During the nineteenth century the analysis of democratic politics and its economics were viewed as sufficiently symbiotic to be the focus of a single academic discipline known as political economy. This approach fell into disuse while market economics became more mathematical and assumed the pretensions of a science. Yet, as far back as Adam Smith, it was theorized capitalist economies prosper, at least in part, due to the agency of an “invisible hand” that mysteriously steers society through the collective purchasing decisions made by individuals — each in pursuit of his or her own self-interest. In recent decades this assessment has assumed nearly theological power.
After spending an evening recently at a We Work space in Denver, I find myself wondering whether this provident hand may be invisible because it also seems blind. What other explanation can there be when 100% of income growth in America since the great recession has accrued to the top 1% of earners? Not the group that was desperately in need of further riches, I suspect. Dorothy Parker’s quip that, “If you wonder what God thinks of money, look at who he gives it to,” comes to mind. If you are surprised that half of young voters look favorably on socialism today, despite its dismal historical record, it’s worth considering the fairness of an economic system that funnels its profits to those least in need of them.
The self-employed entrepreneurs I met understand the technologies reshaping the American economy far better than I, but their knowledge provides little financial security or the promise of a comfortable future. In every age, economic arrangements reward certain talents and discount others. I think of my great-great-grandfather Samuel who was a wagon master on the Santa Fe Trail for nearly 40 years, from 1850 into the late 1880s. He had only a sixth-grade education but was six feet eight inches tall and weighed 280 pounds at a time when the average man was fifteen inches shorter and half his size. As my grandfather told us, “There were few disputes about who was in charge of the wagon train.”
The photos we have of Samuel show a man who looked like a Mormon prophet. Despite his lack of formal education, he could speak several native American languages, as well as Spanish. It is believed his wagon trains never experienced an Indian attack because he always carried trade goods for barter and peaceful passage. He departed Santa Fe each spring for Independence, Missouri, where he recruited immigrants headed for the American West. During the winter months he often took a pack train of manufactured goods into Chihuahua, returning with Mexican silver and liquor. Arriving home in Santa Fe in the early fall he was greeted 22 times by a new Hudson baby. The first Mrs. Hudson expired following 14 of these confinements. We needn’t speculate about which spouse raised these children. He became a wealthy man by the standards of his time — not a gold or silver King, to be sure, but more than comfortable.
It’s doubtful Samuel could achieve such success today. He would require more education, more credentials and more capital. Muscle and initiative wouldn’t be sufficient. Laissez faire capitalism has transformed serfdom into wage peonage in the 21st century, reducing the opportunities for small business success as national chains gobble up local restaurants while Amazon and Wal-Mart exterminate neighborhood retailers. So, we find bright kids in shared work spaces dreaming up “apps” they can peddle on the Internet. Meanwhile, they pay their bills with gig economy chores and sharing services — driving extra hours with Uber and Lyft while renting a spare bedroom on Air B&B.
Colorado’s turbo-charged economy may be leading the nation right now, but it rests on a fragile infrastructure. How many billion-dollar unicorns are really waiting to be born? How much of our high-tech expansion is premised on venture capital flowing into companies that can’t turn a profit? How much longer can that continue? Our largest companies that once offered health insurance, retirement plans and promotions are rapidly shrinking their payrolls and turning to the denizens of those shared work spaces for design, IT and marketing support. So long as our economy continues to expand, these workers may be able to hang on by their fingernails. When another chill passes through the economy, however, many of them will be in the market for an outward-bound U-Haul.
Since the commencement of the industrial revolution each economic transformation has marginalized differing segments of the population. Asylums and poor houses were needed to house the homeless, the lame and the lost. An alternative is to guarantee an adequate income for minimum wage fast food workers, clerks, auto mechanics, teachers and nurses. If that constitutes socialism, there’s a reason it has been attracting fans.
Miller Hudson is a public affairs consultant and a former legislator. He can be reached at email@example.com.