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Inequality's roots deep in US history

Steve Haycox

Income inequality is abroad in America today as at no time since the 1920s. It is a result of relaxation of government regulation and oversight of financial and investment institutions that began with the 1980s conservative Reagan revolution, resting on faith in supply-side economic principles and an exclusionist view of individuals in society. Supply-siders sold a willing government on the idea that freeing money from constraint, particularly for the wealthy, would generate capital investment and create jobs. While it may have in the short term, it was a freedom too easily abused, which led to reckless risk-taking without accountability, and, in the long run, to deep recession.

But the reckless behavior of investment managers and their wunderkind rested ultimately on two careless assumptions, one about capitalism, the other regarding human society. Deregulators expected capitalist functionaries to police themselves, to exercise disciplined restraint in the name of their own, and society's, perpetuation. They forgot, or more likely did not care, that, as Lewis Lapham writes in the current issue of Harper's Magazine, while "a democratic society places a premium on equality, a capitalist economy does not. 'Buy cheap, sell dear,' is for capitalism the name of the game." They who expect self-discipline of capitalist managers expect what hasn't been and won't be. As most Alaskans know well, the fisherman who lets the fish go in the name of perpetuation simply sends a present to the folks in the next boat.

More fundamentally, however, the failures resulting from deregulation, and consequent income inequality, rest on the conviction that those who succeed have no obligation to those who do not. There is a deep history in this country of the notion that those who do not succeed don't deserve to, that they have only themselves to blame. It began at the beginning.

As Edmund S. Morgan explained in "The Puritan Dilemma" in 1958, the Separatists who founded Massachusetts believed in predestination: Salvation or damnation were predetermined. The dilemma was that no one's destiny could be known. The Separatists solved the problem by imagining that those who lived ostensibly upright lives and who accumulated wealth and power must surely be the anointed. They acted accordingly, conferring social and political prestige on the successful, often overlooking the contradictions in their behavior and explaining the failures of the disadvantaged by their eternal flaws: After all, what could one expect? That Puritan legacy is deep in American culture, somewhat secularized today.

The current critique of growing income inequality focuses on its recreation of class, its lack of fairness and its new Social Darwinism. As New Yorker staff writer George Packer wrote this winter in Foreign Affairs, inequality divides us from one another "in schools, in neighborhoods, at work, on airplanes, in hospitals, in what we eat, in the condition of our bodies, in what we think, in our children's futures, in how we die." It complicates imagining the lives of others. That separation is a function of financial capacity, as Michael Sandel outlined in last month's Atlantic. MVP is nice; MVP Gold is nicer; first class is nicest of all, as is buying a solo drive in the HOV lane.

The defense of income inequality addresses American opportunity, arguing that income distribution does not matter since we do not enjoy equal capabilities. Artificially to nurture the less fortunate through welfare and tax policy is destined to fail, while at the same time betraying self-discipline, encouraging decay of personal morality. Additionally, regulation through the enormous federal bureaucracy, dedicated to unproductive limitations on personal and institutional freedom, shackles the genius of the free market.

Alfred Chandler addressed the free market in his 1977 Pulitzer Prize-winning work "The Visible Hand," about the managerial revolution. The growing power and efficiency of the modern corporation, dedicated to its own survival and aggrandizement, makes a mockery of the idea of the level playing field. Corporations do everything in their power to manipulate the market in their favor. And a rising tide cannot lift the boats that are tethered to the pilings.

What liberals understand is that too many inequalities in society are consciously created, are self-serving and are incompatible with real democracy. A conservatism truly compassionate would act on this same understanding.

Steve Haycox is a professor of history at the University of Alaska Anchorage.