Neither of these approaches will create a genuine middle class, and both are leading to a modern form of serfdom. This is one reason the Tea Party opposes both Wall Street and big government. A genuine middle class refers to the people who can live on their own without the help of government or large businesses. It is this type of middle class, self-sufficient people, not people who earn between $25,000 and $100,000 per year, that are the backbone of a democracy. This is why you can find subsistence farmers in rural America, who might earn less than $25,000 per year, supporting the Tea Party movement to get back to founding principles, and why both establishment Democrats and Republicans are threatened by this movement.
It is a self-sufficient people, not people who earn between $25,000 and $100,000 per year, that is the backbone of a democracy.
The idea that a middle class is defined by earnings provided by someone else is a major sociological myth of our time for, if that “someone else,” be they government or corporate elite, are in charge of the lives of the people, they will eventually maximize their own wealth at the expense of those in their charge. This is the nature of both monopolies and governments (which have a monopoly on force).
We can look at the transformation of Rome, originally a vibrant republic with independent farmers, shop owners, sea-merchants, and tradesmen, that declined into the agrarian feudalism of the Early Middle Ages, for a clue as to what is going on in the world today. The descendants of Rome’s middle classes became agrarian serfs who lived under the patronage of feudal lords, the 1% of those times. Feudal lords had consolidated the ownership of land and political power, leaving no place for independent citizens to live. The feudal serfs largely lived at the whim of the feudal lords, some who were generous and some who were cruel. In many ways, this serfdom was not very different from slavery on plantations in the southern U.S. in the early 19th century. Within this system of feudalism, time was not on the side of the serfs, the only hope they had for improving their lot was to marry a prince or princess—hence the foundation of fairy tales.
Time was not on the side of the serfs, the only hope they had for improving their lot was to marry a prince or princess–hence the foundation of traditional fairy tales.
Middle Classes Arise When Politics and Economy are Separated
Middle classes did not arise again until independent city-states developed in the later middle ages. These city-states were walled off from the warring feudal lords and provided a place for artisans and merchants to set up shops and own their own property. The rulers of these city-states may have been either feudal princes or elected mayors, but the main feature that differentiated them from feudal estates was the separation of politics and economy. Markets and the economy were largely independent from the political rulers, who may have imposed taxes but did not control the means of production. This allowed middle classes, people who produced goods and services they could sell to others on a market, to prosper.
Note that the form of government, i.e. a monarchy, single party rule, or democracy, is not the key factor determining where a strong middle class will arise. What is important is the ability to own private property and trade one’s own goods and services in a market. Today China is run by the same Communist regime that Mao Zedung put into place, but under Mao all people were treated as serfs because the government controlled the economy. Today, with economic reforms that have separated government and economy, a new middle class has arisen in China. Note also that the recent Arab Spring, which brought democracy to Egypt, did not lead to the creation of a more vibrant middle class. A great myth of our time is that the Western imposition of democracy around the world will create strong middle classes. Rather, the reverse is true, a strong middle class is required for democracy to work.
Arisotle and Thomas Jefferson (who read Aristotle) both argued that democracies only seemed to work among agricultural households. This was the philosophical foundation of Jefferson’s agrarianism. In a letter to James Madison on December 20, 1787, Jefferson wrote:
I think our governments will remain virtuous for many centuries; as long as they are chiefly agricultural; and this will be as long as there shall be vacant lands in any part of America. When they get piled upon one another in large cities, as in Europe, they will become corrupt as in Europe.
What Aristotle and Jefferson did not foresee was the tremendous rise of industry and technology that led to other types of work than traditional agrarian economies. Yet, there is an essential truth in their observation, for they were both referring to self-sufficient households. Today a strong middle class is still based on self-sufficient households, even though the economy is not primarily agricultural. Today higher standards of living are made possible by advanced technologies and industrial products. In fact, life for an American on welfare in Section 8 housing can be more physically comfortable than the life of a wealthy person in ancient times.
But, life with creature comforts in Section 8 housing does not make one happy. Today such a life is referred to as lower class or underclass, but in reality it is a form of modern serfdom because people are living a life that someone else provides for them, not a life they made for themselves. We can refer to the “welfare class” as government serfdom, because the “feudal lord” this class depends upon is the government, and this life is made possible by taxes obtained from people who work in a relatively independent economic sector.
We can refer to the “welfare class” as government serfdom, because the “feudal lord” this class depends upon is the government.
There is another form of serfdom arising today, industrial serfdom. This is the result of the consolidation of economic power and capital that is displacing middle class economic opportunity. It is the rise of Wall Street capitalism, mass production, and mass distribution through chain stores. Mom and Pop businesses, which are middle class enterprises, are being gobbled up or put out of business by industrial enterprises run by the 1% on Wall Street or other capital markets. They employ low-cost labor for production of goods in China or other places where labor is cheap, and they employ low cost labor in Walmart, Best Buy, Menards or other megastores in the sale of these goods. Most workers on both the production and distribution end of a concentrated capitalist economy can be considered “industrial serfs.”
Most workers on both the production and distribution end of a concentrated capitalist economy can be considered industrial serfs.
Increasingly these mega corporations and government are forming alliances variously called “crony capitalism” or “plutocracy.” This emerging social system is one in which industrial feudal lords with combined political and economic power may emerge, paving the way for an industrial feudalism that parallels the agrarian feudalism of the Dark Ages. Such a social system will seek to overtax self-sufficient people or create government regulations that inhibit the possibility of independent businesses. Such a system is characterized by the consolidation of government and economy, where the role of government has switched from the protection of human rights and private property to the provision of welfare and jobs with the help of the large industrial corporations that are profitable largely because of selective government favoritism. This is a social system vividly portrayed by Ayn Rand in Atlas Shrugged.
What can Prevent the Further Rise of Industrial Serfdom?
What can prevent the further rise of industrial serfdom and bring back to life a vibrant middle class? This was one of the points I addressed in Life, Liberty and the Pursuit of Happiness, Version 4.0. The answer is to enact laws that punish consolidation of wealth and power and reward household self-sufficiency. This means, to name a few, laws that tax mergers and acquisitions, rather than rewarding them; laws that eliminate patents for pharmaceutical companies and large corporations, and only allow patents and copyrights to individual citizens; laws that outlaw government debt except in the case of aggression against the state; laws that forbid attaching the name of political parties to candidates on ballots, laws that forbid the contribution of political parties, corporations, or PACs to political campaigns, and only allow capped contributions from citizens to political campaigns. These, and a number of other reforms discussed in the book, would help restore the principles of a republican form of democracy by enabling the re-creation of a strong self-sufficient middle class in an economy largely decoupled from government.
To name a few, laws that tax mergers and acquisitions, rather than rewarding them; laws that eliminate patents for pharmaceutical companies and large corporations, and only allow patents and copyrights to individual citizens; laws that outlaw government debt except in the case of aggression against the state; laws that forbid attaching the name of political parties to candidates on ballots, laws that forbid the contribution of political parties, corporations, or PACs to political campaigns, and only allow capped contributions from citizens to political campaigns.
There will be no bureaucrat or stock broker that will want to enact such laws as they are the 1% who want to control and live off of the sweat of the masses. These reforms are not in the interest of either the Republican Party or Democratic Party. The foundations for the proper separation of government, economy, and culture exist in the U.S. Declaration of Independence, the U.S. Constitution, and the Bill of Rights. The political trends we are witnessing today were warned against by James Madison in the Federalist Papers and George Washington in his Farewell Address. Solutions are not difficult to imagine if one has a good understanding of human nature, economic motivations, and the nature of bureaucracies. It will take people with such understanding to continue to push for principled governance and the education of all citizens on why protection of human rights and property are essential to the pursuit of happiness.