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Wednesday, September 2, 2015

The industrialization of democracy

by John MacBeath Watkins

For most of human history, we have beer ruled by force, faith, and convention. Enlightenment thinkers thought they could do better, by coming up with a form of society that would be better suited to humanity. One might think that as our way of life has changed, our form of government would need to change, and it has.

At the time when Enlightenment thinkers were inventing liberalism, one of the few examples around of a democratic society was Switzerland.

The Swiss cantons were predominantly occupied by people who owned small farms. During the middle ages, they were famous for producing pikemen who could stand up well to cavalry. Jean-Jacques Rousseau, who was Swiss, considered the Swiss way of life ideal for democracy. There was an equality of means between the farmers, and the technology that they employed in warfare did not require the investment in armor that tended to result in rule by aristocracy elsewhere in Europe.

This is part of the reason the founders of the United States designed a democratic republic, rather than a direct democracy. The economy of the U.S. varied from Maine fishermen who caught lobster from a small boat to planters like George Washington and Thomas Jefferson, who owned large estates worked by slave labor. Everything they read from the great thinkers of their day and the ancient Greek philosophers said that a large and varied country needed to be guided by the wise men.

However, they chose to have those wise men selected by the voters. They left it up to the states to decide who could vote, and in the beginning it was mainly men with property. (Not women, and not men who were property.)

But our country has become more democratic over time. Where the constitution originally said that state legislatures would select U.S. senators, that system was found all to easy to corrupt. In 1899, William A. Clark simply paid Montana state senators to vote him into office as a U.S. senator. The senate refused to seat him after the scandal broke, This resulted in the 17th Amendment, which provided for direct election of U.S. senators.

In 1800, 83% of Americans were engaged in agriculture. Currently, about 2% of the American population are farm families. Capitalism, a term not invented until 1850, has transformed our way of life, yet we still manage under the same old constitution. How is this possible?

The answer is that we have marvelously flexible institutions which have managed to change as society changed.

Not everyone has been happy with that. Andrew Jackson, president from 1829 to 1837, was a great believer in democracy, and the extension of the voting franchise to the common man -- that is, all white men. He envisioned a country of yeoman farmers, provided with land by removing Indians and colonizing their land.

This went with a version of values favored by the physiocrats, claiming all real value came from working the land. He feared moneyed interests would undermine republican values. It's all too easy to connect the term "republican values" with the values of the Republican Party, but that's a very different thing.

Republican values, to a person of Jackson's day, were the values of a virtuous citizen. Such a citizen exemplified civic virtue and patriotism above greed and power. John Adams, the second American president, said the following in a 1776 letter to Mercy Warren:

"The Spirit of Commerce, Madam, which even insinuates itself into Families, and influences holy Matrimony, and thereby corrupts the morals of families as well as destroys their Happiness, it is much to be feared is incompatible with that purity of Heart and Greatness of soul which is necessary for an happy Republic."
Adams ended that letter with the following:

"Every man must seriously set himself to root out his Passions, Prejudices and Attachments, and to get the better of his private Interest. The only reputable Principle and Doctrine must be that all Things must give Way to the public."

Good luck with that, Mr. Adams.

Jackson worried so much about the monied interests that he took some steps, such as not renewing the charter for the Bank of the United States, and requiring that payments made for government land had to be made with silver or gold coins, and eliminating the U.S. government debt, that sent the nation into an economic crisis. We didn't have a proper central bank again until 1913, by which time it was evident that we needed some means of dealing with financial panics.

The fact is, our democratic republic has had to adapt to enormous changes in the way we live, and has also changed the way we think about ourselves. More and more people have had their humanity recognized, if you like, the ownership of their own souls and the equality of all people before the law in such areas as voting, holding property, and marriage.

Groups who once counted toward the distribution of power, but were not allowed to vote, have gained the ability to have a say in who governs them and how.

Representation had to become more democratic, because our ideas about humanity changed. When John Locke was writing, society in general accepted the notion that the head of the household should represent the household. Now our ideas are in accord with the reality that women have strong minds and strong opinions, and wish to speak for themselves. We stopped accepting slavery as an institution, because Locke's philosophy permeated our society with the notion that we each own ourselves.

We quite rightly worry that our current way of life leads to great inequality, but what could be more unequal than slavery? We have had undemocratic representation from the first. What we have now are huge differences in the wealth of voting members of society, and a far more urban way of life than the founders could have envisioned.

The urbanization of society tends to warp the issue of representation, because apportioning districts tends to favor rural populations. Those whose concerns are urban are, by the very nature of cities, concentrated in a smaller space than those with rural concerns.

Another issue is that the vision of a nation of yeoman farmers people like Andrew Jackson wanted is long gone. Most people work for wages, which goes against the old tradition of American individualism.

In the 19th Century, there were radical individualists who believed that working for wages was no better than slavery, and invented the term "wage slave" to make their point. This was the theory of liberty that C.B. McPherson called possessive individualism, the idea that liberty consists of freedom from dependence on the will of other people. We still hear echoes of this in, for example, former President George W. Bush's use of the term "ownership society."

Tom Palmer at the Cato Institute, and advocate of Bush's policies, put it this way:

As the American Founders knew and as generations of serious students of society have long known, an ownership society is a society of responsibility, liberty, and prosperity. A number of policy initiatives - including creation of personal retirement accounts, expansion of medical savings accounts, and school choice - have been proposed recently that seek to strengthen an “ownership society.” Such initiatives build on a long and deep tradition.
Port of what Palmer was referring to was Bush's poorly-received plan to remake Social Security. Social Security Insurance has always acted as insurance -- those who can work pay into the fund from which those who can no longer work are paid. Bush proposed to turn it into sort of a saving program, which would have meant that somehow, we would have to pay Social Security benefits for retirees while working people would be paying into retirement savings plans. As it happened, there already was a program for retirement savings plans called 401(K) accounts, and the plan was financially unworkable in any case.

Palmer attributed the "ownership society" tradition to the founders, but as we've seen from what John Adams wrote, some of them were big believers in personal sacrifice and public service. He was also a big advocate of strong central government. Adams even pushed through the Alien and Sedition Acts, a horrible law which, among other things, resulted in the arrest of 20 newspaper editors who opposed Adams. When Jefferson became president, he pardoned those serving time under the law and made sure their fines were repaid. The law is now considered unconstitutional.

The sort of possessive individualism that Palmer and Bush admired had more to do with the tradition of Adams' opponents, among them Thomas Jefferson. Jefferson, and later Andrew Jackson, advocated a different sort of country with the ownership of property the key to liberty.

This fit with the notion of manifest destiny, in that people could have land by homesteading the land formerly occupied by Indians.

There were a couple of problems with this. The Indians did not willingly give up their land, so the U.S. military had to take it from them by force. Homesteaders may have felt they were building a new life for themselves by the sweat of their brow, but the thing that made that possible was a major government initiative to conquer the land they homesteaded. And the logistics that made the settlement possible started with clipper ships and Conestoga wagons, but getting their crops and cattle to the cities of the East required the construction of railroads.

Some of the more important railways were built with government loans and on land grants given to them by state and federal governments. About 9.5 percent of all federal land was granted to the railroads between 1850 and 1870. The railroads then sold off much of the land to help defray the cost of building the railroads. Once the main lines were in, private capital built the rest of the railroads, so that only about 8% of American railroads were built with government loans and land grants -- but they tended to be the most important ones.

All this was in aid of a vision of America as a country of small farms. And it was such a country. It wasn't until about 1920 that more people lived in and around cities than lived in the countryside. Now, about 80% of American live in urban areas.

One major problem with the 19th century version of radical individualism was that most people working for wages don't feel they are slaves. People often quit their jobs if they don't like them. As a bookseller, some of my best and most loyal employees have been people I hired after they left their previous jobs in disgust. For an employer competing for smart, honest, hard-working people, treating people well turns out to be a competitive advantage.

The other problem with this idea is that it doesn't fit with capitalism. One of the distinguishing features of capitalism is that it produces large enterprises which invest funds in the means of production, and hire people to do the work. Jacksonian democracy would have seen this as inevitably undermining the virtues of the republic and its citizens.

One answer to that was to get the workers representation through organizing unions. And, when unions were strong, they produced a society with greater equality of incomes than America had before or since then.

Part of the reason this could happen was a moral climate that opposed an economic aristocracy. In a reaction to the inequality and abuse of workers seen in the Gilded Age, top tax rates were raised so that a tiny number of very rich people were subject to a 90% tax rate, and inheritance taxes aimed to make it harder for families to accumulate great wealth and power. It didn't take William Clark buying a seat in the U.S. Senate to convince people that wealth equaled power, there were plenty of other examples.

But since 1970, there has been a political movement to increase inequality.

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