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Part 4: What we know that the founders didn’t
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By William C. Shelton

Approaching the end of the War of Independence, Congress chose to put on the Great Seal of the United States the phrase, “Novus Ordo Seclorum,” which they understood to mean, “A new order of the ages,” or, “A new age now begins.” They hoped that what they were accomplishing would inspire people everywhere to create governments in which humanity could live with freedom and dignity.

Although their own new government would exclude women, slaves, and natives from the full rights of citizenship, they had created the most expansive political democracy in history. They established principles by which subsequent liberation movements could critique and correct the founders’ hypocrisies. And they succeeded in their hope, in that leaders of the French, Russian, Vietnamese, and other revolutions subsequently cited ours as inspiration.

The founders had been, in turn, inspired by Enlightenment ideas made possible by the emergence of a new form of political economy that would come to be called “capitalism.” It was creating personal freedom, cognitive enlargement, and prosperity for many more people than had theretofore enjoyed them.

The founders lived in a society that consisted of farmers, tradesmen, and slaves, with a smattering of doctors, lawyers, merchants, and clergy. It “was shockingly equal at the time, in ways that seem really surprising to us today,” writes legal scholar Ganesh Sitaraman.

So it’s not surprising that they understood equality to be essential to freedom. In order to be free, you had to have equal standing as a decision maker in matters that affected you.

For the same reasons, they did not understand that political democracy cannot sustain itself without economic democracy, or legal “justice,” without economic justice. So they could not anticipate that long-term dynamics essential to the very economic system that had created the freedom that they cherished would ultimately undermine it by destroying the equality they cherished.

One such dynamic is that at the end of every profitable transaction, investors must reinvest their profit to gain more profit, or consume it and thereby cease to be investors. This expand-or-die competition produces winners and losers.

To remain a winner, the enterprise must not only be profitable. It must produce the highest possible rate of profit so that it can continue to attract investment. It is like a human built at a 45° angle who must run as fast as possible because slowing means falling.
Over time, fewer and fewer winners remain in any profitable industry, and less profitable industries fade away. The winners have more and more concentrated power, wealth, and relative capacity to buy the statutes, regulations, legal decisions, and memes that they want.

By the early 19^th Century, growing economic inequality and wealth concentration made these dynamics more apparent. By 1861, they obligated Abraham Lincoln to oppose “the effort to place capital on an equal footing with, if not above, labor in the structure of government…Labor is prior to and independent of capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”

Nevertheless, those with greater wealth maintained the greater power. As detailed in the previous column, they created police forces, not to fight crime, but to repress spontaneous and organized resistance to economic exploitation, and to maintain an order defined by class and racial inequality. Toward this end, they used their influence to enact and enforce statutes that expanded what are considered to be punishable crimes.

It is also true that material deprivation, and economic inequality produce crime. This relationship exists across countries and across times. It enables the powerful to justify the expansion of intrusive police power.

The most exploited of us have always been those in the reserve labor force. They are mobilized during the boom period of the economic cycle that is characteristic of capitalist economies. They are expelled and economically confined to segregated communities during periods of contraction.

People of color are disproportionately represented in this group. From the beginning of American industrialization, business interests used ethnic, then racial differences to undermine labor unity.

They exploited and promoted hateful ideas and attitudes about Irish immigrants, then Italians, then African Americans, Mexican immigrants in the Southwest, and Chinese and Filipino immigrants in the far West. They also used these economically desperate workers as strike breakers.

White workers initially bought into this, fearing that these despised alien creatures would take their jobs or drive down wages. Acts of racial violence were common.

Abraham Lincoln reacted to one such incident where White workers lynched free Black workers in New York City:  “The strongest bond of human sympathy, outside of the family relation, should be one uniting all working people, of all nations, and tongues, and kindreds.” And over time, the labor movement came to understand the necessity of such solidarity.

The period of 1914 to 1975 saw first massive destruction of global capital, and then expansion of organized labor’s reach and political influence. These changes brought steep reductions in economic inequality along with historic extensions of civil rights protections.

But they were an anomaly. As the after-tax return on capital again came to exceed the economic growth rate, neoliberal politicians and policies became ascendant, and economic inequality skyrocketed. The poor become poorer, and formerly middle-class White workers slid into the underclass, their life expectancies declining.

The poorest, and especially African Americans, remain in residentially segregated neighborhoods, cut off from work opportunities, efficient public transportation, and even healthy food options.  There, the finance industry has declined to issue mortgages and make business loans. So the median American White family has 41 times more wealth than the median African-American family, and 22 times more wealth than the median Latino family.

Brutal deprivation and inequality will inevitably produce resistance, and yes, crime. Crime is used, in turn, to justify racism, implying that Black and Brown neighborhoods are higher in crime because their inhabitants are morally inferior. Consider, for example, Ronald Reagan’s dog-whistle references to “welfare queens.”

Maintaining “order” required greatly expanding crime definitions, mandatory sentencing, mass incarceration, and intrusive policing. Spending on criminal punishment increased by 40 percent between 1993 and 2012, while actual crime rates steadily declined.

If the U.S. model of policing were really about fighting crime, then the “war on drugs” would not be fought overwhelmingly in non-White communities, as drug use rates for Black and White Americans are almost identical. 

Whites in the slave South lived in fear of slave rebellions and learned to hate and despise those whom they feared. Today, police charged with pacifying communities of color are often exposed to individual inhabitants on the worst days of their lives. It would take exceptional character and ongoing support for those police to not develop similar attitudes.

Numerous policing reforms are now under discussion. None can end structural racism without transforming the inherent dynamics in our political economy that produce concentrated wealth and power, cementing economic and racial inequality.

Unlike America’s founders, we now know that we cannot have political democracy without economic democracy, or legal justice without economic justice. Martin Luther King understood this when he wrote to his future wife that capitalism had “outlived its usefulness” because it had “brought about a system that takes necessities from the masses to give luxuries to the classes.”

It would take him another sixteen years before he could say this publicly. Or effectively fuse identity politics with class politics, a lesson many liberals and progressives have still to learn.

But today, young people are increasingly unintimidated to utter the word, “socialism.” And some form of socialism is what is now required. I say “some form” because, unlike the caricatured boogey man promulgated by the right for a century, there is a broad array of strains.

What they have in common is democratic control and self-management of the economic enterprises that most affect our lives. An American model would probably emphasize democracy, share work and rewards equitably, nourish personal development, reward innovation, effectively utilize diversity, and seek regeneration of the natural environment.

It is a conversation that is overdue. And it is a necessary one, so that “government of the people, by the people, and for the people shall not perish from the earth.”