There's Nothing "Normal" About A Middle Class

What's "normal" in a "free and unfettered" economy is the rapid evolution of a small but fabulously wealthy ownership class, and a large but poor working class.
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"That liberty [is pure] which is to go to all, and not to the few or the rich alone." --Thomas Jefferson to Horatio Gates, 1798.

There is nothing "normal" about a nation having a middle class, even though it is vital to the survival of democracy.

As twenty-three years of conservative economic policies have now shown millions of un- and underemployed Americans, what's "normal" in a "free and unfettered" economy is the rapid evolution of a small but fabulously wealthy ownership class, and a large but poor working class. In the entire history of civilization, outside of a small mercantilist class and the very few skilled tradesmen who'd managed to organize in guilds (the earliest unions) like the ancient Masons, the middle class was an aberration.

A middle class can only come about in one of two ways.

The first is by a sudden change in the relationship between population and resources. After the Black Death wiped out more than a third of the population in 14th century Europe, the increased demand for labor drove up the price of labor to the point when a middle class emerged in some places. Many historians identify this as one of the factors that brought about the Renaissance.

Another example came four hundred years later, when a second European middle class (and the first European middle class in North America) emerged because of the "discovery" of "resources" (e.g. "we can steal gold, wood, furs, and land from Native Americans) in The Americas. Some historians suggest that increasing the overall wealth of Europe (and Europeans living in North America) while the overall population was relatively stable produced not just a second middle class, but brought about The Enlightenment and the American Revolution as well.

But as the population of North America increased in the years leading up to the Civil War, the middle class began to vanish. From the 1830s until the 1930s, outside of family farms, the American middle class was again small and limited to shop owners and specialists.

Thus, when the Republican Great Depression hit America, Franklin Roosevelt was faced with a dilemma: how to create a middle class without killing off a third of the population or discovering gold in a distant land?

What he came up with - largely by pragmatic, trial-and-error work - was a synthesis of controls on previously-uncontrolled capitalism which, quite literally, saved American capitalism from itself. The Wagner Act of 1935, mandating unions when 51 percent of workers voted for them. The Social Security Act. Minimum wage and maximum hour laws. Child labor laws. The government as employer of last resort through the WPA, CCC, etc.

Republicans are fond of arguing that World War II ended the Republican Great Depression, not FDR's policies, but in that argument they ignore a central economic reality: When money is invested in infrastructure like roads, bridges, dams, hospitals, and schools (as FDR did), that infrastructure produces a return on that investment for generations to come. When the same number of dollars are put into bombs and then dropped on Dresden or Tokyo, those dollars vanish along with the bombs, never to be recovered.

While gearing up for the war did stimulate and alter the American economy, it's much easier to argue that WWII actually slowed our recovery from the Republican Great Depression, because it forced FDR to shift so many resources from infrastructure and into disposable instruments of warfare.

When Ronald Reagan came into office in 1981, he set about to undo FDR's New Deal. For 26 years now, economic conservatives have run this country, and the result has been the steady deterioration of the middle class, a rise in the wealthy elite, and a massive transfer from infrastructure investment to war expense. The result could easily be another Republican Great Depression (or, more likely, given the massive debts run up by Reagan and both Bush's, a Republican Weimar-style Hyperinflation).

The idea that turning a nation's economy over to "free market" corporatists is idiotic isn't new. Thomas Jefferson laid it out in an 1816 letter to Samuel Kerchival.

"Those seeking profits," Jefferson wrote, "were they given total freedom, would not be the ones to trust to keep government pure and our rights secure. Indeed, it has always been those seeking wealth who were the source of corruption in government. No other depositories of power have ever yet been found, which did not end in converting to their own profit the earnings of those committed to their charge."

He added: "I am not among those who fear the people. They, and not the rich, are our dependence for continued freedom. ... We must make our election between economy and liberty, or profusion and servitude. ... [Otherwise], as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, ... and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes; have no time to think, no means of calling the mismanagers to account; but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow sufferers."

A totally "free" market where corporations reign supreme, just like the oppressive governments of old, Jefferson said could transform America "...until the bulk of the society is reduced to be mere automatons of misery, to have no sensibilities left but for sinning and suffering. Then begins, indeed, the bellum omnium in omnia, which some philosophers observing to be so general in this world, have mistaken it for the natural, instead of the abusive state of man."

To stimulate our economy after the collapse of the Republican Great Depression, FDR also instituted progressive taxation, which gave workers more to spend, thus stimulating demand for more goods and services.

Progressive taxation, too, has a long history: As Jefferson said in a 1785 letter to James Madison, "Another means of silently lessening the inequality of property is to exempt all from taxation below a certain point, and to tax the higher portions of property in geometrical progression as they rise."

As Jefferson realized, and FDR proved, with no government "interference" by setting the rules of the game of business and fair taxation, there will be no middle class.

And as history around the world proves, when the middle class vanishes, democracy often goes with it.

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