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Wealth and Democracy: A Political History of the American Richby Kevin Phillips
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.
Addendum to Preface
When the leaders of the Draft Nader movement gathered at the Lincoln Memorial in January, 2000, the passage that was read, quoted above, came from Democracy At Risk, a book published by Jeff Gates, a Green Party activist. Gates, in turn, drew on an old Lincoln Encyclopedia.
Most serious historians are skeptical, many believe that this exact Lincoln quote is an outright fake. In 1931, Democratic Congressman Louis McFadden quoted it on the House floor, and GOP Representative Merlin Hull countered two days later with a letter from the director of the Legislative Reference Service of the Library of Congress saying that there was no record of any such statement. Lincoln, contended Hull, had lived and died before big corporations came into existence. Such a statement would never have occurred to him. (See Paul F. Boller and John George, They Never Said It (New York: Oxford University Press, 1989) p. 85). Hull also quoted John C. Nicolay, one of Lincoln?s private secretaries and later one of his biographers. Nicolay called the quote ?a forgery.? Lincoln ?never said or wrote anything that by the utmost license could be distorted to resemble it.?
It could easily be a forgery, because it tries ? presumably for political convenience — to put too much in Lincoln?s mouth through a single paragraph. However, the president does seem to have been reaching some similar conclusions in a piecemeal way. The definitive exposition of the economic viewpoints of Abraham Lincoln is Lincoln and the Economics of the American Dream (Urbana, 1994) , by Gabor S. Boritt, Professor of Civil War Studies and Director of the Civil War Institute at Gettysburg College. The Lincoln quotes on pp. 298-299 of Wealth and Democracy mostly come from pp. 175-225 of this volume.
If Lincoln?s support for labor as superior to capital has been widely noted, less attention has been paid to his strong support for labor unions and strikes. He publicly backed the New England shoe strike of 1860, the greatest in the pre-Civil War United States , and met with striking machinists during the war (Boritt, pp. 184-186). Lincoln?s outspoken embrace of workers and strikers earned a congratulatory letter from Karl Marx and the First International, which lauded the U.S. Civil War as a fight for the rights of all workingmen. According to Boritt, reply was made by Secretary of State William Seward through (US Minister to London) Charles Francis Adams ?for the Chief Executive, at his direction, as the Secretary of State explained, and in so friendly a fashion as to make Marx exultant.? (Boritt, p. 219)
As for corporations, the big New York and Pennsylvania railroads ? like the Pennsylvania, the Erie, the New York and Harlem and the New York Central ? dwarfed anything Lincoln had earlier seen in the Midwest. The Erie, for example, had a capitalization of $26 million in 1860, and presumably far more in 1864. When the New York railroads had raised rates in 1862 after the Confederacy had cut the alternative east-west routes farther south, Lincoln threatened federal action and they backed down (Boritt, p. 224). By 1864, such suddenly huge sums were involved in the fight for control of the New York and Harlem ? its share price soared from 30 in January, 1863 to 179 in August 1863 ? that the totally corrupt New York State legislature was dueling with the equally venal New York City Council over bribes, rights and shares. Lincoln would have known about this emerging corporate predation and its enthronement of corruption. The man who in 1869 ?wrote the book? ? entitled A Chapter of Erie — about the new menace was Charles Francis Adams Jr., like his father a close associate of William Seward. In 1863 and 1864, he may well have had access to Lincoln.
Be that as it may, Lincoln in 1864 spoke to a workingmen?s association about ?the effort to place capital on an equal footing with, if not above labor, in the structure of the government.? To laborers, the President issued what Boritt (p. 218) calls ? a remarkably strong, forward-looking warning?:
Let them beware of surrendering a political power which they already possess, and which, if surrendered, will surely be used to close the door of advancement against such as they, and to fix new disabilities and burdens on them, till all liberty shall be lost.
This is not too much less of a warning than the dubious paragraph read at the Draft Nader rally. The Republican Party of 2002 has certainly lost touch with the Abraham Lincoln of 1864.
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