In the early 1800s, wealthy Southern slaveowners realized the northern states were outlawing “the peculiar institution” and enjoying rapid population growth. What if the North were to use that demographic advantage in Congress to outlaw slavery everywhere?
The slaveowners could have taken that moment to question their own ethics. Nah! Instead they questioned democracy. As Supreme Court Justice Louis Brandeis framed it many years later, “We must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can’t have both.” Led by South Carolina’s John C. Calhoun, the slaveowners argued that when the property rights of the few conflict with the rights of the many, the many must yield.
The Civil War should have settled that argument, but subsequent federal failures, including the infamous Compromise of 1877, which ended Reconstruction, led to a system very like the one Calhoun envisioned, to the detriment of African-Americans, workers, and almost everyone else. But eventually the federal government righted itself. Passage of the 16th Amendment in 1913 allowed it to levy progressive income taxes. Twenty years later, the New Deal struck repeated blows on behalf of the common good against concentrated wealth. Passage of the Civil Rights Act of 1964 and Voting Rights Act of 1965 cemented America’s commitment to equal rights and democracy.
What were property rights absolutists to do?
When I was a kid in the 1970s, Americans were unsympathetic to the rich. The rich were capitalists, plutocrats, takers who earned their outrageous fortunes by exploiting makers, i.e. workers. Recognizing that we ordinary folk were unpersuadable, the property rights absolutists changed tactics, bypassing the electorate and exerting direct influence on the media, the courts, and politicians. In a notorious memorandum, Lewis Powell, soon to become a Supreme Court justice, noted that “the American economic system is under broad attack” and urged the U.S. Chamber of Commerce to, among other things, (1) develop “highly qualified scholars in the social sciences who do believe in the system,” (2) establish a speakers’ bureau to get out the message about the wonders of capitalism, (3) review textbooks and advocate for pro-business changes, and (4) pressure politicians.
The Chamber heeded his advice. According to OpenSecrets.org, during the 2016 campaign the Chamber spent more than any other entity on lobbying — $103,950,000 — and ranked fifteenth in outside spending — another $29,106,034.
But Powell and the Chamber of Commerce aren’t the biggest players. Taking as their intellectual foundation the cold philosophies of Austrian economists Ludwig von Mises and Friedrich Hayek, along with that of homegrown (and thoroughly non-empirical) Nobel Prize winner James McGill Buchanan, Charles Koch and other stupendously rich property rights absolutists have underwritten a web of organizations dedicated to rigging the system for the wealthy.
They’ve enjoyed stunning success. A 2014 study by Martin Gilens of Princeton and Benjamin Page of Northwestern concluded that “economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.”
That’s why Congress won’t confront global warming, extreme income inequality, or the demise of privacy, and why it cuts the budget of vital functions like the Centers for Disease Control. That’s why the executive branch pushes through a massive tax cut for corporations and the wealthy, advocates for the privatization of education and veterans’ services, and eviscerates popular regulations like the Endangered Species Act. That’s why the Supreme Court circumscribes civil rights in general (Masterpiece Cakeshop v. Colorado Civil Rights Commission) and workers’ rights in particular (Epic Systems v. Lewis and Janus v. AFSCME).
That’s the real deep state. John C. Calhoun and those old slaveowners would have been proud.
If this sounds too pat or conspiracy-theoryish, here are some well-documented works by rigorous writers that provide more nuance:
Gordon Lafer, The One Percent Solution: How Corporations Are Remaking America One State at a Time. ILR Press, 2017.
Eric Levitz, “America’s Version of Capitalism Is Incompatible With Democracy.” New York Magazine, May 23, 2018.
Nancy MacLean, Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America. Viking, 2017.
Jane Mayer, Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. Doubleday, 2016.
Daniel Schulman, Sons of Wichita: How the Koch Brothers Became America’s Most Powerful and Private Dynasty. Grand Central Publishing, 2014.