Americans Are Unfit for Self-Government

President Andrew Jackson suggested that when expedience became the basis on which the Constitution was interpreted, then Americans would no longer be fit for self governance. That day passed a century ago.

I have watched the City of New York, once a great industrial, artistic, cultural, and port center deteriorate and all of its vibrancy wither. It has become a cash cow for real estate and Wall Street interests. All of its innovative callings have fled. This was done in accordance with mandates of the City's democratic vote: urban renewal, taxes, corruption, city projects, expressways, rent control, and mismanagement.

I have watched the nation raise taxes on its citizens so that Americans are no longer free, but are wage slaves to the government, paying half or more of their incomes to corrupt, morally depraved programs like Social Security and the Department of Education.

I have watched Americans accept the debasement of their currency without effort to understand the relationships among banking, Wall Street, the Federal Reserve Bank and diminishing American expectations.

I have watched Americans allow their educational system become a plaything for extremist cranks who indoctrinate, brainwash and defraud, but do not educate.

I have watched Americans passively accept waste and failed bureaucracies: the Department of Labor; the Department of Energy; the Department of Education; the Department of Health Education and Welfare. The taxes extracted to subsidize these are paid without protest by brainwashed fools, made dull witted by the American educational system.

I have watched American culture deteriorate to the point where the flagrant stupidity that passes as entertainment and the ignorance that passes as news shocks and disorients the observer, and makes me wonder about the possibility of some widespread mental contagion.

Because Americans are unfit for self government, they have allowed a succession of special interests, Wall Street, education, employers' associations, labor unions and health care lobbies to dictate spending and taxation levels, government programs and tax systems, silently and smugly accepting the abuses of corrupt lobbies.

If future generations might look back and recall the contribution of 20th century Americans to the course of history, they will remark that this was a people that was given a great nation, and through cupidity and stupidity proved that republicanism does not work.

President Andrew Jackson on Infrastructure Improvement

"...I will not detain you with professions of zeal in the cause of internal improvements...for I do not suppose there is an intelligent citizen who does not wish to see them flourish. But though all are their friends, but few, I trust, are unmindful of the means by which they should be promoted; none certainly are so degenerate as to desire their success at the cost of that sacred instrument with the preservation of which is indissolubly bound our country's hopes...When an honest observance of constitutional compacts can not be obtained from communities like ours, it need not be anticipated elsewhere, and the cause in which there has been so much martyrdom, and from which so much was expected by the friends of liberty, may be abandoned, and the degrading truth that man is unfit for self-government admitted. And this will be the case if expediency be made a rule of construction in interpreting the Constitution...."

----President Andrew Jackson, on the veto of the Mayville Road, 1830. In Henry L. Watson, Andrew Jackson vs. Henry Clay, Boston: Bedford St. Martin's, p. 179.

Evolution of Progressivism as Elitist Paradigm

The debate between individualists and social democrats centers on the effects of centralization and the scope of rationality. Social democrats or "progressives" argue for enhanced centralization and the possibility of broad rationality in policy making. The rationality is accomplished through elite experts who claim to have superior, scientific knowledge obtained through university education. Individualists, in contrast, argue for the necessity to coordinate economic activity through decentralized, autonomous producers who are coordinated via price and motivated by private property. The debate between advocates of price versus hyper-rationalistic human planning through a centralized government agency would seem to have been settled in the 1980s. None of the socialist states was able to successfully implement centrally planned economies. Moreover, the tyranny associated with communism confirmed the worst fears of Milton Friedman and others. Yet, as late as 1972, when it had become evident that the Chinese communists had murdered approximately 25 million people, leading advocates of rational planning, John Kenneth Galbraith and Wassily Leontief, argued for the virtues of the Chinese communist system in the pages of the New York Times Magazine. Within a decade the Chinese themselves admitted that their approach to communism had failed, yet this had escaped the expertise of American universities' most famous economists. Now, 20 years after the final failure of Soviet communism, American academics and the Democratic Party continue to argue for state coordination and elitist-conceived solutions to elitist-conceived problems.

The question of centralization and decentralization has a long history in the United States. Its advocates hearken back to the ideas of Steuart and Shaftesbury and Hume, who was an anti-rationalist in epistemology and ethics but a rationalist in economics. Alexander Hamilton adopted the ideas of Hume and aimed to implement the mercantilist model. The Federalists believed that elite business people had exceptional rationality so that they could transform paper money into enhanced real wealth. This idea came from Hume. In turn, the elitist centralizing and hyper-rationalist idea was adopted by the Whigs, Henry Clay and then Abraham Lincoln, and carried forward by the Republicans in the form of advocacy of high tariffs and national banking. Although the Republicans voiced the ideology of laissez faire in the late nineteenth century, their reform impulses, as reflected in the National Banking Act, the Morrill Act, high tariffs, and the Pendleton Act reflected a centralizing interest in rationality. In turn, the early twentieth century Progressives advocated rationality and centralization, and this theme was reenforced by the New Deal.

If one looks at the social origins of the centralizing rationalists in American history there was a transformation in the late nineteenth century. Hamilton and Clay were a Federalist and a Whig who came from modest origins. Hamilton was an orphan who had won the support of businessmen in Nevis who financed his education and Clay was from a frontier middle class background, although he claimed to be poor. This was William Henry Harrison's response to the Jacksonian common man ideology of which Louis Hartz writes and that Abraham Lincoln carried forward.

A shift occurred in the Gilded Age. The Mugwumps did not identify themselves as having come from poor backgrounds. Their interest in rationalization of civil service and contempt for corruption was a reaction to Jacksonian democracy. They were college educated and saw themselves as differentiated from the mass of Americans and immigrants because of their education. They conceptualized themselves as a self conscious elite, and were other-directed. Their opposition to James Blaine in 1884 was group and media derived. It was fashionable. Among the Mugwumps was Theodore Roosevelt. Roosevelt rejected the laissez-faire philosophy of the older Mugwumps and carried forward the view of morality as an elitist obligation. Progressives saw reform as a class-linked moral prerogative. However, Roosevelt also advocated support for big business, centralized authority and the use of rationality as he defined it, for the ends that he defined as moral. The Progressives applied moral skepticism with respect to the natural rights philosophy, but moral dogmatism with respect to their social vision. They were other-directed in that the Progressive vision consisted of ad hoc propositions, news and whim of the elite itself. It claimed to be pragmatic, but refused to permit its dogmas to be falsified. Roosevelt initated a century long claim to superior mental ability of those who advocate the Progressive or liberal dogma.

The claim of superior mental capacity of a superior class follow through Hamilton, Clay and the Mugwumps, into Progressivism and the New Deal. Hamilton and Clay believed with Jefferson that there was a natural aristocracy. Hamilton and Clay both believed that government support for the elite would foster social goals because the elite could best use public wealth. The Mugwumps transformed the claim to superior knowledge from business to control of business via the state. This coincided with the increasing complexity and knowledge required to succeed in business. As technology grew more complex, the centralizing elitist philosophy dispensed with the claim that superior knowledge was needed to found and run business, and transformed into the claim that it was needed to regulate and dominate business.

The Mugwumps were the first group to identify altruistic or moralistic elitist aims. This came about because of their horror at the boss system and what they identified as pathologies of immigration and urbanization--slums and corruption. They sought to rationalize government.

Roosevelt was thus the product of the increasing wealth of American society. Unlike the early nineteenth century Federalists and Whigs, the Progressives made no pretense of humble origins but rather claimed an aristocratic elitism. Jane Addams was a social worker who aimed to altruistically help immigrant poor through a superior social position. Labor was viewed as ineluctably trapped in inferior class status. Class and group differences were viewed as inevitable, with the Progressive leadership expressing the altruism of the elite class. Government support for and rationalization of big business, the good trusts and the Federal Reserve Bank, the Workers' Compensation laws that limited employer liability in the name of altruistic concern for workers expressed the new elitism.

Asymmetric Pluralism

Andrew Jackson created the concept of pluralism. William Appleman Williams in Contours of American History argues that Herbert Hoover did nearly a century later, but the elements of Hoover's notion that labor and management represent distinct interests that require representation through the state were very much present in Jacksonian democracy. Jackson saw the Democratic Party as the means by which common economic interests could be galvanized or represented against the institutionalized power of paper money and speculation. His creation of the party system along disciplined lines was meant to form resistance to the tendency of economic elites to establish central banking and fractional reserve systems. In this, the spoils system provided economic incentives to party activists that paper money inflation provided to speculators and economic elites. The party system evolved into bossism. Elites were able to characterize it as corrupt, but paper money as altruistic or not corrupt. This was accomplished by identifying paper money issuance with agriculture in the late nineteenth century. This attempt failed in part because the remnant of the Jacksonian philosophy was sufficient to resist it. In the Democratic Party this was through the Bourbon Democrats of Grover Cleveland and in the Republican Party it was through the Mugwumps, the philosophical descendants of Adam Smith and Jackson. The reversal of roles is a pattern seen elsewhere in American political history. For example, in the early twentieth century the Republicans came to advocate reform and progressivism, but by the 1930s this became the pretense of the Democratic Party and the Republicans were painted as the party of business.

The failure of pluralism with respect to the working class in both its major forms, the party or spoils system of the 19th century and the labor movement of the late 19th and 20th century has forestalled the ability of American democracy to be representative. That is, as Jackson foresaw, the "monied" interests have a natural incentive to support banking and paper money, but the working class has a looser interest in institutionalization of its interests. This is in part because the interests of workers are not so well defined and are subject to fluctuation because of changing economic arrangements so that institutionalization is quickly outmoded. It is also the case that the working class has less organizational ability and so allows its representative institutions to be co opted and often corrupted.

There has never been a stigma associated with advocacy of paper money as there was with political bossism or with labor unions. Yet, paper money and fractional reserve banking involve a greater degree of deception and fraud than either of these institutions. Labor unions are depicted not only as corrupt (as in the cases of the Teamsters, longshoring, hotel and restaurant and various construction unions) but also violent. The violence of labor unions is not contrasted with the systematic fraud of fractional reserve banking and paper money. Likewise, the political boss system was painted as corrupt.

The Progressives were the ones largely responsible for attacking the patronage and boss system. This began with the Mugwumps in the 1880s and the Pendleton Act, the establishment of the federal civil service. All states followed suit. This was done in the name of expertise. It is questionable that government bureaucrats have any special expertise or that if Bernanke was replaced by a random name taken from the Albuquerque phone book that the Fed would do any worse than it has. A key result of the emphasis on expertise was the severance of direct incentives to fulfill working class needs from the political leadership. Finding a job for a constituent no longer could be a priority because jobs were now to be filled through rational methods, namely civil service exams. Favors for constituents could now be viewed as corrupt.

The case of Robert Moses in New York illustrates the class-driven asymmetry of Progressivism and its sister movement the New Deal with respect to rationalization. On the one hand, a series of bureaucracies utilizing rational hiring methods was established to build the bridges, parks, highways, housing complexes and tunnels that Moses built. On the other hand, strategic choice concerning where to build, the nature of housing and urban redevelopment continued to occur on the basis of personalistic choice, cronyism and the spoils system.

This is equally true of the Federal Reserve Bank. The Bank claims to scientifically or rationally determine the quantity of money, but the distribution of new money to specific banks is purely due to special interest capture and caprice. A pretense of science overlays the asymmetric spoils system.

Over time, American pluralism has fashioned two forms of representation for the working class. The first, Jacksonian democracy, indeed forestalled the central bank. Until the late 1890s American workers saw rising real wages. The system did not work well for business, property or farm owners, who saw asset values depreciate due to inflation. Populism was a movement of farm and other asset owners, it could not have been otherwise for farm labor had no stake in credit availability. Populism was a movement of land speculators, failed or otherwise, but it also served the interests of Wall Street and business owners, who had been complaining of overproduction for several decades in the late nineteenth century. This was occurring because of innovation and because of deflation, which increased labor's savings (its "demand for money). In turn, labor was able to withstand layoffs because it had savings.

William Jennings Bryan proposed to overturn the Jacksonian system in 1896. McKinley, an advocate of high tariffs, defeated the Populist platform. It was not until 1933 that free silver found its quiet adoption in hyper-charged form via Franklin D. Roosevelt's abolition of the gold standard and illegalization of ownership of gold. This was accomplished with little fanfare because by then the media had been completely co opted and the notion that "experts" could better derive decisions in areas like money and banking had been hammered in the public discussion and in increasingly utilized schools for several decades. As well, the establishment of the Federal Reserve Bank in 1913 inured the public to the use of paper money. The class interest involved in adoption of a pure paper money system was ignored both by the media and by Roosevelt's supporters, who argued, as did John Maynard Keynes, that reduced wages were in workers' interest. They argued this in somewhat arcane terms such as the claim that "aggregate demand" needed to to stimulated. This would be accomplished by eliminating savings by reducing interest and increasing the money supply. The Keynesian system is silent as to the chief issue inherent in paper money issuance--who gets the new money. By default, Keynesianism is a class-based, elitist philosophy that subsidizes banks at public expense. It does so by claiming, as does William Greider in his book Secrets of the Temple, that low real wages are good because they help owners of construction companies and land owners. Greider's book is rife with the double talk characteristic of the Keynesian argument, such as that on the one hand billions are given to interests like the Hunt brothers, corrupt foreign governments like those of Mexico and even more is squandered on frivolous investment and speculative schemes on Wall Street, but that nevertheless inflation helps the poor and middle class, as though the large sums handed to banks come from thin air.

Progressive pluralism thus hobbled the working class in two steps. First, it attacked the ward and spoils system, the basis for working class participation in party politics. It did not eliminate the spoils system for elite jobs but rather for the jobs that would attract working class activism. Second, it created labor unions as representative institutions. This was essential to the Progressive agenda of the National Civic Federation in the early twentieth century, the employer association in which "responsible" big business, labor unions and the public claimed to be represented; it was advocated by Theodore Roosevelt; and it was codified in the 1920s by the Railway Labor Act and in the 1930s by the National Labor Relations Act and the National Recovery Act.

Progressives believed that labor unions would represent workers' interests as employer lobbying, employers' associations and government institutions like the Fed represented employers' interests. However, this was not to be. The Department of Labor is an ineffectual bureaucracy, not a money-printing machine like the Fed. Labor unions were saddled with a primary responsibility of representing workers through collective bargaining and a secondary responsibility of representing their interests in the public policy process. There is an inherent conflict of interest across workers. Public works, for instance, subsidize construction and public sector workers but are paid for by private sector workers. Many workers do not conceptualize themselves as part of a bargaining unit subject to collective representative but rather as individual agents and either part of management or with distinct professional interests. The bargaining responsibilities are inherently at odds with the pluralist responsibilities. Moreover, and most importantly, employers have an incentive to oppose unionization at the shop floor level. There is no such incentive with respect to employers' organizations. Workers have no reason to oppose the ability of the National Association of Manufacturers to represent small industrial firms. But employers have an economic incentive to oppose labor representation of workers because collective bargaining costs the employers in two ways: through loss of profitability and through loss of discretion. Thus, Progressivism never did provide workers with a symmetric voice in the pluralistic process.