WEALTH AND DEMOCRACY - Kevin Phillips
Preface
The genesis of this book over the last decade is twofold. In part, it grew out of the great interest in my 1990 book The Politics of Rich and Poor, but other roots lay in my increasing turn to history, not least economic history, during the 1990s. It is hard to imagine how the excesses bred by that decade – the technology mania and bubble, the money culture, belief that economic cycles were over, policies of market extremism, corruption and a politics ruled by campaign contributions – could have developed so destructively if so much knowledge of the past had not slipped away in stock market and “new era” triumphalism.
As previous periods of excess crested or crashed, books emerged to flesh out the historical context of wealth and its wayward pursuit. Gustavus Myers published The History of the Great American Fortunes in 1909 just as the Gilded Age was ending under the whip of Theodore Roosevelt and the Progressive Movement. Matthew Josephson published The Robber Barons in 1934 just when mid-depression Americans were blaming another generation of commercial and financial leaders for the speculative bubble and crash in 1929. This book was begun in 1999 for much the same purpose: to inform public understanding and reform aspirations with a sweep of history – wealth, democracy and their tensions – that goes back to 1776 and before. The stock market mania, the technology bubble and Enron all have precedents aplenty.
Obviously, these points are easier to make in 2002 than in 1999. In 1999, with the stock indexes reaching for the moon and upscale consumer spending surges correlating with major Nasdaq rallies, history seemed on hold. In January, 2000, with the first stages of the crash just weeks away, the movement to draft Ralph Nader to run for president – not, admittedly, a mainstream crowd – held a rally at Washington’s Lincoln Memorial at which they read from a letter of November 21st, 1864 allegedly written by Abraham Lincoln. Looking beyond the war, he said “I see in the near future a crisis approaching that unnerves me and causes me to tremble for the safety of my country. As a result of the war, corporations have been enthroned, and an era of corruption in high places will follow, and the money power of the country will endeavor to prolong its reign by working upon the prejudices of the people until all wealth is aggregated in a few hands and the Republic is destroyed. I feel at this moment more anxiety for the safety of my country than ever before, even in the midst of war.” Amid the excitement of the Nasdaq, hardly anyone paid attention.
Many scholars doubt the genuineness of this letter, and it is a very blunt statement of sentiments that our sixteenth president usually expressed with more restraint. My point, though, is that such viewpoints – which now get one read out of the Republican Party – have a surprising and distinguished history within it. When Theodore Roosevelt was in the White House, his attacks on corporations far exceeded Lincoln’s, and at one point, TR specifically repeated and endorsed Lincoln’s oft-quoted remarks about labor being superior to and more deserving of support than capital.
Some of this GOP skepticism lingered on in the years of Eisenhower and Nixon. Back in 1990, when I published The Politics of Rich and Poor, some of its success was owed to the two lead endorsements on the back of the book jacket. One was from New York Governor Mario Cuomo, then widely expected to be the 1992 Democratic presidential nominee. The second was from former President Richard Nixon, who gave it with full knowledge that the book was critical of the Reagan and Bush administrations for favoring the rich. Nixon’s streetcar worker father had left Ohio for California after getting a name as labor agitator, and he thereafter interrupted his McKinley Republicanism to support third-party progressives like Theodore Roosevelt in 1912 and Robert LaFollette in 1924. Richard Nixon himself as president supported national health insurance, income-maintenance for the poor and higher taxation of unearned than earned income. The 1972 Republican platform actually criticized multinational corporations for building plants overseas to take advantage of cheap labor.
Because my own background is Republican, and I now know much more of GOP history on these subjects, it is hard to avoid the conclusion that the Republican economic polices and biases of the 1990s and early 2000s are a narrow-gauge betrayal of the legacy of the two greatest Republican presidents, Lincoln and Teddy Roosevelt. But that is a debate I will leave to the elections.
Kevin Phillips
West Goshen, Connecticut
January, 2002