Customer Reviews

Wealth and Democracy: A Political History of the American Rich

5 star:		(52)
4 star:		(23)
3 star:		(17)
2 star:		(11)
1 star:		(34)

 

 

Not much that I can add that other reviewers haven't already stated.The fact is that most of the wealth in America is controlled by only 2% of the population and the rest of us are dancing to it.It's time for Americans to get mad and do something about it. This book is a real eye opener.

1 star reviewers, at least do Mr. Phllips the dignity of reading the book before you bash it. Keep in mind that Phillips is a republican and as an American, has the virtue of freedom of speech. Read the book and then come back and state your "opinions."Or----are your minds so frozen that you cannot accept any other viewpoints than whay you percieve to be true?Read it first!

Have we seen the apex of American economic hegemony? Kevin Phillips makes a compelling case that as we enter the 21st Century the United States mirrors many of the historical aspects of previous economic powers in decline. And what is most startling, Phillips provides quotes and historical vignettes showing that the citizens of those powers pilloried anyone who critized the increasing wealth inequality that precedes the downfall of those nations (not unlike the unsubstantiated negative reviews on this page).

The thesis of "Wealth and Democracy" is that wealth inequality is bad for democracy, and viewed historically has always presaged the decline of previous world powers: Hapsburg Spain, the 17th and 18th century Dutch, 19th century Britian. Of course, our current leaders and their supporters make strong arguments that our political and economic systems are superior and therefore less likely to experience detumescence. The author warns that this argument is not unique. "Cocksure Americans were hardly the first to think themsleves immune from prior history."

In "Wealth and Democracy," Phillips takes us through that history and examines the paralells to the modern American dependence on financial institutions and the ways in which money limits access to all three branches of government. It is both enlightening and disheartening. The author says the U.S. can now be called a plutocracy. "The United States remain[s] what comparisons ha[ve] clearly shown: the most polarized and inequality-ridden of the major Western nations."

In fact, what is most troublesome about the myriad statistics in this book is our comparison to other economically advanced nations. Over the past thirty years the "average" American has significantly increased time spent at work while not gaining financially. The promise of more economic freedom has been eroding since the 1960s.

Phillips is a trenchant student of economic history. I highly recommend this book. The only reason I do not give it the highest rating is because I think some of the history may be esoteric. My rating is really 4 1/2 stars--a near classic.

There are those who will attack Philllips' personal and political motives. And others will say his book causes more harm than good because its arguments can be used by those engaged in class warfare. But Phillips has an answer for them as well: "'Class warfare,' however, is a false description, a perverse conservative borrowing from Karl Marx."

For anyone interested in a thorough and insightful discussion of wealth and agressive economic power in United States history, this is an excellent book. If you read the poor reviews, I think you will see that they show a general dislike for hard truths much more than a substantive critique of a well-reasoned and meticulously detailed thesis.

Liberals hoping to find in this book a rousing trumpet call to tear down the bastions of entrenched privilege will be disappointed. There is more sober description on offer here than prescription. Conservatives remembering Kevin Phillip's prescient 1969 advice ("The Emerging Republican Majority") on how the GOP could dominate the rest of the century will be even more disappointed; Phillips sees the time as ripe for a progressive realignment that will bring nothing but pain to the Lott/Armey axis.

The book recounts, at two different scales, the history of wealth and the elites to which it has accumulated. The shorter scale is that of American political cycles, with revolving eras of conservative wealth concentration and progressive wealth distribution. The longer scale concerns the cycle of rise and fall of the four great economic empires of modern history: Spain in the 17th century, Holland in the 18th, Britain in the 19th, and the U.S. in the 20th. He returns to each series of cycles repeatedly, with an emphasis on different aspects of the cycles: the roles of technology, of wars, of speculative bubbles, of fashions in legislation and ideology. The repetition occasionally threatens tedium, but fresh details rise up to relieve it. Along the way, he provides a feast of specifics and statistics, in easily accessible charts which the reader will find useful whether or not he agrees with Phillips' conclusions.

The message he gleans from the shorter scale is a familiar one, if something of a minority report in the current era. Money flows. In hard times, it trickles; in boom times, it roars in cataracts. At no time, as he richly documents, has its motion ever been determined primarily by "market forces." It has always been pumped from pocket to pocket by the grace of government.

And money has proven to be a highly compressible fluid. During each of America's great wars - the Revolution, the Civil War, and the two World Wars - profits have been compressed and pooled among a few suppliers of loans and materiel, creating new moneyed elites. In those eras which have exalted "the market" - the Gilded Age, the roaring twenties, and our current period - government has pumped the refreshing liquid from the middle class to those elites; in eras exalting reform and democracy - the political realignments of Jefferson, Jackson, Lincoln, and the two Roosevelts - the direction has been reversed, though never to the point of actually dismantling the old fortunes.

Inequality of wealth in the U.S. has now reached the highest levels we've enjoyed since 1929, with the top 1% owning 44% of the goodies. And of course, the primary purpose and effect of the Bush tax cuts is to pump a still higher percentage to the same elite. The inequality peak may not yet be in sight, the figure at the height of the Gilded Age having been about 60%; but history informs us that ultimately these levels of inequality aren't sustainable. Phillips doesn't venture to say how long it will be until the next realignment; but each time it has happened, the suddenness and vehemence of middle class anger has taken the rich elite by surprise.

On the broader scale of national fall and rise, the message is more somber: Phillips believes we are on the cusp of a fall. He lists ten characteristics shared by Spain, Holland, and England on the brink of decline (most notably, growing income disparity, export of manufacturing with profits coming largely from the financial sector, and vigorous rejection of tarriffs), all of which are plainly rampant in the present U.S. economy.

It's difficult to walk away from this book with a sound bite summary. Our author is examining complex interlocked patterns across centuries. What you'll walk away with is an enlarged perspective, and perhaps a worried mind.

Like another recent reader from Seattle, I've just started the book ... I picked it up because the author was featured in Sunday's Seattle Times op-ed section. [I may change the star rating after completion]

As some others have said, much of it is dry reading. There are extensive charts, facts and data. I am annoyed that there are citations (notes) at the end of the book -- with numbers for each -- but the cite does not appear in the text [like this].

This is "economics" in that Phillips examines Money and Wealth. This is not "economics" in the sense of collegiate econ101 (I have a master's degree in economics).

As someone who once-upon-a-time worshiped Ayn Rand and the "free-market" ... I have evolved to become a skeptic. I no longer believe that the philosophical prerequisites for "free market" economics exist (if they ever did - and if you don't know what I'm referencing and think you believe in "the free-market" I suggest you do some reading).

The book suggests that wealth breeds both more wealth and _political access_ ... and that technological innovations (munitions, railroads, autos, aerospace, mass production, pharmaecuticals, computers/internet, etc) are aided and abbetted by the hand of government ... and, while they _may_ serve to create new wealth, it seems that more often "wealth" becomes entrenched wealth.

If the following data don't cause you consternation -- then save your pocketbook (and aspirin!) and forgo this book:

-- begin dry facts --
1870: top 1% of Americans own/control ~20% of the country wealth
1912: top 1% of Americans own/control 56.4% of the country wealth
1971: top 1% of Americans own/control 25% of the country's wealth
1976: top 1% of Americans own/control <20% of the country wealth
1999: top 1% -- to classify, you'd have > $3 million in assets/wealth
2001: top 1% of Americans own/control 47% of the country wealth
[they own/control more wealth than the bottom 95% combined]

Business Week's annual review of executive compensation, America's 365 largest companies:
--1980, the disparity between the highest-paid workers and their employees was 42 to one.
-- Today, the ratio exceeds 500 to one ('today' being 2001, I believe, from Gates et al, below)

Inflation-adjusted median household net worth fell from $54,600 in 1989 to $49,900 in 1997. [Haven't seen recent data, but with the stock market crash, I'm guessing it hasn't recovered.]

Less than 1% of the population finances more than 80% of all federal elections.

-- end dry facts --

If the data do cause you consternation, consider adding Phillips book as well as this one by Bill Gate's father to your bookshelf:
Wealth and our Commonwealth: Why America Should Tax Accumulated Fortunes

"Today the levels of inequality in the United States are at their highest point since the 1920s. This is an unusually imprudent time to abolish one of the few taxes that has slowed this buildup of wealth in the hands of a few."
...

[edited to correct spelling]

Though it is not an easy read, Wealth and Democracy in American is a thoroughly researched book which paints a compelling picture of two tendancies in American history: one democratic embodied by both Roosevelts, Jackson Wilson et al. and the Free Marketeers (market worshippers) whose focus seems to lead to the financialization of the real economy. This financialization was rampant during periods wild speculation followed by economic collapse typified by the robber barrons and the 1870s collapse and the era of Coolidge, Harding and Hoover during the 1920s and the collapse of the 1930s. For anyone intersted in the financial mess we are in today and the emergance of plutacracy, a government in and for the rich, this is a must reading.
It clearly places the deregulation mania which intensified under the Reagan Revolution and the worship of free markets as aparty to the disturbing distortion of income distribution. He shows that today the rich are about as rich as they have ever been here (perhaps with the exception of the 1890s) and the poor and middle class are stagnant or slipping in their standard of living.
For any American concerned about where this country is going under the ideology of all out free market theory, this book will be both informative and downright frightening. It is also worth noting that the author was a key strategist under Richard Nixon who predicted the takeover of the Replublican party by the neo-conserviative idelogists in the 1970s.
Finally, the author domonstrates that the U.S. is going the way of three other large empires who succombed to greed and financialization, Britain, Netherlands and Hapsburg Spain.
I would strongly recommend it to any reader with a determination to learn the historical basis of the hideous economic demise this country has seen since the 1990s speculative bubble burst (a symptom of this gross financialization of the U.S. economy). This has been coupled with the outflow of real productive capacity ironically to a Communist country or the selling of U.S. manufacturing and other enterprises to foreign interests in the name of multinationalism. The greed ridden disease permeating U.S. business and politics is very well diagnosed by Mr. Phillips.
He writes with depth and style. Read it. It will make anyone who loves this country very angry.

It is hard to imagine someone who has a better grasp of the issues related to the implications of economic policy and overall economic health than Kevin Phillips. From "The Politics of Rich and Poor" onwards, Phillips continues to distinguish himself both with regard to the breadth of his knowledge and his ability to avoid falling into either "right wing" or "left wing" ideologies. "Wealth and Democracy" is thoroughly researched, carefully presented, and the implications of the trends he analyzes are "musts" for anyone who wants to get their "arms around" this complex of issues. The main thesis of this book is that repeated economic cycles have demonstrated that as wealth concentrations grow (the amount of wealth held by few families/persons), democracy suffers as the political landscape becomes increasingly skewed by those concentrations of wealth. (To suggest, for example, that Phillips is "anti-well-to-do" would be a gross over-exaggeration that largely misses the point.) One could easily expect a book with so many charts, graphes, and other analytic tools to be boring or hard to follow, but Phillips keeps one's attention from beginning to end with a serious, yet entertaining style. Frankly, one can only wish our contemporary policy makers had half Phillips' grasp of economic policy implications. Whatever criticisms one might have of Phillips' work in general, his works are always remarkably well researched, and "Wealth and Democracy" is no exception to that general observation. It will take some concentration to follow all the details of "Wealth and Democracy," but the time necessary to avoid a "thin" understanding of the material will be well worth the effort. While, say, a book of anecdotes (perhaps like "The Lexus and the Olive Branch"), or books about "get rich quick" schemes might be easier to follow, they do not begin to compare to the analytical nature of Phillips' work, and the rewards would be nowhere near as great. If one is determined to bring "laissez faire" presuppositions to the reading of this book, one might prefer to avoid "Wealth and Democracy" as it will be difficult to maintain both those presuppositions and one's integrity in light of Phillips' thorough analysis.

Do open markets necessarily serve representative government? No, asserts maverick conservative Kevin Phillips, who marshals considerable evidence of 30 years of entrenched conflict. That's the kind of apostasy that won't get him invited to the Bush White House any time soon. In fact, the political right has been conflating markets and democracy since cold war's end, the better to open up formerly closed economies. Globalization also rides hard on the heels of this equation and I'm sure it's no comfort to Wall St. power brokers or their apologists in academe to note Phillips' departure from their ranks. But then he's long been sensitive to the powers conferred on wealth inside a democracy, so there should be no great surprise. Not that he endorses the idea of redistribution. He doesn't. His approach is more like that of a value-neutral historian seeking to learn from history and pass along its lessons. And he does find lessons.

Foremost is the effect of rising speculation upon a productive economy. The case studies are Holland, England, and to a lesser extent Spain. These historical studies show a correlation between an economy overtaken by speculation and (to simplify) a resulting imperial decline. The pattern, he believes, is there, while the warning to Wall St.'s expanding appetite for riches and power abroad could not be clearer. He also punctures the hot air sales pitch that pumped up the speculative balloon of the 90's, i.e., how technology and communications have ended the business cycle, resulting in a tide that lifts all boats, etc. As historical precedent shows, this sort of hyperbole is far from being a novelty, all the better to rope in thousands of hapless folks like Enron employees.

There are other hot topics, such as the role of WTO, NAFTA, et. al., those supranational outgrowths designed to aid international finance and its speculative arm. Revealingly, Phillips now appears closer to skeptics such as Ralph Nader and Pat Buchanan than to current Repubocrat gospel. What becomes of democratic self-rule, he wonders, when unelected bodies like the WTO are given the power to overrule representative government. Having rejected the facile mantra of open markets equaling democratic governance, this is a question every conscionable conservative should be asking.

Much of the book is given over to a history of wealth in America, replete with charts, trends, and other necessary impedimenta. The story here is a fairly familiar one with no particular surprises. In the past twenty years the rich have gotten far richer with deregulation, the poor poorer, with a middle class desperately hanging on. When capital so over-reaches, popular revolt follows, at least that is the pattern Phillips locates in our past. Thus, he points to a revolt that would appear in the offing, following wealth's most recent orgy. Perhaps, but perhaps not. Here's where cyclical theories of history can mislead. Consider Hardt and Negri's alternate scenario of an impersonal, decentered global empire, following upon a globalized capitalist economy, dominated by corporate communications, hollow democracy, and an international elite. In other words, a landscape shaped by the culmination of current trends. Such a real possibility would relocate struggle from within national boundaries to a world arena with no boundaries. Hence struggle in America would have to internationalize -- a serious departure from previous cycles, suggesting perhaps a new stage in human history that does not repeat old national cycles.

Be that as it may, by pointing up how private wealth employs government to augment itself, Phillips distinguishes himself from many of his pundit colleagues on the right. Despite charges by detractors, there is precious little advocacy in this work. The story pretty much tells itself in facts and figures. For me, a long-time lefty, Phillips remains a must-read. As he should be for thoughtful conservatives as well.

Kevin Phillips book, for all the wrath it seems to inspire in these reader reviews, is actually a tremendously sensible and well-supported book, without any alarmism, or any of the bitterness or class-warfare that might hurt his argument. In fact, Phillips gives one of the best explanations for why class warfare has never worked in America--beyond the simplistic Horatio Alger myths. In short, Phillips is not attacking the system, so much as showing its current predicament, and describing how America has faced such challenges before. If anything, much of his information is comforting, in that it shows seasonal shifts in America's distribution of wealth.

True, Phillips does suggest that the current plutocracy in America is similar to that which occurred in England, Holland, and the Spanish Hapsburg Empire during their eras of decline, but he stops well short of predicting the same fall from exceptionalism for America. Rather, WEALTH AND DEMOCRACY is a cautionary tale, one written with admiration and affection for the American system, not with scorn. He is a Republican who dislikes Republican free-market utopianism as much as the Democrats' social-program utopianism; and this is a refreshing approach.

Phillips is just the sort of social and economic critic America needs in a time when most books of this kind seem polarized--either with Howard Zinn and Michael Moore, or Catherine Coulter and Bill O'Reilly. What results is a wonderfully sober book--a political history of America that seems virtually untainted by politics.

From the June 10, 2002, _Business Week_, clearly not a bastion of liberal propaganda, comes a glowing review of this book:

Kevin Phillips is most often identified in the press as a "Republican strategist" since he once had a consulting and polling firm near Washington. But he's hardly just another GOP spinmeister. In fact, Phillips is a thoughtful analyst and historian. And he gives most card-carrying Republicans severe heartburn by focusing on the "popular resentments" of America's beleaguered middle class and the dangers the party faces by ignoring discontent. To conservative members of the party, Phillips is just fanning the flames of a class warfare which, conventional wisdom holds, will never have much appeal for Americans. Phillips' latest book, his ninth and most ambitious, may finally drive his conservative critics mad, but it can't easily be dismissed.

...