Corporations and the People's Party

Isaac's journal kept during the Populist Movement

The early years of what became the United States of America consisted almost entirely of a population of farmers, proprietors of small shops, and independent producers, like blacksmiths and farriers.  Gradually, that began to change from self-employed proprietors to large corporations operated by salaried managers.  The agricultural and small merchant society of community businesses and small towns with citizens having fewer economic differences evolved into larger urban areas with greater distinctions in wealth.

At the beginning of the Civil War, there were 400 millionaires in the United States.  By 1892 there were 4,047.  American society had evolved into a wealthy class, a middle class, and a laboring class.  Key to this evolution was the changing view of incorporation.  Many lawmakers saw the interests of the nation as linked to the growth of large corporations.  With this perspective, lawmakers voted for tax cuts and other benefits, and the old way of life changed forever.

It was during this period of rapidly changing social conditions that Isaac Werner kept his daily journal and farmers and other workers formed the People's Party to come together in their greater numbers to politically confront the smaller number of wealthy voters.  However, the wealthy had greater power, and with many politicians seeing corporations as essential to the economic growth of the nation, even those politicians elected by workers often voted with the wealthy once in office.

Power of Wall Street & Railroads political cartoon

Farmers like Isaac saw the incorporation of America as an unfair misappropriation of the nation's wealth.  The original idea had been that the new nation's greatest wealth was in its vast lands, a wealth that seemed inexhaustible.  Thomas Jefferson and others had predicted that it would take a thousand years for the population to spread to the Pacific, and homestead laws were enacted to encourage that spread.  Instead, only three generations had been needed.  Railroads had played a significant role in that expansion, and railroads had also been key to the economic changes in the nation, including the growth of incorporation.

After the Civil War the 14th Amendment was enacted to provide freed slaves "equal protection of the laws."  However, an aggressive lawyer used it for his railroad client's purposes.  Seeking to avoid a California tax on railroad property, the Southern Pacific Railroad Company owned by Leland Stanford argued that his railroad was a person too.  His lawyer cited the intent of those who drafted the amendment as having been meant to embrace 'artificial persons as well as natural persons."  Years later it was found that the lawyer had fabricated that intention.

By then, as the saying goes, the horse was out of the barn.  A series of cases which have led to the more recent Citizens' United case, have expanded the interpretation to see corporations as people too.

In a speech in 2003 by Bill Moyers, he said:  "They [populists and progressives] were a diverse lot, held together by a common admiration of progress--hence the name--and a shared dismay at the paradox of poverty stubbornly persisting in the midst of progress like an unwanted guest at a wedding.  Of course they welcomed, just as we do, the new marvels in the gift-bag of technology...But they saw the underside, too--the slums lurking in the shadows of the glittering cities, the exploited and unprotected workers whose low-paid labor filled the horn of plenty for others, the misery of those whom age, sickness, accident or hard times condemned to servitude and poverty with no hope of comfort or security. ...This is what's hard to believe--hardly a century had passed since 1776 before the still-young revolution was being strangled in the hard grip of a merciless ruling class."

United States Supreme Court

When America was founded, there was a natural suspicion of corporations, based on abuses known from English law.  The evolution of corporations in American was gradual, recognizing the benefits of people coming together to pool assets for businesses larger than the simple independent producers in the original colony but also realizing the potential for abusive power.  Yet, gradually the benefits began to seem more important than the risks.  Black's Law Dictionary defines a corporation as "An artificial person or legal entity created by or under the authority of the laws of a state or nation... acting as a unit or single individual in matters relating to the common purpose of the association..."

We ordinary humans do not need "the authority of the laws of a state or nation" to define us.  Corporations do.  In the Citizen's United case, the dissent argued that the Founding Fathers disliked corporations and never intended the First Amendment to apply to corporations.  In his concurring opinion with the majority, Justice Scalia wrote that even if that argument were relevant, "the individual person's right to speak includes the right to speak in association with other individual persons."  Scalia seemed to think that because a group of individuals had incorporated to manufacture "something or other," they were entitled to select those to speak for them about their common venture, and those persons, acting within that corporate capacity, are protected under the first amendment. 

For Scalia, the individual shareholder in the corporation has not only his voice but also the voice of the corporation of which he is a part.  One might say such a person has his own tiny voice but also the megaphone volume of his voice amplified by the wealth and influence of the corporation.  Others might see it as unfair for both individual shareholders and the corporation of which they are a part to have the protection of the 1st Amendment's freedom of speech, but the Supreme Court did not.

By analogy, it might be argued that all of those coming together in the People's Party in the late 1800s to exert more influence through the combined power of their votes were using the power of a political party to magnify their individual votes.  Even so, they didn't get to vote twice. 

Remember, you can click on images to enlarge them.

     

What's Old is Always New Again

Charles Darwin

After enduring years of debt and struggle, Isaac Werner finally had put that behind.  Unfortunately his financial achievements were eclipsed by his failing health, and he never fully enjoyed the successful farm he had created.  His struggles during the Gilded Age bear much in common with today.  In his time, the disparity between the post-Civil War wealthy men like Jay Rockefeller in comparison to factory laborers, miners, and farmers like Isaac was a new social disparity for Americans, our early history having been primarily a population of working people of similar means producing materials sent to England for manufacture.  It was during the Civil War that the steel mills, factories, railroads, and manufacturing began to change the social landscape of Americans markedly.

Ward McAllister

Charles Darwin's Evolution of the Species was distorted by some to justify a social view never intended by Darwin.  John D. Rockefeller's words reveal this attitude:  "The growth of a large business is merely survival of the fittest.  The American beauty rose can be produced in the splendor and fragrance which bring cheer to its beholder only by sacrificing the early buds which grow up around it.  This is not an evil tendency in business.  It is merely the working out of a law of nature and a law of God..."  Like-minded men of the Gilded Age had little pity for the squalor of immigrant families enticed to America for cheap labor in factories, miners facing daily danger, and farmers struggling to raise crops for which railroads charged unregulated shipping fees to get the farmers' produce to markets.

Jacob Riis

During this time, journalist Ward McAllister wrote about the extravagant lifestyles of wealthy families, describing the centerpiece for one obscenely opulent dinner in the ballroom of Delmonico's at 14th Street in New York City in 1890 as a:  "...long extended oval table, and every inch of it was covered with flowers, excepting a space in the center, left for a lake...thirty feet in length, enclosed by a delicate golden wire network reaching from table to ceiling, making the whole one grand cage; four superb swans, brought from Prospect Park, swam in it, surrounded by high bands of flowers of every species and variety...[and] above the entire table, hung little golden cages with fine songsters..."  The only thing Isaac had in common with the wealthy guests at this dinner was their mutual pleasure in the music of songbirds!

Political cartoon from 1890s

At the same time McAllister was writing about the wealthy, journalist Jacob Riis was exposing the misery, starvation, crowding, graft and political corruption of NYC's tenement district.  His book, How the Other Half Lives, was published in 1891, including photographs of the desperate conditions of working class families.

Then, as now, the wealthy used their riches not just for mansions and extravagant lifestyles but also to influence politics, and the People's Party, of which Isaac Werner was a member, included laborers, miners, and farmers in a political movement to confront the wealthy at the ballot box.

An interesting article, "Who Rules America:  Wealth, Income, and Power," which can be read at http://www.ucsc.edu/whorulesamerica/power/wealth.html, defines wealth as what is owned minus what is owed, and points to the advantage of great wealth with financial resources available to spend on more than is needed for a comfortable life--those additional resources giving them power.  The article describes the United States as a "Power Pyramid," with the "...top 10% having 85 to 90% of the nation's stocks, bonds, trust funds, and business equity...It's tough for the bottom 80%--maybe even the bottom 90% to get organized and exercise much power."

Political cartoon from 1890s

The article supports this relationship between wealth and power with four examples.  First, they are in a better position to make "...donations to political parties, payment to lobbyists, and grants to experts who are employed to think up new policies beneficial to the wealthy."  Second, "...stock ownership can be used to control corporations, which of course have a major impact on how the society functions."  Third, that power can also lead to more wealth through political influence at local, state, and national levels.  And, fourth, the opportunity to do the things that money can buy--whether access to better health, safer jobs, more travel and leisure, among other privileges--becomes a power indicator in itself. 

Both major political parties in America today reflect the influence of power by the wealthy.  Yet, the recent effort by the Senate to act legislatively to change the decision of the Supreme Court's ruling in the Citizens United case shows a definite split between the parties.  That case, which allows massive spending and influence by corporations and unions through Political Action Committees, has magnified the need for campaign finance reform, something about which most Americans agree, regardless of political affiliation.  The Senate vote attempting to overturn the effect of Citizens United received a majority vote but failed to reach the 2/3rds majority needed when not one single Republican voted in support, despite strong support for overturning Citizens United among Republican voters.

Political cartoon from the 1890s

The impact of Citizens United is nowhere more apparent than in Kansas, Isaac's old political grounds.  According to an article published in The Huffington Post on October 25, 2014, since Senator Pat Roberts's failure to break a 50% majority in the Kansas primary, "Spending by super PACs and dark money nonprofits has exploded by at least 560 percent since then, fueling what will end up being the most expensive Senate race in Kansas history.

Aggravated by the bombardment of political ads on television, I became curious about who was funding them, and my informal observation was consistent with the Huffington Post reporting.  "The biggest spender in the race is Freedom Partners Action Fund, a super PAC founded by the Koch brothers, which has paid out nearly $2 million attacking Orman.  Koch Industries, the private company owned by the brothers, is based in Wichita, Kansas, and has long backed Roberts.  Its employees and political action committee are the leading funders of the senator's political career."  A review of Sen. Roberts's voting record shows that he has been a "forceful opponent of campaign finance reform" and a leading opponent of disclosure of donors contributing to nonprofits.

When I began reading Isaac Werner's journal, I was naturally interested in what he wrote about farming and the social life of early settlers on the prairie.  However, what intrigued me were the many political similarities of his time with our own.  (See "Isaac and the Plutocrats," blog archives April 5, 2012.)  Isaac and other farmers and laborers came together to confront the wealth and power of Wall Street and corporations (which had become even more powerful then through trusts and monopolies).  It seems that the impact of wealth and power vs. the one-man-one-vote ideal of the American democracy is an ongoing political issue! 

Remember, to enlarge the cartoons to enable reading the labels and captions, click on the images.

Politics Hardly Seem to Change, the Sequel




Political cartoon from late 1800s, "How Foolish Men Vote"

With the inundation of political commercials on television, few Americans could be unaware of the approaching elections.  On November 24, 2011, soon after I began this blog, I compared the political issues of Isaac Werner's times in the late 1800s with current issues, posting several political cartoons from that era. People continue to visit that blog, making it one of my most popular posts.  I thought it might be worthwhile to take a fresh look at whether conditions have changed.

The political cartoon at right is also from the newpaper to which Isaac Werner subscribed.  Its subtitle reads:  "The Farmer, Mechanic or Workman Who Votes for Either of the Old Parties is Voting Bread, Meat, Clothes and Money Out of Reach of His Wife and Children."  Many of the political cartoons posted in my earlier blog also address the issue of political influence exerted by wealthy and powerful men, at the expense of other Americans.  Obviously, that issue continues to play a significant role in politics today.  (You can enlarge by clicking in the image.)

I recently saw a chart (See below left) posted on face book, comparing the ratio of CEO pay to regular workers' pay.  Not only is the 354 to 1 ratio between CEO and Worker pay in the U.S. noteworthy, but also the U.S. ratio to what exists in other countries stands out.  While it is true that we are living in a global economy today, the ratio is  uniquely extreme in the U.S.  (The sources used by Maclean's appear at the bottom of the chart.) 

Of course, what struck me, just as it did in my earlier blog, is the similarity of economic disparity during the Gilded Age of Isaac Werner's time with today.  A recent news article about a house under construction in Hillsboro Beach, Florida described its 60,000 square feet built on 4 acres along 465'  of beachfront (with a 492' private dock for a yacht), having 11 bedrooms, 17 baths, a private IMAX theater with seating for 18, a putting green, a 30-car underground garage, and a 139-million-dollar price tag!  Even the millionares' mansions along 5th Avenue in NYC during the Gilded Age and the Summer Homes in Newport are eclipsed by this extreme display of wealth.

Compiled by Maclean's from various source statistics

An article posted on msn.com titled "America's 10 richest people" reported that entry into the Forbes 400 List of wealthiest Americans in 2013 required $1.3 billion to be included.  This year's list required $1.55 billion, and 113 billionaires were excluded from the list.

Within days of reading that article I read that because of the wages paid by Wal-Mart, nearly half of the children of that company's 'associates,' qualify for Medicare Benefits or go uninsured, their family situation being cited as an example of America's working poor.


A recent vote in the U.S. Senate intended to take action against the Citizens United case decided by the U.S. Supreme Court failed, cited by many as an example of money and power defeating the voice of individual Americans.  The barrage of political ads on television right now nearly all have a tiny caption at the bottom disclosing some political action group that paid for the advertising.  The power of money exerted a huge influence in American politics in Isaac Werner's times, and it still does.

Perhaps these kinds of news reports explain why my 2011 blog about similarities our own age shares with the Gilded Age explain why that blog continues to attract visitors.  Many of the Progressive ideas from the People's Party were implemented in the early years of the past century and contributed to the growth of America's Middle Class.  Today's shrinking Middle Class and the economic disparity between America's richest and poorest citizens may have more in common with the Gilded Age than the post-W.W. II years many Americans remember proudly.

I hope you visit "Politics Hardly Seem to Change" in the archives at Nov. 24, 2011.  I think you will find the cartoons and the political comparisons thought provoking, regardless of your own political positions.

Politics and Wealth in Isaac's Day

What That "Wave of Prosperity" Is Doing

 

"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both."  Louis D. Brandeis, U.S. Supreme Court Justice (b. 1856 - d. 1941)

 

Ask most people about the Gilded Age and they will perhaps mention the mansions along 5th Avenue in NYC or the elaborate summer homes in Newport, Rhode Island, or they may recall names like Vanderbilt, Carnegie, and Gould.  What they are unlikely to mention are the factory workers, miners, steel workers, and farmers struggling to survive during an era better known for its extravagant displays of wealth.  This is the era during which Isaac Werner wrote in his journal about farmers who signed mortgages when rain did seem to follow the plow and prices for crops were high, only to face foreclosure and starvation when drought, low prices, and higher interest rates defeated hope and hard work. 

 

Early America, when industry meant local craftsmen--like blacksmiths, barrel makers, tanners, tinsmiths, and millers, or crafts such as candle making, spinning, weaving, and butchering done at home--changed around the time of the Civil War to a nation of steel mills, factories, and corporations.  The United States male population described by Alexis de Toqueville in 1835 as having "...greater equality in point of fortune and intellect, or, in other words, more equal in their strength, than in any other country of the world..." had been replaced in only a few decades by a nation of great economic inequality among men.  Vast wealth brought disproportionate power and political influence.

 

The Gilded Age was the time during which the populist movement was born.  Farmers like Isaac joined laborers to confront the political influence of the wealthy few with the greater voting strength of the many.  Disproportionate wealth distribution during the Gilded Age is similar to current economic statistics referred to as the 1% vs. the 99%.  However, in Isaac's time government social programs to assist the aged, the disabled, and the unemployed were not available, and people literally starved.  Although the People's Party of Isaac's time failed in its attempt to establish itself as an enduring third party, many of the issues championed by the People's Party were subsequently implemented, including social programs and government regulations upon which Americans now rely. 

 

If you can afford to buy an election you can afford to pay higher taxes!

Today, the political debate about the disappearing middle class and economic inequity sounds very similar to issues debated during the Gilded Age.  The money pouring in to political ads since the Citizens United case was decided by the US Supreme Court has only made the significance of one citizen's vote more doubtful for some Americans, regardless of party affiliation.  (The  sidewalk graffiti posted on facebook garnered "likes" from friends of all political attitudes.)

 

One presidential candidate has declared that "Corporations are people too," although the definition in Black's Legal Dictionary states that a corporation is "an artificial person or legal entity created by or under the authority of the laws of a state or nation."  Since the creation of people still requires egg and sperm, an artificial person created under the authority of laws doesn't really have what it takes to be a person!  When our nation was founded the distrust of corporations in England was brought to the new land, and early laws reflected that distrust.  Gradually the laws changed, but current distrust of wealth and corporate influence shares much in common with early attitudes, making many voters feel insignificant within the political process, just as the working classes felt after the Civil War when corporations, trusts and monopolies gained power.

 

In 1906, Theodore Roosevelt wrote:  "Behind the ostensible government sits enthroned an invisible government owing no allegiance and acknowledging no responsibility to the people.  To destroy this invisible government, to befoul the unholy alliance between corrupt business and corrupt politics is the first task of the statesmanship of the day."  In Isaac's time the enemies of the working classes were Monopolists, Trusts, Wall Street, and Speculators, who were resented not only because of their disproportionate wealth but also because they used their wealth politically to gain advantages.

 

Letting the Little Fellow Think He's Driving--When He Isn't

Maintaining the economic balance to keep the United States a land of opportunity for all of its citizens has been a challenge since its inception, and particularly so after manufacturing and industry expanded beyond small, local producers.  The global marketplace is not new either, although it has certainly changed.  Franklin Roosevelt left a definition for what he believed necessary to a strong and healthy political and economic system:  Equality of opportunity for youth and others; Jobs for those who can work; Security for those who need it; The ending of the special privileges for the few; The preservation of civil liberties for all; and The enjoyment of the fruits of scientific progress in a wider and constantly rising standard of living."  FDR was a Democrat, but the goals he enumerated would seem to meet with the approval of most Americans. 

 

Isaac's generation confronted how to accomplish those goals during the Gilded Age; the often-described Greatest Generation confronted meeting those goals while fighting a world war during the Depression and World War II; and the present generation confronts those same goals today.  The two political cartoons from 1890 seem especially applicable as election day 2012 nears.  Is the "Wave of Prosperity" lifting only some of America's citizens while drowning others, and are some Americans being hoodwinked by the wealthy and powerful to believe they are driving political decisions when they are not?  Are these questions as relevant today as they were in Isaac's time? 

Reading Isaac's journal and researching the era about which he was writing intrigued me with political similiarities to our own.  Then as now, each person's vote mattered.  Political views continue to differ, but everyone still has the same precious right to cast a ballot!

 

Remember, you can click on the images to enlarge them.