Wednesday, February 18, 2015
Mormonism and Capitalism
On May 27, 1868, the following appeared in a newspaper editorial:
“Throughout the world there is a struggle for power and supremacy between capital and labor. Capital seeks to have labor helplessly in its power, tied hand and foot, so to speak, and entirely subservient to its will. Labor strives to retaliate when circumstances offer opportunity, by attempting to force capital to hire it at its own terms. Capital endeavors to tyrannize over labor, to grind labor down. . . . It is haughty, driving, coercive and unjust, when the demand for labor is less than the supply. And labor, to find an equality, resorts to every means in its power to successfully combat capital. This is the condition of capital and labor in the world. Of course, there are exceptions, and in some places it is worse than in others; but wherever large masses of human beings are collected together to reside and labor, there capital strives to lord it over labor, to fatten on the poor, to grind and oppress the toiling bone and sinew that feeds its intolerable craving for wealth; and labor acts the hypocrite to capital, . . . does the least possible amount of work in the longest given time, and seeks to be even with capital in a struggle of mutual dishonesty.
“. . . Class feelings have thus been engendered, and, though living with and for each other, so to speak, in many places employers and employed hate each other with the most bitter hatred. But the capitalist has an advantage over the laborer, which makes the contest unequal, and the latter in nearly every instance is compelled to yield to the former, where an issue is directly raised as in the case of strikes of workmen. The capitalist can live without the workingman’s labor, in most cases, until he can starve labor to his terms.”
So, where did this treatise appear? England? Germany? And who was its author? Perhaps Karl Marx or one of his cronies? Not quite. Would you believe this editorial appeared in the Deseret News, and although it carried no byline, it was likely written by George Q. Cannon, editor of the News and counselor to Mormon President Brigham Young.
A little historical context is helpful here. It is 1868, and Brigham is worried about two things: the coming of the railroad, less than a year away; and a group of non-Mormon merchants who are reaping big profits by selling merchandise to the Latter-day Saints. Brigham sees these two developments as threats to his vision of Zion, the kingdom of God he is striving to establish. His response is the cooperative movement, the centerpiece of which is the new Zions Cooperative Mercantile Institution (ZCMI).
The above-quoted editorial was part of Brigham Young’s campaign to promote his cooperative movement. The editorial goes on to say that the Mormons have the answer to the labor-capital conflict. Under the cooperative system, the workers become owners. And this defuses the class warfare between capital and labor.
Although arguments like the one quoted above sound extreme in today’s economy where labor has become docile through the repeated threat of having its jobs shipped off to Third World countries or replaced by technology, the flaws of the capitalist system persist. We still have what Peter Block identified as a dual wage system. We have a class of people who are paid as much as possible. And we have another class of people who are paid as little as possible. Hired labor is still defined as a cost to be minimized. The result is a society in which the working class has too little disposable income to buy all the products corporations need to sell to stay in business. So consumers buy on credit (and government picks up the slack). But this accelerates the growing inequality in our society because debt is the most efficient mechanism for shifting wealth from those who pay interest to those who earn it. So the system gets more and more out of balance, with the already wealthy taking a larger and larger percentage of the available wealth. A recent statistic that has been bounced around the media is that there are now eighty-five individuals who possess as much wealth as the bottom half of the earth’s total population. Such an economy cannot endure. Eventually, demand dries up, and as business profits shrink, even the top 1 percent become losers. Everyone loses in such an imbalanced economy. This is why the 1 percenters are starting to speak out about the rapidly growing inequality.
In earlier decades, we tamed this inherent tendency of capitalism with steeply progressive tax rates. After World War II, for instance, the top marginal rate was 94 percent. This helped create the postwar middle class that is now rapidly fading. Things started to change with Reaganomics (which George H. W. Bush called voodoo economics). A major piece of Reagan’s revolution was an economic fad that still plagues us today: supply-side economics. Today the top tax rate is 39.6 percent, which is actually up 4.6 percent from its nadir after the Bush tax cuts. Of course the Republicans, who had all taken the Grover Norquist pledge, howled and wailed and warned that raising the rate on “job creators” would bring dire consequences. Dire, I tell you. Well, so much for the devastating effects of raising taxes. This measly little 4.6 percent increase in the top rate went virtually unnoticed. Corporate profits continued to hit record highs, and the top earners continued to amass wealth at a breakneck pace. It was as if this little tax increase never even happened.
But raising taxes on the wealthy is to treat a symptom rather than attack the cause of the illness. If gross inequality is indeed the real danger that even the obscenely wealthy are now admitting it is, we need to prevent it rather than prune it. And that involves rethinking the whole program of ownership we have bought into. Only a different system of ownership can remove the dual pay system we now labor under.
Perhaps Brigham was onto something. If workers are their own owners, they don’t pay themselves as little as possible. They don’t cut their own health benefits. They don’t send their own jobs off to Vietnam or Indonesia or China. They also have more disposable income to buy consumer products. And there is less wealth being siphoned off by the rich, where it is often invested in foreign jobs or in speculative financial instruments.
I find it interesting, though, that Brigham’s cooperative movement didn’t survive. Even after he threatened to excommunicate any Mormon who did business with a non-Mormon merchant. Perhaps it had something to do with the fact that Brigham refused to personally embrace the law he expected others to live. As David Vaughn Mason puts it in his new biography of Young, “His utopian soul, which had grabbed Mormonism’s promise of a new society of equals in the struggling farmland of New York, could not smother his entrepreneurial instincts, which prosperity in his Utah kingdom inflated. Anyway, the man who proposed that the people submit themselves and their means to an appointed committee could not bring himself to trust anyone else to manage his money.”1
The early Mormon historical landscape is littered with abandoned attempts to achieve the economic equality that Mormon scripture demands (see, for instance, D&C 49:20; 70:14; 104:14–18). Every time Joseph Smith or Brigham Young tried a new method of reapportioning wealth so that the Lord’s goal of economic equality could be reached, the people, by and large, rejected it. But today things are different. Whereas these early attempts at achieving equality were largely theological or idealistic imperatives, today our efforts to tame inequality, the dread beast of Babylon, may spell the difference between a general prosperity and economic collapse. The question we need to ask ourselves is whether we have the willpower to conquer the beast before it sinks the whole system.
1. David Vaughn Mason, Brigham Young: Sovereign in American (New York: Routlegde, 2015), 134.