Chapter Seven:
The Politics of Economic Insecurity - Part One

Attempts to explain economic insecurity are usually superficial. Most commentators analyze only the most obvious reasons why people face poverty or the threat of poverty. One example is 1992 testimony to the House of Representatives by Isabel Sawhill, now a top-level Clinton Administration official. In this testimony, she cited three reasons for increased child poverty during the years immediately prior to her testimony:

1) the increase in the number of single-parent families;

2) declining wages;

3) decreases in public income assistance.

Sawhill's explanation was accurate as far as it went. The three factors she described did contribute to a rise in the number of children living in poverty. She ignored important, underlying factors, however. She stopped short of asking why the number of single-parent families increased, wages declined, and income assistance was cut.

Young children ask why relentlessly; but they learn to stop. As adults, we need to remind ourselves to keep peeling away surface layers to find deeper answers to our questions - including the question we face here: why is there so much economic insecurity in this abundantly wealthy country?

The history of poverty in the United States, as presented in the previous chapter, suggests an answer that is rarely articulated, however obvious it may be: the poor are poor because wealthy people want them to be poor. At the beginning of this country, a small minority seized most of the wealth for itself, forced a large segment of the population to live in poverty, and set up a political system that ever since has concentrated the nation's wealth in the hands of a relatively few white men who pass it on from generation to generation. Commentators on economic insecurity typically overlook this basic reality. But we need to go deeper still. Understanding why the wealthy want to perpetuate poverty cannot simply be explained by greed, the most obvious reason. Other factors also motivate their actions. Understanding these power dynamics can help us overcome them.

A. The Control of Land

Prior to industrialization, wealth was derived from the conquest of land. A close look at the control of land during the early days of this country's history illustrates how ruling elites created wealth and poverty. The new nations of Europe were anxious to exploit the enormous resources of the New World. As historian Hugh Brogan puts it, these lands "were free, it seemed, for the taking. A few years of physical suffering were all that any part of it exacted as the price of conquest." In relatively little time, eight to ten million Native Americans living north of the Rio Grande were decimated, easing the migration of forty million Europeans westward across the Atlantic.

The expansion of colonial empires was driven by the lure of profits. But it was also motivated by a desire on the part of European governments to undercut political rebellion at home. Aristocracies saw out-migration as a way to get rid of discontented, underemployed troublemakers. At first, there was little interest among the general population in bearing the risks involved. So the courts forced many of the disenfranchised to endure the oceanic voyage, and governments used the promise of free or virtually free land to entice others to try their luck in the New World. A rabid hunger for land soon spread like wild fire.

During the early days of colonization, the European super-powers simply claimed ownership of new lands "by right of prior discovery." Whichever explorer landed first simply raised a flag and claimed the surrounding land for his nation. Hence the symbolism of historic flag-raising scenes. These claims to land meant nothing, however, without the military muscle to back them up.

Eager to counter Spain's control of Central America, England claimed North America based on the voyages led by John Cabot from 1497 to 1499 along the northeastern coast of the continent. But the English were initially unable to hold on to North America. The French and Portuguese, attracted to the rich fisheries of the Nova Scotia area, soon dominated that region. In 1524, the French took over the Hudson River region, including the area that is now New York City. But religious wars on the continent undercut the French effort to colonize North America, enabling the Dutch to seize Manhattan Island about one hundred years later and name it "New Amsterdam." In 1664, the English took back control of the area and renamed it "New-York." These changes illustrate how the claim to land depends on military might.

The ebb and flow of European powers in North America continued for 400 years, punctuated by intermittent wars that were mostly struggles over land. Even during periods of relative peace, the conflict played itself out on the high seas as each country stole one another's colonial loot by subsidizing pirates to plunder it in transit. Sir Walter Raleigh, for example, sent the first settlers to Virginia to establish a base for pirates to rob the Spanish fleet for the English crown. And Sir Francis Drake, on one of his expeditions, burned the entire town of Santo Domingo, which had been established by Spain in what is now the Dominican Republic, when its settlers were unable to meet his demand for gold (because they had none).

Though at times the process of taking land from Native Americans was "legitimized" with fraudulent deals, token payments, and treaties (that were usually soon broken), colonial powers essentially seized land by military force. As Mao Tse Tung said years later, "political power grows out of the barrel of the gun." Or, as Max Weber wrote:

"...a state is a human community that claims the monopoly of the legitimate use of physical force within a given territory.... The state is considered the sole source of the 'right' to use violence."

Thus, governments have been established by their ability to kill or physically punish those who resist their policies, including the definition of property rights.

The confiscation of North America and the refusal to share the land with its native inhabitants troubled the conscience of many conquerors. So they tried to justify their theft with various theological arguments concerning "manifest destiny." The following statement by John Winthrop, the original patriarch of New England, is typical:

That which is common to all is proper to none. The savage people ruleth over many lands without title or property; for they enclose no ground, neither have they cattle to maintain it, but remove their dwellings as they have occasion, or as they can prevail against their neighbors. And why may not Christians have liberties to go and dwell amongst them in their waste lands and woods, leaving them such places as they have manured their corn, as lawfully as Abraham did among the Sodomites? For God hath given to the sons of man a two-fold right to the earth; there is a natural right and a civil right. The first right was natural where men held the earth in common, every man settling and feeding where he pleased; then, as men and cattle increased, they appropriated some parcels of ground by enclosing and peculiar manurance, and this in time got them a civil right.

Subsequently, ruling elites used similar arguments to justify concentrating the wealth of the nation in the hands of a few, who have mostly been white males. They used these rationalizations to legitimize the use of physical force to limit economic opportunity for white women, Native Americans, African slaves and their descendants, and the vast majority of white males. But these arguments have confused what is essentially a brute reality: those with power have taken whatever they wanted when they were able - so long as they have considered it in their self-interest to do so.

B. Sharing Land - When Expedient

Elites have shared some of their wealth when powerful political pressure has persuaded them to do so. In those cases, they have generally let go only of the minimum necessary to placate people who have threatened to take more.

These maneuvers are revealed by early land policies. During the early years of this country, the ability to own land was often used as a pawn in political power games. Political calculations behind decisions concerning the distribution of land are seen time and again. Initially, for example, white indentured servants were offered the promise of nearby land following their period of servitude. Once freed, they cleared and developed their land, which contributed to the growth of local towns and villages. These activities increased the value of land held by their former owners. In this way, it initially served the interest of the wealthy elites to allow the first wave of indentured servants to become landowners.

When individuals in the colonies obtained title to property, they often had to negotiate with squatters living on their land. The squatters would sometimes be allowed to stay by paying nominal rents until they improved the land to the point that it could be sold. Landowners would then force the squatters to leave or buy some or all of the property. Owners thus determined the ability of others to stay on their land according to their own economic self-interest.

As the price of African slaves fell and the slave trade flourished, it was no longer necessary to attract whites with the prospect of land ownership, for masters could force slaves to do physical labor more cheaply. Consequently, colonial governments generally stopped allowing indentured servants to assume ownership of land once they earned their freedom. The terms of indenture and access to land changed according to what elites considered to be in their self-interest.

The use of land ownership as a political tool is also demonstrated by various military expeditions. For example, when the British Governor of Virginia sent Lieutenant George Washington (who later became President) to lead troops in an effort to expel French settlers in the Ohio Valley, the governor promised the enlisted men free land in exchange for their service. But once the conflict was over, Washington and a partner altered the governor's proclamation so that officers could get free land as well, thereby cheating his troops out of 20,000 acres of the best land.

Prior to independence, those in control - whether a private company chartered by the Crown of England, the Crown itself, or a colonial legislature controlled by the Crown - seized unsettled land and gave it to selected individuals, who got title to property free of charge or for only a minimal payment. In this way, ruling elites were able to reinforce their power by building political loyalties among their peers.

Before 1800, the British were very careful about seizing land from Native Americans on the western frontier. England wanted to avoid costly conflicts on the frontier while it consolidated its position on the coast. So colonial governments treated Native Americans in that region with relative respect and made extravagant promises to get them to cooperate peacefully. England even tried to prevent expansion into lands beyond the Appalachian Mountains with the Proclamation of 1763 that outlawed westward expansion. George Washington described this proclamation as "a temporary expedient to quiet the minds of the Indians." The British wanted to avoid provoking the powerful Iroquois League into forming alliances with France and/or Spain, who were contesting England for control of North America.

After 1800, however, France and Spain held a weaker position in North America. So the new government in Washington - the United States of America - was free to become more aggressive and brutal in the treatment of Native Americans.

The Proclamation of 1763 was also motivated by another calculation. The British government wanted to push settlers north and south along the coast, where, as the government itself put it:

they would be useful to their mother country, instead of planting themselves in the heart of America, out of the reach of government, and where from the great difficulty of procuring European commodities they would be compelled to commence manufacture to the prejudice of Britain [because they would buy fewer products made in England].
This statement illustrates how governments often attempt to direct economic development to benefit already wealthy economic interests.

This particular effort backfired, however. The Proclamation of 1763 provoked extreme resentment among colonists who wanted the western lands for themselves and contributed greatly to the decision to go to war against Britain.

The initiators of the War of Independence rejected the direct inheritance of political power as it had operated under European monarchs. But the victors preserved the direct inheritance of wealth. Post-colonial governments maintained the distribution of wealth and poverty established by Britain and set up a new government that enabled the wealthy to protect and expand its wealth. Each succeeding government has used its police power to protect this extreme concentration of wealth. With a variety of mechanisms, wealthy elites have managed to wield enormous influence over each succeeding government. In this way, wealthy families have been able to preserve their political power indirectly, even though they have no longer inherited it directly. As the Medici family of 16th Century Florence in Italy said: 'Money to get power, power to protect money.'"

The post-colonial government proved wiser than the British in utilizing its control of unsettled land. The new government declared that all of the territory from the Appalachian Mountains to the Mississippi and from Florida to Canada would be held by the United States Congress in the name of the American people. In 1785, Congress passed the Land Ordinance, drafted by Thomas Jefferson, which provided that these lands would be sold in units of 640 acres for not less than a dollar an acre. Most citizens could not afford this price.

Setting a high price on these lands enabled wealthy land speculators to make a killing. The wealthy could buy land, subdivide it into smaller units, and thereby reap enormous profits, by selling the smaller units at prices others could afford. In return, wealthy elites gave their support to the shaky new federal government, which continued to facilitate a steady increase in the concentration of wealth in other ways as well.

The government's careful reckoning concerning the control of land is also seen in certain post-Civil War decisions. In the South, after the Civil War, ex-slaves pushed for title to some of the land that they had enriched with their labor. A committee on the Georgia Sea Islands, for example, wrote to President Johnson:

Land monopoly is injurious to the advancement of the course of freedom, and if Government Does not make some provision by which we as Freedmen can obtain a Homestead, we have Not bettered our condition (and will) be subject To the will of these Large Landowners.
A freedman in Virginia made the case for land ownership based on sweat equity:
We has a right to the land where we are located. For why? I tell you. Our wives, our children, our husbands, has been sold over and over again to purchase the lands we now locates upon; for that reason we have a divine right to the land.
By the end of the war, the federal government had taken possession of almost one million acres of Southern land that either had been confiscated or abandoned. This action provided the government with the opportunity to provide former slaves with the means of self-sufficiency. General William T. Sherman actually gave forty acres to each of some 40,000 former slave families along the southern coast. This practice had ample precedent in the annals of war - namely, "to the victor go the spoils." After defeating the Creek nation and taking much of their land in the South, for example, Andrew Jackson defended his seizure of land by telling them, "The United States would have been justified by the Great Spirit had they taken all the land of the nation."

After some deliberation, however, the federal government decided to return to those who had most recently held title all the Southern lands it had seized. President Andrew Johnson ordered soldiers to forcibly remove the former slaves from their forty acres of land.

At that same time, the federal government was giving 160-acre plots of land to settlers who had the means to cross the Mississippi and even more land to the burgeoning railroad industry to expedite the construction of the Transcontinental Railroad. Following acquisition of lands west of the Mississippi (which was achieved in part by provoking a war with Mexico to seize control of the Southwest and California), the Homestead Act of 1862 enticed settlers westward with land grants. This law enabled homesteaders to assume ownership after cultivating a piece of land for five years.

Like the English before them, the leaders of the new Congress were honest about one motive behind their decision to subsidize migration: they hoped to reduce political rebellion by the poor in the East by persuading the dissatisfied to go west. As one Senator from Wisconsin explained his support for the Homestead Act:

Its benign operation will postpone for centuries, if it will not forever, all serious conflict between capital and labor in the older free States, withdrawing their surplus population to create in greater abundance the means of subsistence.
The Homestead Act also enriched politically-influential land speculators by enabling them to buy new land outright for only $1.25 per acre without living on the land. Many of these speculators engaged in extensive fraud to buy up many of the 160-acre units that were available. In this way, wealthy individuals assumed ownership of millions of acres of farm land that Native Americans, former slaves, and poor pioneers could have used to establish themselves.

In the 1860s, the desire to build the Transcontinental Railroad led the Congress, greatly influenced by bribes, to give 131 million acres, free of charge, to wealthy investors who sold the land and used some of their profits to lay track. The amount of land given to the railroads was more than twice the sum given away under the Homestead Act. In this way, once again, the selective distribution of land enriched certain wealthy individuals directly, while at the same time indirectly serving the financial interests of other wealthy individuals.

The Southern Homestead Act, which "reserved all federal lands - one-third of the area of Alabama, Arkansas, Florida, Louisiana, Mississippi - for farmers who would work the land," became another pawn in a political power struggle in 1877. In the midst of a terrible depression, the result of the 1876 Presidential election was thrown into uncertainty in the electoral college. This dispute led to political upheaval and the threat of another civil war. In return for Southern votes for Rutherford Hayes, Northern officials agreed to remove Union troops from the South and to repeal the Southern Homestead Act. These actions facilitated the consolidation of white power in the South and enabled wealthy, powerful absentee speculators to buy up valuable land.

The New World was enormous, but it was limited. The ability to utilize this scarce natural resource was essential. The fact that a small minority controlled most of the new land meant that most citizens were excluded from the opportunity to prosper and were forced to struggle to survive. The calculated distribution of that land was a major issue. These decisions were made carefully with great attention to the consequences. The new rulers of the United States were keenly aware of what had happened to the British when they miscalculated. Wanting to avoid the same fate for themselves, they set aside some of the new land for ordinary folk to keep them quiet. But the fact that wealthy elites gained control of most of the land was no accident.

Access to land and the definition of property rights were thus key elements in the development of the United States. As the Christian theologian Philip Wogaman (President Clinton's minister) has argued, the right to property, which varies from society to society, is not an abstract, pre-existing natural right. Rather, each society molds the definition of private-property rights in its own way. Each individual is entitled to property only because its government so declares. As Wogaman puts it:

I may own my toothbrush more or less absolutely, but my ownership of patents or copyrights, of drilling rights, of air rights, of options to buy, of commodity futures, of a co-op apartment, of a second mortgage, or a tenured academic post, of a share in 'community property,' and so on, is all much more complex and socially defined.... It is the community, acting through government, that determines what property is. Property is first, then, a relationship we have with other people and with the community as a whole, determining what claims to 'scarce values' will be respected and, in the event of threat, protected.
During the early history of this country, governments declared that only those who possessed certain pieces of paper called "titles" were entitled to the land in question. These titles to land that previously belonged to the government were given to carefully selected individuals. In this way, a relatively few people who were already wealthy gained access to most of the nation's land and used it to multiply their wealth. During this process, most people were excluded from the means to achieve prosperity and had to struggle merely to survive.

C. Government Of The Few, For The Few

Most of the leaders of the new United States government were wealthy. They socialized and identified with people of wealth and privilege. Abbot Smith, in his study of the colonial period, concluded that this period

was not democratic and certainly not egalitarian; it was dominated by men who had money enough to make others work for them.... Few of these were descended from indentured servants, and practically none had themselves been of that class.
To protect each other's wealth after the War of Independence, a small group of wealthy white men secretly convened the Constitutional Convention in violation of the law of the land as defined by the Articles of Confederation and carefully crafted a system of government that they and their peers could control. Thomas Jefferson and many other leaders of the War effort were dismayed that the Convention decided illegally to create a new government rather than merely amend the Articles of Confederation. But Jefferson was serving in France and the others were unable to stop the conspiracy.

An essential provision in the Constitution of the new United States of America was an agreement to allow each state to establish voting requirements, rather than establishing uniform standards nationwide. This provision meant that in most places, those who did not own land could not vote. In some states, only the very wealthy could hold state office. Sailors, apprentices, many craftsmen, indentured servants, women, and slaves were thus excluded from having a voice in the selection of those representatives who were to rule the new government.

The ideology of the day was clearly expressed by Alexander Hamilton (the chief architect of the Constitution and the first Secretary of the Treasury), who argued:

All communities divide themselves into the few and the many. The first are the rich and well-born, the other the mass of the people. The voice of the people has been said to be the voice of God, and however generally this maxim has been quoted and believed, it is not true in fact. The people are turbulent and changing; they seldom judge or determine right.
Most of the leaders of the war against England knew that they were inflaming a broad discontent that could be directed against themselves as well as England. General Thomas Gage, reflecting on the 1767 protest against the Stamp Act, commented:
People then began to be terrified at the Spirit they had raised, to perceive that popular Fury was not to be guided, and each individual feared he might be the next Victim to their Rapacity.
Colonial elites maintained control of the revolt against England, however, as demonstrated by the fact that two-thirds of the signers of the Declaration of Independence were former colonial officials.

The founding fathers feared landless people who were demanding more for themselves. In reference to one such bloody rebellion, General Henry Knox echoed a dominant sentiment among the aristocracy of the day in a letter to George Washington:

The people who are the insurgents ... feel at once their own poverty, compared with the opulent, and their own force, and they are determined to make use of the latter, in order to remedy the former. Their creed is 'That the property of the United States has been protected from the confiscations of Britain by the joint exertions of all, and therefore ought to be the common property of all. And he that attempts opposition to this creed is an enemy to equity and justice and ought to be swept from off the face of the earth.'
This populist attitude had been widespread in the colonies for some time. Following a series of attacks on some of the houses of the wealthy in Boston, an official report to England described plans for "a War of Plunder, of general leveling and taking away the Distinction of rich and poor." Throughout the colonies, the "leveling" movement was a strong force aiming for an equalization of wealth. A major element at the Pennsylvania constitutional convention in 1776 argued:
an enormous proportion of property vested in a few individuals is dangerous to the rights, and destructive of the common happiness, of mankind; and therefore every free state hath a right by its laws to discourage the possession of such property.
Fear of this radical agitation is reflected in the writings of the highly influential James Madison, who was sorely concerned about the "rage for paper money, for abolition of debts, for an equal distribution of property." In The Federalist Papers, Madison wrote:
But the most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society.... The regulation of these various and interfering interests forms the principal task of modern legislation [italics added].
Post-colonial elites were determined to use the new government to protect their interests. Limiting the political power of those who were not wealthy by restricting the right to vote was only one tactic. Another was active support for land speculation, as discussed earlier in this chapter. In addition, the government took steps such as the following to actively promote the welfare of the wealthy:

The founders thus consciously crafted governmental institutions and economic policies to protect British-created wealth and proceeded to operate this government with this primary aim in mind. Each successive government has functioned along the same line.

D. Divide and Conquer

In a 1787 letter to Jefferson reporting on the Constitutional Convention, Madison discussed a key strategy that elites have long used to protect their wealth and power: divide and conquer. Madison wrote:

It may be asked how private rights will be more secure.... A distinction of property results from that very protection which a free Government gives.... There will be rich and poor.... It remains then, to be inquired, whether a majority having any common interest, or feeling any common passion, will find sufficient motives to restrain themselves from oppressing the minority.... (W)hat remedy can be found in a republican Government, where the majority must ultimately decide, but that of giving such an extent to its sphere, that no common interest or passion will be likely to unite a majority of the whole number in an unjust pursuit? In a large society, the people are broken into so many interests and parties, that a common sentiment is less likely to be felt, and the requisite concert less likely to be formed, by a majority of the whole.... Divide et impera [divide and conquer], the reprobated axiom of tyranny, is, under certain qualifications, the only policy by which a republic can be administered on just principles.
In this passage, although he uses Latin to express his "axiom of tyranny," Madison blatantly proposes relying on "divide and conquer" as a method for perpetuating the concentration of political power in the hands of a few. Madison uses code language in talking about "the minority" in the abstract, but clearly the minority with which he is most concerned is the wealthy.

Madison and his peers were surely familiar with this strategy, for colonial empires had used it effectively for centuries. These colonial policies are still being played out today in former colonies. Post-colonial governments reinforce their own power by manipulating resentments toward ethnic groups that colonial governments had selected to assist them in their domination. In 1994 Gareth Austin commented:

In a way, it is a self-perpetuating process. Just as the Europeans were able to divide and rule, by choosing one group or another as their surrogates, so are the post-colonial political leaders, who now wield tribalism and ethnicity as a kind of flag to whip up political support.
Madison's desire to divide the electorate led him to fragment the new government into many parts. The new constitution:

As intended with this structure, it has been extremely difficult for "the majority" to effectively demand significant change in national policy to promote the general welfare. The weight of existing policy operates to preserve the status quo - especially the wealth of the upper echelon and their ability to operate freely to multiply their wealth.

Concerning poverty, the post-colonial government copied the English model and stipulated that aid to the poor was the responsibility of local governments. This delegation of responsibility effectively meant that the poor would not receive much assistance, for local governments are inherently severely limited in their financial resources. On the one hand, if local governments increase taxes dramatically, they risk driving away taxpayers and businesses. At the same time, if local governments make major improvements in the lives of the poor within their jurisdiction, they risk attracting poor people from other regions, thereby increasing their tax burden.

The same difficulties do not apply to the federal government. Higher taxes are unlikely to force the wealthy out of the country. Most of the industrialized countries to which they might move already have higher taxes than does the United States and tax laws can severely penalize revoking citizenship. Moreover, immigration into the country is restricted, whereas movement between states is not. Thus, the push-and-pull factors that limit state and local governments do not apply to the federal government. These realities require that solutions to poverty must be national in scope.

The Depression of the 1930s forced the federal government to assume certain responsibilities for the poor and almost-poor. But a fragmented system remains largely in place. Major responsibility for the destitute remains in the hands of local and state governments that are unable to effectively remedy the situation. Each level of government is able to point the finger at the other when constituents demand an explanation for inaction. As Stanley Shere, an anti-homelessness activist in San Francisco said:

Each layer of government tries to put the financial burden on the next layer of government. The city leans on the state and the state leans on the federal government and the feds lean back on them. Think of it as a giant Slinky toy.
This fragmented system of governance has served what Madison described as its "principal" function: to preserve the concentration of wealth.

Wealthy elites have also used "divide and conquer" to shore up their positions in the private sector. In a review of Modern Manors: Welfare Capitalism Since the New Deal by Sanford M. Jacoby, historian Nelson Lichtenstein discussed how Kodak management vigorously opposed substantial Social Security retirement benefits because they did not want Social Security to undermine the relative attractiveness of their own retirement package. By establishing a generous image with their own workers, Kodak weakened organized political pressure for increased Social Security benefits. By helping to keep Social Security low, Kodak encouraged their workers to be loyal to Kodak rather than to their co-workers elsewhere.

E. Racism

Throughout history, rulers have been well aware of how to use racism to divide the people and perpetuate the status quo. Government officials have consciously created divisions based on skin color to serve the interests of those in power. The following examples in the history of this country illustrate the point:

President Lyndon Johnson told Bill Moyers:

If you can convince the lowest white man he's better than the best colored man, he won't notice you're picking his pocket. Hell, give him somebody to look down on, and he'll empty his pockets for you.
Drawing upon Jennifer Hochschild's The New American Dilemma, Derrick Bell made the same point in less colorful language:
Racism is a critically important stabilizing factor that enables whites to bond across a wide socioeconomic chasm. Without the deflecting power of racism, masses of whites would likely wake up and revolt against the severe disadvantage they suffer in income and opportunity when compared with those whites at the top of our system.
Consequently, as expressed by Roger Wilkins, "vast numbers of whites [have become] psychically dependent on - addicted to, one might say - their belief in their superiority over blacks." When horribly angry, most people are prone to release their anger by directing it at another person or persons. To stop dumping their anger on African Americans and other minorities would leave racists with enormous reservoirs of anger and no easy target available.

A striking comment by a former prostitute who probably gave her customers the AIDS virus illustrates the need for convenient targets: "I infected a lot of people with a lot of different things.... But I didn't care. Somebody was getting paid back for all the pain I had." Oppressed people are prone to "take it out" on anyone they can. In part because it has been accepted by society-at-large, people of color often serve as a handy punching bag.

The strategy of fomenting racism has continued in recent times, as demonstrated by the following examples:

It was subtler than code cords. It was 'I am on our side. I am going to deal with it in a way you will approve of.' I know he saw Johnson's embrace of blacks as an opportunity. He exploited it.

Inflaming racial tensions serves to divide low- and middle-income people and pit them against one another, thereby reducing the possibility that they will join together to confront vital issues of economic injustice. The same dynamic can be seen with the oppression of other groups of people, including women, gays, and lesbians. The United States continues to legitimize discrimination against women by not requiring equal pay for equal work and not enacting the Equal Rights Amendment. And it foments bias against homosexuals by measures such as authorizing the expulsion of military personnel who are found to be gay or lesbian.

By refusing to protect the rights of minorities, the federal government forces them to protest and fight publicly for equal justice. These struggles are necessarily confrontational, resulting in bitter divisions among people who otherwise could more easily unite around common economic interests over against wealthy elites. To the degree that each group fights only for its own self-interest without also joining with the majority for common economic interests, the fragmentation of the electorate into various "identity groups" reinforces the elite's historic "divide and conquer" strategy.

The essence of racism is the belief that a certain group is genetically inferior. Racists claim that this supposed genetic inferiority, also reflected in skin color, is the reason for social and economic deprivation: "they're in that condition because that's the way they are." This blaming whole groups of people for their oppression ties in neatly with the individualistic "Horatio Alger" myth that "you can be anything you want to be." As described by Roger Wilkins:

Racism thus joins two other enduring strands at the center of American culture, individualism and capitalism. Myths about them are intertwined and mutually reinforcing. Americans are led to believe that capitalism is efficient and just. All individuals who are energetic and disciplined can make it in our economy. Those who fail are unworthy. Therefore, there is nothing wrong with the system. Capitalism is just. Individual worthiness and effort are rewarded. Those who have reaped the most rewards are, of course, the most virtuous and worthy citizens of that society.
Those who miss out, accordingly, are deficient, not unlucky. For the sake of economic growth, the losers in the "struggle for survival" must be sacrificed on the altar of progress. Treating whole groups of people as disposable in this way breeds despair. As the young singer-songwriter Beck states with biting irony in his hit song, "Loser," "I'm a loser, baby. So why don't you kill me?"

F. Co-optation, or "Selling Out"

Perhaps the most important division among the people, however, has been the division between the poor and the "middle class." Far too often, middle-income people have blamed the poor for poverty and supported the wealthy because they have hoped to become wealthy themselves. As the political commentator Michael Kinsley put it, "American politics can be seen ... as a battle between the poor and the rich for the allegiance of the middle class. Call it empathy vs. aspiration."

In exchange for forsaking protest, poor activists have often accepted financial rewards that have lifted them out of poverty into the middle class. Some modest degree of affluence has repeatedly been sufficient to persuade many troublemakers to reach an accommodation with "the system." These deals have openly "bought off" rebellious groups, thereby undermining rebellions that eventually could have achieved a more complete redistribution of wealth.

In the middle of the War of Independence, for example, the New York Legislature was faced with widespread rebellion among tenant farmers in Duchess County. The farmers resented well-connected contractors who were flourishing from war-related business. When many of these farmers stopped paying rent, the Legislature confiscated land from Loyalist supporters of England and gave it to 400 farm families, thereby quelling the rebellion and gaining important support from the new voters in local political maneuverings.

The history of the Hudson River Valley near Albany provides another example. In the mid-1800s, hundreds of thousands of tenant farmers worked enormous tracts of land owned by extremely wealthy landowners. During hard times, unable to pay rent, they organized forceful resistance against eviction under the name of the "Anti-Rent Movement." This movement persisted for some four decades. By the early 1880s, this political agitation had enabled most of the farmers to obtain title to their land. But the terms made it difficult for most of them to keep their head above water. Some 20 percent were still tenant farmers. As the historian Howard Zinn concludes in his account of this rebellion: "the system [was] stabilized by enlarging the class of small landowners, leaving the basic structure of rich and poor intact. It was a common sequence in American history."

The fate of the Populist Party at the turn of the century also demonstrates this pattern of seducing the leaders of a protest movement to betray their principles. After achieving some victories in local races in 1890, the Populist Party won more than a third of the vote in nine states during the Presidential Campaign of 1892 and was building real momentum for a challenge to entrenched economic interests. Based on a call for unity among rural farmers and urban workers and its claim that "wealth belongs to him who creates it," the Populist Party called for vigorous action by the federal government to protect the interests of working people. But the Democratic Party adopted weak versions of much of the Populist program and seduced the populists with the hope of quickly electing William Jennings Bryan President, while forsaking their overall program.

The established powers also undermined the threat of the populist movement by shaping the self-image of farmers. The historian Richard Hofstadter describes this co-optation in The Age of Reform:

It was during the early years of the twentieth century that American businessmen, disturbed by the anti-business rhetoric of the agrarian movement and mindful of their own stake in farm prosperity, began self-consciously to woo the farmers and to build that rapport between the two interests which is now so characteristic of American politics.
This effort included getting banks to threaten to withhold loans unless farmers adopted modern techniques of crop cultivation and care of livestock. Farm journals, farmers' organizations, and the Department of Agriculture all campaigned to persuade farmers to think of themselves as businessmen. In 1935, the Idaho Farmer instructed farm wives as follows:
Hands should be soft enough to flatter the most delicate of the new fabrics. They must be carefully manicured, with none of the hot, brilliant shades of nail polish.
In Hofstadter's words:
[This process resulted in] the rapid decline of the [farmer's] traditional identification with all laboring men [and] the growing tendency of substantial farmers to think of themselves as businessmen and employers.... Farmers on marginal land, farmers bought out by the large-scale units and unable to relocate, farmers handicapped by credit difficulties, tenancy, race discrimination, political disfranchisement, the migratory farm workers who wander with their families from place to place and crop to crop, making possible the cultivation of seasonal fruit and vegetable crops with a minimum of labor costs and a minimum of employer responsibility - such interests as these have been spurned by the commercial farmers.
The history of the labor movement provides another example of how key segments of the total population have been offered sufficient rewards to persuade them to forsake efforts to expand economic opportunity for all. Faced with frequent, costly strikes, a consensus formed among wealthy elites in the 1930s that it would be more profitable to accede to the demands of organized workers in certain sectors of the economy. Over the course of the next several decades, major wage increases were given to a portion of the workforce, especially in factories and construction.

This "labor-capital accord" resulted in relative tranquillity. But during the process, most labor unions became increasingly concerned only about higher wages for their own members. Labor unions neglected organizing the unorganized, the development of strong alliances among unions, and the formation of coalitions with community-based organizations struggling for justice on a variety of fronts. Consequently, although some workers achieved remarkably high levels of compensation, the majority of the workforce has been poorly-paid, underemployed, or unemployed.

The same dynamic is reflected in the African American revolt of the 1960s. Often overlooked in accounts of this period is the fact that economic issues were at the heart of the civil-rights movement. The segregation of public facilities and restrictions on voting rights in the South receives much of the attention today. But the famous 1963 March on Washington was a march for "justice and jobs." Many of the demonstrations outside the South focused on demands for the employment of blacks. When Martin Luther King, Jr. was assassinated, he was organizing a Poor People's March on Washington demanding that the government guarantee the right to a living-wage income.

In response to this serious threat to public order, the powers-that-be responded with a War on Poverty that was in large part "A Campaign to Seduce Black Leaders." After rejecting a Labor Department proposal to create public-sector jobs, the Johnson Administration chose instead to focus on "community empowerment." Funds were provided for neighborhood boards to run various programs that were supposed to reduce poverty, largely indirectly. But most importantly, community leaders were offered well-paying jobs to run these programs, which led to the phrase "poverty pimp" becoming commonplace in ghettos. Many activists suddenly became concerned most of all with maintaining the flow of funds for their own salaries and forgot about the need for broader change in public policy.

Since then, a substantial portion of the African American community has been incorporated into the middle-class, leading to co-optation similar to that seen in other communities. Nearly one in seven African American families had annual incomes of $50,000 or more in 1989, four times the number in 1967. As reported by the Los Angeles Times:

the expanding black middle black middle class increasingly is distancing itself from blacks locked in 'poverty' and inner-city despair.... Indeed, some black scholars and sociologists predict that racial identity will continue to recede in significance as class stratification assumes more relevance among black Americans.
In lamenting this process of division, the eminent African American theater director, George C. Wolf commented, "One of the problems with integration is that only the best and brightest Blacks were invited to join the White party." The reality of racism, however, serves to remind middle-class Africans Americans where they come from. These reminders serve to slow down the process of co-optation. Only time will tell if the acculturation of African Americans will follow the course of co-optation as completely as it has with other populations.

The same tension between gains for a few versus the interests of everyone is seen in the history of the welfare-rights movement. In the late 1960s and early 1970s, this movement was able to amass considerable power demanding and achieving increased public assistance for low-income families. The strength of this movement was rooted in its ability to win increased benefits for its members at administrative hearings and by demanding changes in local welfare policy.

Concentrating energies in this way, however, ultimately proved to be counter-productive. As Linda Gordon comments, "...[A]t a certain point the long-range goals of benefiting all welfare recipients were no longer advanced by these daily, individual gains." Devoting so much energy to the fight for individuals' rights weakened the struggle for universal human rights. Winning victories for individuals or even particular populations can help build a political constituency among those who benefit. But sustaining that momentum and directing it toward change in national policies to provide universal benefits is another matter. As was the case with the union movement, once enough members get their own rewards, the energy for further protest tends to wane.

Governing elites have been keenly aware of the importance of creating a strong middle-class as a way to help stabilize poverty-ridden economies that are prone to turmoil if too many citizens become rebellious. This awareness can often be seen in discussions of third-world countries. Following the withdrawal of the Marines from Haiti in 1934, for example, a government commission concluded that a major reason for "the failure of the occupation [was] its brusque attempt to plant democracy there by drill and harrow, its determination to set up a middle class." Growing a middle-class gradually works better than trying to "plant" one "brusquely," the report suggests. But establishing a middle-class as a buffer against the poor is acknowledged as essential.

Historically, the seductive power of "upward mobility" has served to persuade most Americans to accept unjust economic conditions. Until recently, most generations have been able to improve on their parents' standard of living. The standard antipoverty program has been more "economic growth." In the midst of these conditions, it has been easy for victims of discrimination, such as people of color and women, to simply demand "equality."

Equality so defined, however, means an equal share of injustice. There is no justification for low-income people having to bear a dispro-portionate burden. Demands for "equality" need not accept poverty. We can demand economic security for all while at the same time pushing for affirmative action and other steps to counter the effects of discrimination. In fact, establishing economic security will make it easier to achieve equality, for economic insecurity will no longer fuel divisions. To date, however, the allure of getting "my piece of the pie" has diverted many Americans from aiming to reconstruct the pie. "Selling out" continues to be far too common, as self-centered materialism runs rampant.

The building of barriers between the poor and middle-class is ongoing. Class divisions continue to weaken political opposition to existing conditions. In 1991, for example, the Bush Administration proposed increasing college-tuition grants for families who earn less than $10,000 a year, while eliminating them for students from families above that threshold. This plan rightly moved Jesse Jackson to comment:

[The Administration] chooses, in the noble name of helping the poor, to pit the poor against working- and middle-class Americans. The potentially explosive nature of the politics of such a proposal are as obvious as they are cynical.
In the 1992 Presidential campaign, Bill Clinton appealed repeatedly to the "middle-class," called on them to support his plans for "economic growth," and almost never mentioned the words "poverty" or "the poor." The Clinton campaign probably reveals the commitment to building alliances between the middle-class and the wealthy over against the poor as clearly as any in the history of American politics.

In these examples, we observe a consistent pattern. When faced with a serious threat that could lead to a populist seizure of wealth, the system manages to relinquish enough rewards to suppress the rebellion. As Henry Stern expressed it so succinctly in a letter to the editor of the San Francisco Examiner, "The people winning this class war are willing to pay no more than the least it is possible for them to get away with."

G. Police Power

Another central weapon in the government's political arsenal has been the use and threatened use of police power. As governments have utilized the military to take land, so have they employed the police, with military backup as needed, to subdue the inhabitants. As Leo Tolstoy surmised, "The advantages of the rich over the poor could not and cannot be maintained by anything but violence." Awareness of this reality presumably led Pope Leo XIII in 1891 to declare, "A small number of the very rich have been able to lay upon the teeming masses a yoke little better than that of slavery itself."

Bacon's Rebellion in Virginia in 1676 was one of the most serious colonial-era uprisings. In a rare instance of unity, poor whites, indentured servants, and African slaves were united and armed. The elite saw this revolt against taxes, favoritism, and economic oppression as a dangerous precedent that could spread to other areas of the country if successful. At one point, the Governor fled the capital in fear of his safety. Eventually, a thousand British soldiers came to the rescue, hanged twenty-three rebel leaders, and eliminated what could have been a dangerous precedent.

With the advent of industrialization and the increase in the number of unemployed persons congregated in urban areas in the 1800s, those with money and power became increasingly concerned about the specter of widespread disorder. The need to assert established authority and intimidate the poor rose in importance. In a review of David Montgomery's book, Citizen Worker, Nelson Lichenstein recounts how the system chose to deal with this dilemma:

Thus the rise of a full-time, salaried police force made possible a vast criminalization of what had once been the customary behavior of the urban poor and casual workers. After mid-century a huge proportion of all arrests were for a new misdemeanor, "drunk and disorderly" conduct, and with the promulgation of state laws governing vagrancy and tramping, the police reminded everyone that workers with no employer were virtual criminals.... The courts invalidated more than sixty state labor laws between 1881 and 1900, and this era also saw the unprecedented deployment of the injunction, which gave judges virtually unlimited power to declare illegal any activity - strikes, boycotts, meetings or marches - without interference by elected officials or verdict of a jury.
Since their introduction, police forces have provided more protection to wealthy elites than they have to ordinary people. From violently suppressing non-violent labor strikes, which were illegal until 1935, to attacking lawful civil-rights and anti-war demonstrators in the 1960s, wealthy elites have regularly called on the police to quell political protest - both directly with force and indirectly by intimidating people with the threat of police violence.

Behind the scenes, police intelligence units and the Federal Bureau of Investigation (FBI) have undermined the activity of non-violent groups seeking fundamental social change. The sustained FBI campaign to discredit Martin Luther King, Jr., for example, was no aberration but merely another example of police power being used to counter what was perceived to be a political threat to the status quo.

The maintenance of order extends into daily life. The affluent and comfortable are troubled by visible signs of human suffering. Those with an active conscience cannot rest easy if they are constantly reminded that the poor languish in unbearable conditions. Others simply don't like being forced to see sights they consider "ugly." So the police have traditionally tried to persuade the poor to make themselves invisible. Failing that, they lock up the poor "out of sight, out of mind" in psychiatric institutions, drunk tanks and nursing homes.

Shifting compensation from workers to supervisors, as documented by David Gordon in Fat and Mean: The Corporate Squeeze of Working Americans and the Myth of Managerial “Downsizing,” is another way that owners and executives have maintained loyalty among the middle-class. According to Gordon’s calculations, the average worker has lost about 1 percent a year to inflation since the early 1970s, and supervisors have gained an almost equivalent amount. Moreover, supervisors are becoming an ever-larger share of the total workforce, as corporations lay off blue-collar workers and their equivalents faster than they downsize white-collar workers. This growth in the ranks of supervisors is driven in part by the need to control dispirited (and less productive) workers faced with falling wages. But it also, not coincidentally, serves to preserve the allegiance of the bosses’ agents to a system that divides to conquer.

In addition to comforting those who are disturbed by visible poverty, these measures also serve to undermine political action. The poor themselves are less likely to engage in political agitation if they are constantly being harassed by the police. At the same time, if people of conscience are not constantly reminded of the true nature and extent of poverty, they can more easily forget these troubling realities without feeling compelled to take political action.

H. Understating the Problem

In much the same way, the government's definition of poverty serves to weaken political action. The government counts only about 10 percent of the population as poor. Moreover, these people are not "typical" Americans, especially in terms of race, marital status, and employment status. A more accurate reporting of the number of people counted as poor and the kind of people counted as poor, as proposed in Chapter Four, would increase awareness that most Americans can easily fall into poverty. This greater awareness would result in more outrage among the American people. The larger the number of people considered poor and the more they look like average Americans, the more sympathy there will be for the poor and the more pressure there will be to address the problem.

On the other hand, the smaller the number of people counted as poor and the more different they appear to be, the more the problem can be dismissed as a problem that afflicts only a small minority of people who are responsible for their condition. If the poor consist of only a relative handful of individuals who "look different" and "act different," then it's fairly easy to argue that they merely need to learn how to "learn the ropes" and "adjust" in order to avoid poverty.

Moreover, if the poverty line is relatively low, it's easier for elected officials to claim major progress in reducing poverty than is the case with a higher poverty line. To cut the poverty rate in half from 20% to 10%, as allegedly happened from 1962 to 1973, according to the government's definition of poverty, is more impressive than is merely reducing it from 45% to 33%, which is what actually happened.

In these ways, defining poverty carries with it major political ramifications. These consequences of undercounting the poor need not be intentional; they could simply result from honest mistakes. But the history of the official definition of poverty, as described in Chapter Four, suggests that cynical political calculations did influence the final official definition of poverty. It's quite clear that when the executive office established the Orshansky index as the official measure of poverty in 1969, that office had available to it a much more credible alternative: the Bureau of Labor Statistics Lower Family Budget. But if this definition of poverty had been adopted, more than twice as many Americans would have been counted as poor and it would have been more difficult for elected leaders to claim success with their antipoverty programs.

Given these underlying political calculations, it is no surprise that when the National Academy of Sciences issued its 1995 report recommending raising the poverty line, The New York Times reported, "the forthcoming report seems unlikely to be embraced by the Republicans who now control Congress." Despite the impeccable credentials of the panel that concluded that the official poverty line is too low, Republican legislators realized that an increase in the number of people officially counted as poor would not strengthen their attempt to cut back government programs for the poor. In this way, the definition of poverty remains a political football. The Republicans want to count less people as poor to justify reducing antipoverty programs. The Democrats want to count a few more people as poor to justify small-scale programs that at least do something to address the problem. But neither party acknowledges the complete reality; to do so would highlight the need for greater change than either party is willing to discuss.

Sources for this chapter included the following, in order of appearance.
For more specific references, contact Wade Hudson at

Isabel V. Sawhill, "Poverty in the U.S.: Trends, Sources, and Policy Implications," Social Insurance Update No. 25, National Academy of Social Insurance, September 1992, 1.

Hugh Brogan, The Penguin History of the United States of America, Penguin Books, 18-9.

Max Weber, Essays in Sociology, Oxford University Press, 78.

George, Henry WashingtonGeorge Washington: The Man Who Wouldn't Be King," David Sutherland, producer, WGHB Education Foundation and WNET/Thirteen, 1992.

Brogan, The Penguin History of the United States of America, 122.

Richard Gross, "Tyranny's Threat To Our Planet," San Francisco Examiner, 5 May 1992, A14.

Brogan, The Penguin History of the United States of America, 198.

Jacqueline Jones, The Dispossessed: America's Underclass from the Civil War to the Present, Basic Books, 14.

Howard Zinn, A People's History of the United States, Harper & Row, 127.

Brogan, The Penguin History of the United States of America, 394.

Zinn, A People's History of the United States.

J. Philip Wogaman, Christian Perspectives on Politics, Fortress Press.

Edmund S. Morgan, "The Fixers," The New York Review, 2 March 1995, 25-27.

Letters and Other Writings of Madison, 350-3.

William E. Schmidt, "Once Chosen, Tribal Elites Now Suffer Consequences," The New York Times, 17 April 1994, Week in Review, 3.

Malcom Gladwell, "The Road to Homelessness, Paved With Good Intentions," The Washington Post National Weekly Edition, 2-8 May, 1994, 31.

Derrick Bell, "The Freedom of Employment Act," The Nation, 23 May 1994, 710.

Roger Wilkins, "Dream Deferred But Not Defeated," The Nation, 23 May 1994, 715.

Carla Marinucci, "School for Johns," San Francisco Examiner, 19 April 1995, C1/C3.

Nicholas Lemann, "The Unfinished War," The Atlantic Monthly, January 1989

Governor Pete Wilson quoted interview on KCBS, San Francisco, 20 July 1995, following an anti-affirmative action by the University of California Board of Regents.

Roger Wilkins, "Dream Deferred But Not Defeated," The Nation, 23 May 1994, 717.

Beck, "Loser," Mellow Gold, Cyanide Breathmint Music/BMG Songs, Inc., 1994.

Michael Kinsley, "Class Warfare? Tell Me About It," Time, 6 February 1995, 80.

Sam Fulwood III, "Gap Grows Between Black Middle Class and Those Mired in 'Poverty," Study Find," Los Angeles Times, 9 August 1991, 27.

Quoted on "All Things Considered," National Public Radio, 8 April 1994.

Linda Gordon, "A Right to Live," The Nation, March 7, 1994, 310.

"Haitians Don't Compromise," The New York Times.

"Jackson Assails Report of Fewer Tuition Grants," San Francisco Chronicle, May 28, 1991.

Henry Stern, "In the Contest for Nation Wealth, the Poor Fail to Fight," San Francisco Examiner, 6 February 1994, A12.

Leo Tolstoy, The Kingdom of God Is Within You, 12.1, 1983, tr. Aylmer Maude, 1936.

Pope Leo XIII, De Rerum Novarum (On the Condition of Workers), 15 May 1891.

Robert Pear, "Proposed Definition of Indigence Could Expand Number of Poor," The New York Times, 30 April 1995, A1/A15.

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