The Crisis of the Middle-Class Constitution

Ganesh Sitaraman “The Crisis of the Middle-Class Constitution: Why Economic Inequality Threatens Our Republic,” Alfred A. Knopf, 2017, 305 pp.

Although this book presents many interesting ideas, it does not convincingly demonstrate that the middle class is essential to preserving our democracy and constitution.  Common-sense supports this link as most likely necessary, but the book does not provide the support the title indicates.

The title implying our constitution was created for a middle-class and that middle class is now in a crisis, attracted me to this book.  It is something I have been thinking about and wanted to put some meat on my thoughts.  The book starts with an intriguing premise: the U.S. Constitution was created in a time of relative economic equality in an agrarian setting, which is true if you ignore slavery, women’s rights, Indians, and indentured servants—and, did I forget to mention the entire south?  This link between the creation of the Middle-Class Constitution and economic equality, according to the author, is essential—all other countries provided for the never ending tension between the well-off and the poor by dividing their legislatures into representatives of poor and rich, such as House of Lords and Commons in England—this legislative construction is called the Class Warfare Constitution. 

After 1789, the U.S. relative economic equality persevered during the following decades because of the presence of the cheap and available western lands, especially expanded by Jefferson’s Louisiana Purchase.  But then came the Gilded Age (1870-1900).  Agriculture became less dominant, industrialization, immigration and urbanization created depressed economic areas and the western lands were no longer available as a safety valve; however, Progressivism beginning with Teddy Roosevelt rescued us from the inequality of the gilded age.  Yet, I am unsure that a similar Progressivism will save us now.  Back then the “Robber Barons” apparently felt they had enough and supported the changes.  They controlled their fortunes as individuals.  Nowadays, large corporations control the media and they are not human in spite of Court rulings—they have no incentive other than forestalling revolution to lessen economic inequality.  (This last idea is totally mine, this is not in the book).

Addenda:  In the Gilded Age, income inequality had reached levels comparable to those we see today. In his book, Sitaraman, highlights the achievements of the Progressive movement, one of whose aims was taming inequality, and which successfully modified the Constitution. There were four constitutional amendments in seven years — the direct election of senators, the franchise for women, the prohibition of alcohol and the income tax. To which I would add another reform, the establishment of the Federal Reserve, which provided a mechanism for handling financial crises without the need for the government to be bailed out by rich bankers, as well as the reduction in the tariff, which favored ordinary people by bringing down the cost of manufactures. Politics can and has responded to inequality, and the Constitution is not set in stone.

My Notes:

Pg. 3:  The number one threat to American constitutional government today is the collapse of the middle class—not the rise of presidential power, not the growing national security state, not the gridlock in Washington, not the polarization of the two political parties. 

Pg. 4:  The framers of the Constitution were well aware of the history of statesmen and theorists grappling with class warfare.    

Pg. 11:  Looking back from the present, commentators often interpret the founding era through ideas associated with some of the most prominent political philosophers in history: Karl Marx, John Locke, and Niccolo Machiavelli.  Devotees of Marx see society as mired in class conflict; in their version of the founding era, wealthy landowners designed a scheme of government that would preserve and promote their economic interests.  Followers of John Locke emphasize instead a revolutionary tradition built on individual rights to life, liberty, and private property, the absence of feudalism, and the social contract.  A third approach is inspired by Machiavelli, one of the great theorists of republican government.  The republicans argue that the founding generation valued freedom and self-government, and they believed a republic could only exist if the people and their leaders were virtuous citizens.  Each of these leading traditions finds support in the historical evidence and brings a powerful perspective to understanding America’s past and present.  But another tradition was prevalent at the time, though largely forgotten today.  In the seventeenth century the Englishman James Harrington argued that a republican form of government could not exist without a relatively equal distribution of wealth.  In all societies, Harrington said, power followed property.  Many in the founding generation had internalized Harrington’s lessons, and they believed that the American republic was built on America’s exceptional economic conditions—on the foundation of the middle class. 

Pg. 16:  By the late nineteenth century the economic equality of the country was breaking down.  The closing of the frontier, massive population shifts from farms to cities, industrialization, and the rise of corporations and trusts meant greater and greater concentrations of people and power than the founding generation could ever have imagined.  Concentrated economic power became the great fear of the populists and progressives, and they took up two tasks: reform the structure of the economy to redress the imbalance between workers and owners, and reform the structure of government to break the political power of the economically powerful. Populists and progressives during this time came up with some of the most innovative and creative solutions in American history: constitutional amendments democratizing the country, corporate and income taxes, antitrust laws, campaign fiancé reforms, the professionalization of government officials.  And although reformers did not always rely on constitutional amendments, they did rely on constitutional arguments.  These reformers understood that economic structure and constitutional structure were interconnected.  Then, from the 1940s to the 1970s, America saw a growing middle class, rising wages, rising productivity, rising standards of living, and progress on equality for everyone.  Constitutional debate turned to issues of civil rights and eventually to the culture wars.  Economic issues were less salient, and their constitutional significance was largely forgotten—WWII did wonders for restoring economic equality.

Pg. 30:  Polybius fame stems from his documenting the rise of Roman power over the previous century.  He argued in The Histories that Rome was able to conquer the known world in such a short period of time because of its political system.  Most Political systems, he observed, fall into one of six categories: kingship, aristocracy, and democracy, and their perversions, tyranny, oligarchy, and mob rule.  Rome created a stronger and more stable political system by combining features of each system.

Pg. 60:  The founding generation saw that America was exceptional because it had a relatively equal distribution of wealth.  It was perhaps the only place on earth suited to republican government.  The Constitution was radical because it rejected two thousand years of thinking on class warfare constitutions.  Instead the Constitution was built on the bedrock of America’s middle class.

Pg. 63:  Article 1, section 9 of the Constitution declares, “No title of nobility shall be granted by the United States.” 

Pg. 67:  In England in 1759 only 20 percent of the population owned land and more than 60 percent owned no property at all.  In America, two thirds of the white population owed land, and those who didn’t were usually young men and recent immigrants who were readying themselves to go west.

Pg. 121:  In 1796, cotton amounted to 2.2 percent of U.S. exports; by 1820, the commodity accounted for 32 percent of exports.  By 1831, nearly 50 percent of global cotton was produced in the U.S., and more than 70 percent of British cotton imports came from America.  (This fact alone resulted in the inevitability of a Civil War if the institution of slavery was attacked.)

Pg. 139:  With the founders’ economic assumptions collapsing under the weight of industrial transformation, the critical question was whether the republican constitutional system could survive the shift from productive property ownership to wages.  Wage laborers were dependent on other people for their economic survival, and that dependence conflicted with republicanism’s requirement that citizens be free and independent.

Pg. 164:  When the Sixteenth Amendment, which established Congress’s power to create and income tax, was ratified in 1913, it was only the third time the American people reversed a Supreme Court decision through constitutional amendment.  The first was the Eleventh Amendment*, dealing with sovereign immunity, in 1795, and the second was the Civil War amendments, reversing the infamous Dred Scott decision.  Congress passed the first graduated income tax in 1913, placing a 1 percent tax on incomes of $3,000 ($4,000) for married couples), and a rich man’s tax of between 1 percent and 6 percent on incomes between $20,000 and $500,000. 

*The text of the Eleventh Amendment limits the power of federal courts to hear lawsuits against state governments brought by the citizens of another state or the citizens of a foreign country.

Pg. 174:  The progressives passed four constitutional amendments in seven years—establishing an income tax shifting the structure of the Constitution to require the direct election of senators, prohibiting the sale of alcohol, and giving women the right to vote.  At the same time, through food and drug regulation, conservation, income taxes, and antitrust, they sought to constrain the economic powers of corporations and wealth elites that had been unleashed during the Gilded Age.

Pg. 202:  Between 1948 and 1978, American productivity rose by 107.8 percent.  During that same period, the median male worker’s income continually rose, tracking GDP closely, by 1978, hourly compensation was up 96 percent.  Shared growth and prosperity meant a stronger middle class on metrics other than wages.  In 1940, 43.6 percent of Americans were homeowners.  With the postwar boom, that number had hit 64.4 percent by 1980.

Pg. 226:  From 1948 to 1978, wages and productivity marched upward together.  But since then growth has far outstripped wages.  By 2013, productivity in America was up 243.1 percent since 1948.  But wages had only risen by 108.9 percent.  In the last generation, the wealthiest Americans have taken home a larger and larger share of America’s income and wealth.  In 1979 the top 10 percent of Americans captured 32 percent of American income, excluding capital gains; in 2014, they captured 47 percent of income.  That number is higher than the peak during the Roaring Twenties (46 percent).  In 2015, for the first time in generations, the American middle class no longer comprised the majority of Americans.  The upper and lower classes together are now more than 50 percent of the population.

Pg. 230:  Fifty-one percent of all workers in the U.S.—more than half—make less than $30,000 a year.