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BIOLOGY AND ECONOMICS (PART II)

August 12, 2017

BIOLOGY AND ECONOMICS (PART II)

Before plunging into Sumner’s post-death paper tardily published (On the Concentration of Wealth), I think it appropriate to expand on my earlier observation that Trump is a Social Darwinist, but one in accord with Sumner’s earlier view that “capitalism rewards the smartest and most deserving among us.”

Piketty put that theory to rest in his book Capital in the Twenty-First Century with his discussion of patrimonial capitalism in which he noted among other things that capitalism rewards those who are the recipients of inherited wealth and punishes who do not inherit wealth. Thus Bush and Trump, both of whom had access to inherited wealth, must somehow fantasize that they are “the smartest and most deserving among us,” as though the accident of their birth equals merit.

Such a view necessarily and logically holds that those who are not rich and successful are losers, lazy, and even immoral and should be responsible for their own futures with regard to their health, income, education and other such means of becoming successful, responsibilities that Bush and Trump did not encounter in their coddled lives. My view is that accidental wealth by reason of birth has nothing to do with merit and a lot to do with a system that rewards those who claim to be “the smartest and most deserving among us,” and that the description of “losers, lazy and immoral” has application to both Bush and Trump irrespective of their trove of assets in Switzerland or elsewhere. I accordingly continue to reject Sumner’s earlier application of biology to economics via some Darwinian theoretical offshoot.

However, it appears that Sumner had a change of heart with his paper above cited which was suppressed by Keller until after Sumner’s death, apparently because Keller thought Sumner got it right the first time. I think Sumner did not get it right the first time, but did the second time. So what is it in his post-death paper that suggests he had a change of heart?

Curtis notes in a footnote to his paper published by The Journal of American History that Keller left Sumner’s essay here discussed as well as a number of others unpublished after Sumner’s death which left the image of a Sumner who appears more unchangingly dogmatic and unimaginative than was actually the case. Apparently, if such other papers were not in accord with Keller’s views, they went unpublished. Keller’s hardcore views of an early Sumner were demonstrated later when Keller viciously attacked FDR and his New Deal policies, policies which rightly treated reality with no regard to a Darwinian mix of biology and economics.

In the essay in question, Sumner quotes Daniel Webster who in his famous oration at Plymouth given on December, 1820, presciently noted that “We are perplexed by the presence of huge corporate possessions, which by their size are able to dominate markets, to affect government through influences whose strength we cannot measure, and national consciousness is much exercised by the problem how to restore the old conditions of equality upon which our social philosophy has always rested.” Sumner also quotes with approval Webster’s further observations that “The purpose of democratic government is to secure equal opportunities to each of its citizens. . . . equal sharing in government that each may have equal opportunities of life, liberty and the pursuit of happiness; that “private right and distributive justice may coincide. A right to vote, a right to be represented, is worth nothing if it be not worth this. Democratic government which does not protect these rights has abandoned it first and essential function. . . . The freest government, if it could exist, would not long be accepted, if the tendency of the laws were to create a rapid accumulation of property in few hands, and to render the great mass of the people dependent and penniless. In such a case, the popular power would be likely to break in upon the rights of property, or else the influence of property to limit and control the exercise of popular power.”

This wonderful oration, given only three years short of two hundred years ago, not only establishes Webster as the Nostradamus of his time, but could be given today with minor editing, and with his approval marks a drastic change in Sumner’s thinking away from his previous “survival of the fittest” Darwinian views. He was right to modify his past views with the realities of unregulated corporate trusts which were running amok with no public restraint on price fixing and other monopolistic practices, and Keller’s reluctance to publish this and other papers Sumner wrote misled policy makers and even people such as me and my wife. We were laboring under the misapprehension that Sumner was the hard right inventor of Social Darwinism for a market that was anything but free and who ignored merit and the public good, and we responded accordingly, rejecting such attempted union of biology and economics.

Sumner’s paper is largely devoted to Webster’s two-century old speech that could be given today as well as to the then-developing menace of trusts. He was opposed to the great concentration of wealth held by late 19th and early 20th century corporations and in favor of regulation of such leviathans lest the popular will (see civil commotion in the streets) do the job the policy makers refuse to do. He had little regard for apologists for such monopolists with their chatter about how concentration of wealth would lead to lower prices for consumers etc. in view of their history to the contrary. I here note that if he thought the concentration of wealth and corporate power was bad in his day, he should be around today where it is far worse, and where, as in Webster’s terms, a rapid accumulation of property in few hands renders the great mass of the people “dependent and penniless.” Proof? A 22,000 Dow and speaking of wage inequality) a median wage adjusted for inflation that has not moved in forty years.

I am now a disciple of Sumner’s altered views though still rejecting his earlier views. Curtis rightly notes that Sumner’s loyalty to “democratic civilization” impelled him to an analysis of industrial monopolies. . . and while his remedies remain vague and incomplete. . . he clearly indicated that his 19th century liberalism was not utterly rigid and that his adherence to middle class values had led him to call upon the state for succor. In other words, monopolies and great corporate concentrations of corporate power must be publicly regulated lest we all go down with the ship, rich and poor. He was and is right to a fault.

So, in summary, is there any rational connection between a Darwinian subset and its application to our capitalistic system. No, none. Economics is man-made; there is nothing “natural” about it and there is no “invisible hand” of Adam Smith or any other metaphysical force at work in our market. It is on its own and it is up to us to fashion and police it to the benefit of all of us and not just the chosen few who claim to be deserving by reason of birth or other happenstance.

I finally note that we can live up to the language of Webster and Sumner by effectively regulating Wall Street banks in the public interest, a decided change in policy since the Wall Street banks are now effectively regulating us.      GERALD      E

 

 

 

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