Most Americans are not Capitalists

At the time of the American Revolution there were five major social classes. They included New England merchants; Southern planters; royalists (the lawyers, notaries, and everybody else who pushed paper for the Crown; shopkeepers, artisans, and laborers; and small farmers.

England’s attack on the interests of the merchants and the planters via an imposition of taxes helped stir the Revolution. The ability of the merchants and planters to sell the lower caste shopkeepers, artisans, laborers, and small farmers on the notion that King George was trampling on their liberties as well helped bring them on board. Otherwise there was really nothing else to bind these classes together.

The doggy bone that merchants and planters were able to throw to the lower classes to nibble on has been able to hold for the last 236 years. The classes, however, have changed.

Today’s classes are the capitalists; financiers; professionals; service and retail; agricultural; and laborers. Most Americans assume that they are capitalists, but in reality we merely aspire to be the private owners of production and distribution channels; therefore we promote capitalism.

The proper class distinctions are important because class interests influenced the role of government as described in the U.S. Constitution. Merchants and planters wanted their interests in commerce and trade protected. That interest took priority.

Commerce and trade are still important. Our nation excels at it, but the interests taking priority are financial. America’s last recession was aggravated by a frozen credit market. There is a political debate still raging over the bailouts of General Motors, Chrysler, and major commercial and investment banks. The Federal Reserve is also at the center of the debate, with the central bank’s effectiveness as an influence on the economy under fire.

As the debate over the role of government continues, the winner of that debate should come from the capitalist or financial class. The U.S. Supreme Court’s holding in Citizens United increased the political strength of corporations. Returns from this new found strength will depend on how well capitalists and financiers, via their corporate structures, are able to leverage their campaign and other messaging.

About Alton Drew

Alton Drew brings a straight forward and insightful brand of political market intelligence. Alton Drew graduated from the Florida State University with a Bachelor of Science in economics and political science (1984); a Master of Public Administration (1993); and a Juris Doctor (1999). You can also follow Alton Drew on Twitter @altondrew.
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8 Responses to Most Americans are not Capitalists

  1. Stanford says:

    Are you suggesting that the capitalist and financial class should determine the role of Government ? I just want to be sure I have that right.

    • altondrew says:

      I suggest that I expect them to. The top two classes shaped government’s role during America’s creation. If the top two classes leverage the means of social media and other media they could so as well. The corporate class until recently has not been known for fully immersing itself in politics. That may change. I do believe that government should promote the characteristic of its economy, in our case a free market. It should also ensure that national resources go to the groups that place the highest production value on it. I don’t think we have been seeing that lately.

      • stanford says:

        I got you. I guess I am viewing this from the perspective that I was thought about America(I am from Antigua). That everyone in the US has an equal say in the shaping of the American Government.

        What I understand from you is that the American Revolution is not product of all the classes wanting freedom, but instead the Merchants/Planters who convinced the shopkeepers, artisans, laborers, and small farmers that King George was hurting everyone. Am I correct in this understanding ?

        Please forgive me if I am repeating what you have said before. It is my method of getting it clear in my mind.

      • altondrew says:

        Yes Sanford. Exactly. The lower classes had no interests in the economic interests of the two upper classes so to get them aboard, the argument was that the Crown was impinging on their rights, liberties. AltonDrew 404.756.2580begin_of_the_skype_highlighting404.756.2580end_of_the_skype_highlightingbegin_of_the_skype_highlighting404.756.2580end_of_the_skype_highlightingbegin_of_the_skype_highlighting404.756.2580end_of_the_skype_highlighting


  2. Ken Ciszewski says:

    It wasn’t just the English taxes that the colonists hated. As I understand it, the King of England also gave out charters (presumably to his “friends”) that gave them exclusive rights in business and trade in certain markets, thereby locking others out, most likely colonists who wanted to enter those business markets. From that point of view, “the business classes” as you describe them had a definite interest in getting out of under English rule.

    Also, I doubt seriously that most Americans think they are capitalists. I’m not convinced many of them understand what that actually means. In any case, the majority are not entrepreneurs or business owners, so it could hardly be said they are capitalists.

    “As the debate over the role of government continues, the winner of that debate should come from the capitalist or financial class. The U.S. Supreme Court’s holding in Citizens United increased the political strength of corporations.” That’s a scary thought, especially if I am correct in observing that capitalist or financial class believes in “social and economic Darwinism”–“winner take all, let the fittest survive, let the Devil take the hindmost”. Unless this tendency is moderated, like it was in the past by trade unionization and business regulation, the capitalist or financial class may find itself the target of the serious challenge of a revolution of some form. “Occupy Wall Street ” kind of got the idea that Wall Street wasn’t for the common man. They have yet to understand that government really isn’t our enemy in the USA, but business, well, that’s a different story and a much bigger problem that needs to be dealt with. Business has “lobbied” (read “bought off”) the Congress, and even perhaps the Executive branch to do its bidding. That bidding is not in the interest of the common man in too many cases.

    It’s not that all businesses are bad, or that don’t contribute many positive things to our society, but there have been some pretty ugly examples in the last few years (Enron, with its shady accounting practices that hid its bad deals and its manipulation of California electric power resources to drive up electric price, and the mortgage companies who made fraudulent loans to people who couldn’t afford them, to name a few). The recent proclamations by the CEOs of Emerson and Cisco that they won’t continue to invest (that would create jobs) in the USA because its too expensive should make it clear that they are not the common man’s friend, to put it mildly.

    I was once talking to some friends who complained that too many in the USA don’t want to work. I said that I agreed that everyone should work, if at all possible, to provide for himself, his family, and thus contribute to society. However, as I told them, there must be jobs so people can work. Shipping them off shore doesn’t help improve people’s chances of being employed.

    I know that there are those who believe that everyone should be a capitalist or an entrepreneur. In practice, in modern society, I don’t see how that would work well. If everyone had a farm and traded foodstuffs, or farmers traded with craftsmen (blacksmiths, auto mechanics, the cable TV company…!)… I’m making a joke here because, the amount of money required to support a person or a family in highly organized civilized societies is very large, and unless we want to take our standard of living back to a less modern, less technological society, raising crops, chickens, and selling fruit off a cart in downtown St. Louis, Missouri (like my great grandfather did 80 years ago) isn’t going to cut it financially. Further, it takes a lot of different skills (technical. business, marketing) to create, transport, market, finance, and sell the goods and services required in the modern world. We need leaders, and we need works to do the day to day work.

    My point is that the winner of the debate [referenced earlier] should come not only from the capitalist or financial class, but also from a much broader spectrum of our society.

    • altondrew says:

      Ken. As usual you make powerful points. Thanks for sharing. Given the flat wage growth we have experienced in the past two or three decades, what do you attribute that problem to and how can we get wages increasing again?

      • Kenneth J. Ciszewski says:

        The economist Lester Thurow (from MIT) predicted, in the late 1980s/early 1990s (I saw him on PBS) that global competition would have negative effects on wages and salaries in the US. I’m not sure I know how to fix the problem. If I suggested what I have been thinking, it would probably sound considerably socialist.

        I was talking to a business associate the other day, and in some way this “wage problem”, as you call it, came up. My associate has relatives in England and Ireland. He pointed out that a number of his relatives in Europe travel extensively to various European countries and even to the USA. Many of them are “on the dole” (I assume he meant welfare), as he put it, so they live frugally, and somehow find the money to travel. They live in small apartments and flats, don’t buy houses or lots of cars. He pointed out that in US society our economy sort of requires that large numbers of us change houses every few years and buy cars every few years. The money has to keep circulating in our consumer-oriented economy by these kinds of purchases.

        It’s a little like the Visa check card commercial that shows the customers in a circle swiping the Visa check card one after the other as they make purchases. Then one customer stops to write an actual check, and everything comes to a stand still. I always thought of this commercial as a metaphor for our economy as my associate described it.

        My associate told me that he believed that, at some time, although probably not in his and my life time, that the US would have to become considerably socialist ala the European mode, in order to provide for a fair number of our citizens. You might find that pessimistic. I find it kind of pessimistic as well, because it suggests that the majority of our future citizens would have a much different and probably a considerably reduced standard of living relative to today.

        But then, I have often wondered if we need to live at the standard of living that we do, in the sense that, well, how many people need a four bedroom three and a half bath house on a half acre lot? How many can actually afford such a house, even in my area, where such housing is not near as expensive as it is in other areas, assuming one can buy such a house in other areas. I have a relative in California who has a two-story house on a reasonable lot. The house is not that big inside. It’s on a cul de sac and has a tiny front yard. Not a big deal, except that it goes for somewhere between $400000 and $500000, depending on the housing market’s gyrations in the last few years. A similar house here in St. Louis would only cost around $300000, if that, although it would have a smaller lot, but it would have an unfinished basement.

        In order to get wages growing, we need to have people working in businesses that can charge enough for their products and services to get wages up to higher levels. Obviously, working at McDonalds won’t do that. Working in Information Technology or high-end manufacturing has a better chance at getting higher wages. The recent commercials on TV about people who work for GE making power turbines and jet engines is closer to what we need, as are jobs in the defense industry, where wages and benefits are pretty good. The problem with that is that I believe the long-term trend of defense is probably not skyrocketing upward, but is more likely to level off if not decline slightly. The GE jobs are nice, but GE has shipped at least some high end manufacturing off shore. Ironically, GE’s CEO is Obama’s jobs czar.

        People who can sell products and services often do fairly well, although they are somewhat at the mercy of economic conditions.

        I have serious concerns that we can mass-produce higher wage jobs. We did years ago when we had no foreign competition. It’s a lot harder to do now because of foreign competition. We had the “Big Three” automakers for a long time. I recently counted at least a dozen foreign car manufacturers that sell cars in the USA. A lot of good jobs went to the foreign car manufacturers over the last 30 years.

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