The Way Back - F. H. Buckley

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Dicks who seek to rise, nothing is more important than the rule of law, the security of property rights, and sanctity of contract provided by a mature and efficient legal system. The alternative, contract law in the state of nature, is the old boy network composed of America’s aristocrats. They know each other, and their personal bonds supply the trust that is needed before deals can be done and promises can be relied on. We’re all made worse off when the rule of law is weak, when promises meant to be legally binding are imperfectly enforced by the courts, but then the costs of inefficient departures from the rule of law are borne disproportionately by the Ragged Dicks who begin without the benefit of an old boy network.

      For all these barriers to mobility we can thank the members of the New Class, which dominates America’s politics and constrains our policy choices. It is they who can be blamed for the recent run-up in American income inequality, more than anything else. The economy has become sclerotic, and the path to advancement over the last 40 and 50 years has been blocked by a profusion of new legal and regulatory barriers, all of which they have supported. The terrible schools, the broken immigration system, the decline in the rule of law—all of that is recent, and the member of the New Class who professes to be surprised by the rise in inequality seems a wee bit hypocritical.

      Of the New Class, I can write with some authority, since as a lawyer and a tenured academic I am one of its members. But then I aspire to be, like Franklin Roosevelt, a traitor to my class, and will seek to explain how the land of opportunity became class-ridden. How did it happen that, while this country became immobile, the American Dream is alive and well in Denmark? In particular, why is there such an enormous difference in mobility rates between the United States and the country it most resembles, Canada?

      One can’t account for the rise of an American aristocracy without answering these questions, and the reasons most often given aren’t up to the task. Did the move to a high-tech world make the difference? But then it’s not as though the rest of the First World is living in the Stone Age. As for globalization, that’s by definition a worldwide phenomenon. America’s growing inequality has been blamed on the disappearance of manufacturing jobs, lost to automation and globalization, but the manufacturing sector is larger in the U.S. (one in six jobs) than in, say, Canada (one in ten jobs).

      We need to pay attention to cross-border differences. Those who tell us that inequality and immobility are our most pressing problems seem not to care overmuch why the rest of the world fares better. And that’s taking American Exceptionalism a bit too far. If we seek to return to Ragged Dick’s America, we need to know precisely why other countries are more mobile, and how we might follow their example.

      That’s where I am headed. To begin, however, let’s examine how America became the land of opportunity, how the promise of income mobility came to define the very idea of America.

       PART I

       The Idea of America

      A city ought to be composed, as far as possible, of equals and similars; and these are generally the middle classes. This is the class of citizens which is most secure in a state, for they do not, like the poor, covet their neighbors’ goods; nor do others covet theirs, as the poor covet the goods of the rich; and as they neither plot against others, nor are themselves plotted against, they pass through life safely.

      —ARISTOTLE, Politics

       CHAPTER

       2

       Up from Aristocracy

      PHILADELPHIA WAS NOT UNUSUALLY HOT IN THE SUMMER of 1787, as is often supposed. The weather was cooler than normal and it often rained, as it did on the morning of Monday, June 18 when Alexander Hamilton stepped out from Miss Daley’s boardinghouse. His walk would take him the three blocks to the Pennsylvania State House, where the delegates to the Constitutional Convention were meeting (the name Independence Hall came later), and where he served as a representative from New York.

      Hamilton strode into the Assembly Room, past the guards, and took his seat at the table on the left, at the back of the room. Was he a little nervous? He was young, only 32—or possibly only 30, for his birth to a single mother on the West Indian island of Nevis was so obscure that historians cannot agree when it happened. Before him, on the dais, stood George Washington, the Convention’s president, for whom Hamilton had served as aide-de-camp during the Revolution. The other delegates included Benjamin Franklin, James Madison, George Mason, John Dickinson, Gouverneur Morris, and James Wilson. When he learned their names, Jefferson described them as “demigods” in a letter to John Adams.1 It was an audience that might intimidate a person with more age and experience than Hamilton, who was about to deliver one of the most remarkable speeches in American history.

      The Convention was then at a standstill. On May 29, Edmund Randolph, Virginia’s Governor, had presented what came to be called the Virginia Plan, which would have replaced the decentralized government of the Articles of Confederation with a strongly national constitution. The plan, drafted principally by James Madison, was supported by the large states of Virginia and Pennsylvania. On June 15 the small-states delegates responded with the rival New Jersey plan, which was much more decentralized. Until that point Hamilton had been silent. Now, on June 18, he would rise to speak.

      Neither the Virginia nor the New Jersey plan would do, he said. He was particularly opposed to the New Jersey plan, but even the Virginia plan left too much power to the states. It was, “pork still, with a little change of the sauce.”2 In principle, said Hamilton, we might as well abolish the states, and in any event the national government should be given the power to veto their laws. By this point, the small state delegates were likely apoplectic, but Hamilton hadn’t finished (he went on for five or six hours in all). In what followed he gave the most ringing endorsement for aristocratic government by any major American politician, then or now.

      He began by praising the British constitution. Many of the delegates had good things to say about it, but Hamilton went further and doubted whether anything short of a constitutional monarchy would do for America. A republic could serve up nothing suitable for the man who would be president, and “the English model was the only good one on this subject.”

       The Hereditary interest of the King was so interwoven with that of the Nation, and his personal emoluments so great, that he was placed above the danger of being corrupted from abroad.3

      Perhaps we shouldn’t be surprised by this. Monarchy prevailed everywhere else, and historian Gordon Wood has observed that, “we shall never understand events of the 1790s until we take seriously, as contemporaries did, the possibility of some sort of monarchy developing in America.”4 Still, this was much further than any of the other delegates would go, and Hamilton knew an American king wouldn’t do. What he suggested instead was a lifetime appointment for the president during good behavior, a republican government but one as close to monarchism as republican principles would permit. Call the president an elective monarch, if you want, said Hamilton. That’s just what the country needs. He would also have given senators lifetime appointment, during good behavior, which was his way of engrafting a British House of Lords onto a republican constitution. “Having nothing to hope for by a change,” the senators would then form a barrier against the “pernicious innovations” of democracy.5

      Hamilton wasn’t the only delegate who was fearful of democracy. Many thought that the defects of the Articles of Confederation could be traced to an “excess

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