Never in human history has the average human had “More.” Capitalism if left alone to continue to work its magic promises to bring even “More” to everyone allowed to participate. Only where economies are increasingly run by top-down dictates is the human condition deteriorating. Yet as we have seen this highway to more is threatened both at home and abroad. Even China where allowing capitalism rum a major part of its economy brought a billion people out of abject poverty is reasserting top-down control. No wonder its growth rate is slowing in line with every turn of the screw. We know where this leads, increasing oppression and, of course, “Less.” At home, we have a large part of our populous favorable to socialism and outright hostility to capitalism. To understand this strange reaction to a system that has provided everyone with far “More” than our forebearers ever dreamed possible, Joseph Schumpeter (1883-1950) gave us some insight. The economist popularized the phrase “Creative Destruction” to describe the dynamics of market capitalism and how its disruptive the forces of innovation undermined norms. With the widespread change, some suffer near term loss but overall most gained. He lauded the entrepreneurial spirit of the capitalists, but thought the loss of equilibrium would cause socialism to win out in the end. He based this on the hostility of intellectuals on one hand and workers on the other. He couldn’t have been more wrong. As we’ve shown, socialism and every other top-down system have proven to be an utter disaster. As it turns out the equilibrium under these systems is upset but not in a good way. However, this hasn’t quashed the hostility among many intellectuals and workers.
Today’s intellectuals are the direct descendants of the small number of literate elites topping the heap all over the world for all those centuries prior to 15th. Whatever “More” there was to have belonged to them. They were the military leaders, the governors, the lawmakers and keepers, the bureaucrats running most everything, the repositories of whatever passed for knowledge and the intermediaries to the gods. The vast majority of humanity was just dust beneath their feet. The uncouth deplorables were put on earth to serve their betters. They only suffered merchants and artisans to provide them with the good things of life. They were the top of the human pyramid. The commercial class had to kowtow and often bribe these officials in order to survive. This still exists but much more muted in liberal capitalist countries. As commerce grew and entrepreneurs prospered, the intelligentsia had to share power and place. They are not happy.
Dominant in all levels of government bureaucracy, education and media, the intellectuals are not without resources. Whatever ideas, policies and people they favor find their way to the forefront. Those opposing the general intellectual consensus are often ignored or denigrated. This can be illustrated by their hammerlock on all sorts of major awards. Consider their adored President Obama was awarded the Nobel Peace Prize without ever doing a single thing to advance peace anywhere. On the other hand, Ronald Reagan detested by much of our intelligentsia actually brought a great deal of peace to the world. He was ignored. Intellectually loved Paul Krugman was awarded the Nobel Prize for economics but Arthur Laffer an economist having a much greater direct effect on the actual economy will probably never get close to one. Can anyone tell us what Krugman’s winning contribution was? Far more are aware of the Laffer Curve. If you’re not part of the left of center intellectual consensus your chances of winning an Academy Award are dim. In fact, you’re discouraged from even watching the award ceremony. If you’re right of center you are berated from the stage. Where we used to have a common experience honoring the entertainment most shared, we are increasingly divided. We find this intellectual control of awards and honors is pervasive in virtually all fields. The message is clear if you want to be recognized for your success in any endeavor you’d better be right with the elites. The power to honor or not is a very powerful tool.
As knowledge, resources and political power became far more dispersed, the elites have to find ways exert control. With the market making better timely decisions forcing change, they have turned to quasi-religious means to reassert control. This allows them to try to turn facts upside down. For instance, they tell us America is forever stained by our “original sin of slavery.” This allows them to dictate what penance is endlessly due. But this is crazy. At the signing of our Constitution only the English people any rights against the whims of their rulers. That’s it. Along with a lofty exposition of the rights of men, the Declaration of Independence mostly deals with the crown’s denial of the colonists their rights as Englishmen as their reason for leaving. The idea of people having rights was found nowhere else in the world. However, people as chattels were found across the globe. Why would that be our original sin? It was just the opposite. The idea of people having rights had to come first before anyone much less slaves could be really free. We were the ones brandishing the stain remover of liberty. We have steadily expanded the area cleansed by extending freedom. To castigate those throwing the first rock in the still pool of oppression is folly. The resulting waves have continued to widen liberty not only here but across the world. If not for the founding fathers we simply wouldn’t have the rights we enjoy today. Myths aren’t facts
Let’s take the idea put forth by so many intellectuals, liberal capitalism has led to a shrinkage of the middle class from the Halcyon days of super high taxes on the rich and union dominance of the 1960s. This is true as far as it goes and from much of the press and academia that is what we are told, but there is much more to the story as we can see from the following:
Since 1967 the middle has indeed been steadily shrinking and by implication, the dropouts are migrating to the lower class. Looking at the actual chart we find the lower class has also been shrinking. This leaves the only place for these displaced people to end up, in the upper class. This is exactly where the journey to “More” should lead. (The Chart used the last available data thru 2016, but does anyone think this trend hasn’t continued to the present given the economic expansion the last three years?) Using their position to tell untruths is the danger of the intelligentsia to our continued journey to “More.” Poor ideas such as high a minimum wage, super high taxes on productive people, confusing counterproductive regulations, and picking winners and losers are doomed to fail in a rapidly changing world. How do we know this, because it happens in every instance it’s been tried. As the failures become more apparent, those in charge have to silence their critics. Every misstep must be covered up by more repression. One morning you wake up and you’re in Venezuela.
Through the years, many schemes were thought up by various intellectuals purported alleviate the misery of the working class. Chief among these was Marxism. Karl Marx and Friedrich Engels claimed to have found the path to a worker’s paradise. The people, meaning the government, would own the means of production and make all the decisions. Without capitalism’s obscene profits there would be more for ordinary people. This socialist idea while never having any success whenever tried has kept an amazing hold on a great part of the intelligentsia. This is mainly because they have never come up with anything else to challenge the success of liberal capitalism.
At one time many workers in various industries shared the elites fondness for socialism, but feeling their cares were either ignored or treated with contempt by the elites they Joining with social conservatives, rural interests and others feeling harmed by or uncomfortable with a changing world, they have to go in another direction. Promising to turn back the clock with walls and tariffs, Donald Trump captured a wide swath of these disenchanted people. Immigrants, globalization and the courts among others were offered up as destroyers of the “American Way.” Curiously Trump also exposed s fondness for the 1960s. The warm feelings toward this era by both Trump followers and many elites are curious, as one can see from the chart above far more households inhabited the lower rung of society then. It’s doubtful they found those times so great. Adherence to Myths would seem to be a prime characteristic of those Schumpeter predicted would bring liberal capitalism down. Trumps claims Americans don’t pay Tariffs. Tell that to any American importer as he writes the check to the US government. Bernie Sanders when questioned by an MSNBC host (one of their debate team), claimed all the Democratic candidates now favored to his $15 an hour minimum wage. This was at the same time the Congressional Budget had just told us for every person it could help out of poverty, up to 3 would lose their jobs. What a deal!
Today the intelligentsia mostly migrated to the Democratic Party, while those disenchanted with the modern world have joined the Republican Party. As we have shown in our series on “the Future Party” our current party primary system favors those at the extremes over the generally more numerous center. The intellectuals and the nostalgic form the extreme in each party. Neither is a friend to the liberal capitalism that has brought us so much “More.” For instance, both have disdain for free trade, one of the three ways we get “More.” That is why we are in great danger of ending up with much “Less.”