Wednesday, February 5, 2014


(I had actually written the first draft of this before I heard Barack Obama’s insanely stupid comment that the government had created the middle class by applying the GI bill after WWII.)

Where did we get a middle class?

In the beginning, everybody was dirt poor, and I mean DIRT poor.  Now, I’m talking about the real beginning, before there were enough people to call a “society,” or even a village.  Each person had to produce whatever they needed to live; there were no stores, or even other people to trade with.  There was no upper, middle, or lower class.

People being as fecund then as now, at some point, there were enough individuals that somebody said, “Look here.  I’m really good at gathering firewood, but I can’t make those dandy badger hide skivvies nearly as well as you.  How about I bring you some wood, and you make me a pair of skivvies?”  (Actually, this is an exact quote.  Some translations have it as porcupine quill skivvies.)   Thus was born the idea of trade and the specialization of labor.  It probably didn’t take long before people were trading all kinds of things. 

This barter economy went on for a long time because there was no such thing as money.  People traded goods and services directly for goods and services.  Some gradually amassed more wealth than their neighbors, but the differences weren’t great because the limiting factor was how much livestock or whatever one person could manage.

Now here’s a critical distinction:  wealth vs. money.  Wealth is real stuff – goods and property - chickens, firewood, berries, those nifty badger hide skivvies, clubs, flint knives, etc..  In a village where everybody likes his yardbird, the citizen with a mess of chickens would be considered wealthy.  ‘cause he’s got all that wealth, see?

Money is something that stands for wealth.  Today, a dollar bill stands for a certain amount of real, tangible goods.  The bill, itself, isn’t wealth.  It is, in every particular, a universal certificate of value. A barter economy doesn’t need money.

I’ve never travelled with chickens, but intuition tells me they’d be a pain in the butt before you’d gone very far.  A barter economy, in which people trade wealth directly, limits mobility.  It also limits invention because whether its chickens or hide skivvies, having ones’ wealth concentrated in such commodities is very time-consuming.  Also, if you can barter for anything you need, there’s not a lot of motivation to invent.

Back to the story.  Many years after the passing of the guy who started trading firewood, somebody came up with the idea of leaving the chickens at home and travelling with certificates, or chits, as we call them in the Marines.  He’d go to the next village and strike deal to trade 20 chickens for a camel.  To the camel dealer he’d give a chit that was redeemable for 20 chickens.  The camel dealer would send his lackey to Chickenville.  The lackey would present the chicken chit, and haul the chickens back to Camelville.  As long as everybody actually had the wealth that was represented by the chits, it worked great.  A pox on the SOB who figured out he could write chits for anything, whether he had it or not, but it probably happened fairly early in this whole process.

This business of chits, or certificates was revolutionary.  It allowed people to travel much more easily, but sooner or later, the camel dealer would have needed to trade for a new cook pot, which was available in Camelville, but the proportion of the wealth being traded was odd.  A whole camel would buy one hell of a big pot – or more little ones that anyone could reasonably use – and trading just a camel’s leg for a pot of the right size would markedly diminish the value of the camel for later commerce.

But, wait!  The camel dealer has this chit for 20 chickens, and two chickens would get him a perfect pot!  So he goes to the pot dealer (different from modern pot dealers, BTW), and says, “Hey, ol’ Cluckenheimer in Chickenville is holding 20 chickens for me – see, here’s the chicken chit – and I’ll sign two of them over to you in exchange for a pot.”

Do you see what happened right there?  Commerce happened without a single chicken actually changing hands!  Brilliant!  Man, did that ever catch on!  Pretty soon, folks were trading chits for everything under the sun, and, true to human nature, some sharpies started trading counterfeit chits, and even stealing the real ones.  (The convenience was a two-edged sword; you could hide a stolen certificate for a dozen camels considerably easier than the camels, themselves.)  As Sir Walter Scott would observe later, it is an ill wind that blows no one some good, and this mischief with certificates and robbery was no exception.   It led to the rise of a subspecies of HH Sapiens called “factors,” which morphed into bankers.

In exchange for one chicken, the factor would hold the certificate for the others and guarantee its legitimacy.  These certificates were the beginning of money. This development allowed people to accumulate money, rather than the wealth it stood for.  By trading money for wealth, or even for more money, some people rose above the subsistence level.  It was literally possible to have more money than actual, real wealth.

Now here’s where we get to the point of this riveting drama.  For the longest time, there was one class of people: struggling.  Even the best off among them struggled.  After the development of the rudiments of money, there came to be a class that struggled a lot less.  Now there were two.

Eventually, the specialization of labor and the mobility of the population allowed some, but not all of the upper class to actually become even more wealthy, and now there were three.  There were the poor, who struggled with subsistence.  There were the quite wealthy, who had considerable wealth and/or the money that represented it.  And in the middle, there was a – wait for it - middle class that had risen from real poverty, but hadn’t attained great wealth.  This happened at least several weeks before the end of WWII.

The admonitions to take care of the poor that fill the Old Testament stand witness to this shift.  In fact, the Bible speaks of the rich and the poor as being very distinct from the intended audience of the Books.  This group that was neither rich nor poor was the “middle class.  In Biblical days, the vast majority of very wealthy people were actually the ruling class – the royalty, dictators, and high priests – many of whom had seized the wealth of those who had created it.  This actually created a fourth economic class: looters who existed only because there were wealthy producers for them to devour.

There had been a very gradual shift in the structure of human society from the days of our wood-swapper.  The middle class was not created by the rich, and it sure as shootin’ wasn’t created by any government!  It was created by poor folks who slaved and worked and saved and took risks and lifted themselves by blood, sweat, and sheer force of will.  Some of them continued on the trajectory and became wealthy. .  The rich didn’t voluntarily build up some of the poor for the purpose of creating a middle class.  The middle class was not created by gutting the rich and giving their wealth to the poor, and Obama’s statement that it was is a measure of the man’s willingness to lie through his teeth.  (Or of his sheer, jaw-dropping stupidity.)

The existence of a middle class is an indication of a healthy economy and society only insofar as its existence proves that growth is possible – that it is possible to have wealth beyond what is needed for subsistence.  The middle class is not a primary, or essential part of our society or our economy.  It is, rather, proof of the moral substance of our form of government, and its decline is presaged by the decline of that government.   “Preserving the middle class,” as our president is fond of ranting about, is absurd.  The only way to help the middle class is to leave them alone!  If one would increase the size of the middle class, one should concentrate on eliminating things that keep the poor from advancing, or, specifically, protect and promote the things that allowed a middle class to exist.

Two things, other than hard work, made the birth of a middle class possible.  One was the existence of wealth, in the first place.  Careful, now; that’s wealth, not money.  A society must be able to produce wealth sufficient to meet the primary needs of the people, and a little more for those driven to accumulate.  If a society produces no wealth, there can be no advancement from poverty.  Had there been no wealth to be gathered, what could possibly have motivated the poor to work like that?

The second thing was freedom.  Freedom allowed those with the drive, intelligence, and a measure of luck to rise above poverty.  In essence, they had someplace to go and the freedom to go there.  Had there been no freedom, those in power would certainly not have allowed anyone but themselves to have any wealth, at all.

The surest way to destroy the middle class is to destroy those two things – destroy that to which the people might aspire, and destroy their freedom to build themselves up by honest effort.  Destroying the rich will accomplish both, and we will be back in that medieval state in which the terms “rich” and “poor” are replaced with the terms “powerful” and “powerless,” with the powerless living in horrid squalor while the powerful suck the life out of them in a ghastly ritual of economic cannibalism.

The sheer, staggering moral stature of the American Republic has always been proven by the fact  that the rich and the powerful were two distinct groups.  When the statists have destroyed the rich, there will be only the powerful.  The rest of us will exist only at their pleasure.

And that, brothers and sisters, is precisely their objective.

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