Inequality of Equality

In the immortal words of Thomas Jefferson, "We hold these truths to be self-evident, that all men are created equal." In Jefferson's world, some men were born into the aristocracy and that entitled them to be treated by the government differently than commoners. Jefferson merely claimed that God did not ordain some men to be superior to others by reason of birth. Neither Jefferson or his peers would have claimed that being created equal meant that everyone had the same innate abilities, intelligence, skills, character or circumstances in life. Nor would they have insisted that being born equal meant you should die equal. They recognized that some people would succeed and others fail. Some would become rich and others poor. What they hoped for was an educated citizen with sterling character who would contribute to the common good by engaging in productive work. Given human nature, that was perhaps overly optimistic. It would follow, then, that government should not benefit some people with superior social and economic endowments simply because of who their parents were. But neither should government penalize people for being more successful than others.

Of course, thanks to Jefferson and his compatriots, we have no hereditary aristocracy in America. What the founding fathers, or at least those who shared the philosophy of Jefferson, envisioned was a meritocracy where those with superior natural endowments could use them to fashion a life of their choosing, that is, to pursue happiness unfettered by government obstacles. So long as the pursuit of happiness did not infringe on the natural rights of others to make the same pursuit, there was to be no interference by politicians or bureaucrats. Government, then, was seen as the referee, the impartial maintainer of personal sovereignty and individual liberty. Every citizen had a right to live for his or her own self, not, as in aristocracy, the dictates of the feudal lord or the government. Of course, given human nature, there must be people who would try to take advantage of others by theft, robbery, fraud or other devices and it was government's job to enforce laws prohibiting such activity. Likewise, it was government's job to defend the nation against foreign aggression by the monarchial regimes of Europe or from anywhere else.

What the founding fathers feared the most, however, was the mob. In the pre-revolutionary days, the crown endowed some people with huge estates and monopolies on trade, resulting in landed gentry who were the equivalent of aristocrats even if they lacked a title. Some had tenants on their land who were treated in much the same disdainful fashion as the peasants of Europe. And like those European peasants, they sometimes rose up against their landlords, burning their mansions and squatting on their land. The founding fathers, being mostly men of property, recognized that the lower strata of society would always cast envious eyes on their property and would attempt to expropriate it through any available means. So when the United States was founded, it was not as a democracy, but rather as a republic, that is, a government of laws that ensure certain rights and protections against the mob. As Thomas Jefferson wrote, "A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine." In fact, to insulate government from the passions of the mob, senators were to be elected by state legislatures and the president by an electoral college, rather than by direct vote.

Likewise, the founding fathers sought to insulate the people from the ravages of government. To ensure that, the Bill of Rights was incorporated into the Constitution. It was a list of activities limiting the government's ability to subjugate the people. In due time, of course, Congress and the Supreme Court have steadily weakened these restraints on government. For example, the Tenth Amendment states, "The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people." This amendment has been largely discarded as an impediment to government activism. Many in government would agree with the tyrant Napoleon who said, "A constitution should be short and obscure." Or, as Democratic representative Pete Stark of California said, "The Federal government can do most anything in this country."

So, neither could the mob ransack your dwelling or vote themselves your property, and neither could the government take your property or enslave you. That is, until the progressive movement arrived. In 1913, the 16th Amendment of the Constitution was added. For the first time, the federal government could directly tax the individual. That amendment opened the door to confiscation of wealth for the simple intention of enforcing income equality. Initially, the rates ranged from a low of one percent to a high of seven percent. But that skyrocketed when Franklin Roosevelt took office, reaching a high of 94 percent during World War II. Clearly, some people were being exploited by the government for the benefit of the mob. As the Greek philosopher Diogenes put it, "Mobs are the mother of tyrants." During the progressive era, government became entwined with the economy as various regulatory agencies were created, bills were enacted limiting businesses, the Federal Reserve was created and trusts were busted. No longer was the government an impartial referee.

Jefferson envisioned a land filled with small farms and estates run by beneficent landlords. His America would consist of educated men knowledgeable about the issues of the day, able to elect wise representatives who would value liberty and restrain the government. His political opponents, men such as Hamilton and Adams, wanted to foster the rise of an industrial America. To these Federalists, government was an instrument of national power whose task was to intervene directly in the economy, creating industries and fortunes for a select few who would have power. As Hamilton wrote,

"All communities divide themselves into the few and the many. The first are the rich and well born, the other the mass of the people. The voice of the people has been said to be the voice of God; and however generally this maxim has been quoted and believed, it is not true in fact. The people are turbulent and changing; they seldom judge or determine right. Give therefore to the first class a distinct, permanent share in the government. They will check the unsteadiness of the second,...".

Government was envisioned to operate in a similar fashion to the mercantile policies of Great Britain, the very system the colonies rebelled against. In fact, Hamilton thought the British system to be perfect. John Adams allowed that it could use some tweaking, but was essentially sound. Jefferson thought both positions were appalling. Among the characteristics of mercantilism were the government's promotion of industry by research and development grants, continual low wages, monopolies or licenses granted to favored businesses, protectionism, and ensuring domestic population increases to provide more consumers and workers to compete for jobs. The idea was to use economic policy to enrich a country's elites and bolster the nation's power.

If the characteristics of mercantilism, which was the dominant European economic system of the time, seem familiar, it's because the same policies are being promoted by the American government today. For example, the Obama administration has been attempting to create "green jobs" and alternative energy industries through direct subsidies to businessmen who contributed heavily to his campaign. Population increases are encouraged by unrestricted illegal immigration, fostered by both parties. One consequence of a massive influx of uneducated illegal immigrants has been competition for jobs and the lowering of wages. Protectionism is also on the agenda as the Democratic Party has refused to pass free trade agreements because of objections by big unions. Moreover, just as 18th century mercantilists granted trade monopolies to favored businesses, such as the British East India Company, the growth of regulations and licensing have stifled competition to the benefit of favored big businesses. And while this country doesn't have colonies from which to extract cheap raw materials, modern companies outsource their manufacturing to undeveloped or developing countries, in many cases former colonies, where wages are cheap.

What's more, under "progressivism", an elite mix of politicians, bureaucrats and big businessmen would form that "first class" that Hamilton saw as necessary to ensure profits and control the mob. True, in an age of globalism, the new mercantile policies aren't so much intended to bolster national power as they are to further enrich elites and their clients. Obama even appointed GE head Jeffrey Immelt as the head of his Council on Jobs. Immelt has often spoke of businesses combining with government, citing China as a role model.

The consequence of the new mercantilism, or fascism as it is also known, is the stagnation and decline of America's middle class. The engine of economic progress, small businesses, are pressured by high taxes, unbearable regulations from all levels of government, and competition from big businesses able to undercut the small businesses' prices due to lower costs from economies of scale. Less businesses are started, more go under, and more big businesses relocate overseas. Of course, there are other contributing factors, such as the poor quality of education under state run monopolies that results in less skilled workers. Colleges, increasingly expensive reeducation camps run by Marxists, turn out far too many liberal arts graduates with no marketable skills to get a job but with a huge debt load to pay for. Those students would have been better off learning a trade. Combine that with government policies, including from the Federal Reserve, that promote economic bubbles whose collapses damage the finances of many middle class families, and you have a recipe for anger and resentment.

So the rise of the new mercantilism has resulted in the increasing empowerment of government as the arbiter of financial success. Consequently, any business that wants to compete needs, at the least, to have lobbyists in Washington that try to prevent competitors from buying off politicians who then pass bills favoring their competitors. Washington has assumed so much power over the economy, even the Federalists would be astonished. That power has increased steadily over the years and under the Obama administration has grown exponentially, with bailouts of large, troubled financial institutions while muscling in on healthy institutions, takeovers of automobile companies and a health care bill that essentially puts government in control of that industry at horrendous expense to the taxpayers.

Clearly, the vision of Jefferson has been transformed, perhaps inevitably, by the urge of some to assume an advantage over others by using the only legitimate source of political power, the government. That is, some have understood that if you can't win in the market place, you can win by using government power to benefit your business and stifle competition. All you need to do is contribute enough money to some key politician's reelection campaign. As George Washington said, "Few men have the virtue to withstand the highest bidder."

Consequently, under the new mercantilism government does not treat every citizen equally. It has not only ceased to be the impartial referee, it is now the main engine of partisanship, not only politically, but economically. Every business with the wherewithal is engaged in buying influence among the politicians and bureaucrats. In some cases, they clamor for subsidies like the mercantilists of old. In other cases, seek trade or tariff advantages to disadvantage competitors. They want regulations that require entire departments of lawyers to interpret while smaller businesses who can't afford those lawyers risk sanctions from government busybodies.

One example is so-called Obamacare. The government's health care takeover would result in such financial distress for small businesses that they've stopped hiring while big business (and unions) are getting exemptions. And then there are the environmental policies that can ruin entire industries, for example, coal mining, while favoring others such as solar power. The marketplace no longer determines the most efficient and cost effective means of production or what is produced in some cases. The main difference between previous administrations and that of Barack Obama is that for now, giant unions and community organization groups are engaged in the economic warfare alongside big businesses, and it's not the big businesses that are always favored.

It's no wonder, then, that many American's are angry. Tea Partiers protested, wanting less spending and smaller, less intrusive government. True, they wanted to maintain certain entitlements, such as social security and medicare as a safety net, but they also wanted a dynamic economy able to generate the revenue to pay for these programs, not an economy strangled by red tape, out of control government spending, and excessive taxation. These are in many respects the heirs to the ideas of Jefferson. For the most part, the rank and file represent small businesses, farmers, independent wage earners and those who still believe in the original principles upon which America was founded. The America they see now is an ugly caricature of the America they thought they knew, the America that was presented in civics class textbooks decades ago. For the most part, these Tea Partiers are older, traditionally conservative, and patriotic.

The recent phenomenon of Occupy Wall Street (OWS) represents an amalgam of interests. The crowds appear to be mostly young but with a sizeable proportion of older people, mostly Democrats or independents, many radical leftists, more unemployed than average, hurting financially even if they have a job, overly indebted, and, like the Tea Party, angry against what they see as Wall Street influence on the political process. (And there appears to be a sizeable contingent there to simply party, some criminals, and some mentally disturbed people looking for an audience.) In fact, a majority say they want the outcome of the occupation to end Wall Street's influence on politics, although it isn't clear how that would benefit them. For many, democracy rather than a republic is their ideal because all their lives they've been taught that majority rule is good and oligarchy in whatever form is bad. They look upon government as the tool of the people, there to enforce equality by preventing anyone from having undue influence who wasn't elected by the people. Many sound almost Jeffersonian, so it's not surprising that they oppose the new mercantilism of creating and sustaining wealthy elites at the taxpayers' expense.

But if there is anything that seems to exercise them more than anything else, it's income inequality. They describe themselves as the 99% in opposition to the rich 1% who they believe have corrupted their ideal of a government that works for the common good rather than the wealthy big businesses. But more than that, for them, income inequality is bad in itself for reasons they never seem to articulate. It's not surprising, then, that the OWS crowd has many of the characteristics of a mob.

The extremists in the OWS encampments demonize the rich, wanting to take their wealth away from them. They demand pure democracy so that the majority can victimize any minority by a simple vote. Many demand to live off the labor of others and, in fact, are living at the expense of taxpayers while engaging in the occupation. Some make economic demands that are so far divorced from reality as to be fantasy. They threaten violence if they don't get their way. Because they equate Jews with wealth and Wall Street, some are anti-Semitic. One television star even suggested sending the rich to the guillotine if they aren't reformed in reeducation camps. They march into commercial areas to disrupt commerce and even to the private homes of the wealthy to intimidate them. So, in the name of equality, many have adopted a philosophy that is even worse than the new mercantilism, that is, Marxism. Whereas mercantilism uses government to create and sustain a Hamiltonian class of wealthy, politically empowered elites, Marxism wants to use government to level everyone down to the same economic status.

That shouldn't be surprising. The initial call for an "Occupy Wall Street" demonstration came last July from a web site called "Adbusters" which is anti-capitalist. The editor said he was inspired by the Egyptian demonstrations in Tahrir Square and the right wing's Tea Party. Adbusters may have been also responding to Obama's former green jobs czar and avowed communist, Van Jones, who last June created an organization of leftist groups to "Rebuild the Dream." The organization included assorted groups, such as, that are funded by George Soros. Among their demands was increasing taxes on the rich and a tax on Wall Street transactions. If that sounds exactly like what Obama has been saying over and over again, it's probably not a coincidence. (As it is, the top one percent of earners pay 38% of all income taxes.) Citing the size of the Tea Party demonstrations, Van Jones told his crowd that they could match or exceed them. In September, Jones warned that October is going to be the “turning point” when it comes to the progressive fight back. He said the “American Dream Movement” will be the counterbalance to the tea party and there is going to be an “October offensive.” Not surprisingly, big unions have joined in and are aiding the OWS protestors. Even less surprisingly, the Communist Party of the United States, the American Nazi Party and even Communist China have expressed support.

So, for these leftists, the inevitable result of capitalism is moneyed interests that subvert the will of the people. These capitalists are responsible, in their view, for exploiting workers and the environment. And they corrupt the people's representatives. So the far leftists have used these discontented young people to advance a Marxist agenda. (Some have called them "useful idiots.") They want capitalism brought down. They want enforced equality so that, in theory, only the common good, as expressed by the will of the people, prevails. In practice, of course, the will of the people has always been expressed by a chosen few who eliminate any dissent. In any case, they have turned OWS into a distinctly Marxist movement. One person reported that virtually all of the literature being handed out is Marxist.

The Obama administration sees them as supporting the populist meme the president has been advancing that the rich need to pay their "fair share" by increasing their tax rate. So the administration, which has dropped the pretense of not being on the far left, has come out in their support. But this is an administration that was given a record amount of money by Wall Street interests when Obama ran for the presidency in 2008. It's an administration that has numerous Wall Street executives in its employ (some call Goldman-Sachs the fourth branch of government). It's an administration that has essentially used Wall Street to get elected and now has turned on them to promote the interests of big unions and community organizing groups. True, the bailouts rescued several financial institutions and many banks. It also gave the government and the United Auto Workers control of General Motors, and Obama even fired that company's CEO. Its 800 billion dollar stimulus package was essentially a Democratic Party slush fund. The money went to Democratic Party interests and causes while doing nothing to promote job growth. Still, you don't see OWS demonstrators occupying the White House or Congress because the people who organize and finance it are in bed with Obama.

When the German National Socialist Workers Party (Nazi) started out, there was a branch in Berlin that was truly socialist led by Gregor Strasser. There was another branch in Munich led by Adolph Hitler. The Munich Party eschewed socialism, despite the party's name, because they solicited financial support from rich industrialists and it would be counterproductive to threaten their interests. (The Munich faction eliminated, literally, the Berlin socialists during the "Night of the Long Knives.") The industrialists saw the Nazis as a bulwark against the growing influence of the communists and what's more, saw in the fascism of Mussolini's Italy, a marriage between business and state that would stifle competition and ensure profits during the Great Depression. That Hitler was ready to implement fascism in Germany also led to his support. These industrialists thought they could control Hitler. But eventually, it became clear that once Hitler assumed total political power, the industrialists were at his mercy like everyone else.

In some respects, history is repeating itself. Obama sought the financial aid of Wall Street and portrayed himself as a moderate who would look out for their interests. Indeed, the bailouts came at a price, but they kept big Wall Street firms afloat during a major recession. But now, Obama is demonstrating that it's government that has the legitimate use of force and is now issuing hordes of new regulations, urging increased taxes on business and the wealthy, and is fostering big union and community organizers' demands at the expense of those on Wall Street who had previously supported the Democratic Party.

Meanwhile, the OWS crowd protests at Wall Street. Most voted for Obama in 2008 and most say they'll vote for him again. Yet, it wasn't capitalism that corrupted their ideal government. It has always been a consensual marriage between business interests who wanted to buy influence and political interests that wanted money. That version of crony capitalism is closer to fascism than capitalism. It was capitalism, after all, that enabled America to enjoy enormous prosperity, the elevation of millions out of poverty, and an array of goods and services that is mind boggling. It is crony capitalism, or fascism, or new mercantilism that is destroying it and paving the way for Marxism. Businesses can do nothing that government doesn't allow them to do. So long as government has the legal right to dictate winners and losers in the economy, there will be inexorable pressure for corruption. When government goes back to being an impartial referee, businesses will win or lose because of their own efforts.

Yes, there will be wealthy people, but they will have acquired that wealth the old fashioned way, by creating goods and services that people want to buy to improve their lives. For the left, the economy has always been likened to a pie, and if someone has a larger slice, someone else must have less. So for the OWS crowd, being in the 1% means someone else was made poorer. Yet, that's Marxist nonsense. Under capitalism, the pie expands and everyone benefits. If done honestly, the rich can only succeed by hiring workers and can only make profits larger by either selling more or increasing productivity. Increased productivity results in the ability to pay higher wages. So, the rich get that way by improving society, so long as they have an incentive to do so. Remove that incentive, and everyone loses.

It seems, then, that the solution to the problem is to restore equality. That is, a system where the government treats all citizens equally and doesn't favor some over others for whatever reason. The solution is not the equality of the left, which would impoverish everyone and reduce us to the level of the usual dirt poor Communist countries. Unfortunately, the OWS crowd wants to achieve the first equality by inflicting the second equality. That is, they want the government to treat everyone with equal oppression.

Which brings us back to "All men are created equal." When the government decided that not all citizens should be treated equally, but rather, some wealthy businesses should be benefited, it decided that all men can be created unequal. When the government decided that powerful unions should be granted power over employers, it decided that all men can be created unequal. When the government decided that some people should have to pay more taxes to support other people who aren't required to pay taxes, it decided that all men can be created unequal. When the government decided that you could buy the votes of some citizens by redistributing the income of other citizens, it decided that all men can be created unequal. All it takes is government to decide who wins and who loses. We have no aristocracy, but then, we have less and less meritocracy. What we have is bureaucracy and the elites who run them. If the OWS people really wanted to solve the problem, they'd be in Washington or better, at the ballot box ejecting corrupt politicians.

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