"Whenever there is great property, there is great inequality. For one very rich man there must be at least five hundred poor, and the affluence of the few supposes the indigence of the many. ... The acquisition of valuable and extensive property, therefore necessarily requires the establishment of civil government." Adam Smith, -- Book V, Wealth of Nations
Recently, President Obama has been accused of promoting class war. But the conservative free market fundamentalism, which entered the political stage in the late 1970s and early 1980s, is described by many as a one-sided class war, waged by those on top. Certainly, the data shows that even by the end of the 1980s, a large share of the income gains were going to the wealthiest. That trend has continued and intensified and has been much more pronounced in the U.S. than other nations. This redistribution of wealth has occurred because astronomical sums of money have pushed U.S. politics to the right. Both Rick Perry's verbal assaults on Social Security -- a centerpiece of the New Deal -- and Herman Cain's very regressive tax schemes can be seen as a continuation of the one-sided class warfare waged against the poorer classes.
Our society attempts to minimize the importance of class. Several decades ago it was easier to ignore class; from the 1950s to the 1970s almost all Americans believed they were part of the middle class. Since the 1970s, about half of the country has seen almost no increase in their inflation-adjusted income while class differences have sharpened and upward mobility has become more difficult here than in other countries, although massive doses of consumer debt has allowed millions to continue to enjoy a middle-class lifestyle.
Modern economics divides society into consumers (which have and determine demands) and producers (which create supplies). Thus, both conservative economists and the more liberal Keynesian economists employ this modern approach, which largely neglects class. The media follows their lead by featuring articles such as "Consumers Need to Spend More." The media seldom feature articles critical of class exploitation or articles that explore class privilege, class power, class interest or class struggle.
The classical economists (those writing before the 1870s) did not divide society into producers and consumers. They divided society into classes. For the classical economists, there were no sharp dividing lines isolating economics from history, politics, or sociological subjects. They write as though those subjects are inseparable. An example of such an economist is Adam Smith.
Adam Smith (1723-1790) was the first economist to develop a complete model about the nature and structure and advantages of capitalism. His 1776, work, "An Inquiry into the Nature and Causes of the Wealth of Nations," (generally referred to as "The Wealth of Nations") is one of the most influential books of all time. He has been idolized by advocates of free markets. Milton Friedman and some members of the Reagan administration wore Adam Smith ties. In Cleon Skousen's book, The 5000 Year Leap, (which Glen Beck has promoted) he has a chapter extolling free-market economics and venerating Adam Smith with section headings, such as "After 1900 Adam Smith Got Lost in the Shuffle." "Adam Smith Out, Karl Marx In" and "The Rediscovery of Adam Smith."
Yet, although Smith is claimed by the political right and though he himself speaks of "inferior ranks" and "superior classes," there are many passages in Smith indicating he believed that class differences were causally linked; that is, that the rich had become rich by impoverishing the poor. Smith closes Book I of the aforementioned work by observing that "those who live by profit" are "an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it."
Smith showed that "those who live by profit" (he also called them "the masters") had at least three advantages over workers: they had time on their side in disputes because workers could not wait months to eat; they were able to manipulate public opinion; and government had been instituted for their benefit and they controlled the government. Examining the labor disputes of the last several decades, it is easy to conclude that not much has changed.
There is enough complexity and richness in Smith's work that he can be viewed as helping to father two rival major traditions: one that employs class analysis and seeks to understand class conflict; and two, one that downplays or ignores class. Given the U.S. trends over the last three decades, it is likely that the importance and usefulness of the first approach will grow.
Jones, who has taught economics at Weber State University, lives in West Haven.
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