In a matter of decades, the United States has gone from a largely benign form of capitalism to a neo-feudal form that has created an ever-widening gap in wealth and power. In his 2013 bestseller Capital in the 21st Century, French economist French economist Thomas Piketty declared that "the level of inequality in the US is probably higher than in any other society at any time in the past anywhere in the world." In a 2014 podcast about the book, Bill Moyers commented:

Here's one of its extraordinary insights: "We are now really all headed into a future dominated by inherited wealth, as capital is concentrated in fewer and fewer hands, giving the very rich ever greater power over politics, government and society. Patrimonial capitalism is the name for it, and it has potentially terrifying consequences for democracy."

Paul Krugman maintained in the same podcast that the United States is becoming an oligarchy, a society of inherited wealth, "the very system our founders revolted against...While things have only gotten worse since then thanks to the economic crisis of 2020, it's worth retracing the history that brought us to this volatile moment."

Not the Vision of Our Founders

The sort of capitalism on which the United States was originally built has been called mom-and-pop capitalism. Families owned their own farms and small shops and competed with each other on a more or less level playing field. It was a form of capitalism that broke free of the feudalistic model and reflected the groundbreaking values set forth in the Declaration of Independence and Bill of Rights: that all men are created equal and are endowed by their Creator with certain inalienable rights, including the rights to free speech, a free press, to worship and assemble; and the right not to be deprived of life, liberty or property without due process.

It was good in theory, but there were glaring, inhumane exceptions to this idealized template, including the confiscation of the lands of indigenous populations and the slavery that then prevailed. The slaves were emancipated by the US Civil War; but while they were freed in their persons, they were not economically free. They remained entrapped in economic serfdom. Although Black and Indigenous communities have been disproportionately oppressed, poor people were all trapped in "indentured servitude" of sorts the obligation to serve in order to pay off debts, e.g. the debts of Irish workers to pay for passage to the United States, and the debts of "sharecroppers" (two-thirds of whom were white), who had to borrow from landlords at interest for land and equipment. Today's U.S. prison system has also been called a form of slavery, in which free or cheap labor is extracted from poor people of color.

To the creditors, economic captivity actually had certain advantages over "chattel" slavery (ownership of humans as a property right). According to an infamous document called the Hazard Circular, circulated by British banking interests among their American banking counterparts during the American Civil War:

"Slavery is likely to be abolished by the war power and chattel slavery destroyed. This, I and my European friends are glad of, for slavery is but the owning of labor and carries with it the care of the laborers, while the European plan, led by England, is that capital shall control labor by controlling wages."

Slaves had to be housed, fed and cared for. "Free" men housed and fed themselves. Free men could be kept enslaved by debt by paying them wages that were insufficient to meet their costs of living.

From "Industrial Capitalism" to "Finance Capitalism"

The economy crashed in the Great Depression, when Franklin D. Roosevelt's government revived it and rebuilt the country through a public financial institution called the Reconstruction Finance Corporation. After World War II, the US middle class thrived. Small businesses competed on a relatively level playing field similar to the mom-and-pop capitalism of the early pioneers.

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