By William Neil
I now live in the heavily Republican area of the Western Maryland mountains, which are closer in the gritty facts of harsh economic life to West Virginia than to those of affluent Montgomery County, the “engine” of the Maryland economy, and where I used to live, but can no longer afford to.
Our region has been consumed over the past few months by the campaign to stop fracking, and I’ve been getting itchy to write about the broader context of the political economy in which it takes place. After all, Maryland’s new Governor, Republican Larry Hogan, successfully beat the much larger Democratic political machine by revving up the classic Republican Right ideology of Austerity, not much different than Reagan’s older rhetoric which captured the presidency in 1980: anti-regulatory, anti-tax, anti-government, pro-free markets. That formula, before it was called “Austerity,” was designed to deliver a permanent crisis in government by denying it revenue, thereby forcing cuts in spending in non-defense areas, because, let us not forget, this philosophy insists on balancing budgets no matter what the broader economic circumstances: financial panic, recession, depression, no matter, the Republican Right wants to dance on Keynes’ grave in a Dionysian attempt to create the conditions which will restore business “confidence.” This is one formula for “all seasons,” in other words, and one which has become the dominant economic ideology in much of the West. But if you understood the meaning of Thomas Piketty’s book, Capitalism in the 21st Century, you have to ask, how much more of the national wealth will businesses demand before they feel confident and deliver the goods: jobs for all? The American maldistribution of wealth now approaches that of the late 1920’s, just before the crash, and it was rising throughout the Gilded Age of the late 19th century, when it was bad enough. And since we are living in the second great age of Globalization, the first being 1870-1914, there is no guarantee that further gilding of CEO’s pay will produce the jobs, or if it does, they will be in our own nation.
There is a particularly German variety of Austerity, which dominates the economic views in the key financial institutions of the increasingly shaky European Union, and which has driven the citizens of Greece to the economic wall. Germany ideology presents a complication for American minds, doubtless, since isn’t this the same Germany of national healthcare, strong unions and environmental vision, supposedly a social democracy at odds with American’s vaunted “exceptionalism,” the one based on heroic individualism? Well, that’s a complex story for another day, but for now, please note that what happens between the Greeks and the Germans in the ongoing negotiations is being watched very carefully in Spain, and in Italy, since the Syriza party’s coming to power in Athens in 2015 represents the first successful left electoral challenge to Austerity, something the existing supposedly “leftist” socialist/social democratic parties in France, Spain and Great Britain haven’t been able to manage. The issues the Greeks in Athens are struggling with do have something in common with those in Annapolis, even though Greece is in the equivalent of the American Great Depression, but is being denied the tools that we ourselves used in the New Deal to help pull ourselves out: debt forgiveness and creative government job programs.
Did Maryland voters who elected Larry Hogan have this in mind when they supported him in November of 2014? He claims they did and he has a decent claim, based on the values he talked about in building his organization. If you listened to his speeches in the early going this year, all the classic tropes of the Republican Right and the Austerians were there, given added power, as always, by the legal requirement that the state’s budget must be balanced, with an additional fiscal vise being supplied by his party’s tax and fee rollback pledges. Greece is like an American state in its relation to the European Union: it doesn’t control its own currency, it must use the Euro and it already had a huge government deficit heading into the economic crisis caused by European bank lending to those terrible, lazy southern periphery countries, the PIGS (Portugal, Italy, Greece and Spain.)
There is a personal side to this for me, though, which makes the Athens story mesh more closely with the one in Annapolis: the chief Greek negotiator, economist Yanis Varoufakis, has published two powerful essays about democracy and economics at the American website run by Yves Smith, at Naked Capitalism, and I commented heavily upon the democracy/Internet focused essay, and it turns out that Varoufakis and I had been reading and thinking along similar lines without ever knowing it. (The links will be provided at the end of this introductory essay.) It turns out that American economist James Galbraith has also been working with Varoufakis in formulating a way out of the Austerity traps Greece is in, and he is one of the three authors who drew up an intellectual outline of solutions based in good part from the American New Deal, adjusted for the realities of the institutions of the contemporary European Union.
Now it just so happens that a Letter-the-Editor appeared in our regional newspaper, The Cumberland-Times News on April 7th which breathlessly, in about 300 words, described the distributionist evils of the big government sprung from Progressivism, the New Deal and LBJ’s War on Poverty. Those programs have illegal origins, the writer, Jim Hinebaugh of Maysville, West Virginia, says, because the American Constitution, properly understand, does not authorize any of these activities, which are essentially public charity undertaken with “other people’s money.” In contrast, the more modest view of the 19th century based on private property, was much more respectful “of the life, liberty or estate of another.”
What is most interesting to me about his letter is not only its attack on progressive economics, but his “strict constructionist” interpretation of our brief founding Constitution, which his very idealized version of the 19th century understood correctly , but which we on the left get so wrong. In responding, I could have chosen to focus on this Republican Right “originalist” Constitutional theme, but instead I chose to sketch a very different picture of life in 19th century American, to illustrate how a larger governmental response grew logically out of a response to repeated disturbances. This is a century I have been increasingly reading and thinking about precisely because it is the Heavenly City of today’s Republican Right and if they ever get us there it’s going to turn out to be the same destination as the one in Nathaniel Hawthorne’s cautionary 1843 tale of illusionary, technology driven material progress (the impacts of railroads especially), portrayed in the short story, The Celestial Railroad. With just a little stretch, environmentalists can insert global warming into Hawthorne’s warning, driven by now worldwide visions of “middle class life” coming at an ecologically catastrophic cost, in Hawthorne’s terms, a worldwide Vanity Fair of pretense with terrible secular consequences.
And so that is how I came to write the rebuttal Letter-to-the-Editor which appeared in the lead “guest” slot this past Sunday (April 12th). I’m giving you, at the end of this essay, the full version I originally submitted, some 1500 words, which was edited down by me at the suggestion of the paper’s editors. You’ll also get the full letter by Mr. Hinebaugh, so you can appreciate where the Right is coming from in his own words. And as a check on my “translation.”
I want to use these conservative assertions about the 19th century’s virtues and my objections to it to help create the context, the intellectual and policy background, for the coming American Presidential race in 2016. That’s an election, where, just to be clear, I’m not happy about the choices I seem to be facing, their “inevitability” in one case, and their uniform location on the Right in the other. To paint that canvas, I need a little more space than that allotted in “Letters-to-the Editor” formats. So bear with me.
There is a great dichotomy building in American life today, and it grows from the deepest assumptions about the role of government in American economic life. You can see the outlines in the exchange I had with Mr. Hinebaugh. The heart of it is this: a minimalist national government will be straightjacketed by a “literal” reading of the original constitution, and we will all be subjected to the waves of creative destructions unleashed by the constantly churning private sector, whose power will be presented as omnipotent. A longer version of this schizophrenic “dream” reads like this: the Republican Right wants to return us, via their strict constructionist view of the Founder’s intent in writing the Constitution, to the same weak federal state that they say characterized the great 19th century, a century when we didn’t have a regulatory state, environmentalists, powerful labor unions or consumer movements, or a vast printing press at the Federal Reserve. With these countervailing powers out of the way, and taxes reduced by the ever shrinking government, the average citizen will have to face the awesome power of modern capitalism alone. Apparently the expectation is that each citizen will be as strong and resourceful as James Fenimore Cooper’s Deerslayer, and as morally upright. But instead of shooting deer at incredible distances and rescuing Indian captured maidens, we will all be founding small businesses – nearly as heroic an act. The fact that Mr. Hinebaugh totally ignores the vast concentration of private power, national wealth and income that had been accumulated by the Robber Barons and their trusts by the late 19th is an astonishing feature of his assertions. It is as if no abuse ever came out of this system of private property which is the foundation underneath capitalism, the real name of our economic system. Lord Acton’s assertion that “power tends to corrupt, and absolute power corrupts absolutely” I have always taken to be a human universal, applying wherever too much power is accumulated, and I still do. (Feminists might ask why I left out the next sentence from him: “Great men are almost always bad men.” It’s because it’s less convincing than the first two, and I wonder if they would think it would apply to great females. Are we about to find out?)
This growing dichotomy leads me to ask what then will balance the power equation in America between the Right’s worship of private economic power, nicely summarized by the commandment that “only the private sector can create jobs,” and the weak federal government they want to return us to? Did Madison, the famous designer of our checks and balances, ever envision his fractious private interests all uniting behind one anti-government, anti-regulatory, anti-tax ideology, small businesses and large? I don’t believe he ever envisioned anything like that. Apparently the Right sees no “moral chaos” emanating from the private sector, whose vast powers to transform all aspects of tradition and culture was seen very clearly by Marx even by the mid-nineteenth century, by a Marx who applauded the material and technological progress it was bringing, its modernizing thrust, but who had no illusions about the price being paid in human and economic disruptions, especially for workers. In more modern historical terms, the auto, the pill and the credit card all came out of the private economy, yet surely the Right must have greater reservations than the left about their moral and cultural implications. By the mid-1970’s, even the Rock of Ages, the Catholic Church, had been deeply shaken by the “Cultural Contradictions of Capitalism,” the name of a seminal book written by the social democrat Daniel Bell in the 1970’s.
Although it is never presented this way in public discourse, the rise of the infamous black urban ghetto came not out of liberal government policy, but from private sector technological change, directly out of the mechanization of agriculture in the South, especially in the 1940’s. Blacks left that region by the millions, as had many white tenant farmers, headed for the urban jobs created by two world wars. But Northern and Mid-Western cities were scarcely prepared to meet the rural culture blacks brought with them, with their the long training in the economic futility and hopelessness that came from tenant farming and share-cropping, preceded by the history of slavery and Reconstruction. All we hear about are the black poor’s bad cultural habits, not the impact of capitalism’s “creative destruction and technological change” upon them. And isn’t it remarkable how much the American conservative calumny that is still directed against urban blacks (just look at the comment sections under articles about Detroit’s bankruptcy to get a reminder) resembles the insults hurled by Germans today against the work habits of those awful Southern European periphery countries, the ones that the good northern banks had no trouble loaning money too, despite those traits surely having existed at loan time as well as today, and after the bank problems have been transferred to the public’s balance sheets.
I’ve learned, however that Lord Acton was not too troubled by the motto of the establishment in the 19th century, and of the Republican Right and too much of the Democratic Center today: “All Power to the Private Sector.” That’s because he was an outspoken Confederate sympathizer in the English political struggle over our American Civil War; he saw the South’s secession as a check upon growing federal power, which, if it kept growing, would of course have made us a more powerful rival to England. That serves as a very interesting, ironical comment upon American politics today, with the Southernization of the Republican Party and its demonization of government, especially the federal government.
And notice who else was left out of Mr. Hinebaugh’s 19th century view: slaves were not full human beings, they were property in the 1787 view; women were not equal citizens legally and could not vote, and as to the country’s original inhabitants, well, Andrew Jackson had a plan for them: first all-out war and then forced migration to alien habitats after treaty after treaty was broken. After all, they didn’t believe in our concept of “private property” did they? But if the Constitution is short and to be taken literally, and absolutely as the last word, incapable of supporting substantial re-interpretations over time, how would black people and women have come to an improved standing in 20th century society? Indeed, how would the Constitution adapt to all the changes the transforming private sector would be delivering, not the least of which, out of the gate of the early 19th century, had the industrial system eliminating independent, skilled craftsmen in favor of simplified assembly line procedures, changes which provoked the first attempts at organizing unions in Philadelphia?
Lincoln himself, the formulator of the essence of the American Dream, couldn’t see the full power or dangers of this great dichotomy from his historical vantage point. Richard Hofstadter, the late great historian, wrote one of the most profound essays about Lincoln in 1948, and about our self-illusions on the economy, when he said Lincoln failed to realize that the small farmer and business dominated economy of his childhood, the early decades of the 19th century, would turn, by the logic of capitalism’s dynamics, into the predatory era of giant trusts of the late 19th century, with democracy itself threatened by the power their private interests wielded in buying influence in capitol hallways. And the party he built would be their home base. It was the industrial magnates themselves who also advertised in the peasant villages of Eastern Europe to recruit the cheap and desperate labor forces they needed, then complained about their political passions, union sympathies and threats to “democracy” itself. The “best men” of means in the late 19th century were deeply ambivalent about allowing them into the voting franchise, because the panics, recessions and depressions of their own system were making them very worried that an awakened American democracy might spell a limitation on their own power, and lead to future government interventions into the economy, the greatest economic “crime” of the laissez faire era. They needn’t have worried so much, because at the point of maximum strain in the system, in 1896, the largely Catholic ethnic urban industrial workers voted with management’s candidate, as they had been urged to do, and not with the white Protestant agrarian rebels in the South and West who went with Bryan.
Ironically, and despite the relative weakness of the American federal government in the antebellum society of Lincoln’s rise, the private corporation was often a limited, specific mission legal creation of state legislatures, and was not a citizen. It was sometimes joined by government in funding and carrying out that mission, and remember this well, that was the public’s purpose in authorizing them. And lo and behold, after all the bustling, earnest striving of the farmers and small businesses, they still found their products trapped by the limited scope of local markets, and so we then had the first calls for a supporting infrastructure, one of bridges, canals and even the first national road, through Western Maryland, now Route 40, begun in 1811, one in which black slaves worked in the taverns and hotels that sprung up to support the travelers and goods heading West out of Cumberland, Maryland. So even then, a capitalism which must have larger and larger markets, today’s global ones, demanded the infrastructure to move the people and the goods, and needed a large legal infrastructure to police and enforce the growing number of private contracts.
I can’t think of a better antidote to the ideas expressed by Mr. Hinebaugh than the magisterial book written by Karl Polanyi in 1944, The Great Transformation: The Political and Economic Origins of Our Time, the very same year that Friedrich Hayek’s Road to Serfdom appeared, which has been the far more famous book, especially on the Right. Citations of Polanyi’s work are growing, however, because it is about the deliberate construction of the world’s first fully blown market economy, that of Great Britain in the first three decades of the 19th century, the seed bed of “classical economics,” where land, money and most importantly, human labor had been fully commoditized, and markets, Polanyi says, for the first time in human history, had been consciously disembodied from the older values and institutions of society itself. Over the previous three centuries English agricultural workers had been subject to many transformations as the enclosure movement turned the shared common land over to innovation minded private estate owners. The process only intensified in the first decades of the 19th century. English governments passed laws which forced the rural peasantry off the lands entirely and off of parish support rolls as well, and into the all too ready Satanic Mills of the English Midlands, where they had to work for next to nothing or starve, ostensibly free men and women who not only lived at the edge of subsistence, but also lost any semblance of their old skills and semi-independent life as rural workers. In other words, they had lost their pride and sense of social place.
Polanyi should be credited for at least four powerful insights. First, he emphasized how much governmental work had to go into creating the markets in the first place, on top of the already significant effort that had gone into creating the legal mechanisms to enforce private property. Turning land, labor and money into pure commodities meant, socially and morally, undoing, century by century, the old Catholic feudal order, where these factors were valued very differently, and then also undoing the state’s powerful role in mercantilism which followed the feudal system, a role which sought to limit the social disruptions which came from technological and economic change, and the growing entrepreneurial spirit.
Then came that final push, the great undoing of public welfare laws in England, the ancient parish support system, which included public jobs in troubled economic times and made sure payments could decently feed families. By revising the law to limit payments to the bare subsistence level, or worse, Poor Law reforms legally cemented the basic Malthusian outlook which the private sector has ever since, especially in the US, used to make sure that no government assistance, or scale of private charity, undermines the “work incentive” to take whatever the private market offers, no matter how little or degrading. Bill Clinton might not have thought of his welfare reform as having a direct link to the most infamous decades in economic history, or being closer in spirit to the Satanic Mills of the Midlands than the human needs of late 20th century American citizens, but that’s one good reason why we ought to read Polanyi’s book, and then consider Fred Block’s and Margaret Somers’ 2014 follow-up, The Power of Market Fundamentalism: Karl Polanyi’s Critique, which goes into great detail in explaining the changes in “poor law” relief, then and now. Americans may disdain the past, but they rarely fully escape its haunting legacies.
Now comes one of the truly most powerful and original thoughts ever expressed about markets and classical economics. Polanyi asserts, and I have quoted it in my full Letter-to-the-Editor below, which did not make it into the shortened published version, that no one in society could live for long with the “stark Utopia” that the Great Transformation had wrought. The factory system was barely up and fully running when outraged citizens began demanding Parliamentary investigations into the working conditions for the women and children who had been forced into the system to make ends meets, to avoid family starvation. And Parliament responded with famous investigations and the beginnings of child labor laws and regulation of hours. Better wages would come much later. And so began what Polanyi calls the “double movement,” with labor and business each demanding their own survival systems from the stark cruelties of these markets which had been set off and apart from all previous societal arrangements about the economy. It turns out that no one could live with the world the classical economists had envisioned and then enacted. It was too brutal.
And neither could Nature. Polanyi perhaps earlier than anyone else understood that, and perhaps his bold and dramatic declaration that the allegedly self-regulating market would also destroy the natural systems which support human civilization came from his deep insights into the early industrial system which first emerged in the English Midlands. Perhaps he saw more clearly than others by 1944 that what was first expressed as the power of coal and steam and chimneys belching smoke would so grow in destructive potential that it could eventually destroy nature itself, or alter it so much that humans could no longer utilize it, even for their own survival.
I’ll close with Polanyi’s description of the “pillars” of 19th century civilization. It rested upon the liberal state (and you can almost always substitute today’s word “conservative” for the meaning of “liberal” in the 19th century), the self-regulating market, and its two international mainsprings, the balance of power system and the gold standard, the latter emerging out of the search for commercial security, so that free trade could take place without the traders being burned by the different nation’s currencies – and their potential debasements. Polanyi asserts that the “long” 19th century did not end until the crisis of the 1930’s when key nations like Britain and the US had to leave the gold standard as a matter of economic survival. The gold standard functioned as the physical enforcer (in addition to the guns of the British navy) of a nation’s international balance of payments as well as domestically balanced budgets because if either standard was violated, or a negative trend spotted, traders and investors could demand payment in gold, and it’s migration out would send the offending nation’s economy into a recession -or worse. The conservative obsession with balanced budgets carries on until this very day, throughout the West, and anyone who follows finance knows that the relationship of “gold bugs” to conservative economics, to Austerity economics, is a very close one. So I see the present day Republican Right’s theology on balanced budgets and federal debt as having its origin in this 19th century gold standard. Polanyi puts it this way: “Belief in the gold standard was the faith of the age…Where Ricardo and Marx were at one, the nineteenth century knew not doubt. Bismarck and Lassalle, John Stuart Mill and Henry George, Philip Snowden and Calvin Coolidge, Mises and Trotsky equally accepted the faith.” It was a faith full of looming tragedy, because those nations which clung to it in the late 1920’s and through the Depression fared much worse than those which abandoned it, groping towards Keynes’ insights, even though his theories were not clearly grasped, in Britain or the United States, even by FDR himself, who was still haunted by the tradition of balancing budgets, just less so than Hoover.
To bring this line of reasoning closer to home, and to the views of Jim Hinebaugh whom I am answering, consider the wonderful account by one of our preeminent historians of the New Deal, William E. Leuchtenbrug, of the meeting between Herbert Hoover and incoming President Franklin D. Roosevelt, which took place on November 22, 1932. What did Hoover want? He wanted to lock Roosevelt into staying on the gold standard, and also to get the British to return to the one that they had already left. FDR did not like this attempt to lasso him before he took his oath. But Hoover went even further in a ten page “hand-written letter” he sent to Roosevelt on February 17, still before the March Inauguration of those days. “The brassy document concluded by asking Roosevelt to restore confidence through a series of statements: that ‘there will be no tampering or inflation of the currency; that the budget will be unquestionably balanced, even if further taxation is necessary; that the government credit will be maintained by refusal to exhaust it in the issue of securities.’” (From the Herbert Hoover biography in the American Presidents Series, 2009).
I hope that by now my readers can begin to understand the broader causes of the Republican Right’s desire to rebuild their Heavenly City somewhere in the 19century, which might include, as Hoover has just demonstrated, the late 1920’s and early 1930’s. What enthralls them in their nostalgia is the absence of most of the institutions of a reforming progressive state, and powerful dissenting blocks in civil society that don’t worship markets with their own near religious enthusiasm. Of course, conservatives are attracted by the high growth rates of the U.S. economy in that century, the fact that our nation rose to be the world’s greatest economic power, pulling ahead of Great Britain and Germany in key categories of industrial production by the early 20th century. No one disputes those growth rates or the achievements, but we have to keep in mind that given the United States’ weak neighbors, entrepreneurial origins, abundant natural resources, we were the poster child for the rapid growth rates that many emerging market nations would demonstrate later in the 20th century: Brazil, China, India...and that Argentina had between 1880 and 1920. But the costs were very high in income and wealth inequality, for democracy itself, and the actual physical processes at the work places exacted a terrible death toll: historian Eric Foner say “between 1880 and 1900, an average of 35,000 workers perished each year in factory and mine accidents, the highest rate in the industrial world.”
Perhaps these are the reasons why Polanyi has been so long ignored. As ignored as The Second Bill of Rights: FDR’s Unfinished Revolution and Why We Need It More Than Ever, the full title of a book written by legal scholar, civil servant and prolific author Cass Sunstein, written even before our great financial crisis, and which appeared in 2004. The book is important for our dilemmas today, in facing the Republican Right on the proper economic “high ground,” and also for understanding the very different answer progressives should be delivering to the legal straightjackets that the Right’s Constitutional understandings want to tie us up in. FDR’s answer grew out of his understanding of the causes of the 1929 stock market crash, the Great Depression and his Four Freedoms speech from 1941, and from the nature of the dangers that Fascism posed with its terrible solutions to the economic cauldron of the 1930’s.
FDR’s Second Bill of Rights was delivered in his last State of the Union speech to Congress and the American people, a vision and a true farewell the finality of which FDR could perhaps not appreciate, but maybe he had a sense of his impending death the very next year.
There are eight rights listed in FDR enumeration of the Second Bill, and the very first one is the right to a job. Sunstein’s background review of how FDR thought over time, how he got to this formulation, which was intended not as a series of Constitutional Amendments to be formally adopted by the long process we know so well, but a matter of foundational understandings, like those in the Declaration of Independence, which is not legally a part of law or the Constitution, but is perhaps just as important for our nation’s understanding of itself and its values. I can’t overstate how important I think Roosevelt’s framing of his values are to answering the Right today, addressing head on the Right’s seizure of the words Liberty and Freedom, which have come to mean largely the freedom of entrepreneurs, not workers in their workplaces or voters given ballot choices that don’t reflect their views – and won’t solve their economic problems.
Here’s what Sunstein says about how FDR got there. “It was freedom, not equality, that motivated the Second Bill of Rights. Roosevelt contended that people who live in ‘want’ are not free. And he believed that ‘want’ is not inevitable.” In his dramatic 1932 Democratic nominating convention speech, he asked “What do Americans ‘want more than anything else?...work with all the moral and spiritual values that go with it; and with work, a reasonable measure of security…Work and security – these are more than words.’”
Roosevelt went on in that Convention speech to put the 19th century’s understandings, its ironclad laws, on notice that he would not be bound by them: “‘economic laws – sacred, inviolable, unchangeable – cause panics which no one could prevent…We must lay hold of the fact that economic laws are not made by nature. They are made by human beings.’”
And so are Constitutions, even when framed by intellectual giants, remarkable for any age, like the men who supplied the ideas behind ours, in their remarkably brief document. The one before my eyes right now, at the end of my 1966 edition of The Oxford Companion to American History, runs only from Page 889 to 906, seventeen pages in all, including amendments. Yet its late 18th century wisdom, which drew so heavily on selected Roman experience, the long and neglected history of the Atlantic republican tradition in Renaissance Italy (Florence, Machiavelli and Venice: indebtedness to J.GA. Pocock here), filtered through the long English Civil War of the 17th century and the struggle between the Court and Country parties which followed, would have to cope with the rapidly changing world of evolutionary science, railroads, electricity, cars, planes, atomic bombs and space travel, genetic engineering and the spread of the Internet, and finally, the Panoptican nature of the surveillance state, public and private, which surely would trouble the Founders who did not like the much more direct search and seizure without warrants practices of the Crown, which now seem quaint. The more rigid the view of the “original,” the more imaginative must be the attempts to capture the “intent of the founders” in considering late 19th, 20th and early 21st century predicaments. Sunstein asks us whether this is what they intended, and offers instead an alternative view of the Constitution which he sketches out for us in a few scattered passages, mercifully presented in laymen terms. They offer a usable vocabulary for progressives to challenge what they see and hear from the Right about the Founder’s intent.
First, Sunstein asserts that “the meaning of the Constitution changes over time,” sometimes within the span of just decades, not centuries. For example, the view of slavery between Dred Scott in the 1850’s and the famous post civil war amendments, and then the contemporary application of those amendments to gender and sexual discrimination. This seems logical if we understand that “many of the key provisions of the Constitution are general and ambiguous.” Another example he gives, very relevant for the rise of corporate power and the influence of its money upon American government, is this: “In 1960, it was clear that the Constitution allowed government to regulate commercial speech, which was not protected by the free speech principle. By 2000, it was clear that the Constitution generally did not allow government to regulate commercial speech unless it was false or misleading.”
Have we really suffered through bouts of wild liberal judicial overreach, of legislating from the bench? Perhaps, but how could that happen, or be prevented, if it is true that “in our Constitutional tradition, the Constitution’s meaning is settled through case-by-case judgements, building through precedents in a way that allows evolution over time”?
If we step back and take a long historical overview of the relationship between social and economic changes in society and legal decisions, I think most reasonable people will conclude that interpretations of the Constitution do indeed change over time, and overall, there is a conservatively biased time lag between the courts view and these deeper changes as reflected in American politics. That conservative bias is most visible in the late 19th century interpretations of the law of contracts and the Commerce clause, which held out against the strong tide of the New Deal and the economic calamity of the Great Depression, and in today’s bias to favor private and corporate wealth in matters of not only contracts but in matters of “free speech” and election spending.
A wonderful work in the history of ideas, which appeared in 1998 and which gives detailed examples of how Constitutional meanings change, is historian Eric Foner’s The Story of American Freedom. It is doubly useful to progressives because the words “Freedom and Liberty” are keystone words wielded by the Right, used as if they had only one central meaning, and for one primary group, the right of entrepreneurs “to do what they will with their own” – and what they expansively claim is rightly “their own.” I know that phrase well, or its original brethren, because it was chiseled in bold words just below the exterior pediment of the grand entrance façade of the Kirby Hall of Civil Rights at Lafayette College. In its original biblical rendition, “Is it not lawful for me to do what I will with my own,” it served as stark reminder to the teachers and students within that servitude to economic power has many lives, and dies a very slow death in the United States. The power of that building, and the attempted message, were not lost on a young freshman student in 1968 as he pondered its words and the other messages implied in its architecture and interiors. It was constructed in 1929-1930 and donated by Fred Morgan Kirby, a co-founder of the F.W. Woolworth chain, and rumored to be the most expensive building in America of that day, per square foot, a monument to the late Fitzgerald-Gatsby era, and American entrepreneurship. I think this excellent short video, and its musical background, captures the power and intent of the donor very well here at https://www.youtube.com/watch?v=ByPW3AZ5jBU
Despite the persuasiveness of Sunstein’s arguments and his grounding in the historical record, the Right’s view of the Constitution seems to me to be winning in the broad “court” of public opinion. And what was strange about his otherwise very useful book, is that the Republican Right is only a shadow of its powerful self in the book, a ghost of movement, and so he understates the determination with which it has consciously worked toward the implementation of its constitutional interpretations. These interpretations take flight, and reach, high altitude from plain common sense and only amplify my worries about the great chasm growing between the vast powers of creative destruction wielded by the private sector – and the weak state conservatives envision as the unstated servant of that sector.
The train of logic contained in this essay brings me, naturally, I would like to believe, to the fate of democracy itself in an age of great and growing inequality: inequality of income, inequality of wealth, and inequality of influence over the “democratic” process itself. So I am going to leave you with some words of Yanis Varoufakis, the Greek economist and philosopher of democratic life whose head is on the chopping block, no place to hide, in the current negotiations with the Austerians of the European Union, especially the Germans. There is a lot at stake since the elected government whom Varoufakis represents is the first elected government of the European left to directly challenge the conservative economic ideas which have ruled us since the rise of Margaret Thatcher in the late 1970’s. Remember, the situation he and his fellow Greeks face is the same as that the American people faced in 1932 during the Great Depression, but the dominant ideas held by the governors of the European Union would insist that Greece cannot get out of its Depression with the tools that the American New Deal and FDR used – and the added chain around their ankles is that they cannot go off the contemporary equivalent of the “gold standard” as we did, and cannot issue their own currency. It may well be that they cannot get out of their predicament without leaving the European Union entirely, although that has not been Syriza’s platform or current intent. I don’t know what the outcome will be; I only know that the dilemmas the Greeks face are shared by Spain and Italy, and to an unrealized extent, the middle and working classes in the United States, because the tools that the Republican Right here finds acceptable in governing the economy – and too often the Democrats too – are the same hopelessly inadequate ones that the Greeks have demonstrated don’t work, which only plunge them further into economic servitude. So no wonder that their Greek negotiator had written the following in 2014 in an article at Naked Capitalism, which is much deeper than the title “Can the Internet Save Democracy?” would lead one to believe. Here’s a sample of his reasoning:
The hunch underpinning the paper is that, behind voter apathy and the low participation in politics, lays a powerful social force, buried deeply in the institutions of our liberal democracies and working inexorably toward undermining democratic politics…I believe that a fair reading of liberal Democracy’s history confirms this is so. That the devaluation of citizenship is an integral component of a ‘successful modern democracy, not a failure to be corrected by technical means…the ‘free world,’ a term we often use interchangeably with ‘Western liberal Democracies,’ is free only in a limited sense: Citizenship (including formal liberties) is distributed liberally to all citizens but its reach is confined to a small political sphere; a sphere which is increasingly losing out to a separate economic sphere where all the capacities to change people’s lives (for better or worse) congregate but where citizenship is irrelevant.
Here are the two links to the essays Varoufakis had published at Naked Capitalism in 2014, which make it more difficult to turn him into the demon that some of the financial press have made him out to be:
And so now my readers know a bit more about the Republican Right’s destination, of their Heavenly City located somewhere in the American 19th century. It may well be that if you are an entrepreneur, it will be the Empire of Liberty that was proclaimed for our young republic of those days. For the rest, for the majority living today, it will be truly an Empire of Economic Servitude where democracy’s very limited deliberations leave us, in all important matters, under the reign of Mr. Kirby’s chiseled proclamation: “Is it Not Lawful for Me to do What I will with my Own?”
Here is the April 7 the Letter of Jim Hinebaugh of Maysville, West Virginia, to the Cumberland-Times News, “Government’s role is to serve, not to create chaos” :
During the 19th century, most Americans took it for granted that the federal government has no constitutional authority to engage in public charity, (that is, to legislate forced transfers to help some individuals at the expense of others.)
It was generally understood that the powers of the federal government are delegated, enumerated, and therefore limited, and that there is no explicit authority for the welfare state. Now health and human services are the most significant cost to the taxpayer.
The “liberal transformation” of constitutional law began with the Progressive Era. Roosevelt’s New Deal, and President Johnson’s War on Poverty. They created new entitlements and enshrined welfare rights.
That transformation has come to mean freedom from responsibility and has created moral and social chaos.
For the modern liberal, justice refers to distributive justice or social justice. But “social justice” is a vague term, subject to all sorts of abuse if made the goal of public policy. As we can now see when the role of government is to do good with other people’s money, there is no end to the moral and social chaos government can cause. The internal moral compass that normally guides individual behavior no longer functions as the state undermines incentives for moral conduct and blurs the distinction between right and wrong. Additionally, right to welfare create a legal obligation to help others. In contrast, the right to property merely obligates individuals to refrain from taking what is not theirs namely, the life, liberty or estate of another.
We have forgotten that the government is supposed to be a servant; it cannot be its prerogative to determine what is right and what is wrong, and decide who is a patriot and who isn’t. Its function is to obey orders, not originate them.
And here is my original reply, only part of which was printed:
CRUCIFYING SOCIETY, AND NATURE, ON A 19TH CENTURY CROSS OF MARKET AUSTERITY
Jim Hinebaugh’s Letter to the Editor of April 7 ought to worry every high school and college history teacher in our region, and every citizen as well. It sets out a vast, distorted and simplistic equation that government today is bad, undermining the individual’s “moral compass,” and, by its pursuit of “distributive or social justice,” creating instead general moral and social chaos. Filling in the rest of the equation, it vastly idealizes the 19th century’s small government and entirely virtuous private sector. Given this allegedly “moral” equation, it must therefore demonize the Progressive Era, the New Deal and the 1960’s War on Poverty.
I write as a green New Deal social democrat, and my first response is to ask, “whose government is this?” that Mr.Hinebaugh hates so much, because I am as unwelcome in today’s Democratic Party as I am in the party of the Republican Right and Libertarians. I’ve been no fan of former Governor O’Malley (or of Bill Clinton) who gave the green light to fracking, which can’t be made safe by even the toughest of regulations. He also thinks families can survive at Maryland prices on $10.10 per hour. Both parties are floated by the secular “Great Flood” of corporate money, and they listen to Wall Street’s and Silicon Valley’s fables more than to the vastly diminished voices of labor and the middle class. For the bottom 60% of us, there is no economic ark in sight.
Which 19th century is Mr. Hinebaugh referring to, the Antebellum society of Lincoln’s boyhood, where 80% of the citizens were farmers, the rest small business owners or craftsmen - or the vast industrial and financial trusts of Mark Twain’s Gilded Age, the late 19th century, when government of, by and for “the people,” and presumably the “public interest,” turned into government of, by and for the predatory capitalism that literally bought governments from Charleston to Harrisburg to Washington, DC. By 1896, Lincoln’s virtuous small producers were not so happy with the exercise of the property rights of the railroads and banks, or the golden monetary system. It led William Jennings Bryan to demand that these powers not “crucify mankind upon a cross of gold.” Today the average citizen, in Annapolis and Athens, is again being crucified upon the cross of fiscal Austerity preached by the banks and practiced in every state capital – the true secular religion of Gov. Larry Hogan as well as Ronald Reagan.
Perhaps, Mr. Hinebaugh, we should all take pride in our international banks and corporations having raised up millions of Chinese peasants out of poverty while sinking our own “rustbelt.” That’s the polite cover story of both parties to the reality: that they wanted to chase the mystical “China Market,” like the green light at the end of Daisy’s dock, to clamp American labor into the chains of wage penury and vast credit card debt. What a virtuous crew! But they had noble ancestors, didn’t they, in that glorious late 19th century?
We all must ask where your “demon” big government came from, what caused it to rise from its weaker role in the 19 century, a role which still saw the need for large public works to get those small producers’ products to the ever expanding markets, via canals and “national highways,” like Route 40 in the heart of our area? Could a larger role for government have possibly been generated by the failures and power abuses of the private sector economy, the one that produced the Panics of 1819, 1825, 1837, 1857, 1873, 1884, 1893 and 1907, the last resulting, at banker urging, in the creation of the Federal Reserve?
These panics did not stand alone: they were accompanied by years of recession and even depression, and the hard times that followed the one in 1873 led to the great railroad strikes and violence of 1877, after wages were repeatedly cut, yet dividends raised, on the B&O Railroad, our region’s very own, no less. The strike went national and viral, and blood was shed in Martinsburg, WVA, Baltimore, MD and Pittsburgh, PA and great turmoil erupted in Cumberland, MD as well. And relevant to the question of private property and “whose government is it?” the Governor of Maryland in 1877, a famous Carroll family member, John Carroll, was intimately connected to the railroad, committing his own money as well as the public’s to build it. “Ditto” for the City of Baltimore, although I’ve never heard that from “Rush.” No surprise then, when Carroll called Maryland state troops out to defend the “railroad’s” property.
Only the government is sowing moral chaos? The world of MAD Men, of private corporate advertising doesn’t, and doesn’t track us down now through every alleyway of life, from cradle to grave, a private sector version of 1984, worthy of the old Kremlin itself? And when we walk through the doors of our virtuous private sector employers, we can kiss any notion of our Bill of Rights goodbye, just as the coal miners had to in that wonderful 19th century of yours.
What do you suppose President Woodrow Wilson meant when he said in a speech in the 1912 campaign, that “‘the truth is, we are all caught in a great economic system which is heartless’”? He went on to write that small entrepreneurs would come to him and tell him privately about the aggressive, predatory tactics the robber barons would use to drive them out of business. Wilson said he couldn’t publicly broach the methods, good defender of capitalism that he was, but he didn’t like what he heard. And no one has ever said Wilson wasn’t a grand “moralist.”
And what do you think the great conservative economist Joseph Schumpeter meant by his term the “creative destruction” of capitalism? He at least knew that private economic power could turn existing moral and social fabrics inside out, create great turmoil, leave whole industries, regions, depressed even as others sometimes boomed.
Karl Polanyi, the other great economist from 1944, wrote The Great Transformation about the rise of industrialism and the character of the 19th century, and then its collapse in the 1930’s. He saw the growth of government as the direct response to the fact that no one, businesses or average citizens, or even nature itself, could survive the workings of the “pure” free market system as presented in the 1830’s and 1840’s in England, birthplace of classical economics, and its demands of “hands off sacred private property, no interventions.”
Finally, Jim, you paint an entirely benign picture of the workings of private property, as if giant economic powers have not grown out of its premises, and dumped their industrial and chemical wastes into the citizen’s commons of the air, the water and into the very food we eat, as well as trying to, under their religiously repeated, ritual calls for deregulation, to make the public pay for the cleanup, if we get any at all. “Deregulate, will you, even as we ‘consolidate.’”
So where do you want to take us back to Jim? I think Polanyi has a great description of where you want to go, that idealized 19th century world, on the very opening page of his book:
Our thesis is that the idea of a self-adjusting market implied a stark utopia. Such an institution could not exist for any length of time without annihilating the human and natural substance of society; it would have physically destroyed man and transformed his surroundings into a wilderness. Inevitably, society took measures to protect itself but whatever measures it took impaired the self-regulation of the market, disorganized industrial life and thus endangered society in yet another way. It was this dilemma which forced the development of the market system into a definite groove and finally disrupted the social organization based upon it.
Under the sway of conservative economic and environmental theology, we’re well on our way again to the catastrophes foreseen by Polanyi in those first two sentences, written well before there was an organized “environmentalism.” Thus it was an early introduction by him to our day’s Austerity, Global Warming and Fracking. He liked the New Deal, the one that the Right and corporate Democrats have buried and distorted. You too. I left in Polanyi’s concluding sentences above to show that he knew that government interventions were not all good, that they could be problematic in a complex world: an honorable concession to a fair historical summary. He reminds us to always ask: “whose government is it?”
Maybe I “Better call Saul” for help.
William R. Neil