by Mark A. Monoscalco

The following article is written by Daniel James Sanchez editor of Mises.org and director of the Mises Academy:


The 99 and the 1

The concept of the bottom 99% of society versus the top 1% has been promoted for the last year by the “Occupy Wall Street” movement.  The above article dissects this topic and puts it into historical perspective.

Here is the historical analysis:

Whatever one thinks of the current plight of the 99%, throughout almost all of history, things were much worse for the vast majority of the population. In precapitalist ages, the average member of the economic 99%, if lucky enough to survive infancy, was consigned to a life of back-breaking work and poverty, constantly on the verge of famine, disease, and death.
The only individuals who did not have such a wretched life were the “1%” of old. This economic 1% was virtually identical with the state. It was made up of the French kings, the English lords, the Roman senators, the Egyptian viziers, and the Sumerian temple priests. The members of this elite lived in Olympian splendor: servants at their beck and call, as much food as they could possibly want, spacious homes, an abundance of jewelry, and a tremendous amount of leisure time.
Everything the Occupy Wall Street protesters say today about the 99% and the 1% was completely accurate then.
Why did the 99% of old put up with the 1% lording it over them? Why did they not rise up, and overthrow their masters? Were they simply cowed by the mailed fists and the flashing sabers?
No; as David Hume pointed out, since “those who are ruled” always vastly outnumber “those who rule,” a regime’s power can never be about brute strength alone. The ruled many must believe that the power of the ruling few is somehow good for them.
Perhaps the temple priests have convinced the people that the gods would be angry if the rulers were disobeyed: that the rains won’t come, and the crops won’t grow. Or maybe the populace believes that the rulers are responsible for the peace and order in society.
Not only do the 99% put up with the ruling 1%; they put them up on their lofty pedestals. The 99% give the 1% their power.
As Ludwig von Mises made clear, real power, what he called “ideological might,” always lies in the support of public opinion. If public opinion were ever to turn on any regime, its days would be numbered.
Mises went even further to argue that public opinion not only determines who is in charge but the general character of the legal order, or as he put it, “whether there is freedom or bondage.”
Ultimately the only kind of tyranny that can last is a tyrannical public opinion.
The struggle for freedom is ultimately not resistance to autocrats or oligarchs but resistance to the despotism of public opinion.
…throughout most of the history of civilization, the ruling 1% took for itself a huge portion of what the 99% produced. And if any private person ever accumulated enough wealth for it to be noticeable, some potentate would snatch that too.
With such rampant government confiscation, there was never enough incentive for large-scale capital accumulation. Without large-scale capital accumulation, there can be no mass production. And without mass production, there can be no great improvements in the lives of the masses.
And that is basically why the 99% had such shabby lives for almost all of history.
Then in the 18th and 19th centuries, something revolutionary happened……”Laissez faire et laissez passer,” the economists said. Let people control as much of their property as completely as possible, and everybody will be more prosperous.
Through this process, public opinion shifted toward the belief that government should be as limited as possible, and property rights as sacrosanct as possible.
Again, the way society is organized ultimately depends on public opinion. So, since public opinion changed, policy changed too. Private capital became more secure. Trade restrictions were lifted. Business barriers were abolished. Private property reigned supreme as never before.
And the results were miraculous. As never before in history, the productive energies of humanity were unleashed. Items that were once reserved for the elite 1% were soon mass produced for the 99%. Amenities that did not even exist before were developed, first for small markets, but ultimately for the mass market.
In the new order there was still a 99% and a 1%. But the 99% of this period lived better than the 1% of times past. And the chief way to ascend to the 1% was to become a successful capitalist-entrepreneur: to strive to serve the 99% (the masses of consumers) better than one’s competitors.
In the old order, most would-be one-percenters, in order to get ahead in life, would have had to apply their smarts and ambition to become conquerors, rulers, and government administrators, and in those roles to exploit the masses. In the new order, under what Mises called the “consumer sovereignty” of the market, their capabilities were turned toward providing for the masses of sovereign consumers.
The masters became servants: wealthy servants, but servants nonetheless.
Now, the 99%, under the thrall of unsound ideas, are once again oppressing themselves. Thanks to the calamitous state of public opinion, the ranks of the 1% are once again increasingly being filled, not by capitalist-entrepreneurs serving the 99%, but by the state and its cronies exploiting and impoverishing the 99%. And the redistributionist remedies that the self-styled 99% clamor for would only accelerate this trend.

Daniel James Sanchez delves beyond a historical discussion of the “Occupy Wall Street” movement.  He suggests actions to combat the assault on society by the proponents of redistribution and state control.

These economic philosophers, people like Richard Cantillon, Adam Smith, and J.B. Say, were theorists. They wrote brilliant, if sometimes turgid, books that changed the minds of communicators: individuals whom F.A. Hayek called “secondhand dealers of ideas.”
These included professional communicators: writers, like Richard Cobden, and speakers, like John Bright. These writers and speakers wrote pamphlets and gave speeches that changed the minds of many thoughtful, if less eloquent, individuals, who might be called amateur communicators. And this thoughtful stratum, in turn, led their nonthoughtful fellows (who, in modern parlance might be called “sheeple”) to change their positions on public affairs.
If our civilization is to be rescued — if the tide of public opinion is ever to turn again — it will be thanks to the sound ideas formulated by theorists like Mises and the scholars who work in his tradition. But that can only happen if those ideas are effectively disseminated by a new generation of communicators.

And so dear reader it is time to decide if you will become an active participant in the struggle for freedom.  As Daniel James Sanchez so eloquently reminds us this struggle is ultimately not resistance to autocrats or oligarchs but resistance to the despotism of public opinion. To join this struggle you must become a “secondhand dealers of ideas”.  You do not need to write books, author blogs or host radio shows.  You need only to be an “amateur communicator”.  Speak openly, honestly, and without fear about your belief in limited government, property rights, the rule of law, free markets, and personal freedom.

Mark A. Monoscalco is a member of the Grassroot Institute of Hawaii. His personal blog, from which this is re-posted, can be found at http://defendingcivilsociety.blogspot.com.