classical economics
for analysis,  forecasting
and policy design

Middle Class Must Have

MIDDLE CLASS MUST HAVE CAPITALISM
Mercantilism is the Enemy
Wayne Jett © October 17, 2011
    Those protesting Wall Street oligarchs and those protesting Big Government spending have much more in common than even they think. They are all middle class who worry their prospects are suffering, although they propose conflicting political solutions and rhetorically attack each other. Each must awaken to this fact: their common oppressor is mercantilism – not capitalism.
Oligarchs and Mercantilism
     Mercantilism is the historical name given to methods used by oligarchs to influence government and advance their agenda. First on the oligarch agenda is to increase their capital holdings by looting financial markets and by exploiting de facto monopolies in business. Greater capital brings them closer to complete control of government and, eventually, to full power without need for bending to the appearance of democratic process. Mercantilism effectively implemented builds this destructive cycle: greater capital builds greater government influence which brings greater capital, and on and on.
    What is an oligarch? Think “king-maker” in the original sense of that word. In the Dark Ages, oligarchs put kings on thrones, and kings returned the favor by granting chartered monopolies prime lines of commerce. Today, oligarchs put presidents in office. Think of Russia’s Putin and the U. S.’s Obama. They put lesser officials in office, as well, such as Treasury secretary Timothy Geithner and his immediate predecessor, Henry Paulson Jr.
     George Soros’ accumulated capital of $50 billion or so (Forbes says $22 billion, but other estimates range up to $350 billion) puts him in the oligarch circle, although possibly a smaller fry. The biggest players usually prefer layers of secrecy concealing their existence, while Soros appears to crave the spotlight, though he may be performing assigned tasks. The Leftist political organizations he has co-opted with financing (notably moveon.org and others) orchestrate the Occupy Wall Street protests now underway.
     One Soros objective is to give the OWS activities a Leftist political face with “know nothing” advocates. When spokesmen for OWS mount Marxist slogans and identify no credible charge against Wall Street, the public assumes no credible charge exists. Thus, oligarchs who exploit the financial sector to rob capital and destroy middle class business are immunized from indictment.
     The tactic also avoids a possible coalition of interests between those presently demonstrating against the U. S. financial sector and Tea Party activists who influenced federal elections so noticeably in 2010. Tea Party people emphasize the economically and socially destructive role of Big Government deficit spending and regulation, but remain deeply skeptical of the financial sector.
Middle Class Grievances
    Aligned interests of OWS and Tea Party are not obvious, largely because grievances are heavily camouflaged in political ideology. Essentially all activists in both groups are middle class, sprinkled with some who are poor. None is among the dominant elite, whose operatives watch, ready to spend or withhold money to determine the course of events.
    Dig into Tea Party grievances and you quickly find distrust of financial sector influence in the events of 2008 which crippled the U. S. economy and brought unprecedented federal government intervention in private firms. Political outcry against widely perceived manipulation of crude oil prices to $147 per barrel in 2008 delivered many middle class voters to “change we can believe in.”
     Distrust of financial sector influence over the Troubled Asset Recovery Program (TARP) $700 billion bailout of “too-big-to-fail” banks likewise produced 90%-plus popular opposition and initial defeat of TARP in the first House vote, despite bipartisan leadership touting passage. Such near-unanimous political activism is possible only when the middle class is united.
     American liberals correctly believe oligarchs control U. S. policy and oppress the middle class and poor. Conservatives struggle valiantly to overcome “Eastern Establishment” influence which produces “Republican-in-name-only” elected officials and elitist-inspired government policies which heap regulatory and tax burdens ever higher on middle class producers.
     These grievances from Left and Right are fundamentally the same. Conflict arises in designing solutions to the problem. The Left sees relief in bigger government called socialism. The Right wants smaller government, lower taxes and less regulation. Both Left and Right demand fairness, transparency and justice in the financial sector.
Divide and Conquer
     Disagreement stems largely from influence of dominant elite whose agenda requires splitting the middle class politically. Some upper middle class align with the Left, mistaking themselves as among the dominant elite or at least aligned with them. Some upper middle class align with the Right, making the same error. Considering themselves “the rich” in comparison to middle income and poor Americans is entirely rational in one sense, but it is a tragic mistake of historic proportions for upper middle class (who “earned” their capital) to think they are among the truly dominant elite.
     In reality, a member of the upper middle class (who prospers due to production of earned income) is considered arch-enemy by the dominant elite unless the individual embraces a sociopathic agenda which aims to liquidate the middle class and republican democracy. But upper middle class are not the only ones misled by political rhetoric so they act counter-productively.
Mistakes of the Left
     Those in the middle and lower middle class and poor on the Left sometimes mistake the upper middle class as the oligarchs and capitalism as the tool for oppression of lower classes. Capitalism was, in fact, invented by the middle class to enable competition against the mercantilists and thereby to advance the middle class along the path to prosperity. Without both capitalism and the upper middle class, the middle class and poor have no realistic chance of survival.
     Another mistake made by middle class and poor on the Left is their failure to recognize Karl Marx as a conscious operative of mercantilist oligarchs. This should be simple. Marx’s most despised target coincidentally is the oligarchs’ target: the bourgeoisie, or middle class. Socialism and communism are alternative government policies suited to subduing societies under rule of oligarchs.
Mistakes of the Right
     On the Right, hard-working people trying to sustain or climb into prosperity too often jump to conclude that they have nothing in common with one who calls for justice in the financial sector, especially if rhetoric of the Left is used. Conservatives also fall for the elitist ruse that the upper middle class are “the rich.” Because conservatives know the upper middle class is not waging class warfare against the middle class and poor, they sometimes wind up opposing any encroachment on oligarchic domination of financial markets and the federal government.
     Here is the bottom line. If the middle class and poor are to live in republican democracy which achieves ideals of personal liberty and justice, they must join with true allies to defeat the mercantilist agenda. The class war is well underway while most in the middle class and poor are still mistakenly treating natural allies as adversaries. ~