“We’ve no use for intellectuals in this outfit. What we need is chimpanzees. Let me give you a word of advice: never say a word to us about being intelligent. We will think for you, my friend. Don’t forget it.”Louis-Ferdinand Céline (1894–1961), Examining doctor at Ford auto factory in Detroit, where the narrator Ferdinand Bardamu (and Céline) worked, in Journey to the End of the Night (1932; translated 1934; p. 196).
There is a great deal of talk these days about risking our nest eggs in the stock market, hedge funds, commodity futures, real estate, and the myriad other methods that have come into existence to not only protect, but to grow our wealth.
Most Americans have, in absolute financial terms, a paltry amount of money at risk: perhaps a few hundred thousand or even a million dollars, if they are lucky. Barely enough to merit a return call from an assistant accounts manager's assistant at a major brokerage if you are feeling nervous about your investments. In personal terms it is the whole world, but compared to those who have accounts in the tens or hundreds of millions of dollars, you are just small potatoes.
These people with tens or even hundreds of millions of dollars to invest are the so called “investor class.” Under the theories of “supply side” economics, these are the people who make the economy happen; it is the risk of their fortunes that is the straw that stirs the drink that is our economic prosperity. Because they are the ones who risk their fortunes, they deserve the greatest rewards of our economic system.
I am writing not only of the worker being told to produce ever increasing volumes of product for a stagnant wage paid by a multinational corporation. I am writing of the shopkeeper who is one accident, one serious illness, one junkie with a gun from ruin. I am writing of the small factory owner who turns out a superior product; yet has trouble competing with a foreign competitor, who turns out an inferior product for a much lower price. I am writing of the small construction company who has paid its carpenters, plumbers, masons, electricians, etc., a good union wage for building homes for years; which can no longer compete against the nationwide home-building franchises that use illegal and cut-rate, non-union labor to build their inferior quality homes with marvelous façades.
The small business owner, as I have described above, does not necessarily have huge amounts of investor—or perhaps even personal—capital tied up in his business. The value of their businesses has not risen through stock offerings, hostile takeovers, using volume buying to undercut the prices of their local competition to force them out of business, or treating the people who work for them like indentured servants. The value of their businesses has increased through “sweat equity,” by building a good reputation among their customers, and by making do when they had no other choice. There is, unlike the investor class, little difference between the small businessperson and the people who work for them. It was both the small businessperson and the worker of whom Abraham Lincoln wrote (in his message to the Congress 3 December 1861), “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.”
The small businessperson, who works beside his employees, taking most if not all of the risks of his employees, plus the risk of his business failing, is rightly considered a paragon in America's economic system. The members of the investor class who buy an initial stock offering, and then play with the various shares of stock they own like poker chips in some half mad game of chance, are not paragons, but at best necessary evils.
So, we must ask whose risk is actually the greater: is it the investor who has bought stock as an investment which capitalizes the opening of a mine he never sees. Or is it the people who toil beneath a million tons of rock five days a week; working for a company that may lose their pensions if the company is taken over by another corporation or if it goes out of business; doing work in a fetid and sometimes poisonous atmosphere, using explosives and dangerous machinery which can easily maim and kill; in short, the miners who risk their lives as well as their futures when they actually work that mine? I think you can guess my answer.
The conflict between oligarchic plutocracy and democratic freedom goes back to the founding of the United States. Alexander Hamilton wanted an oligarchic republic with a mercantile economic system. Thomas Jefferson (speaking through James Madison) wanted a democratic republic with an agrarian economic system. The Constitution was a compromise between these two extremes. Neither side could have dreamed of our modern representative democracy with its post-industrial, information age, economic system. However, I feel that Jefferson and his world view are far more applicable to our modern political system than Hamilton.
Americans must learn that there are limits to the lessons the Founders and Framers—as well as other thinkers of the Enlightenment—can teach us, particularly in terms of economics. For example, the Scottish professor who founded the “dismal science” of economics, Adam Smith, wrote his book The Wealth of Nations, in part as an answer to the complaints of the American colonists against the British Crown at the inception of the American Revolution.
The propagandists for this system neglect to mention one of the great lies of this form of capitalism: the struggle is not between management and labor; it never has been and it never will be. So-called management has no real power to make anything other than short term decisions; i.e., one year or less. The real power lies with the owners—or holders of large blocks of stock—who actually control the corporate entity in the long term; having the ability to sell it, move it, change it or dissolve it. Management is nothing more than workers with fancy titles and better benefits. Their job is keeping their fellow workers under the thumb of the owners, and taking the fall when things go wrong.
A perfect example of this is the Ludlow Massacre here in Colorado in 1914. No one blamed John D. Rockefeller, Jr., whose family owned controlling interest in the Colorado Fuel and Iron (CF&I) coalfields where twenty-one people, mostly women and children, died. He was thousands of miles away at the time. The blame fell instead on the managers of CF&I, the Governor of Colorado, and the State militia. Only a few radical newspapers dared claim Rockefeller had anything to do with the Massacre, and no evidence of his involvement has surfaced to this day.