Harvard economist Greg Mankiw challenges Thomas Piketty's
claim that wealth inequality threatens democracy and argues:
“The fathers of
American democracy, including George Washington, Thomas Jefferson, John Adams,
and James Madison, were very rich men. With estimated net worth (in today’s
dollars) ranging from $20 million to $500 million, they were likely all in the
top 0.1 percent of the wealth distribution, demonstrating that the accumulation
of capital is perfectly compatible with democratic values.”
Mankiw’s example of the Founding Fathers is a vivid
illustration of Piketty's point, not a refutation of it. The United States in
the 1780s was controlled by economic elites that were universally white and
male and owned considerable capital, much of it (as in the cases of Washington,
Jefferson, and Madison) in the form of slaves. So they then created a political
system in which power was concentrated among property-holding white men such as
themselves, and in which slavery was allowed to flourish. The slave-holding
class was able to translate its wealth into political influence, enough to
maintain the institution for 77 years after the Constitution was ratified. And
the economic power of white men helped keep in place a system in which a
substantial majority of the US population was denied suffrage for over a century.
They kept in place a system that was, by any reasonable definition, not a
democracy.
No reputable historian denies that the class interests of
the founders in shaping the American Revolution and the writing of the
Constitution. Slaveholdings and/or financial holdings significantly influenced particular
clauses or rules contained in the Constitution. American historian Charles A.
Beard argued in his book An Economic Interpretation of the
Constitution of the United States that the framers and ratifiers of the
Constitution were less interested in furthering democratic principles than in
advancing specific economic and financial interests. Beard's thesis eventually
emerged as the standard historical interpretation. This analysis is further
supported in a more modern account by Robert McGuire who also argues that Alexander
Hamilton, James Madison, George Mason and the other Founding Fathers did act as
much for economic motives as for “abstract democratic” ideals. Despite
pretensions of being “enlightened” – sweeping aside monarchy, aristocracy and
the established church – the new republic was never designed to be anything
other than an oligarchic state. His book “To Form a More Perfect Union” offers
compelling evidence showing that the economic, financial, and other interests
of the founders can account for the specific design and adoption of our
Constitution. McGuire convincingly demonstrates that an economic interpretation
of the Constitution is valid.
Howard Zinn wrote “The Founding Fathers did lead the war for
independence from Britain. But they did not do it for the equal right of all to
life, liberty, and equality. Their intention was to set up a new government
that would protect the property of slave owners, land speculators, merchants,
and bondholders."
The Founding Fathers substituted the abstract principles
that “all men are created equal” and that power is derived from “the will of
the people”. They adopted a definition of “the people” which excluded women,
non-landowners and slaves. Those architects of the Declaration of Independence
– the land and property owners – were quick to build a system of government
based on the division of power that would guard against the “excesses of
democracy”. The richer property owners were afraid that, as they were not
themselves in the majority, the less well-off would vote to take away their
property and arrangements (restricted franchise and/or indirect election) were
made to keep power out of the hands of the majority. The president was an
elected monarch, as argued by Frank Prochaska.
By having two different houses of Congress, a Senate and a
House of Representatives, places an obvious obstacle to simple majority rule.
There are 435 Representatives and 100 Senators. 51 Senators can block the
majority rule. Moreover, Senators are elected for six years instead of the two
for which Representatives are elected. The electoral college to elect the president
operates intentionally in opposition to majority rule in this same way. In a
system of electing the President by mere simple majority, a candidate or party
could win by appealing to 51% of the voters. The electoral college serves as a
partial safeguard against those who might be able to find and win over a
majority. The national popular vote is not the basis for electing a President
or Vice President. Since 1944 Gallup Polls have found a majority of Americans
have continually expressed support for an official amendment of the U.S.
Constitution that would allow for direct election of the president.
The American War of Independence did not establish a truly
democratic government. It did not significantly change the structure of
American society; rather, it reinforced the political, economic, and social
gaps between classes of Americans. James Madison, for instance, who would serve
as the young republic’s fourth president, warned his fellow founders of the
perils of democracy, saying too much of it would jeopardize the property of the
landed aristocracy. “In England,” he observed, “if elections were open to all
classes of people, the property of the landed proprietors would be insecure.” Land would be redistributed to the landless,
he cautioned. Without the rich exercising monopoly privileges over the commons,
the masses would be less dependent on elites like them.
Edmund Randolph, the country’s first attorney general, said
that as he saw it from looking at the example of the states, “Our chief danger
arises from the democratic parts of our constitutions.”
Alexander Hamilton derided the allegedly “pure democracy” of
the ancients.
Mankiw, despite his intellectual credentials, couldn’t have
been more wrong, and we can only suspect that his attack on Piketty is
ideological and he was acting in defence of the plutocracy that pays him to be their mouthpiece by offering
misinformation, rather than presenting a genuine academic contribution.
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