I begin this course with an overview of human economic development. It may rattle your own recollection of history but we must understand that economic injustice has been a part of the human condition throughout recorded history.
After all, we evolved from Neanderthals (ouch) who were conquerers.
It is a proven fact our DNA retains many of the behaviors of our ancient ancestors. Slavery and economic servitude are recorded as far back as the 1400s. Ebenezer Scrooge and Bob Cratchit weren’t original to Charles Dickens.
Our ancestors also were conquerors. One of the most shameful land-grabs in American history was the forceful seizure of vast territories occupied by Native Americans. They were called Indians because early explorers thought they had found India. The label stuck because it was useful as a means of dehumanizing a people the whites were intent on annihilating. The “Indians” may have led simple lives but they were wise and highly cultured. They didn’t understand the land grab because they worshiped the land, skies and stars and had no concept of “owning” gifts of nature. The land belonged to their spiritual makers and no individual had the right of ownership.
Regardless of what the movie industry has shown, America’s original inhabitants were virtually defenseless against muskets, cannons and smallpox, the forerunner of chemical warfare and economic injustice for all.
Humans can be nasty.
Economic Injustice in Perspective
But let’s begin by questioning what we think we know and discovering what we don’t know. I give you economic history with perspective.
It was economic injustice that prompted early European settlers to set sail for the “New World” – which, we now know from Native American history, was only new to the immigrants.
Nevertheless, settlers came from all over Europe to escape their own oppression under the rules of kings and queens. Most were English and soon after they arrived in North America, they were surprised to find they’d move to a land seized by the British Empire.
Economic injustice – taxation without representation – motivated a revolution, leading to the formation of a new government independent of British rule.
Although our founding fathers were mostly the elite of the times, they were high- minded and thoughtful. They drafted a constitution that stands today as the best guide for a democracy ever written, though its intent has been badly bent.
However, they failed to draft a companion plan for economic development. They were mostly landowners and slave holders and dropped their idealism in favor of leaving economics to chance.
The founding fathers also realized they had formed a government that had no money, but taxation was still frowned on. It was an idealogical conundrum that kept the country weak.
The economy at the time was based on agriculture and cottage industries; anyone could establish a business on a shoestring and hard work. Without structure, the economic policy was known as laissez faire, meaning to leave alone. Economics without a plan worked for the next 100 years and beyond.
It was still another 25 years before policy-makers took a shot at the inherent dangers of free trade. Anti-trust laws were finally passed to control business but these laws were not intended to protect consumers or workers. Rather, they were to contain the power of business over the power of government. These documents weren’t as clear as the Constitution or its Bill of Rights, with the language open to interpretation. Politicians and regulators didn’t really have their hearts in it and continued to favor laissez faire.
Unrest in the Democracy
Meanwhile, unrest was brewing in the democracy. The conflict was over states’ rights vs. federalism. The boiling point came when the federalists in the North tried to abolish slavery, mostly in the South, as a business model. It was more about economics than human rights.
Patriotism on both sides sent brothers and sisters into battle against each other and the worst carnage on American soil took place. The North won and slavery was supposedly abolished. But a country of states united was broken and the political power of the land shifted to the federal government. Big Government was born.
After the Civil War, blacks were found roaming the streets, competing with whites for jobs. As a result, slavery was replaced by the same kind of racism the Indians had suffered. Blacks were demonized and pushed by economics into ghettos in the cities and shacks in rural areas. Schools were segregated and inferior. The policy was to keep them dumb and out of sight.
Immediately the American Industrial Revolution replaced actual slavery with virtual slavery, imposing take-it-or-leave-it wages on the lower class. Women were also without emancipation. Men worked for slave wages in dangerous underground mines and enormous factories while women and children toiled in sweatshops. Races and cultures became social classes pitted against each other for the spoils. The first of the class wars were wars on and among the lower classes.
After the Civil War, the federal government was still short on funds and turned to the expanding power of robber barons to build an infrastructure intended to reunite the country. To entice the moneyed class, laws against monopolies and other unfair trade practices were ignored. Farmworkers became industrial workers. Chinese, Italians, Irishmen and other immigrants slaved to lay railroad tracks from coast to coast. Big Business was called upon to accomplish the big things government couldn’t afford. A handful of men became rich. And the terms capitalism and socialism were born. Yes, at the same time. Capitalism and democracy do not share the same birthright.
Now we had Big Government and Big Business.
Divide Between Business and Labor
Virtual slavery led to the formation of trade unions and thus the divide in the country was not just between North and South. It was between business and labor. Political parties chose sides, along with their followers. Dogma prevailed.
At first the politicians took their purposes seriously and measures were taken to protect the worker and the economy – later to be ignored.
Even the right-minded FDR succumbed to the idea that what was good for business was good for the country. His New Deal favored business in the hope that less regulation would spur more competition and create jobs. That time, the policies did work and the country finally climbed out of the Great Depression that had lasted for well over a decade. Roosevelt was roundly applauded for it.
Some people claim the New Deal was based on welfare, but make-work programs and handouts were a small part of the deal.
Meanwhile, Big Business was heavily called upon to finance World Wars I and II. Labor, including women for the first time, was used as homeland warriors in the factories and the military-industrial complex was born. Big Business prospered during the wars while the people existed on scant pay and rations and their sons died overseas.
After World War II, the military-industrial complex continued to grow. Homeland security during the cold war was followed by a series of non-stop aggressions around the world. Sons and daughters continued to be killed while capitalists prospered. Meanwhile, the country’s military budget grew larger than the domestic budget and social purpose took a back seat to the warring class.
Soldiers of modern warfare returned to face dead-end jobs and post traumatic stress syndrome – unlike the end of World War II when troops returned to ticker-tape parades and endless programs to help them get in on the spoils of war and good times economics.
Ironically, a few decades after FDR used capitalism to stimulate jobs to end the Depression, another president launched a plan similar to FDR’s that became known, negatively this time, as the “trickle down theory.” Instead of creating good jobs, it robbed from the poor and working class to accelerate wealth held by the now elite class. More people were employed, but at slave wages for the lower class, limited and dwindling wages and benefits for the middle class. Inflation outpaced any gains in personal income.
But the politicians began pointing to Wall Street anyway, claiming it as the indicator of wealth and prosperity, declaring that we were a “wealthy nation,” even though its people were not. It was no longer the people’s economy.
The War Economy
Meanwhile, the country’s military budget continued to rise and began to consume more than half of the annual appropriations passed by Congress. Not only were we about to lose a government “of and by the people,” we were losing a government for the people.
The domestic budget took the back seat. Prosperity went to the munitions makers and their like and the people were left begging for what was left.
Unrestrained capitalists became so powerful they could buy politicians and bureaucrats. Laws to prevent such influence were circumvented or ignored. First it was the conservative party bragging about it, then the liberal party continuing to claim an allegiance to the people while accepting financial contributions from the rich and turning its back on the working poor and failing middle class.
Finally it became apparent that policy and leadership wasn’t being determined at the polling place. A vast majority of citizens stopped casting their votes; elections are now decided by roughly 25 percent of all people eligible to register.
Money now rules everything – the media, politicians, policy makers, even the educational system. Consequently, the registered voters who are left no longer decide based on facts. Instead, voters are solicited as if their votes are currency to purchase political candidates like consumer products. Voters are now impulse buyers selecting politicians as seen on TV. The usual lies are now Big Lies.
A seat in the House or Senate costs millions and the last Presidential campaign cost the two candidates a total of $75 million, which is probably a fraction when the “dark money” is added.
Politicians, therefore, have been usurped by their financiers and ordinary citizens have little influence on who’s in office. Democracy as we knew it is either dead or dying.
Okay, let’s get back to the contemporary history of the years you and I have lived through, the 60s until now. It goes from pretty good to very bad.
In the 1960s and ’70s, college students could graduate with little or no debt. Young couples could buy a first home, start a family and work toward a better future for themselves and their children.
In the ’80s, single-worker families started struggling on one paycheck. Career women were invited back into the workplace at unequal pay; those who wanted to stay home and raise their children found they needed to go to work to supplement the family income.
The Two Paycheck Economy
By the ’90s, it took two breadwinners to maintain a comfortable lifestyle, even for the middle class. The working poor were paid so little that they were still forced to depend on welfare and suffered a lifestyle that looked like something out of the third world, not the richest nation in the world.
By the year 2000, Millennials had a shock coming when they left the nest – little or no inheritance to look forward to and very little chance to earn a life as good or better than their parents. With little possibility of owning their own homes, they began life as renters and debtors, unable to get ahead, let alone accumulate wealth. Instead they have become slaves to the wealthy who own the Millenials’ debts, their homes, their cars, their futures. Most Millenials have nothing to show for their own worth and little to look forward to.
In retirement, several generations graduated downward from a productive life to poverty. They worked hard for employers who gave them bare paychecks unaccompanied by basic benefits. Pensions are rare these days. Many retire on nothing but Social Security, which was meant to be a supplement, not a replacement for disappearing benefits in the workplace. Seniors now can be found punching cash registers and bagging groceries, forced to work well beyond their years. What wealth they have disappears into reverse mortgages while the next generation is left to “go fish.”
In the 2016 election, in confusion, frustration and anger, the people had enough of history. It wasn’t the beginning of a new era. It was an end. Without a plan, people acted out.
Now it’s time to step up.
Both economics and democracy are in real trouble. To stop the madness would be daunting, except for one thing. The working class still has the economic power to make a difference. Our power may be dormant now, but we can change that by understanding the history of the economic problem. We need to abandon the hopeless quest to change the behaviors of capitalists and politicians. And we can. We are both the means of production and the consumer power in the money chain. We need to develop personal strategies based on changing economics DIY.
I’m not just talking about a “buy local” campaign. We need to change our economy from the ground up. At home and at work. We need to change the game, take charge or our own destinies. And we can.
Please move on to the next essay
The Future of Capitalism