This is the sixth in a series of essays by Tim Ferguson, founder of the Anacyclosis Institute, arguing in favour of Rationism, a middle-class-oriented political theory that advocates benchmarking the national economy against the national median household net worth. Izabella Kaminska has also described Rationism as Vitruvian Capitalism, based on its promotion of the values of proportion and balance. The series emulates the Federalist Papers and is written under the pen name of Gracchus, a reformer of the Roman Republic.
Here is the introductory essay to the series.
Note: The purpose of this series is to enable readers to engage an interesting thought experiment through a series of essays defending a hypothetical constitutional amendment. The hypothetical constitutional amendment considered in these essays has not been officially proposed or introduced in any legislative assembly, and The Blind Spot does not engage in lobbying or legislative advocacy or present these essays for such purposes. It is all merely an exercise in the interest of stimulating debate.
To the People of the United States of America:
A community which has no communion with either poverty or wealth is generally the one in which the noblest characters will be formed; for in it there is no place for the growth of insolence and injustice, of rivalries and jealousies.
This series has so far demonstrated that authentic democracy is enforced by one circumstance alone: elite fear of an upright middle class. We now consider what happens when that middle class dies.
Modesty in Fortunes Produces Moderation in Customs, Laws, and Governments.
The best political society exists where the greatest number are busy, self-sufficient, and content in their pursuit of higher status. Living within their means and financially independent, the people retain modest political expectations. There being no need to develop robust political machinery by which to channel revenue and appropriations, for there being little need of subsidies and interventions, government remains weak as an unexercised muscle, minimizing both the objects of political faction and the prospects of despotism.
These happy circumstances of civic moderation and limited government emanate from a common devotion to industry and the equitable sharing of its blessings. The obligation to work, merged with the opportunity and the belief that the rewards justify the efforts, binds everyone to the expectations incidental to labour: modesty, personal responsibility, self-reliance, diligence, frugality, honesty, sobriety, scepticism of shortcuts and get-rich-quick schemes.
Preoccupied with their various exertions and diversions, a middling people are also oblivious to all sensationalism which does not advance their immediate self-interest, and hostile to all projects perceived to injure them. The blind eyes and deaf ears of a distracted middle class prove a greater safeguard against deception and demagoguery than relying upon any scheme that would only permit good information and only forbid bad information. Indeed, the very existence of a power to determine what is true and censor what is false presupposes an authority that is unnecessary for a middling people and pernicious for all others, as the ruling bias inevitably infects the major organs of public opinion in democracy and despotism alike.
Not only do such circumstances distract the people from falsehoods and propaganda, they make them insensible to the unequal distribution of gains which always increases in a peaceful, prosperous, and lightly regulated economy. As long as the road to riches stays open to all diligent labour, and provided that great fortunes are attributed to the beneficial inventions and contributions of their holders, the people even celebrate inequality as an index of prosperity, innovation, and free enterprise, regarding poverty as the just reward of idleness and laziness.
There being little sympathy for subsidies and interventions among a people who do not need them, and little attention for narratives that do not concern them, the body politic remains immune to electoral bribery and false narratives. Society’s collective morality is also not corrupted by the prospect of unscrupulous gain: the notion that rewards and comfort should come to idlers, cheaters, fraudsters, promoters, speculators, and thieves is anathema.
Such describes a paradigm of civic moderation, anyway. One at which perhaps no society has ever truly arrived. But of all the political ideals for which men have ever struggled – for justice, liberty, equality, fraternity, enlightenment – that of middling status has surely been nearest approached and will always remain the most attainable to mankind.
To be sure, the middling virtues alone do not ameliorate every single social ill. Much would be needed of responsible educators, advocates, and journalists even amidst the most perfect middle class. Certain traditions and beliefs suffocate beneficial liberalizations long after they have become useless. A middling people often draw undisciplined adverse inferences against poorer racial minorities, ripening into debilitating discrimination. Many fail to recognize when changing economic circumstances render their economic assumptions anachronistic, and that poverty is not always the fault of the poor. Yet on balance, the nearer any free society approaches these middling ideals, the better, for the reasons considered.
The Extremes of Poverty and Luxury Destroy the Middling Virtues.
As Aristotle said, man is by nature a political animal. But democracy only remains anchored to the middling virtues provided the herd does not spread too thin at the middle. To prevent the dissolution of the herd, and preserve these middling virtues, the bulk of ordinary workers must be kept within eyesight and earshot of the median household net worth. Not only that, those beneath the median must harbour reasonable hopes of attaining it, while many who achieve it must be able to surpass it by their own efforts. When the herd dissipates too far from the centre and too much wealth is concentrated in too few hands, the middling virtues are ruined.
The second essay established that wealth is the principal standard by which men, enterprises, and nations appraise their value. All institutions, therefore, sanction the accumulation of great wealth as prima facie evidence of merit and success: school, church, media, government, and society. The greater the wealth, the greater the accolades. But when pecuniary success is widely celebrated without inquiry into the social benefit or ethical circumstances surrounding its acquisition, as it is today, virtually every fortune is ratified without regard to whether it was honourably or ill-gotten. The man on the street comes to admire the world’s most rapacious hedge fund manager no less than the scientist that devised the cure to cancer. Youthful ambition is accordingly taught not only to tolerate but to employ almost any means to acquire wealth, whether its motives or effects are base or honourable, creative or destructive, selfish or beneficent.
Thus alienated from the middling virtues, successive generations of unscrupulous financiers, speculators, monopolists, lobbyists, extortionists, and arbitrageurs capitalize on every conceivable commercial opportunity without regard to the harm thereafter inflicted upon ordinary workers and consumers. Whether it be environments of high capital mobility, developing communications networks, capital-friendly tax regimes, extensions of market exclusivity, or proliferating automation technologies as today – or an influx of slaves, the importation of foreign grain, or the exhaustion of small hold farmers as in antiquity – avaricious minds exploit every economic circumstance and legal artifice to their advantage, encroaching ever further into the middling share of national prosperity, acquiring fortunes so vast they exceed any practical utility.
And since pecuniary success cannot be demonstrated unless it is displayed, modesty and frugality become synonymous with failure within the collective consciousness. More than honour and valour, wealth and extravagance become the commonest benchmarks of human excellence. The similarity of conditions that were once society’s cardinal virtue transforms into a curse of mediocrity and obscurity. So, in order to prove their worth and be acknowledged, many ordinary people will (among other attention-grabbing techniques) deplete their savings or plunge themselves into debt in making prodigal acquisitions and ostentatious displays of their possessions. Yet as Montesquieu noted long ago, most efforts at recognition are doomed to fail:
The more men there are together, the more vain they are, and the more they feel arise within them the desire to call attention to themselves by small things. If their number is so great that most are unknown to one another, the desire to distinguish oneself redoubles because there is more expectation of succeeding. Luxury produces this expectation; each man takes the marks of the condition above his own. But, by dint of wanting to distinguish themselves, all become equal, and one is no longer distinct; as everyone wants to be looked at, no one is noticed.
The common avarice, united with the common obscurity, amplifies the notoriety and influence of wealth, producing a corresponding obsequiousness to the richest men and organizations. Measured by the standard of wealth, the richest are the best, wisest and strongest, their advice ignored at peril. Undue deference is thereby afforded the opinions and preferences of the most avaricious and frequently least virtuous portion of society. Offering financial inducements to legislators who defend these practices, while threatening capital flight against those who would dare temper them, elite whims are thus codified as the very constitution of the free market economy, neutralizing all serious remedial political movements.
The Greater the Social Stratification, the Greater the Political Faction.
The people nevertheless tolerate the loss of their virtues so long as it is not clearly accompanied by the loss of their status and prospects. They may even countenance temporary stagnation, provided their immediate demands can be met through stimulus and debt. But political moderation and social cohesion quickly dissolve, fragmenting the body politic, once the middle class apprehends its own decline.
When ordinary households experience financial precariousness, the vast fortunes once imputed to national prosperity are condemned by many as proof of corruption and exploitation. Household precariousness meanwhile increases the people’s need for public support, fueling demands for safety nets, subsidies, stimulus payments, bread and circuses, and the like. This expands the role and powers of government, hence the objects, frequency, and intensity of political conflict. As household precariousness persists, household dependency deepens. Ever more people come to rely on ever greater support from the public treasury. Ever more people therefore gradually become wards and dependents of the state, forfeiting the political volition necessary to sustain an authentic democracy as considered in the fourth essay.
Despite the transformation of independent middle classes into dependent underclasses, many – even of modest means – oppose all subsidies and interventions. Some credit the general prosperity to prevailing economic practices. Others object to any regulation of such practices simply because they profit from them, or imagine they will. Some fear expatriation of wealth or some other retribution by elites. Others adhere to the errors or anachronisms of beloved statesmen or philosophers. Some are unwilling to sanction forms of support they themselves never received. Many see the spectre of socialism behind every egalitarian plan.
Such oppositions and admonitions notwithstanding, networks of public support tend to expand, at least in America, less to promote equality or dignity than to pacify the swelling multitude. In difficult economic times, politicians reap greater rewards for liberality than austerity. And though many of egalitarian minds proclaim each new thread added to the public safety net as a progressive triumph, the expanding public support actually does more to reveal than to resolve the underlying household precarity, since it is better not to need any help than to receive even the best help.
In all events, the domestic strife that inevitably ensues when many seek to obtain and many others to deny great appropriations from the public treasury predictably aggravates the people’s animosities, as it perpetuates their precariousness, as it entrenches their dependencies. All this, in turn, correspondingly enhances the people’s responsiveness to every species of political rhetoric.
Populist demagogues and an unscrupulous press exploit these dependencies and animosities for their own economic and political gain. The very instrumentalities of public opinion and choice that were once entrusted to preserve public liberty thereby selfishly inflame political faction, the principal causes of which Publius (James Madison) has already shown to be “the various and unequal distribution of property”. Incidentally, this reflects the main conclusion about political faction that Publius got right in Federalist No. 10, at least as remains relevant to contemporary American society.
We have already considered the power of the middle classes to quell political faction. This series challenges several of Publius’s other conclusions set forth in Federalist No. 10 accordingly, arguing that our proposed median-benchmarking Amendment would faster cure the causes of faction than any scheme of representation ever devised would cure its effects. Furthermore, curing the causes of faction does not require as Publius claims that every citizen be given the same opinions, interests, and passions. It only requires the general similarity of conditions already considered in our prior essay. Moreover, while wealth concentration widens the gaps between the social classes, American political faction is in practice defined less by a sharp class division between those with and those without property than it is by the assignment of blame for the public distress.
Which brings our view to present-day America. Although as Aristotle noted “the encroachments of the rich are more destructive to the constitution than those of the people” many are oblivious to elite excesses. It is easy to perceive the abuses of the native-born poor or immigrants who routinely immigrate from their poorer homelands to wealthy democracies. Even simple men know it is wrong to steal food, abuse entitlement programs, or violate immigration laws. But many do not understand elite intrigue in an advanced commercial republic such as America has become. The intricacies of tax laws or various methods of financial arbitrage, for instance – even the distinction between wages and capital gains – are incomprehensible to many. Many are accordingly found condemning the crimes of foreigners and the poor, while pardoning those of elites; perhaps in most cases less due to racism, malice, or for want of a sense of justice than for knowing what forces inflict greater injury upon the state.
Thus deprived of their middling virtues, their upward mobility, their financial independence, and their political volition; addicted to demagoguery, propaganda, and patronage; divided and antagonistic; and bewildered in the causes of their stagnation and decline and how to redress it, the electorate’s only meaningful political choice finally becomes who to blame for the public distress: whether poor people, rich people, foreign people, or some combination thereof. Because as long as the multitude subsists on the public treasury, there are few inducements – especially for progressive legislators – to truly alleviate the household dependency which nourishes their careers. And because the petty crimes of many are more apparent than the subtle plunders by few, even good and fair-minded men may attend more to their animosities than their reason, posterity, and immediate self-interest in obliging their reactionary champions.
Demagogues exploit these animosities by promising to eject foreigners and reclaim past glory. They exploit these dependencies by promising to improve the condition of workers and the poor. Around these poles of animosity and dependency do we find two factions hardening and diverging from America’s centre. One accusing the other of xenophobia and greed; the second accusing the first of weakness and betrayal, neither liberating their adherents from their underlying precarity, and both deploying increasingly authoritarian techniques to win their allegiance.
And though it may seem that such factions arise from ideological differences and therefore invite varying philosophical conclusions, these factions are really two sides of the same coin admitting of no solution except to restore and expand the middle class. For both animosity and dependency – the poles of our present polarization – are the product of household precariousness. Hence the death of our middle class threatens to consummate Anacyclosis in America, quite like George Washington thought it might:
The alternate domination of one faction over another, sharpened by the spirit of revenge natural to party dissention, which in different ages & countries has perpetrated the most horrid enormities, is itself a frightful despotism. But this leads at length to a more formal and permanent despotism. The disorders & miseries, which result, gradually incline the minds of men to seek security & repose in the absolute power of an Individual: and sooner or later the chief of some prevailing faction more able or more fortunate than his competitors, turns this disposition to the purposes of his own elevation, on the ruins of Public Liberty.