The War Against Wealth

...The declining rich are happy to stay put at the top, administering ideological benefits for those below...

...It can dominate the media and the foundations, the universities and the government, all the secure but ultimately unenriching havens for those who refuse to enter the real arena of upward mobility-the businesses that are necessarily the prime source of wealth in still capitalist America...

...Hence all the usual upper-class caricatures of the new rich...

...Everywhere the horrors and the bodies pile up, in the world's perennial struggle to rid itself of the productive-of the shopkeepers, bankers, merchants, traders, entrepreneurs-at the same time that the toll also mounts in victims of unGeorge Gilder is the author of Sexual Suicide and Visible Man, among other works...

...then darker rumors arose...

...One group of such experts, under the auspices of the Carnegie Foundation, recently issued a report, entitled Small Futures, which summed up American society as a "stacked deck," a conspiracy of racists and sexists to keep down the poor...

...Far easier to see the masters of these works as evil, as favored by occult powers or Faustian links, and to hunt them as witches...

...The great secret of the American gentry is downward mobility...

...But whether crude or labyrinthine, seasoned with ethnic resentments or elaborated in computer printouts, the intellectual case against the rich reflects the same dumb disbelief in capitalism that seethed on the streets of Harlem, the same incomprehension of the mutuality of gains from trade that has always animated the hysterias of protectionism, the same fantastic belief that the real cause of poverty is-wealth...

...Since 1950, the number of new small businesses started annually rose by nearly 500 percent, to some 450,000, and they provide over 80 percent of the new jobs for young blacks...

...The New York Times, sounding like the reve-nant voice of Adolph Ochs, was ecstatic in its praise and quoted Carnegie's nonsensical findings, a shoddy mass of propagan-distic deceptions ("only one American in five exceeds his father's economic status...

...But hatred of the producers of wealth still flourishes and has become, in fact, the "racism" of the intelligentsia...

...For upward mobility is at least partly dependent on upward admiration: on an accurate perception of the nature of the contest and respect for the previous winners of it...

...Behind the scenes, moreover, one sometimes finds the native wealthy trying to deflect hostility away from themselves and toward alien rivals...

...Most group resentments therefore took on an ostensibly ethnic character...

...In more recent times the fashion has turned decisively against ethnic prejudice, which remains socially acceptable chiefly among the poor...

...It got elaborately and expensively educated...

...it is also almost the only route for those without education...

...Property is theft...

...A convict once told me, with complete assurance, that everyone in his prison knew for a fact that John D. Rockefeller had acquired his money as a member of the Jesse James gang, for which Standard Oil served as a convenient cover...

...Instead, their shop, though extremely successful, was frequently vandalized, and* finally burned during the long night of darkness and torches, despite conspicuous signs in the windows telling of black ownership...

...In the 30 years between 1946 and 1975, unincorporated firms in America achieved a net (corrected for inflation) of 500 billion dollars in capital gains (realized or unrealized), an amount greater than households earned in the stock market by a factor of 20...

...How much easier it is-rather than learning the hard lessons of the world-merely to rage at the rich, and even steal from them...

...But it left them reluctant to confront the spectacle of hundreds of thousands of the sons and grandsons of immigrants moving into the commanding heights, of the American economy-left them loath to acknowledge that these usurpers are surely forming a new American upper class, consisting largely of Jews, Italians, Irish, Orientals, Germans, and Poles, and even of black West Indians, many of short heritage on these shores...

...At the United Nations these contradictions reach a polyglot climax, with voices rising in alternating zeal against the blight of want and against the creators of wealth, the Americans and Zionists...

...in Russia, the pogroms of Kulaks and Jews...

...And whatever they chose, most of them did far less well than the largely Catholic groups that, lacking inheritance and "culture," studied science and machines, and entered business...

...Replacing the ethnic conspiracy theories, therefore, have been fantasies that envisage a whole system of predatory oppressors-plutocrats, robber barons, bankers, speculators, oil monopolists, establishments, nabobs, exploiters, imperialists, with, as an occasional fillip, a family of Rockefellers so potent as to seem an entire ruling class in itself...

...The resentment of riches emerges apparently without regard to race, creed, or color, though it helps, of course, when the pogroms begin, to have a clearly identifiable class of victims...

...The fact is that the U.S...

...But it is everywhere in the air...

...This essay is adapted from Wealth and Poverty, to be published next year by Basic Books...

...Historically, in fact, it has usually been deemed more respectable to hate another race or tribe than to hate the wealthy or successful...

...In American cities, this mode of thought appears in milder form in the inevitable rumors surrounding any prosperous Italian businessman ("he is in league with the Mafia"), and in the notion that any thriving Chinese restaurant or laundry is a conduit for the opium trade...

...Many saw their children enter the professions and live moderately and well...

...Such a view of the world may have had some remote validity in the rural Italy depicted by Banfield, where the few local businessmen did seem corrupt and the Mafia sometimes preyed upon the citizenry...

...Why, then, is a contrary vision so popular in government and the media, in education and social service...

...How much simpler than diligence and study are the formulas of expropriation...

...The virtues that are most valuable in it are diligence, discipline, ambition, and a willingness to take risks...

...Yet the displaced upper class did do one thing that the new one did not...

...But these expressions of xenophobia only rarely broke out into ravages of mass violence, unless the resented group also happened to be economically visible...

...Rich people who inherited and attempted to husband their wealth through the last five decades have seen most of it wither away...

...The fantasies take a lurid turn in the mind of the mob...

...in Indonesia, the killing of nearly a million overseas Chinese...

...This reluctance to come to terms with the new American social reality also has a darker side...

...in northern Nigeria, the eviction and slaughter of Ibo tribesmen...

...If the average black fails to get the message through direct instruction, he can encounter it again on television, as each narrative tells a story in which the ultimate villains nearly always wear expensive suits, live in penthouses, work in the sleek office towers of corporate business, and hold their positions chiefly by benefit of violence and chicanery...

...in Tanzania, their expropriation and expulsion...

...They made deal with society, exchanging the possibility of great achievement for the assurance of security, the solace of leisure and limited demands...

...The answer is that the picture of a static society offering little opportunity and scarce room for risk and initiative-except for the corrupt and predatory-is highly congenial to the offspring of the American upper class who were taught to disdain business and have had to come to terms with secure but uninspiring jobs in bureaucracy...

...They were selling drugs, it was muttered at first...

...A French sociologist tells of the furies called forth by a group of Jewish dressmakers who opened shops in a small town in Provence...

...Such a belief would call all their cautious and credentialled choices into agonizing question...

...Reality is oppression...

...What this image of a racist and violent country achieves, just as surely as the image of a corrupt and immobile society in Italy, is to incapacitate all of the poor who believe in it...

...Such a position allowed one to benefit from incomes that rose with the price level, to gain non-monetary perquisites that one needed because of inflation, and to hold assets that appreciated rapidly...

...In the small town in Italy which he studied in an effort to understand the sources of poverty, every businessman was assumed to be cheating his employees, every priest to be filching from the plate, every politician and policeman to be on the take...

...It must be a conspiracy...

...Two young black businessmen had opened a store to sell stylish fashions in Harlem, expecting to be happily received by their "brothers...

...Yet everywhere that these ideas prevail, poverty persists and spreads...

...Amid the smoldering ashes, the proprietors presumably reflected on the strange profits of efficient enterprise...

...It was not necessarily an unworthy exchange...

...Instead, members of the American upper class tended to eschew technical training and to alternate financially between conservative securities that declined in value, bank accounts that shrunk with the rising price level, and occasional desperate gambles on " growth" stocks purchased at their peaks...

...is probably the most mobile society in the history of the world...

...It was compelling...

...in Uganda, the massacre of whites and Indians...

...The war against the rich thus continues in the world's wealthiest country...

...Business is not only the best route to wealth in America...

...Those from once upper-class families thereby accepted a career trajectory likely to run far below the pinnacles of their forebears...

...One of the little-probed mysteries of social history is society's hostility to its greatest benefactors, the producers of wealth...

...A mob gathered, and burned the shops to the ground...

...The idea that all wealth is acquired through stealing is popular in prisons and at Harvard...

...Any signs of prosperity were taken asr evidence of peculation or crime...

...It is a campaign now led and inspired by the declining rich, to arouse the currently poor against the insurgently successful business class...

...The result is the peculiar American sense of defeat propagated by the media and government, and communicated to the poor at a time of unprecedented opportunity and mobility in our society...

...They were victims of the white slave trade, it was said, and the dressmakers were its front...

...How could their prices be so low for fashions so elegant, for styles of such graceful Parisian design...

...In such reports, blacks are told that the world is against them, that the prevailing powers want to keep them down, that racism and discrimination are ubiquitous, that jobs are unavailable in business, that slumlords gouge their tenants, that policemen are prejudiced and brutal, that Martin Luther King and the Kennedy brothers were killed by the white establishment, and that the only allies of the young black are the poverty lawyers, social workers, employment counselors, liberal politicians, and other agents of the state...

...In choosing to eschew the great risks and great opportunities of enterprise in favor of work in government or the non-profit sector, in the arts or education, or even in some of the professions, many millions of Americans gave up any real prospect of winning great wealth...

...Many who lived off capital found their capital dwindling rapidly and their income from it shrivelled by inflation and taxes...

...Hence the references to corruption and chicanery as the prerequisites of wealth...

...It mastered the arts of communication...

...In the American inner city, the suspicion of wealth arises still more virulently, with anti-Semitic overtones but ecumenical fire and plunder when the electrical power goes out...

...In the past, this strange struggle has often enlisted the services of lumpen intellectuals, contriving gothic rationales for racism and pillage: tales of cabalistic Jewish financiers, or conspiracies of Oriental shopkeepers...

...Orde Coombs has written poignantly of the schism among blacks that yawned over the rubble of the New York riots in 1977...

...Rather than wealth causing poverty, it is far more true to say that what causes poverty is the widespread belief that wealth does...

...Evidently, there is something in the human mind, even when carefully honed at Oxford or the Sorbonne, that hesitates to believe in capitalism: in the enriching mysteries of inequality, the inexhaustible mines of the division of labor, the multiplying miracles of market economics, the compounding gains from trade and property...

...By its communicative skills and social refinements, the defecting upper class can mobilize support far beyond its own numbers...

...It therefore exerts influence on the prevailing imagery all out of proportion with its numbers...

...A chief American source of this impoverishing creed-much the same sad system of beliefs that Banfield detected in his backward society-is the public establishment of government officials, academic social scientists, and media pundits, with their theories of poverty focused on blacks...

...The victims, though, of the war against wealth, even when they are inveigled to join its ranks, are always and inevitably the poor, the ones who still need a mobile society...

...Two young women left for Paris...

...Hence a refusal to believe that intelligence, resolution, hard work, and a willingness to take risks are all one really needs to succeed in the American economy...

...Edward Banfield, in his book The Moral Basis of a Backward Society, maintains that this attitude is a crucial characteristic of an undeveloped economy...

...in Bangladesh, the murder and confinement of the Biharis...

...On every continent and in every epoch the peoples who have excelled in creating wealth have been the victims of some of society's greatest brutalities...

...Needless to say, few such signs appeared...

...Violence is freedom...

...As young Abby Rockefeller, the most eloquent of radicals in the younger generation of the family, once put it: "The idea that riches and poverty were interwoven, that one fed on the other, that the many suffered because of the few, that good and bad fortune were inextricably linked-this was new to me...

...Wealth causes poverty-an idea that has burst like blinding sunlight in the mind of many a young radical and still shines brightly for all who seek some alternative to hard work, thrift, inequality, and free exchange as a way of escaping want...

...But the United States is not a backward society and the vision of it presented by the media and the government is almost totally untrue...

...Recent history has seen, in Germany, the Holocaust of Jews...

...Everywhere nations proclaim a determination to "develop...

...Since most skills are learned on the job (education and credentials are most important in government and the professions), the best prospects for poor, uneducated blacks are in small business firms, where dedication and hard work serve better than any other assets...

...Now in Southeast Asia there proceeds the latest assault on the producers of riches, as much of the human wealth and capital of the region is relegated to the open seas...

...but everywhere, too, their first goal is to expropriate, banish, or kill the existing developers...

...But then they had to watch their grandsons grow hair down to their shoulders, drop out of expensive schools, and dabble with careers in art and carpentry, interspersed with unemployment checks, before grabbing a briefly open slot in a government bureaucracy, from which to instruct the poor on the ways of upward mobility...

...It is not discussed much when the scions of the displaced upper class gather together...

...necessary famine and poverty...

...From this general animus and in this essential idiom arises much of the dense scholarship and obsessive polemics of Marxism...

...The best route to negotiate the rapids of the American capitalist economy over the last decades has been to own or work for a business in a sector of growth, usually serving consumers directly or working with advanced technology-firms small and large in insurance, real estate, fast foods, retailing, electronics, computers, and energy...