper money which shall be a tender in all cases whatever.

We can also read the immediate concern expressed in Federalist 10 (click here):
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.

Similar concerns were also expressed in the Constitutional Debates (click here). We should first note Charles Pinckney's words:
We cannot pretend to rival the European nations in their grandeur or power; nor is the situation of any two nations so exactly alike as that the one can adopt the regulations or government of the other. If we have any distinctions thay may be divided into three classes. 
      1. Professional men.
                2. Commercial men.
 
               3. The landed interest.



The latter is the governing power of America, and the other two must ever be dependent on them-Will a national government suit them? No. The three orders have necessarily a mixed interest, and in that view, I repeat it again, the United States of America compose in fact but one order. The clergy and nobility of Great Britain can never be adopted by us. Our government must be made suitable to the people, and we are perhaps the only people in the world who ever had sense enough to appoint delegates to establish a general government. I believe that the propositions from Virginia, with some amendments, will satisfy the people. But a general government must not be made dependent on the State governments.

Note how Pinckney, who had a plantation and owned slaves, wanted both an enduring general government and a ruling class--the landed interest. Here, the distinction between what Europe had and what Pinckney wanted was that divisions in Europe were based on birth while in America, divisions would be based on economic class. BTW, the people whom Pinckney was referring to when he said 'government must be made suitable to the people' will be identified a little later.

Now it is time to read James Madison's concerns expressed on a different days during the debates:

The government we mean to erect is intended to last for ages. The landed interest, at present, is prevalent; but in process of time, when we approximate to the states and kingdoms of Europe; when the number of landholders shall be comparatively small, through the various means of trade and manufactures, will not the landed interest be overbalanced in future elections, and unless wisely provided against, what will become of your government? In England, at this day, if elections were open to all classes of people, the property of the landed proprietors would be insecure. An agrarian law would soon take place. If these observations be jsut, our government ought to secure the permanent interests of the country against innovation. Landholders ought to have a share in the government, to support these invaluable interests, and to balance and check the other. They ought to be so constituted as to protect the minority of the opulent against the majority. The senate, therefore, ought to be this body; and to answer these purposes, they ought to have permanency and stability. Various have been the propositions; but my opinion is, the longer they continue in office, the better will these views be answered.

Now we should note that the last two quotes were part of a debate so that other opinions were expressed. But the intended result of the Constitution was to strengthen the federal government by giving it a power of enforcement. And the purpose for strengthening the federal government was so that it could better respond to dissent and actions like Shays Rebellion. 

As for Madison's statements, note his fear of opening England's elections to 'all classes of people.'  Agrarian law was one of then current issues being advanced by those Americans who were resisting or rebelling against the status quo. Also note that Madison adds an additional layer of protection for Senators from public opinion. That layer consisted of the length of the term each senator should serve. The longer the term, the more immune the Senator would be from public opinion.

We should know a couple of other things about the Constitution. First, of the 55 delegates, 18 were land speculators or either owned or presided over slave plantations. Thirteen delegates obtained their wealth from business, merchant or shipping ventures. Eleven delegates dealt with securities. A large portion of the delegates possessed at least a significant amount of wealth. And there were only a few who were small farmers (click here).

We should note one other thing about the Constitution and those times: only white, male landowners could vote. These were the people to whom government had to be 'suitable' as Pinckney referred to them. It wasn't until 1850 that all could vote regardless of land ownership. But the all then refered to white males only (click here).

In addition, we have Shays Rebellion and the dissent that was expressed in most of the nation at that time. People were losing their farms due to the combination of hard economic times and taxation (click here). In addition there was the sentiment that the land should belong to all who participated in the Revolution. 

What is the point of all of this? The point is that our government was originally constructed to protect the property of the wealthy. But some fair-minded people would ask: Don't the rich have rights? They certainly do, but not at the expense of the rights of others. We might ask the Constitutional delegates who owned slaves this question: How much of their personal wealth morally belonged to them? We can find out how much of their wealth legally belonged to them. But that isn't the question. 

We should also ask the same question to those other delegates whose wealth might have been due in part to the exploitation of others. In fact, this is the question we must ask of all of ourselves. After all, how much of our own wealth morally belongs to us if when the money we save from paying "low" prices is because workers are being exploited. The plight of migrant farm workers immediately comes to mind here. If migrant farm workers are not being paid a fair wage, then how much of the money we saved in paying low prices morally belongs to us? And migrant workers are not the only ones being abused here. Many people working in the cities and suburbs are being paid such poverty wages that they must apply to government assistance programs in order to survive. And none of this includes the sweatshop and trafficked labor who produce many of the goods we consume.

But it isn't just those who are exploited by our financial transactions who might have a legitimate claim on our wealth. Doesn't the government provide a certain number of services, such as the police, judicial services, and the military, that protects us and our wealth? And don't those services cost money? So when corporations work so hard to avoid paying taxes for those services, aren't those same corporations vying for a free lunch at everybody else's  expense? So how much of each corporation's wealth morally belongs to that corporation?

In addition, when we think about the costs to society when some are able to hoard so much wealth, doesn't part of the wealth actually belong to other people as well? Here, we could consider how expensive it is to maintain a civil society. Doesn't such expenses have a claim on our wealth as well?

Finally, for us religious folks, doesn't God provide us with everything we have. And thus, when we see those in need, aren't we called to imitate what God has done for us by sharing with them? 

The combination of the Ayn Rand-libertarian thinking with being, as Martin Luther King Jr. called it, 'thing-oriented' is causing our society to implode--to King, being thing-oriented meant that we we care more for profits, gadgets, and property rights than for people. And perhaps some of those who have the most wealth would prefer that society implodes in order to, perhaps, lessen the outside demand made on their riches. And yet, all that was stated above confronts us with the fact that we have what we have because of interdependencies. We have what we have because of the contributions made by others. So the question becomes, will we moral-up to the legitimate claims which others have on our wealth? Or, are we too thing-oriented to share what we should?



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