How Elites Control the Way You Think About Economics
Since the beginning of our nation, American elites have used their power to justify their disproportionate levels of wealth. Today, those few, those happy few, continue this wicked tradition with disturbing effectiveness. They do so by deploying an assortment of tried-and-true strategies to manipulate public sentiment in order to stay on top of the heap.
These strategies, however, are hardly novel. In fact, the game plan for today’s elite class is largely derivative of tactics used by some gilded individuals and corporate titans right after the New Deal. Kim Phillips-Fein, a historian and author of Invisible Hands: The Businessman’s Crusade Against the New Deal, has spent a lot of time researching just how these economic elites perpetuated self-serving (and arbitrary) economic arrangements.
She told me on our new podcast episode (which you can subscribe to here):
Starting in the 1930s and the 1940s, some American business people were highly troubled by the direction the country was taking—the rise of the New Deal, the rise of the labor movement, by what they thought was a widespread acceptance of Keynesian ideas. [They were concerned by] the idea that high wages mattered more than high profits for driving economic growth and development.
To resist the “creeping socialism,” Phillips-Fein revealed how the rich set up think tanks to pump out anti-labor propaganda, sponsored economists like Milton Friedman and Friedrich Hayek to consort with prominent businessmen, and indoctrinated politicians like Ronald Reagan to roll back economic progress for the many.
These tactics were instrumental in sending the predominant economic narrative back to a “business-friendly” state.
Phillips-Fein’s research on this era of American history is remarkable in that it showcases the wealthy’s blind urge to preserve what is best for them above all else. The irony, of course, is that hoarding wealth and sustaining an economy that only works for a few ultimately ends up hurting the rich in the long run.
As Nick Hanauer, a venture capitalist and Civic Skunk Works’ founder, pointed out in the same podcast episode:
Concentrated wealth and power, in every circumstance, corrodes the public good. [I acknowledge] that hierarchies are necessary and need to exist…[but] massively unequal arrangements are never good. They never work out well… The most inclusive societies are always the most successful.
Yet even in a time when we know that inclusive economies outperform exclusive ones, the rich still insist on keeping America great only for them. In a time of economic plight, they are gorging in front of the hungry.
If you think that image is over the top, how else can you rationalize why and how three men now own as much wealth as the bottom 50% of American society?
When so much money is sucked away from the vast majority, it is inevitable that the social fabric will begin to unravel. The greed of those at the top creates an environment where established interests are raged against and the undernourished and underpaid masses make rash social and political decisions.
Furthermore, an economic system that hoards prosperity fosters hatred for that very system—and that is surely not what the privileged class desires. But that’s what they are getting, because they cannot stop themselves from accumulating more and more wealth.
In his famous book, Capital, Thomas Piketty saw the self-defeating nature of this type of thinking, noting:
The inescapable reality is this: wealth is so concentrated that a large segment of society is virtually unaware of its existence, so that some people imagine that it belongs to surreal or mysterious entities.
It doesn’t take a whole lot to know that the average individual cannot see how the current economic order is benefitting them, they will question the validity of that order. Is it any surprise then that (at least on face value) a majority of millennials reject capitalism? That outcome is clearly not beneficial to elites, yet they are bringing this upon themselves. It is only through their insatiable greed that the American people are now discovering their economic bullshit.
Just look at the reception of the GOP’s “tax reform” plan. A new poll from Quinnipiac shows that the Republican plan is approved by only 25 percent of Americans, with 61 percent believing it will benefit the wealthy most.
The trickle-down narrative propagated by the wealthy and internalized by the masses is finally being challenged. While that is cause for hope, if there is anything that history teaches us, it is that the rich are a resilient bunch and they will morph their self-interest into some other equally insidious rationale or argument.
That unfortunate truth should not discourage anyone, however. The slow, methodical task of eroding exclusive societal arrangements has been the main endeavor of human civilization. As long as Americans become aware (and stay aware) of the wealthy’s tactics, we have it within our power to shape a nation that is built upon shared prosperity.
