Americans have long mistrusted great power, which they regard as the enemy of freedom. They have not been as consistent in their mistrust of great wealth. This discrepancy, born alike of innocence and ambition, has provided the occasion for much mischief.
The founders of the American Republic cherished political liberty above all else. For them, political liberty rested on economic independence. No man who relied on another for his livelihood could be truly free. He was beholden to whomever paid his wages and, indirectly at least, put a shirt on his back and food on his table. In the minds of the Founding Fathers, political liberty and economic independence were inseparable. The ownership, control, use, and enjoyment of private property were thus essential to the survival of a free society.
According to this definition, most Americans today, as has been the case for the past 150 years or so, are neither economically nor politically free. They are, instead, servile, prime subjects for abuse and manipulation, because most depend on a wage or a salary. Once the guarantor of familial security and freedom across the generations, property has long since become the source of individual profits and wealth for those fortunate enough to have acquired it.
It is no exaggeration to say that we are at present in the midst of a counterrevolution of property and an accompanying war against working people. The defeat of efforts to establish a union at the Volkswagen factory in Chattanooga, Tennessee, which Senator Bob Corker apparently orchestrated, provides only the most recent illustration. Portraying himself as the champion of labor, Senator Corker insists that membership in the UAW would cost many working men their jobs. He may be right, but even so his assertion is irrelevant. For can we reasonably imagine that the failure to unionize will by some miracle promise workers greater security, rather than leaving them even more exposed to, and defenseless before, the vicissitudes of the market? And, in the final analysis, with or without a union, they still constitute a dependent class.
I am not writing to vindicate unions or to endorse union membership. Having been a member of four unions during a youth that was not as misspent as I would have hoped—the American Federation of Musicians, Local 118, the Service Employees International Union, Local 101, the International Brotherhood of Painters and Allied Trades, Local 327, and the United Steel Workers, Local 1331—I can say that every concession won from management was offset by some act of cowardice, stupidity, or betrayal on the part of union leaders that compromised the strength and welfare of the rank-and-file. Nor, by contrast, do I intend to catalog the numerous injustices and miseries that workers endured in the days before union recognition. To anyone who has even a passing familiarity with the historical record, that undertaking is mere child’s play. I wish, instead, to propose that there is an American suspicion of concentrated wealth that is as venerable as the traditional American suspicion of concentrated power.
Until the early nineteenth century, the law defined corporations as bodies organized to accomplish some public good. Most who received the grant of a corporate charter were engaged in rendering some kind of religious, charitable, or educational service. In 1809, Judge Spencer Roane of the Virginia Court of Appeals set forth the prevailing legal theory about the nature of corporations:
With respect to acts of incorporation, they ought never to be passed, but in consideration of services to be rendered to the public… It may be often convenient for a set of associated individuals, to have privileges of a corporation bestowed upon them; but if their object is merely private or selfish; if it is detrimental to, or not promotive of, the public good, they have no adequate claim upon the legislature for the privileges.
The welfare of the community, rather than the profits of the individual, was of paramount concern in the decision to bestow or withhold a corporate charter.
The same was true of contract law, until, during the 1820s, the courts gradually began to forsake traditional ideas of equity and to substitute for them market values that promoted economic growth and the accumulation of capital. The social need for particular goods and services had once determined their value, affirming the so-called just price, enforceable at law because it was thought intrinsically equitable and morally fair. A common sense of equity and justice thus pervaded contract law; both parties to an agreement had to benefit from it. “All bargains,” declared the New York politician and lawyer Gulian C. Verplanck in 1825, “are made under the idea of giving and receiving equivalents in value.”
The need to respond to continual fluctuations in the market divested corporations of their formerly public character and freed businessmen of their prior accountability. With economic conditions in daily flux, older community standards of value no longer seemed viable and could not be enforced by contract. They potentially inhibited economic activity, and might even prevent the enterprising businessman from pressing his advantage against a competitor or from pursuing the main chance. Corporations thus came to be defined as convenient legal instruments that businessmen could wield to organize and conduct their private affairs with the sole objective of maximizing profits. They no longer had a responsibility to advance the public good. In essence, a corporate charter now offered the private sanction to compete for economic rewards. Law had distanced itself from custom, tradition, and morality.
Despite the growing number of corporate charters issued by increasingly permissive state legislatures and despite the economic success that corporations attained, many Americans rejected the changes that their rise, and with them the emergence of a market society, portended. They sensed that the concentration of wealth, which the corporations represented, posed a grave threat to individual property owners as well as to those who wished to enter their ranks. In 1820, the lawyer and political economist Daniel Raymond expressed what has become a classic indictment. Corporations, Raymond asserted:
are always created for the benefit of the rich, and never for the poor. The poor have no money to vest in them, and can, therefore, derive no advantage from such corporations. The rich have money, and not being satisfied with the power which money itself gives them, in their private individual capacities, they seek for an artificial combination, or amalgamation of their power, that its force may be augmented.
Like many of his contemporaries, Raymond was not implacably hostile to corporations or to the consolidation of wealth that they performed. Although he recognized the dangers inherent in the accumulation of large sums of money, he understood at the same time that surplus capital was essential. It made possible the construction of roads, bridges, canals, and other expensive projects that benefitted the nation and its people. If corporations were to exist, Raymond thought, they must be obliged to serve the commonwealth.
Raymond’s analysis is indicative of much early American economic thought. His arguments reveal that the principal economic debate threading its way through the nineteenth century was not between socialists on the one hand and capitalists on the other. Rather, the disagreement set the advocates of an older proprietary economy at odds with the advocates of an emerging corporate capitalism. Raymond sought to prevent the development of an impoverished working class in the United States. England, he knew, had grown rich, but at an unacceptable social cost. The acquisition of national wealth had forced workers there into grinding poverty, which had both physically and morally debased them. For Raymond, whose Calvinism often influenced his thought, the economic realm was a domain for moral as well as material improvement. The state, therefore, had a duty to intervene in economic affairs to restrain the sinful passions of humanity. The English government had abdicated this responsibility by permitting, and even encouraging, the aristocracy and the bankers to obtain a disproportionate share of the national wealth, to subdue and ruin “independent labor,” and to divide society into antagonistic classes. A small and exclusive portion of English society had been corrupted by greed, while the vast majority had been degraded by poverty. Such an arrangement, Raymond concluded, was an invitation to disaster, which Americans ought to do their utmost to avoid if they could.
Free of aristocratic cunning and subterfuge, the United States presented “the fairest theatre on earth for acquisition of knowledge in the science of government and political economy.” Unlike the English, who had yielded to their irrational and selfish desires, the Americans, through the application of reason, could redeem economic life and turn it toward wholesome ends. In the United States, Raymond explained, incorporation, rather than aristocracy, threatened the independence of labor. To nullify corporate power, he emphasized the accumulation of “individual wealth,” which he defined as the “possession of property, for the use of which, the owner can obtain a quantity of the necessaries and comforts of life.” According to this characterization, laborers were small proprietors who owned, or who were in the process of acquiring, the property and skills that enabled them to become and remain economically independent. The presence of a large pool of unskilled, propertyless men who must, of necessity, work for another to earn their daily bread, was an anathema to Raymond and a disease infecting the body politic. Operating without administration or restraint, the market was useless to prevent the economic and moral destitution of the laboring classes. The American government must intervene, as it had not in England, to alleviate unemployment, to secure an equitable distribution of property, to direct private enterprise toward the public welfare, and to restrain the natural (and sinful) human ambition to obtain an unjust share of profits and property by exploiting and dispossessing large segments of the population. For Raymond, both the nation and the state were compelled to safeguard the independence of labor. The future of the American Republic depended on the success of their efforts.
Raymond understood both the perils and the advantages of economic growth. Whatever confusion entered his thinking, whatever he lost in analytical rigor and precision, as a consequence, he was steadfast in his resolve to inhibit the concentration of wealth and to sustain the independence of labor. Yet, Raymond never sought to mastermind an egalitarian utopia in the United States. He dismissed all radical utopian proposals, such as those of William Godwin or the Marquis de Condorcet, not only as fanciful but also as harmful to civilization. Justice, in Raymond’s view, did not require perfect social and economic equality. Such a desire, always an expression of sinful pride in Raymond’s Calvinist imagination, violated the laws of nature:
Nature, therefore, never intended, that there should be perfect equality among men; and the chimerical theories of Godwin, Condorcet, and other visionary dreamers about a state of perfect equality, are in direct violation of natural law as those existing systems, which place strength in subjection to weakness, talents in subjection to imbecility, and secure to one portion of the community in perpetuity, all the property, to the total exclusion of a more numerous and equally entitled portion. 
The “natural” distribution of property thus implied a permanent inequality of condition in any advanced society such as the United States. All schemes to contrive an egalitarian paradise, Raymond argued, would invariably lead to economic collapse and social dissolution as rapidly as did aristocratic and capitalist greed.
Raymond wisely did not rest his defense of independent labor, specifically the ownership of property and the means of production that land-owning farmers and self-reliant craftsmen had long enjoyed, on the illusion of social and economic equality. On the contrary, he recognized, or at least he intuited, that capitalism in general, and corporate capitalism in particular, constituted the greatest revolutionary agent in history—an agent that if suffered to proceed without restraint would despoil the traditional American way of life.
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1. Quoted in Morton J. Horwitz, The Transformation of American Law, 1780-1860 (Cambridge, MA: Harvard University Press, 1977), 112. Italics in the original.
2. Quoted in Ibid., 182.
3. Quoted in George Rogers Taylor, The Transportation Revolution, 1815-1860 (New York: Harper Torchbooks, 1968), 242.
4. Daniel Raymond, The Elements of Political Economy in Two Parts, Second Edition (1823) (New York: Augustus M. Kelly, 1964), Vol. II, 399.
5. Ibid., Vol. I, 36. Italics in the original.
6. Ibid., Vol. II, 9.