The Founding Fathers Backed Thomas Piketty—And Feared a Powerful 1 Percent

[xchrom]

http://www.alternet.org/economy/founding-fathers-backed-thomas-piketty-and-feared-powerful-1-percent



Many of America’s Founders believed that excessive wealth inequality would be incompatible with having a representative republic. They did not expect wealth to be identically distributed, but many did envision a thriving middle class with very broad-based capital ownership and they supported muscular government policies to allow citizens to acquire property on an ongoing basis. Following their lead, our principal strategy to deal with wealth inequality should be to make every citizen a capitalist by encouraging meaningful broad-based profit sharing and employee ownership and remaking our tax system to make this possible.

In his 1787 book, “A Defense of the Constitutions of the Government of the United States,” John Adams, later the second U.S. president, wrote: “If all power be suffered to slide into hands not interested in the rights of property … one of two things cannot fail to happen.” His first prediction was that the majority “will unite against” those with property. His second prediction was that the dependence of the majority “will render them mercenary instruments of wealth.”

Adams opened this passage by asking his readers to imagine a nation with a population of 10 million where 1 or 2 million owned most of the property and 8 or 9 million had very little wealth. How prescient! Today, for total U.S. wealth and many specific asset classes of wealth, such as all capital gains, America is approaching a situation where the top 10 percent or the top 20 percent hold far more wealth than the 80 percent of land held by the English aristocracy at the time of the American Revolution.

As half of the country spends its time criticizing Thomas Piketty for doing his research and the other half spends its time figuring out what to actually do next, it is time to examine how some major American historical figures considered how to balance the tension between economic development and our democratic ideals of equality. There is much to be learned about what America’s early leaders thought about these problems, how they struggled to resolve them, how their favored solution – shares of property – has evolved in American history and how it could address the inequality dilemma that is top-of-mind today.

[msongs]

1. the "founding fathers" were the 1% lol nt

[el_bryanto]

2. There are people in the 1% today who can see the problems the concentration of wealth has

being in the 1% usually means you identify with them, but not always.

Bryant

[merrily]

4. The Founding Fathers were wealthy and powerful, i.e., plutocrats.

Rule by the wealthy is indeed incompatible with a true Republic but it's not incompatible with a plutocracy. I assert that's what we've really been since the East India Company and it's gotten even worse.

The Constitution gave the vote only to white male landowners who could also afford to pay a poll tax. At the time, that meant about 3% of the population could vote. At that, they could vote only for Representatives. Very odd way of showing fear of the wealthy.

State legislatures, pretty much also peopled with the wealthier citizens of the state, elected Senators and ratified the Constitution. Only electors voted for President, with no requirement that they follow the vote of their respective states. (Still true, but I imagine that a deviation these days could easily be fatal.)

In the notes of the Secret Meetings of the Framers, it's very clear what they really fear is "the mob."

John Adams, of course, was not typical of most of that group.

[merrily]

3. Bingo!

http://en.wikipedia.org/wiki/Founding_Fathers_of_the_United_States

[longship]

9. Really? Thos. Jefferson lost Monticello.

And Madison wasn't much better off. His place ended up with the DuPont's (now being lovingly restored to Madison's rather more austere facade -- it is still beautiful).

Monroe's family home is rather small and Washington's is positively palatial in comparison.

I love touring these places. Their history is interesting.

However, your point is well taken, and is substantially correct.

[dixiegrrrrl]

5. Adams and his peers had a lot of history to draw on

and the French Revolution 2 years later proved his point.

Today we are not, as a rule, focused on history and the long view.
So we get to learn the same lessons over and over and over.

[xchrom]

6. +1

[Faryn Balyncd]

7. & here are a few thoughts from Adam Smith, patron saint of capitalism:

Emma Rothschild, director of the Center for History and Economics at King's College, Cambridge, in her study ''Economic Sentiments: Adam Smith, Condorcet and the Enlightenment'' portrays an Adam Smith far, far different from the "philosophy" of today's right wing corporate apologists. Rothschild discusses how, despite the fact that Smith has been "reinvented" & misrepresented as "a narrow, unyielding defender of unfettered free enterprise", the real Adam Smith was much more complex.

The real Adam Smith:
- - - "railed against monopolies and the political influence that accompanies economic power",
- - - "worried about the encroachment of government on economic activity, but his concerns were directed at least as much toward parish councils, church wardens, big corporations, guilds and religious institutions as to the national government",
- - - "was sometimes tolerant of government intervention, especially when the object is to reduce poverty'',
- - - "supported universal government-financed education because he believed the division of labor destined people to perform monotonous, mind-numbing tasks that eroded their intelligence, not because education led to economic gain."




So let's listen, for a while, to Adam Smith himself:

"The interest of the dealers [referring to stock owners, manufacturers, and merchants], however, in any particular branch of trade or manufacture, is always in some respects different from, and even opposite to, that of the public. To widen the market and to narrow the competition, is always the interest of the dealers. To widen the market may frequently be agreeable enough to the interest of the public; but to narrow the competition must always be against it, and can serve only to enable the dealers, by raising their profits above what they naturally would be, to levy, for their own benefit, and absurd tax upon the rest of their fellow-citizens."

(Adam Smith, Wealth of Nations (Amherst, New York: Prometheus Books, 1991), pages 219-220)

"This monopoly has so much increased the number of some particular tribes of [manufacturers], that, like an overgrown standing army, they have become formidable to the government, and upon many occasions intimidate the legislature. The member of parliament who supports every proposal for strengthening this monopoly, is sure to acquire not only the reputation of understanding trade, but great popularity and influence with an order of men whose numbers and wealth render them of great importance. If he opposes them, on the contrary, and still more if he has authority enough to be able to thwart them, neither the most acknowledged probity, nor the highest rank, nor the greatest public services, can protect him from the most infamous abuse and destruction, from personal insults, nor sometimes from real danger, arising from the insolent outrage of furious and disappointed monopolists."

(Adam Smith, Wealth of Nations, page 368)

"The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even to oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."

(Adam Smith, Wealth of Nations, page 220)

"But though the interest of the labourer is strictly connected with that of the society, he is incapable either of comprehending that interest, or of understanding its connexion with his own. His condition leaves him no time to receive the necessary information, and his education and habits are commonly such as to render him unfit to judge even though he was fully informed. In the public deliberations, therefore, his voice is little heard and less regarded, except upon some particular occasions, when his clamour is animated, set on, and supported by his employers, not for his, but for their own particular purposes."

(Adam Smith, Wealth of Nations, page 218)

''When the regulation, therefore, is in support of the workman, it is always just and equitable; but it is sometimes otherwise when in favour of the masters.''

- Adam Smith, The Wealth of Nations

''No society can surely be flourishing and happy, of which the far greater part of the members are poor and miserable. It is but equity, besides, that they who feed, clothe and lodge the whole body of the people, should have such a share of the produce of their own labour as to be themselves tolerably well fed, clothed and lodged.''

Adam Smith
http://www.nytimes.com/2001/08/16/business/economic-scene-the-many-faces-of-adam-smith-rediscovering-the-wealth-of-nations.html?sec=&spon=&pagewanted=print

(If Adam Smith were alive today, would the right wing propagandists label him a "socialist", or would they label him a "communist"?)

[truedelphi]

8. Thanks for pointing out how the "capitalism" of Adam Smith was a

Moderated capitalism, and not at all related in any way shape or form to the Predatory, Vulturistic Capitalism of today's "Free market" supporters. (And I include Geithner and Bernanke among those Predatory Capitalists.)

[xchrom]

10. indeed. nt

[freshwest]

18. Excellent addtion but deserves its own thread. Thanks.

[WillyT]

11. HUGE K & R !!! - Thank You !!!

[xchrom]

12. +1

[saidsimplesimon]

13. Some original US 1% understood income inequality.

They lacked the courage to deal with it. It's a new day in America.

[Skeeter Barnes]

14. They knew there needed to be a buffer between the poor and themselves to stay in control.

That was the extent of their interest in the existence of a "middle class".

[littlemissmartypants]

15. Kicking. Thank you. nt

[Enthusiast]

16. Kicked and recommended!

Everyone should read this.

[freshwest]

17. K&R