Tribute to America

Dear readers, I have the pleasure of announcing to you my second article in a series of analyses that I wish to dedicate to the United States of America.

Here is the first, What the hell’s the presidency for?, published 14 December 2020.

All of American history – from 1776 to Ronald Reagan – exhibits the struggles of the nation’s politicians and citizens against the hyper-concentration of public powers. It’s been two centuries that this country has tackled this issue head-on and been a pioneer in dismantling monopolies. The American Revolution itself was underpinned by a challenging of the economic checks and balances like that of the East India Company. It was this exact struggle set out by the founding fathers that defined the US’s philosophy on economic policy. They understood very early on that human freedom cannot prosper under the reins of economic servitude. The Declaration of Independence, that was for its time quite extraordinary, goes beyond the liberation of a people under the control of its occupier and guarantees perfect equality. Having at heart the goal of liberating men from the clasps of their fellows, the founding fathers therefore created institutions and refined, sophisticated laws, whose aim was to protect each citizen from the excesses of public powers. Black people, other ethnic minorities and women at the time did alas not benefit from these new civic privileges, but the fact remains that the Revolutionaries and their immediate successors were motivated by a genuine philanthropic desire and commendable organisational abilities.

As the cornerstone of this whole edifice, the US Constitution therefore laid the foundations for the equitable distribution of land to families who benefited immediately from the protection provided by public powers against private monopolies. It would be wrong to think that this document only outlines the balance of public powers in America, since the other priority of the US Constitution was to complicate the jobs of finance and industry leaders of the time, making it harder to be tempted into concentrating too much power in their own hands. It is James Madison who wrote that “when power is held by the majority and not by a privileged minority, there is then little danger that this minority is favoured”. This explains the laws adopted in 1789 by the first Congress under the presidency of George Washington that aimed to instil democratic values in the colonisers by outlawing landowning speculators, making parents pass on their belongings to their children of both sexes in a fair and equitable way, and by penalising overly large agglomerations of land. The ultimate goal of the founding fathers of the USA was therefore to build a healthy society thanks to equitable rules and to an education system that had become open to the public. Much later on, emblematic laws like the “Interstate Commerce Act” in 1887 and the “Sherman Antitrust Act” in 1890 were voted into force to break up the railway and finance monopolies. Without however preventing at the turn of the 20th century the emergence of a small oligarchy built around JP Morgan, who succeeded in dominating – and syphoning off –many parts of the US economy.

It required all the steel and determination of Woodrow Wilson, elected president in 1912, and all of his reformatory talent, to create firstly a central bank (the Federal Reserve) that would control the flow of credit and regulate even break up Wall Street, secondly to levy a progressive tax on income so as to avoid the concentration of enormous fortunes, and thirdly to dismantle the giant of the time that was AT&T. Wilson’s successive legislatures thus opened the gates to a genuine second American Revolution – that he himself called the “New Freedom” – that made Roosevelt’s “New Deal” possible 20 years on. Roosevelt continued the works of his predecessor by taking action against the financial monopolies and the industrial and commercial conglomerates. “The fight against private monopolies”, he declared, “is a battle for, not against, the American business world. It’s a fight to preserve individual enterprise and economic freedom”. Under his leadership, the number of lawyers specialised in the application of anti-trust laws at the Department of Justice leapt from 60 to more than 600! The economic and financial predators were thus gagged, got rid of even, and wages rose, the rate of membership to trade unions shot up, and private business prospered. These were decisive factors that freed up energy and thus saw the richest period in human history in terms of innovation.

To be continued…