Most Americans are fully cognizant of the fact that we value making money probably over all else. I would imagine that there are not many people willing to contest it. There are clear historical reasons to explain why it is so. In the last chapter I mentioned that our first two British colonies, in order of appearance Virginia and then Massachusetts, were publicly traded corporations, something I learned from my wife’s college American history textbook (Blum). The only difference from today’s corporations is that they required a royal charter. The Virginia Colony was governed by its periodic shareholders meeting in which each share was worth one vote. The more shares you had, the more you influenced the outcome. Note, in passing, that this state of affairs establishes deference to the wealthier people as opposed to deference to title of nobility, but it favors the wealthy over the poor. Freed ex-indentured servants could travel to the meeting and participate, as they had at least one share in the company. Freemen who lived too far from Williamsburg to attend the meeting could pool their shares, if they had an important stake in an upcoming decision, and each give a proxy to one of them who was able to make the trip and promised to vote all the shares as they instructed. According to the tours offered to visitors at Williamsburg, the practice was the first representative government held by Europeans in the New World. Thus, from the earliest times of our history, business and government have been inextricably linked, as have owning land and the right to vote, a situation which persisted until very recently, as history goes.
By the eighteenth century, Virginia had such a prosperous economy and vibrant culture that the British crown decided it wanted a bigger piece of the action. London sent a governor to Virginia to represent the decisions of the king to the shareholders’ meeting. The first order of business was new taxes, of course. The shareholder colonists took the position that the governor could not levy a tax without their approval, based on a by then long-standing principle that Englishmen could not be taxed without representation in Parliament. The first governors found the arrangement quite natural. It was definitely a cultural theme in Great Britain. The colonists used an unquestioned cultural practice to obtain leverage when asking for certain laws to be passed in turn for approving new taxation.
Eventually King George took the position that, as Virginia and Massachusetts operated by permission of royal charter, they were his personal property. Accordingly, he set about to bring them into unquestioning obedience. The colonists responded that they were English citizens and thus entitled to certain rights. The king would have none of it. His actions are clearly detailed in our Declaration of Independence and so do not need to be repeated here, but it should be kept in mind that George was violating agreements established back in medieval times. The 18th century was the age of creating strong nation-states ruled by monarchs, who were seeing how far they could extend their power. The intransigence of the king in insisting on taxing the colonies directly, in violation of a culturally accepted practice of long standing, eventually led to the revolution and independence. A major triggering event was the taxation of tea, that is, a tax on commerce, establishing an American theme holding that taxation on business is something negative. We tend to believe this, allowing our politicians to play on shared values and experience, and on other themes, in order to get us to support what they want for deregulated commerce.
It is worth noting here that there was ferment going on simultaneously in France. The colonial envoys, who eventually became the American ambassadors and consuls, spent considerable time in France. They eagerly absorbed the political philosophies circulating in France and England and these philosophies in turn are reflected in our founding documents.
US independence came, as we all know, in 1776. Ferment continued in the American states. The Vineyard of Liberty recounts how in Massachusetts, the unicameral legislature, dominated by common people, voted to void all existing debts. This and other developments in the states as well as in France, and the weakness of the Continental Congress and its currency, alarmed many. The more patrician element of American society pushed for a constitutional convention to create a strong central government with the division of powers which persists until now. This constitution was signed in 1789 (the same year that launched the French Revolution with the taking of the Bastille) and then circulated to the states for ratification.
During the unsettled time of the rule by the Continental Congress, a useless person was called “not being worth a Continental,” in reference to the disdained paper currency of the day. I suppose the habit stuck. By contrast, people who had great landholdings and other measures of wealth were called worthy. Another saying, both in the US and in England, was that the poor were undeserving (Shaw): if they were poor, it was their own fault.
How, then, was one to become deserving and worthy? In the US, the only way was to be rich or at least become prosperous by dint of hard work. The stories by Horatio Alger, appearing in the last quarter of the 19th century and coinciding with the Gilded Age, nearly always featured poor young boys who attain at least middle-class status and security if not more, by working hard and displaying a sense of responsibility, heroism, or some other sterling quality that brings him to the attention of a wealthy person who then eases the boy’s way into a lucrative occupation. Alger helped create the enduring myth of a country which almost guarantees a comfortable life if only one puts out enough effort to make it happen. The convenient corollary, obtained through a popular but flawed bit of logic, held that those who remained poor did so for lack of stamina, purpose, work ethic, or some other negative quality.
During the 1930s, in response to the Great Depression, the US government instituted a series of policies designed to give as many people as possible (excluding minorities) a roughly equal playing field. The measures relied largely on emphasizing free quality education and redistribution of income through taxation. The country’s entry into World War II stimulated the economy with the demand for armaments, tanks, military transportation airplanes, bombers, jeeps, and so on. Countless newspaper stories, books, and documentaries attest to it. When the war was over, the factories were converted to producing major consumer articles, such as refrigerators and washing machines.
The result was unprecedented material affluence in the US at a time when Europe was still recovering from devastation, the United Kingdom was divesting itself from its imperial holdings, and much of the rest of the world had suffered great damage. The US, itself untouched by war, naturally emerged as the richest and most powerful country in the world. People took this newfound power and prosperity as confirmation of its myth of worth by monetary and heroic achievements. Had we not been rewarded for our work ethic and selfless commitment by a huge victory?
This is the world I grew up in and, in my immature and under-informed mind, I assumed that people had learned how to establish wealth and stability and that, once learned, they could keep it that way. Unfortunately, there were tensions I only vaguely was aware of that would prove my assumptions wrong in due time. After all, until I went to college, America’s position meant a strong dollar which allowed us to live comfortably in Argentina.
The by then unquestioning faith in business was fertile ground for neoliberal ideologues to plant three ideas which have grown out of control. The first held that all institutions should be run on business