Note 1: Watch my take on Trump’ inauguration on this week’s Trump Watch.
Note 2: We are putting together a luncheon get-together in downtown Boston after the oral arguments in Ian Freeman’s appeal. Wednesday, Feb. 5. Details forthcoming.
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Longtime Washington Post columnist Eugene Robinson’s new article about a “second Gilded Age” in America gets it wrong. He writes: “In the first Gilded Age, a few tycoons amassed unimaginable riches — men such as John D. Rockefeller, Cornelius Vanderbilt and J.P. Morgan. With their great wealth came great power and influence. When they spoke, presidents listened. On Monday, as a billionaire reassumes the nation’s highest office, in attendance will be the three wealthiest human beings on the planet, according to the Forbes and Bloomberg lists of billionaires: Elon Musk, Jeff Bezos (who owns The Post) and Mark Zuckerberg.”
While those facts are technically correct, where Robinson goes wrong is in failing to recognize that America had a totally different economic and political system in the Gilded Age period that it now has.
Back then, the powers of the federal government were relatively few and limited. Therefore, people who were making large amounts of money were largely doing so under the principles of a genuine free market — that is, by providing goods and services that other people wanted and were willing to pay for. The federal government had virtually no power to do good things for people or bad things to people. Thus, it didn’t make a big difference if presidents listened or not.
Today, things are totally different. Many Americans make vast amounts of money through the connections, contracts, and influence they have with the welfare-warfare-state/regulated-economy way of life — that is, through the vast overwhelming power of the federal government to do good things for people and bad things to people. This is especially true for those who benefit, either directly or indirectly, from the enormous largess that is pumped into the “defense” industry.
Let’s examine some of the principles of the Gilded Age to see how differently Americans back then thought in comparison to how Americans today think:
1. No income tax, income tax returns, or IRS. Everyone kept 100 percent of what he earned. There was nothing the feds could do about it.
2. No Social Security. Helping out parents and seniors was a voluntary choice.
3. No Medicare or Medicaid. A free-market healthcare system.
4. No welfare state. Charity was voluntary, not coerced.
5. No Pentagon, CIA, or NSA. No national-security state. Just a relatively small, basic military force.
6. Minimal immigration control. Almost all immigrants were permitted entry into the United States.
7. No Federal Reserve or paper money. Gold coins and silver coins were mandated by the Constitution.
8. No foreign wars in Europe, Africa, the Middle East, or Asia.
9. No foreign military bases.
10. No foreign aid.
11. No drug laws. No drug war.
12. Virtually no economic regulations, including minimum-wage laws.
13. Virtually no public-schooling systems.
Do you see any differences between that system and the system under which we all have been born and raised today?
The result of that unusual system? The most prosperous era in the history of man! In decrying the Gilded Age, Robinson makes a common mistake, one that is rooted in the indoctrination that everyone receives in America’s public (i.e, government) school system and state-supported colleges and universities. He fails to see the tremendous increase in the overall standard of living, especially for the poor. It was skyrocketing. That’s why tens of thousands of penniless immigrants were flooding into America every week. For the first time in history, they and their families not only had a chance of surviving for a long period of time, they now actually had an excellent chance of prospering! And they did!
Yes, it’s true that some people, including poor people, were becoming fabulously wealthy. But who cares? Why is that bad, especially when even the poorest people in society were doing so well? The reason the rich were becoming wealthy is that they were improving people’s well-being by coming up with goods and services that were improving people’s lives. People were willing to buy their goods and services. Those goods and services were raising the standard of living for the poor and middle class. Moreover, as part of the production process, the entrepreneurs were providing gainful employment to people, which enabled them to make and save large amounts of money, which provided the capital that was making workers more productive.
The problem occurred when people in the 20th century let envy and covetousness gain control over them. They railed against the “rich” and begin calling for forced equalization of wealth through the income tax and the monetary-debasement process. The problem though is that when they embarked on their equalization schemes, they ended up harming the poor by inflicting lower standards of living on them. Moreover, the fear that began afflicting their lives caused them to relinquish their rights and liberties to an all-powerful national-security establishment, which began producing an entirely new class of rich people.
John D. Rockefeller
Oh, did I mention that the Gilded Age was also the most charitable period in history? When people were free to accumulate unlimited amounts of wealth, they voluntarily gave much of it away, on a purely voluntary basis. That includes the so-called robber barons. John D. Rockefeller, one of the “robber barons” who Eugene Robinson mentions in his article, gave away $450 million, which in today’s value was equivalent to billions of dollars — and, no, not to get an income-tax deduction because — remember — there was no income tax!
When President Franklin Roosevelt completed the transformation of American society to a welfare-warfare state/regulated-managed economy in the 1930s, one of his central principles was to make certain that Americans never realize that their political and economic system had changed. He emphasized that the new way of life was simply saving and continuing America’s free-enterprise system. Americans bought it. That’s why today Americans are convinced that the economic and political system under which they have been born and raised is the same “free-enterprise” system under which people in 1870-1900 lived. That’s why people like Eugene Robinson are unable to see that the “first” Gilded Age is dramatically different from the system under which we live today — the system that he incorrectly calls a “second” Gilded Age.
