In 1883, the Republican Party moved into full-throated support for the industrialists who were concentrating the nation’s wealth into their own hands while factory workers stayed above the poverty line only by working 12 hours a day, seven days a week.
It was Yale sociologist William Graham Sumner who responded to those worried about the extremes of wealth and poverty in the country with his book “What Social Classes Owe to Each Other.”
Sumner concluded it was unfair that “worthy, industrious, independent, and self-supporting” men should be taxed to support those he claimed were lazy. Worse, he said, such a redistribution of wealth would destroy America by destroying individual enterprise.
Sumner called for a “laissez-faire” world in which those who failed should be permitted to sink into poverty, and even to die, to keep America from becoming a land where lazy folks waited for a handout. Such people should be weeded out of society for the good of the nation.
Republicans echoed Sumner’s “What Social Classes Owe to Each Other,” concluding, as he did, that the wealthy owed the lower classes nothing. Even though “his views are singularly hard and uncompromising,” wrote “The New York Times” that, “it is difficult to quarrel with their deductions, however one may feel one’s finer instincts hurt by their apparent cruelty.”
In contrast to those who believed government should stay out of economic affairs so individuals can amass as much wealth as they can, others looked at the growing extremes of wealth, with so-called robber barons like Cornelius Vanderbilt II building a 70-room summer “cottage” while children went to work in mines and factories, and concluded that the government must try to hold the economic playing field level to give everyone equal chance to rise to prosperity.
Prevailing opinion in the U.S. has seesawed between these two ideologies ever since.
In the Progressive Era, members of both major parties and other upstart parties turned against Sumner’s argument, working to clean up cities, establish better working conditions, provide education, and regulate food and drugs to protect consumers.
After World War I, Republicans led a backlash against those regulations and the taxes necessary to pay for their enforcement. In October 1929 the unregulated stock market crashed, ushering in the Great Depression.
From 1933 to 1981, Americans of both parties came to agree that the government must regulate the economy and provide a basic social safety net, promote infrastructure, and protect civil rights. They believed such intervention would stabilize society and prevent future economic disasters by protecting the rights of all individuals to have equal access to economic prosperity.
Then in 1981, the country began to back away from that idea. Incoming president Ronald Reagan echoed William Graham Sumner when he insisted that this system took tax dollars from hardworking white men and redistributed them to the undeserving. In a time of sluggish economic growth, he assured Americans that “government is not the solution to our problem; government is the problem,” and that tax cuts and deregulation were the way to make the economy boom.
For the next forty years, lawmakers pushed deregulation and tax cuts, privatization of infrastructure, and cuts to the bureaucracy that protected civil rights. Those forty years, from 1981 to 2021, hollowed out the middle class as about $50 trillion moved from the bottom 90% of Americans to the top 1%.
When he took office in January 2021, President Joe Biden set out to reverse that trend and once again use the government to level the economic playing field, returning the nation to the proven system of the years before 1981, under which the middle class had thrived. His director of the Federal Trade Commission, Lina Khan, began to break up the monopolies that had come to control the economy, while new rules at the Department of Labor expanded workers’ rights to overtime pay, and the government worked to expand access to healthcare.
Under Biden and the Democrats, Congress passed a series of laws to bring manufacturing jobs back to the United States. Those laws used federal money to start industries that then attracted private capital — more than $1 trillion of it. According to policy researcher Jack Conness, the CHIPS and Science Act and the Inflation Reduction Act are already responsible for more than 135,000 of the 1.6 million construction and manufacturing jobs created during the Biden administration.
As Jennifer Rubin noted in the “Washington Post” recently, “It is stunning, frankly, that the most successful and far-flung private-public collaboration in history — one that is transforming cities, states, and regions — has gotten so little coverage from legacy media. It may be the most critical government-driven initiative since the GI Bill following World War II.”
“[T]he widespread benefits derived from this massive undertaking — for individuals, communities, national security and government itself (through increased tax revenue) — demonstrate how far superior this approach is to trickle-down economics, which slashes taxes for the rich and big corporations,” Rubin continued. “With the latter, the tax savings for corporations go to everything from stock buybacks to increased compensation for CEOs to foreign investment,” while “the cost of the tax cuts runs up the national debt at a much greater rate than a public-private approach…. Republicans deliver temporary stimulus and wind up with more debt and more income inequality.”
But in 2024, voters elected Donald Trump, who promised to reject Biden’s economic vision and resurrect the system of the years before 2021 in which a few individuals could amass as much wealth as possible. Just ten days after the election, a Texas judge overturned the Biden administration’s overtime pay rule, permitting employers to cancel the raises they gave their employees to comply with that rule.
The change in ideology is clear from Trump’s cabinet picks. While the total net worth of the officials in Biden’s Cabinet was about $118 million, Laura Mannweiler of “U.S. News and World Report” noted that she estimated the worth of Trump’s roster of appointees to be at least $344.4 billion, more than the gross domestic product of 169 countries.
Everett Collection (via Shutterstock)
Letters from an Аmerican is a daily email newsletter written by Heather Cox Richardson, about the history behind today’s politics
