“Is there not growing up among us a class who have all the power without any of the virtues of an aristocracy? We have simple citizens who control thousands of miles of railroad, millions of acres of land … who choose the governors of sovereign states as they name their clerks … and whose will is as supreme with the legislatures as that of a French king sitting in bed of justice.” – Henry George, 1879
Americans are an unusually proud and patriotic people. We sing the national anthem before games, we say the pledge of allegiance in schools, and our culture is full of odes to Americana, both mocking and Top Gun-esque. Tourists often remark on how a lot of Americans fly American flags outside of their houses, just because. Today, Americans are still proud of our country. But that pride is ebbing.
And why wouldn’t it? The American system delivered a great deal at various points in American history, but it seems to be controlled by an out-of-touch oligarchy that has more allegiance to abstract principles and a global superclass than any of us.
On this July 4th, I don’t want to issue a bromide on America, because I am proud to be an American. But I am also feeling we have not lived up to our ideals of late, in fairly profound ways. And I think it’s time to resurrect an old American tradition called a fourth of July oration. In the 19th century, Americans would gather and give political speeches, usually linking the founding of America to current political topics like slavery or industrialization. The most famous oration is one we know about today, it’s Frederick Douglass’ speech in 1852, asking “What to the Slave is the Fourth of July?” Consider this essay my own oration. [Full text here]
At the time Douglass gave his talk, there was no modern polling, and we could not ask whether people were proud of America en masse. But I suspect the polling would not have looked good. America was an extreme oligarchy. In the 1850s, half the millionaires in America were in Natchez, Mississippi – a slaveocracy dictating national policy over a society that increasingly wanted something different. One result is that abolitionists were focused on rejecting the Constitution and forming a new national system. But so, as it turns out, were the John Calhoun-inspired plantation-owners who would eventually form the Confederacy.
Douglass didn’t reject America, though his was a biting speech. He lauded the greatness of the American founders for their high ideals and accomplishments, while pointing out they were not extended to the large slave population. “The rich inheritance of justice, liberty, prosperity and independence, bequeathed by your fathers, is shared by you, not by me,” he said. “The sunlight that brought light and healing to you, has brought stripes and death to me. This Fourth July is yours, not mine. You may rejoice, I must mourn.”
Douglass did not respect the modern American values of his day, but he did believe in the ability to use politics, and “wind, steam, and lightning” – the new technologies of railroads and telegraphs – to fix the nation. His arguments were about oligarchy, bitterly opposing the “land monopoly” he felt led to slavery. Still, 1852 was a grim year, with Democrat Franklin Pierce winning the Presidency over Whig Winfield Scott, the last election where the Whig Party would be a serious political force. It would take eight years for the country to grapple with what was obvious to all – that a nation could only offer liberty for the slave or the slave owner, but not both.
Politically, neither party made sense as a coherent coalition, the Democrats linked populists in the North with slaveowners in the South, and Whigs were a rump northeastern party split on slavery, who had a vague desire for a national system of industrial development. Four years earlier, the founder of the Democrats, former President Martin Van Buren, had run as a third party candidate in the Free Soil Party. But the system seemed locked up again. There were inklings of something different – the novel Uncle Tom’s Cabin was a bestseller that year, showing a hunger for what politicians could not or would not deliver. But not enough, especially for a man like Douglass.
There are periodic moments in American history where there is a mismatch between the major political party coalitions and the underlying electorate, which really is an unwillingness to deal with an increasingly illegitimate social hierarchy. It would take eight more years until Americans could build enough of an argument and political coalition to articulate what was truly needed, the end of slavery.
These kinds of mismatches are not unusual; they also occurred in the 1880s, in the early 1930s, and in the late 1960s. And it’s happening now. Starting in the early 2000s, American politicians sent us to multiple wars, oversaw a financial crisis where bankers got bailed out, fumbled a Covid crisis, offshored production to China, and watched as U.S. lifespans stagnated and then declined from 2015-2023 due to an orgy of drug overdoses and suicides. It’s not a surprise we’ve had change elections in 2006, 2008, 2010, 2014, 2016, 2018, 2020, 2022, and 2024.
To get out of the mismatch of the 1850s, President Abraham Lincoln aligned himself with Douglass’s arguments, using the Declaration of Independence, not the Constitution. The Declaration is about the equality of all men and our right to life, liberty, and the pursuit of happiness. Unlike the absurd libertarian view that government is an alien force, it’s right there in the Declaration that we establish a government to secure our rights.
In 1861, Lincoln offered the framework of economic equality in a speech about the Civil War, with a specific focus on the oligarchy of Southerners who thought the hired or enslaved worker was an inherent class, that capital came first, and it put people to work. That was not true, he argued. Capital deserved a fair return, but, he noted, “Labor is the superior of capital, and deserves much the higher consideration.”
This quote sounds Marxist, but Lincoln didn’t believe that capital would enslave mankind, or that consolidation was inherent. He was following in the tradition of Anglo-American politicians like Benjamin Franklin, who told Europeans that “America is the Land of Labour,” where skilled labor was respected, hard work rewarded. This view was dominant throughout the 19th century and into the 20th. Teddy Roosevelt, an aristocrat if there ever was one in America, cited Lincoln’s quote often.
Lincoln’s political economy framework was populist, viewing the basis of American republicanism as the hired laborer turned small proprietor. “The prudent, penniless beginner in the world labors for wages awhile, saves a surplus with which to buy tools or land for himself,” he said, “then labors on his own account another while, and at length hires another new beginner to help him. This is the just and generous and prosperous system which opens the way to all, gives hope to all, and consequent energy and progress and improvement of condition to all.” The Civil War did indeed break the slaveocracy, and set the stage for a new egalitarian economic order. But in the 1870s, a new power – Wall Street – emerged, fostering inequality once again.
The heir to the abolitionists in the late 19th century was another thinker and political actor – Henry George, who focused, as Douglass did, on land values. In his 1879 book Progress and Poverty, lauded by many former abolitionists and their children, George showed that urban land values drove inequality. Land, which cannot be created or destroyed, increased in worth not based on the effort of the owner, but based on whether there was social activity occurring around it. As such, an owner increased rents based on work he himself did not do, extracting unfairly from both labor and capital.
In 1886, George ran for Mayor of New York City, and he was attacked bitterly by economic elites. As the cartoon below shows, he was called an anarchist who offered to ignorant working men “no taxes,” “free land,” “free lunch,” “free cigars,” “free rides,” “free theater,” “free boycotts,” “no police,” and “no boss.”
George lost the race, but that was probably to his liking. He was not a political creature. “I do not want the responsibility and the work of the office of the Mayor of New York,” he said in justifying his campaign despite Tammany Hall explaining he would lose. “But I do want to raise hell!” And he did. Georgists were pivotal in the Teddy Roosevelt and Wilson administrations, helping to structure the Federal Reserve and the national park system, as well as influencing a generation of politicians who made the New Deal. Georgeists ultimately won the debate, created the New Deal in the 1930s, and the 20th century was a Georgist century.
In 1970, Milton Friedman, representing a new generation of would-be oligarchs presented a different set of values. He wrote an article in the New York Times preaching the shareholder theory of the firm, or absolute liberty for capitalist. “There is one and only one social responsibility of business,” he wrote, “to use its resources and engage in activities designed to increase its profits.” Friedman’s theory was ahistorical nonsense; Americans have used corporations in all sorts of ways, at its heart a firm is a state-chartered collective endeavor meant to help us mass people and capital to do something socially useful while offering a fair return on investment.
But Friedman won the debate, in doing so overturning the philosophy of Douglass, Lincoln, and George, which had been embedded in the New Deal. And so we oriented ourselves to developing excessively profitable corporations, and a resulting economic elite that controls development through their ability to offer or deny permission to anyone who wants to build something. Prior to Friedman, Americans sought to prevent such an elite from existing. Today, however, the power of our elite, the number of billionaires we have, is now our measuring stick for prosperity. The legislation that passed yesterday to cut taxes for financial capital, while slashing food stamps and health care for working people, continues this approach.
But there is hope, in the form of a rebellion, similar in some ways to that of George. A few weeks ago, Zohran Mamdani won the Democratic primary in New York City for mayor, largely on his promise to “freeze the rent.” Mamdani is a Democratic socialist, not an anti-monopolist, though there are overlaps. What makes that race meaningful is not Mamdani himself, he will either succeed or fail, we can’t know that yet. But the potentially enduring significance is the overthrow of a tired and corrupt machine by someone making a different argument about political economy. And the attacks on Mamdani echo those against George.
In America today, we have many of the same challenges faced in George’s day. There’s an out-of-control financial sector engaging in speculation over resources that should be managed for the public good, not just land, but things like data, natural resources, knowledge, and even low orbit space and the atmosphere. And there is an undercurrent of unsatisfied rage. Joe Biden had some populists in his administration, but did not run as a populist, and neither have most Democrats. Trump did run as an economic populist, but with the latest legislation passed yesterday, it’s clear that he is not governing as one.
And what of the people themselves? The politicians themselves matter like sailboats. They can steer, but they cannot create the wind. The voters want what they want; they can be manipulated to some extent, but in general, not by that much. That leads to the question. Is Mamdani is a sign of things to come, or a one-off? Are the people demanding something different, or was he merely a particularly skillful pilot? I don’t know.
Since 2019, this newsletter has looked at America through the lens of monopolistic corporations. That was in part because we had allies at antitrust agencies, so I could more easily explain the connection between legal enforcement and the world in which we live. I’ll still use that lens, but I’m going to start taking a broader definition of monopolization, economic tyranny, and rents. We’ve accomplished a great deal with antitrust, all the more impressive because we didn’t have a big popular electoral mandate behind us. Now I see faint signs of a real political rebellion brewing. I don’t know when it’ll occur, and I don’t know how. But the people are mad. And in America, that does matter.
Happy Fourth of July.
And now here’s Thomas Jefferson’s ice cream recipe.
Thanks for reading! Your tips make this newsletter what it is, so please send me tips on weird monopolies, stories I’ve missed, or other thoughts. And if you liked this issue of BIG, you can sign up here for more issues, a newsletter on how to restore fair commerce, innovation, and democracy. Consider becoming a paying subscriber to support this work, or if you are a paying subscriber, giving a gift subscription to a friend, colleague, or family member. If you really liked it, read my book, Goliath: The 100-Year War Between Monopoly Power and Democracy.
cheers,
Matt Stoller
P.S. I’m researching a private equity owned firm called Primo Brands, which is a water delivery company that rolled up the sector over the last fifteen years. It used to be called BlueTriton or Primo Water. If you work for this firm or are a customer and have insight into how the company works, let me know.