Excerpted from Ralph Nader‘s new book: Who Owns America? What conservatives of the ’30s teach left and right today about crony capitalism
Source: THE AMERICAN CONSERVATIVE, May 21, 2014
“There was a time in the Depression of the 1930s when conservative thought sprang from the dire concrete reality of that terrible era, not from abstractions.
“They did not use the word “conservative” very often, preferring to call themselves “decentralists” or “agrarians.” Eclectic in background, they were columnists, poets, historians, literary figures, economists, theologians, and civic advocates. In 1936, Herbert Agar, a prominent author, foreign correspondent, and columnist for the Louisville Courier-Journal and Alan Tate, poet and social commentator, brought a selection of their writings together in a now nearly forgotten book: Who Owns America? A New Declaration of Independence.
“In his 1999 foreword to the reissued edition, historian Edward S. Shapiro called Who Owns America? “one of the most significant conservative books published in the United States during the 1930s” for its “message of demographic, political, and economic decentralization and the widespread ownership of property” in opposition “to the growth of corporate farming, the decay of the small town, and the expansion of centralized political and economic authority.”
“It is not easy today to convey the intense belief of many activists and intellectuals in the ’30s concerning the necessity and inevitability of radical change. … In this mix, there was espoused a political economy for grassroots America that neither Wall Street nor the socialists nor the New Dealers would find acceptable. It came largely out of the agrarian South, casting a baleful eye on both Wall Street and Washington, D.C. To these decentralists, the concentrated power of bigness would produce its plutocratic injustices whether regulated through the centralization of political authority in Washington or left to its own cyclical failures. They were quite aware of both the corporate state fast maturing in Italy and Nazi Germany and the Marxists in the Soviet Union constructing another form of concentrated power with an ideology favoring centralized bigness in the state economy. They warned that either approach would produce unrestrained plutocracy and oligarchy.
“Nor did they believe that a federal government with sufficient political authority to modestly tame the plutocracy and what they called “monopoly capitalism” could work because its struggle would end either in surrender or with the replacing of one set of autocrats with another. As Shapiro wrote in the foreword, “while the plutocrats wanted to shift control over property to themselves, the Marxists wanted to shift this control to government bureaucrats. Liberty would be sacrificed in either case. Only the restoration of the widespread ownership of property, Tate said, could ‘create a decent society in terms of American history.’”
“Although the decentralists were dismissed by their critics as being impractical, as fighting against the inevitable wave of ever-larger industrial and financial companies empowered by modern technology, their views have a remarkable contemporary resonance given today’s globalized gigantism, absentee control, and intricate corporate statism, which are undermining both economies and workers.
“They started with the effects of concentrated corporate power and its decades-long dispossession of farmers and small business. They rejected abstract theories by focusing instead on such intensifying trends as the separation of ownership from control; the real economy of production in contrast to the manipulative paper economy of finance; and the growth of “wage slavery,” farm tenancy, and corporate farming.
“Year after year, Agar and his colleagues rejected pyramids of power, saying that the country could have “a majority of small proprietors, with no all-powerful plutocracy at the top and no large proletarian class at the bottom.” The decentralists were among the earliest critics of the notion that large industry was inherently more efficient, noting that economies of scale frequently could be met by smaller factories, ones with fewer external costs that would offer fewer abuses to a democratic polity.
“They revolted against “high finance” at a time of multitiered holding companies, especially in the electrical and other utility industries. David Cushman Coyle, a prolific economist, put it this way in “The Fallacy of Mass Production”: “In a capitalist system, mass production is usually a mere camouflage for high-finance manipulation of business, to the detriment of the commonwealth and the impoverishment of the nation.”
“This is why these thinkers insisted on the proximity of direct ownership, in contrast to remote stock ownership, and, as a result, favored individual proprietorship and producer and consumer cooperatives. In cases in which large-scale efficiencies require large-scale operations, they should be run as “public services.”
“In their arguments they often referred to American history, including Jeffersonian traditions of smallness and farmers’ bitter experience with the large railroads and banks of the late 19th century, which spawned a populist revolt from east Texas far and wide—to the north, east, and west. They took repeated note that the farmers’ powers—political and economic—once awakened had their roots in the ownership of their land.
“One of their favorite observations of Adam Smith distinguished between individual capitalism and corporate capitalism. Smith wrote, “People of the same trade seldom meet together, even for merriment or diversion, but the conversation ends in a conspiracy against the public or in some contrivance to raise prices.” Wars, the ’30s conservative group believed, only result in the government’s creation or support of ever-larger “postwar combines.”
“The Catholic priest and author John C. Rawe put it this way:
‘Corporate mergers and all devices of economic and legal control, usurious interest with wholesale foreclosure, unsound manipulation of the nation’s volume of money by banker, broker, and politician—all these have made of us a nation of dispossessed people. …
‘And it is absolutely irrelevant to learn from government and corporation statistics that the total wealth of the nation is much greater today than ever before.’
“Rawe and other agrarians were not easily fooled. They knew that only a shift of power from the plutocrats to the farmers and others would produce the desired social justice. “No State or Federal regulation,” wrote Rawe, “is ever adequately enforced to protect private individual owners in any field of commercial production. The immense power of the incorporated monopoly always has its ways of circumventing legislative programs.”
“The decentralists had a concrete awareness of the ways and means of corporate power that was way ahead of many of today’s conservative thinkers, who believe that the marketplace will suffice to check this ever-boiling force of business power. Many contemporary conservatives exhibit such a focus on government and keeping it at arm’s length that they have neglected to rigorously propose an alternative locus of power, one that would take up many functions of government and restrict what they call “crony capitalism.”
“Part of the reason for this contrast between thinkers of the Depression years and the ones we have now is that the earlier conservative writers were close to the dirt-level poverty, land dispossession, foreclosures, and overturning by Big Business of a historic way of rural life which empirically grounded their diagnoses and reforms. There were no screens to look at daily in their abstract workplaces and households to distract them from grim reality.
“They refused to grant legitimacy to corporate claims of having the same constitutional rights given to people. They knew how little accountability their state charters asked of business entities. Vanderbilt University professor Lyle H. Lanier, in his essay “Big Business in the Property State,” launched a critique by citing Chief Justice John Marshall’s famous words that each corporation is an “artificial being, invisible, intangible, and existing only in the contemplation of the law.” Lanier wondered how “in this land of rugged individualism two hundred corporations control more than fifty percent of the nation’s industrial assets.” …
“’America is confronted with a condition, not a theory. It is obvious that the peculiar disassociation of ownership from control of property, which characterizes the corporation, and the reduction of a progressively increasing number of real property owners to the status of wage-earners, create conditions not contemplated by the founders of the American Republic.’
“Today, the financial, industrial, and commercial stock corporations care far less about ownership than about control. Ironically, the greatest wealth in this country is still owned by the people but controlled by the corporations under the approving aegis of the federal and state governments. These assets are owned under individual claims, in the case of pensions and stocks, and as a commons in the case of the public lands, the public airwaves, and the varieties of government research, development, and other public assets. All are peoples’ assets controlled and taken by corporate power for profit. …
“Not until the 1990s did the decentralists’ core focus on corporate power and personhood begin to be discussed even in liberal/progressive circles. Yet back in the 1930s, Lanier had put the central issue concisely: “The farce of treating these giant corporations as individuals with the rights and privileges of individual American citizens should be discontinued. Constitutional amendment is the only recourse.”
“What the decentralists were pushing for was the supremacy of individual property rights that “secure life, liberty and the pursuit of happiness,” over the property rights of incorporated entities possessing a “legal-social structure of privilege and concentration completely alien” to the agrarians’ notions of a democratic society.
“In this regard, they drew their public’s attention to the early corporate chartering laws, administered by state legislatures in the early 1800s with “the greatest caution and limitation,” reflecting the charterers’ view of the supremacy of property “in the hands of private individuals.”
“Rapid industrialism and the increase in the power of financial institutions led to the changing of these laws and the revising of some state constitutions to authorize more automatic chartering by state agencies, leading the agrarians to lament the lost opportunity, for they had been pressing for the creation of chartered cooperatives that would do the same work of amassing capital and other services without the distorting greed and concentrated power of corporations. …
“The real danger, the decentralists believed, in the awakening of the people was the demagogues—they would name Sen. Huey Long or Dr. Francis Townsend—preying on the lower middle classes by promising them the moon and offering simple solutions. If the demagogue comes to power, knowing he has no easy solution he will turn, in Agar’s indictment, to
‘the Lords and Masters … and make a deal. The demagogue stays in office and keeps the people quiet. The Lords and Masters stay in power and run the economic system just the way they always wanted to run it. The corporate state is monopoly-capitalism made safe. One of the first steps is to destroy all labor unions. Then the plain man is fobbed off with subsistence wages, patriotism, and a uniform. If he is still restive, it is not hard to fling him some racial minority on whom to work off his spleen. The Jews do very nicely. In America the Negroes might also serve.’
“It is remarkable how deeply and concretely these earlier defenders of prudence and tradition kept abreast of the new perils of the corporate supremacists. The Depression years of the ’30s made many thinkers and doers get down to fundamentals, whether they were in the social sciences, humanities, or the arts or organizing actions in communities. They thought more boldly, spoke out more candidly, confronted the realities of power, and, even when they were dealing with abstract principles, sought to ground their thoughts in the real world where people live and work.
“But then, they did not have to go to their offices every day to work in rarified, screen-filled environments, being well paid by grants from economic interests, vested ideologues, or foundations. The decentralists and agrarians had relatives and friends in serious states of impoverishment and insecurity, and if they did not, they saw these avoidable, wretched conditions all around them. …
“Troy J. Cauley, an economist and author of the acclaimed book Agrarianism: A Program for Farmers (1935), questioned the program advanced by the philosophy called “technocracy,” which foresaw a future in which there would be a redistribution of property from the few to the many, or even abundance with less work for all, powered by increasing automation. None of those schemes, he asserted, offered any “method for redistributing property among the people.”
“He went even deeper: “If there is to be a stable and permanent foundation for a redistribution of income, the foundation must be a general diffusion of property ownership, that is, a general diffusion of the control of the sources of income.” …
“The decentralists were not alone in not knowing how to get to their secure and free society—an unanswered question that still haunts today’s advocates of just change. Nevertheless, these writers and scholars, coming off the destitutions of the most prolonged economic collapse and massive unemployment in American history, known as the Great Depression, have much to teach us during these times known, so far, as the Great Recession.
“Their writings shame the thinness of the conservative/liberal appraisals of the contemporary contours of power and control. They were much freer of taboos. They liberated themselves from the latent self-censorship that in our era has precluded fresh thought about even modest power-shifting possibilities and civic motivations. They also had a clear-eyed focus on the grip of the giant corporations over our political economy, whose antagonism to our sense of individual and community freedom and fair access to justice (courts and agencies) is so palpable today.
“Most outstanding was their persistent questioning as to why the artificial entity that is the “joint-stock company” should have ever achieved equality with human beings under our Constitution, a document that starts with “We the people” and never mentions the words “corporation” or “company” or proclaims “We the corporation.”