Thursday, April 14, 2011

All Sail and No Anchor

     All the current budget talk has brought to mind a bit of history. Our fellow Skeptical Conservative, Sub Specie Æternitatis, has an interest in the British historian Thomas Babington Macaulay. Years ago, we ran across a couple of letters by Lord Macaulay on American institutions. The letters had been published in Harper’s magazine in the 19th century, and they pointed to the signal danger of any pure democracy. In every society there are always comparatively few people with great wealth, but in a pure democracy those people are the natural prey of the comparatively less well-off majority. Macaulay referred to the danger of “spoliation.”

     Here is an excerpt from one of the Macaulay letters, taken from a New York Times archive since the Harper’s archive is only available to subscribers:
It is quite plain that your Government will never be able to restrain a distressed and discontented majority. For with you the majority is the Government, and has the rich, who are always a minority, absolutely at its mercy. The day will come when, in the State of New-York, a multitude of people, none of whom has had more than half a breakfast, or expects to have more than half a dinner, will choose a Legislature. Is it possible to doubt what sort of Legislature will be chosen? On one side is a statesman preaching patience, respect for vested rights, strict observance of public faith. On the other is a demagogue ranting about the tyranny of capitalists and usurers, and asking why anybody should be permitted to drink champagne and to ride in a carriage, while thousands of honest folks are in want of necessaries. Which of the two candidates is likely to be preferred by a working man who hears his children cry for more bread? I seriously apprehend that you will, in some such season of adversity as I have described, do things which will prevent prosperity from returning; that you will act like people would, in a year of scarcity, devour all the seed-corn, and thus make the next year, a year not of scarcity, but of absolute famine. There will be, I fear, spoliation. The spoliation will increase the distress. The distress will produce fresh spoliation. There is nothing to stay you. Your Constitution is all sail and no anchor. As I said before, when a society has entered on this downward progress, either civilization or liberty must perish. Either some Caesar or Napoleon will seize the reins of government with a strong hand; or your Republic will be as fearfully plundered and laid waste by barbarians in the twentieth century as the Roman Empire was in the fifth; with this difference, that the Huns and Vandals, who ravaged the Roman Empire, came from without, and that your Huns and Vandals will have been engendered within your country by your own institutions.
     Macaulay was (thankfully) wrong on the timing, since we made it through the 20th century without a Cæsar or Napoleon. Our Constitution was perhaps better founded than he understood, for it did (and does) have some structural protections for the minority rich. The Electoral College was understood to be such a protection, as was the original method for electing senators (until 1913 they were chosen by the state legislatures, not by direct popular vote). Indeed, it took a Constitutional amendment (the 16th) for the government to gain the power of taxing income directly.

     Today, with our media saturation, every hardship of every citizen becomes a matter for government action. At the same time, our leaders succumb to the power of instant and continual polling. Politicians who want to retain their positions fear departing too much from popular opinion. It is always easier to make the case for soaking the rich than it is to argue for fiscal responsibility. In the end, which we hope does not come for a long, long while, Macaulay may still be proven the best prophet after all.

8 comments:

  1. Very interesting. I thought I had at some point or another read most of what Macaulay had written—clearly I was flattering myself.

    For what it is worth, there still is a small band of Macaulay-philes around. Just within my extended circle of D.C. lawyers and economists, the membership includes Walter Olson, the legal commentator, Prof. Boudreaux, Director of the Center for Public Choice at GMU who named his son Thomas Macaulay in our subject's honor, as well as myself, a non-entity whose first-born son's middle name is Macaulay for the same reason.

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  2. What Macaulay did not anticipate was the modern means of protection of the rich, which is the corruption of politics by money. As long as that is true, the rich have nothing to fear. But everyone else does, I think.

    Equating the rich with seed corn is peculiar. I don't understand economics as well as the power hitters do, but it seems to me that since the rise of merchant classes in the Renaissance or thereabouts, the truly affluent societies have been those in which the middle classes are the seed corn. And today it is evident that is being devoured to our detriment. The middle class is the canary in the mine. When it starts keeling over, run for the exits. IMHO.

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  3. You are right, CONSVLTVS, to point to the role of the media. I suspect part of the reason why Western democracies are only now becoming dysfunctional is because of the radical democratization of communication technologies. And, of course, this development is affecting not just Western countries.

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  4. Despite my not being "rich", I abhor the class warfare and castigation of the evil rich going on in today's politics. Indeed, I have never been offered a job by a poor man.

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  5. Aeternitatis, truth be told, the two letters are most of what I've read of Macaulay. I've always meant to explore more of his work. Now, with your enthusiasm as impetus, maybe I can put his essays on the top of my nightstand.

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  6. GTC, another difference of today's world from the 19th century is the heightened ability of the rich (i.e., capital) to relocate to more congenial countries. Make their taxes too high and the rich will just leave. They could do that in Macaulay's time, I suppose, but now they can even do it without physically departing the country, though there are plenty of pleasant places in the world to live with one's millions (I'm told!). Anyway, this phenomenon is partly to blame for the decline in tax receipts when tax rates go up.

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  7. Mark, I think there is a kind of market failure in media. Or maybe it's an analog to Gresham's Law. The loud and the hysterical drive out the sober and the thoughtful. Something similar is also at work in the arts.

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  8. T. Paine, nor have I! Frankly, I've met some truly deplorable rich people, but I've also met some who are veritable Stoic saints. One elderly woman of my acquaintance has nurtured a modest income into a >$1 million fortune simply through frugality. The Left specializes in outrage, but I find it outrageous that anyone would refuse to let this soul of thrift retain what she has sacrificed to build. Anything else sets up perverse incentives.

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