W. R. Mead is on ground I find very familiar today. He is making a pragmatic argument about why we should shift to a system that prefers small business development, but there's a political philosophical argument for the proposal as well. It's Jefferson's old argument about the increased practical liberty that comes from owning your own means of production. Political liberty is good, but if you are effectively under the thumb of another, you are not really at liberty to speak your mind. This is why James Jackson, that greatest of Georgian political heroes, fought to undo the Yazoo land fraud and ensure a Georgia in which you could own your own land.
When I say he fought for this I mean literally fought, not "fought for" in the figurative sense preferred by contemporary politicians. First he fought in the Revolutionary War for the principle of political liberty. Then he fought four duels in the course of trying to undo the Yazoo land fraud as his opponents tried to kill him to prevent his success. He was not dissuaded by these multiple attempts on his life, but saw the question through to victory.
So what was the principle for which he fought? It was that the American system of government should work to ensure that Americans had at least the real potential to own their own means of production. Instead of a society structured around a renter/land-lord relationship, it would be a society structured as much as possible to be about individual families owning the things they needed to produce a living. Then they could say what they wanted when it came time to reason politically rather than having to scrape to the opinions of the great or the rich. It would enshrine the political control of the community among the people because the people would be practically as well as formally free.
There is an Aristotelian idea behind this model as well. In the Politics, Aristotle writes that the least dangerous group to own power in any society is the propertied middle class. Because they have land or businesses of their own, they want strong protections for private property, and thus will not (as the poor tended to do in Aristotle's time) vote to 'take from the rich and give to the poor.' Because they are not so rich that they can afford to be long away from tending to their own business, they will not seek to rule any more than is absolutely necessary, ensuring that government remains limited to only those concerns that absolutely require it. Unlike government by the rich or by those who are paid to govern, popular government led by the middle class will not seek to overawe every aspect of life in order to further their own class interests.
Thus they will avoid both the problems associated with government by unregulated democracy, and government by an elite that is rich or that is paid to perform public office.
It remains a good ideal for future reform. Government could do much less, so much less that it was only done part time by those who would want as quickly as possible to get back to literally minding their own business. What is the solution to poverty on this model? Encouraging the poor in coming to develop a productive business of their own.
An old blog comment from someone named Jane:
ReplyDeleteLet's see, the electronic manufacturing jobs went to Japan decades ago, then all the labor intensive manufacturing jobs went to Asia, the rest were automated; half of our IT jobs went to India. Agriculture, construction, landscaping, housekeeping, restaurant jobs went to illegals.
When manufacturing jobs started to disappear, people went into construction, distribution, transportation, retail, or back to school for IT and Finance. Then the dotcom bust and outsourcing killed off job prospects for IT grads, leaving Finance and Real Estate. Now that Wall Street and Real Estate have imploded, dragging with it Retail, distribution, and what's left of manufacturing, construction...what else is left?
The government!Punditry and activism!
I am no fan of Big Government and its top heavy, non productive technocracy. It certainly does exacerbate the impact of the real economic game changers favoring the mega multinational corps over small businesses. But, it is technology that drives globalization, makes it fast, easy, and cost effective. Together they facilitate the way too powerful global megacorporations with their stunning efficiencies and economies of scale. Think about the big box stores. Today there is more choice and variety in one or two aisles than there used to be in an entire store. The competitive significant price savings afforded by these technologies sucks the business away from the Mom and Pops, and the REAL Economic Game Changers (information technology, automation, instant global communication, navigation technology, logistics technology, RFID) make offshoring efficient and advantageous; the global mercantilist mega corporations couldn’t exist without it. Did you know that the technology exists for… crewless 13,000,000 cu ft ….container cargo ships.
ReplyDeleteUnfortunately, today’s mind boggling efficiencies and staggering economies of scale squeeze out the labor, up and down the supply chain, eliminating many jobs, concentrating the wealth in the hands of the few or sending the wealth out of America. Offshoring just compounds the problem and hobbles the effort to generate jobs that create real wealth in America. The source of this is human ingenuity: Bill Gates, Larry Ellison, Norman McLean, Roger Easton, George Laurer.
The political parties missed the memo that the Industrial Revolution is over and the “New Economy” is pretty unappealing from a middle class perspective. What the parties, all of them, have in common is NO SOLUTION and an unwillingness to step up to the plate and engage in a forthright honest dialogue. The problem is NOT that mid level skilled jobs aren’t being created but that they aren’t being created as fast as they are disappearing. Nor are they as stable and long term as they used to be but just as importantly neither are the businesses that were once the employers.
I agree that technology has driven some changes, but government action in the form of laws, regulations, and treaties, is also in part responsible for the power of mega-corporations.
ReplyDeleteThe tech changes should favor small businesses in many ways; their costs will be reduced as well. The problem for them is more that as they become competitive, they begin to threaten established interests, who then use their money to try to influence politicians to add regulations to make these new businesses less competitive. Uber is providing a good example of this.
Of course, tech changes affect different industries in different ways. In many ways, though, technology is making the yeoman farmer ideal more possible than it was during the industrial age. It has made movie production much, much more possible for the private individual, for example. Publishing is also seeing an increasing number of independent publishers due to the development of web and e-reader technology.
Tech is enabling more people to challenge the mega-corporations, but they need a fair environment to make it work.
Megan McArdle is writing about the same thing from a slightly different vantage point:
ReplyDeleteWhat really scares helicopter parents:
...the upper middle class has found itself in a curious bind. In some ways, its economic fortunes are better than ever: They make more money, more reliably, than they used to. But because they are employees rather than business owners, they have a very limited ability to pass their good fortune onto their children.
That's a good point too. I can pass accumulated wealth, but if I can't also pass some means of production, my children are at a tremendous risk. Wealth doesn't last forever, at least not the kind of wealth even the upper middle class can accumulate in a single lifetime.
ReplyDeleteI don't know where Edith got that boiler plate that she is regurgitating, "mid level skilled jobs"--WTF does that even mean? But she's basically just wrong about choice--There were always lots of choices. There may be more now, but it's not like there wasn't any before.
ReplyDeleteIt always looks like rants like hers seem to be wanting to return to 1955 or 1905 or something like that. And that just isn't going to happen. It's a useless pipe dream.
In 1970, the inheritance tax was 66% on anything over $60,000. And it had been more confiscatory starting in the great Depression. This is why "yeoman" businesses don't exist anymore. They had to get sold to pay the taxes when the owner died. It's probably why lots of family farms disappeared too.
Although there was probably some demographic issues going on, where lots of guys who came back from WWII and built businesses ended up retiring and selling out, because their kids didn't go into the family business, because they could go off and go to college and what not. And since corporations don't die, they could buy up the smaller businesses and conglomerate.
Now, add on the fact that the rest of the world had to rebuild after WWII, and parts of the world that were not industrialized now are, it's pretty clear what was happening, although not many wanted to admit it at the time.