MONEY MATTERS - Class Warfare is Killing America

Written by SP Editor

In college, a time rather more years ago than I’d like to admit, I was fascinated by what was termed the “Horatio Alger myth” – the idea that anyone born in poverty could raise themselves up and become successful in life, “rags to riches” if you will. We used it as a counter-point to William Domhoff’s Who Rules America in which he posited that social mobility was more myth than fact and that elites had generational staying power. This is an interesting time to renew that debate as we find ourselves descending into a modern Gilded Age 150 years after the first.

The Gilded Age, a term coined, it is said, by Mark Twain, ran from the end of the Civil War through 1900 and was characterized by a vast economic expansion and the creation of the first great American fortunes that made the Carnegies, Vanderbilts, Rockefellers, Morgans, and others phenomenally wealthy. Twain and Warner’s The Gilded Age: A Tale of Today (1873) satirized the idea that vast wealth masked the poverty and despair generated by unregulated capital, harsh labor conditions, and monopolies. The drivers of this economic locomotive included rampant child labor, Jim Crow laws, virtually no government regulation of business, and violent suppression of labor organizing. By the 1880s, the political system had managed to transform the 14th Amendment, passed at the end of the Civil War to ensure freed slaves rights of citizenship, to bizarrely include Corporations as “persons” under its provisions. It mattered little that the Court didn’t actually say this, but rather a “Headnote” added by a Court Reporter and former railroad president named Bancroft Davis asserted this meaning. Within a decade or so, this was being referred to as long settled law, while rapacious corporations had a field day with legal personhood, their wealthy owners reaping the gains. Teddy Roosevelt sparked an early version of progressive response as he railed against business Trusts and their stranglehold over politics and politicians.

In this harsh 19th Century economy, one can begin to understand the allure of Alger’s novels, some serialized, that followed brave, young, white men as they rose from shining shoes to become successful business people pursuing what became known as the American Dream. His first novel, Ragged Dick (1868), created the template and was followed by numerous others. Always, some stroke of luck combined with good character produced the path out of poverty in a bustling city. None were set in the South, needless to say, where Jim Crow laws and sharecropping replaced chattel slavery with little change in the social and economic hierarchy. In the North, though, the capital accumulation game was thriving for those positioned to sit at the table.

As a young person, I felt a certain affinity with the Alger premise which helped explain our family myths about hard work leading to success in life. Anyone could do well. Anyone could succeed in 1960s America, even as we struggled to bring justice to those for whom it was more myth than reality. Domhoff taught Sociology at UCSC, where I started college, and in his course I found his notion of a dominant corporate Elite Class a bit off-putting. 60 years later, I wish I had given it more credence. His premise that elites are a social class with their own clubs, schools, and social circles is inarguable but what was more interesting was the idea that this led them to act in a coordinated way to exercise power in defense of their privilege. It’s hard to look at our current world and not see the validity of his analysis.

In 1971, the year after I graduated and shortly before he was named to the Supreme Court by Richard Nixon, Louis Powell wrote a detailed memo to the Chamber of Commerce calling for the corporate community to realize the threats to their welfare represented by the likes of Ralph Nader and public interest lawyers. These actors were working to use law and regulation to constrain the freedom of corporations to profit, whether or not doing so caused the public damage. In the 50 plus years since, with the rise of the Federalist Society, and the indelicate process of appointments by Bush and Trump of the most conservative Supreme Court in the modern era, we are witnessing the most activist legal strategies ever contemplated. From the Voting Rights Act to EPA regulations to the choice NOT to regulate Crypto, we are seeing the corporate elite once again dominating social policy and the law that underpins it. Apparently, Domhoff was right.

The famous “Powell Memo” and the remarkable success of its implementers in using the law to cement corporate power and restrain government’s ability to regulate same was only one part of the puzzle. The media landscape has been similarly transformed by another initiative sponsored by the Elite Class. In 1987 toward the end of Reagan’s second term, a conservative dominated FCC voted to repeal an essential element of media regulation called the Fairness Doctrine wherein “issue speech” (i.e. not electoral or candidate speech, but advocacy of issues) required broadcasters to present both sides of an issue. After the FCC abrogated the policy, Congress passed a law to reinstate it only to see Reagan successfully veto it. What rose in the wake of this was something called “talk radio” where the likes of Rush Limbaugh built audiences for single POV advocacy for or against people or issues they distained. And no one could respond. Many have tried to explain why the right has been so much more successful in this niche than progressives, so I won’t try, but suffice it to say they ran with this one big time. And now, as the “Epstein Class” does the bidding of the billionaires through our Chief Narcissist, we are watching whatever remaining guardrails disappear. As media companies seek favor from the government for mergers, editorial freedom is becoming more pipe dream than practice.

So, in this world, increasingly understood to be governed by the interests of the corporate elite, what has happened to Alger’s ideal of “rags to riches” as a cornerstone of American culture? It’s not a pretty picture, even with rose colored glasses. Among academics focused on social/economic mobility is Bhash Mazumder. In a 2022 paper published by the Chicago Federal Reserve Bank, he makes the following statements:

newer studies suggest that intergenerational mobility is lower than we used to think, and that the U.S. has one of the lower rates of mobility among advanced economies.
Black families experience much lower rates of upward mobility from the bottom of the income distribution, and much higher rates of downward mobility from the top of the income distribution, than similarly situated White families.
The new evidence suggested that, rather than being a country with relatively high mobility, the U.S. was actually a relatively rigid society in which income gaps were likely to persist for many generations.

Thom Hartman, the progressive author, wrote this about his forthcoming book examining all this in great detail:

I wrote Who Stole the American Dream? to wake people up to the corruption of our democracy by the rich and powerful, particularly the corporate “artificial beings” that keep buying off judges and politicians because of corrupt Supreme Court cases citing that corrupt headnote, starting with Santa Clara and then going to Covington and then straight-lined to Bellotti and Citizens United.

As the Trumpian Gilded Age unfolds, will we see an undoing of this class warfare as occurred in the days of the Antitrust movement and later the New Deal? It’s anyone’s guess, but one can start by calling it just that? The term has so often been used against progressives and unions that it’s almost lost its true meaning. Class warfare in the US has almost always been directed AT, not from working and middle-class Americans.

Drummond Pike, a frequent Organizers’ Forum participant and contributor to these pages, was the founder and CEO of Tides in San Francisco, and continues to be involved in philanthropy and social change.