Abstract: On or about the Ides of every month except March, the Adams Institute will send two letters to prominent Americans whose words or actions are relevant to the proposed amendment, and whose contributions to the idea of democratic-republican government merit all of our attention. These letters will also carbon-copy other distinguished individuals who were somehow involved in the recipient’s words or deeds, or in our analysis thereof.
Our initial letters, along with correspondence explaining to copied individuals why they were copied, will be published as an open diary of correspondence in the hopes of inspiring discussion of our proposed amendment and emulation of the recipients’ good examples. PDF files featuring scans of all this original correspondence will be available for download, and the substantive content of each primary letter will be pasted in blog-post format.
August 13, 2024
Dear Mr. Bannon:
Reference is made to your recent interview with David Brooks, the transcript of which was published in The New York Times as the July 1, 2024 op-ed My Unsettling Interview with Steve Bannon. While we certainly don’t agree with all your comments, we agree with these two:
First, that “We’re fighting for a republic.”
And second, that to prevail, “You’ve got to not just reallocate income, you have to reallocate assets. People have to have a stake in this.”
We write you today to solicit your consideration of an economic plan designed to serve both objectives: To productively de-concentrate wealth in order to sustain the independent middle class upon which republican government depends.
This plan is premised on the truth that republican government cannot exist without a broad middle class. We presume you are familiar with the main historical and theoretical reasons for this, so we only briefly summarize them with this wheel analogy:
History permits us to study the lives of many little democratic city-states, but the death of only one superpower popular republic: Rome. Rome’s own historians blamed wealth concentration for that death. Our Founding Fathers drew upon the lessons of history when establishing the United States, but especially the death of republican Rome.[7]
The Founders understood that, despite slavery, the principal fact of America’s founding is that it was born middle class.[8] This is what enabled them to establish the United States as a republic in an age of monarchy and aristocracy. This is also why, despite anti-interventionist and anti-egalitarian rhetoric of the libertarian and neoliberal wings of the Republican Party, the Founders would encourage us to take measures necessary to preserve America as a middling republic.[9]
So far were the Founders from today’s modern laissez-faire lunatics that in John Adams even praised an agrarian law of the Roman Republic imposing wealth caps.[10] Thomas Jefferson sought to emulate this law through his 50-acre viritim in his 1776 Virginia Constitution. Jefferson also wrote the laws to abolish entails and primogeniture in Virginia, by which, as he later wrote to John Adams, he “laid the axe to the root of Pseudoaristocracy.”[11]
Just as the principal fact of America’s founding was its middle-class birth, the principal fact of America’s post-war life was, despite segregation, middle-class re-birth. In the first two decades after the war, the distribution of economic gains kept pace with productivity gains. But that all changed after 1975.[12] Indeed, the stagnation registered for White males at or below the median contains the seeds of MAGA:[13] Your typical American may or may not grasp things like capital mobility, carried interest, or geographic tax arbitrage but he sure understands America-hating woke globalists, the liberal mainstream media, and illegal immigration.
But no matter the rhetoric in which the message is cloaked, or who is blamed, MAGA sells to the right the same product the left has been accused of selling for decades: patronage. Today as in late republican Rome, it is economic insecurity above all which makes people into the clients of demagogues. And the patronage of the right – border walls or protectionist tariffs – is no less saccharine, and brings us no nearer to curing the problem of wealth concentration, than any left-wing plan. Just look at the issue that whips MAGA into the greatest frenzy: immigration. Yes, we need a rational border policy, but haven’t we had a bigger problem with what’s gone out than what’s come in? It wasn’t unskilled immigrants crossing our southern border looking for menial jobs who offshored five million non-menial jobs. And all those immigrants put together can’t even begin to account for the $50 trillion that’s been diverted from American workers since 1975; the total combined wealth of every nation south of the border, from the Rio Grande to the Strait of Magellan, is barely $13 trillion. And within our borders, the total aggregate wealth of all Hispanic households is only $4.6 trillion.[14] This accounts for only a small fraction of the roughly $35 trillion that must be redomesticated into ordinary American households to raise the middle class to its rightful 50% share of our national wealth.[15]
The 1950s – the golden age of American middle-class primacy, is the era remembered by American conservatives with the greatest nostalgia. This should remind us, so long as Republicans remain true to their founding precepts, that egalitarianism is as much embedded within the original DNA of the Republican Party – the party of Abraham Lincoln and Thaddeus Stevens – as it is of America, despite all departures from that ideal. Your own comments to Mr. Brooks show that your fundamental economic outlook is egalitarian:
Right now, the American citizen has all the obligations of serving in the military, of paying taxes, of going through this grind that is American late-stage technofeudal capitalism.
Look at John Fetterman. Fetterman and Steve Bannon are closer in their economics than Steve Bannon and the Republican establishment.
We have a capitalist economy that has no capitalists, right? It has hypercapitalists or state capitalism You’ve got to not just reallocate income, you have to reallocate assets. People have to have a stake in this. That’s all they’re asking for.
These considerations show that without a significant political intervention, the long-term survival of legitimate popular government is historically and theoretically improbable. On the authority of America’s republican tradition and history, and in an effort to preserve it for future generations, we propose this intervention: We should put America’s plutocracy on capitalism’s own device of the long-term incentive plan. The governing philosophy of this plan would be “no gains for the middle, no gains for the top.”
This doctrine would be enforced through the technique of median-top household wealth tethering at an efficient mathematical ratio. Anchoring those elite households which collectively possess market power to the national median such that their outcomes rise and fall lockstep in mathematical proportion to the national median encourages them to raise the national median in order to enjoy any future gains. This ratio would be enforced by taxing only a very few top households exceeding a multiple of the national median – say 10,000x to start – whose aggregate holdings imply market power.[16]
By anchoring the ceiling of our political economy to its foundation, this incentive plan rewards elites for positive-sum behavior: The greater the median gains, the greater the elite gains. Any elite gains extracted via negative-sum behavior – including rentierism, inflation, automation, monopolization, and harmful immigration – would be clawed back at the shared expense of covered households, mobilizing moderate elites against those who would plunder the commons and thus, by operation of the ratio, injure the entire elite class. Like a true incentive plan, this approach lets market actors determine how to raise the national median. Because it only targets a very small number of the top households, no new corporate taxes are required, enlisting all but the most predatory and parasitical enterprises into the defense of this plan.
The Constitution’s Apportionment Clause requires that this plan be implemented through the legal form of a constitutional amendment. To induce the States to ratify it (bypassing Congress if necessary) such amendment could distribute all revenues raised by ratio enforcement in equal shares to each State which timely ratifies it. [17] Not only is this plan true to America’s founding philosophy – Thomas Jefferson proposed an amendment that would similarly distribute luxury tax proceeds to the States in his Second Inaugural Address – the States can use the proceeds, worth billions over time, according to the wishes of their local voters, strengthening the principle of federalism as envisioned by James Madison.
This is not the first time America’s plutocracy has brought our republic to the brink of ruin. In considering how to deal with the southern plutocracy that had plunged the nation into civil war, Thaddeus Stevens said: “Strip the proud nobility of their bloated estates, reduce them to a level with plain republicans, send forth to labor, and teach their children to enter the workshops or handle the plow, and you will thus humble proud traitors.” Our plan is much milder than his, but no less justified, and no less true to the best traditions of America and of the Republican Party.
As you are at the front lines of American populism, we are eager to know your thoughts.
Sincerely,
Tim Ferguson
[1] (i.e. Anacyclosis (ἀνακύκλωσις), the idea that the natural and probable sequence of political evolution is tribal chiefdom, monarchy, tyranny, aristocracy, oligarchy, democracy, and ochlocracy or mob-rule) (For the anthropology see, e.g., Pindar, 2nd Pythian Ode, Herodotus (III. 80), Thucydides (VIII. 97), Plato (Rep. VIII) (Laws, III. 676 A), Aristotle (Nic. Eth. 8.10; Pol. 1286b), Polybius (Hist. Bk. VI), and possibly Panaetius, Dicaercus, Isocrates, Protagoras, and Hecateus). See also Dionysius, (Rom. Ant. VII, 54-56) Cicero, De Re Publica, I, XXIX, II, XXV), Sextus Pomponius, Justinian’s Digest, I Bk. I, Tit. 2., 2. 1-11), Machiavelli Discourses on Livy, Ch. I. Bk. II. See also John Adams, An Essay on Man’s Lust for Power, All Men would be Tyrants if they could, with the Author’s Comment in 1807 (describing Polybius’ sequence as “the Creed of my whole Life. See also Alexander Hamilton, Federalist No. 9, alluding to Anacyclosis. See also David A. Teegarden, Death to Tyrants!: Ancient Greek Democracy and the Struggle against Tyranny, Princeton University Press, 2014. Figure A1 therein shows that ancient Greek city-state regimes peaked accordingly.
[2] The idea is attributed to the legendary Spartan lawgiver Lycurgus. For the anthropology, see, e.g. Thucydides, Peloponnesian War, 8.97.2 Plato, Laws, 681d; Laws, 712d; Menexus, 238b-d, Dionysius of Halicarnassus, Roman Antiquities, VII.55, Polybius, Histories, VI.10-18, and Servius the Grammarian, Commentary on the Aeneid of Vergil, 4.682. See also Charles I, His Majesties Answer to the Nineteen Propositions of Both Houses of Parliament, 1642, Montesquieu, The Spirit of the Laws, Book XI, Chapter VI, John Locke, Two Treatises of Government, Book II, Chapters XII-XIII James Madison, Federalist Nos. 47, 48, and 51, and Articles I, II, and III of the United States Constitution.
[3] See James Harrington, Commonwealth of Oceana, Part I, John Adams to James Sullivan, 26 May 1776 and Defence of the Constitutions, Vol. III, Letter III (Padoua), Noah Webster, An Examination into the Leading Principles of the Federal Constitution, and Misc. Remarks on Divisions of Property.
[4] See Euripides, Suppliants, Line 238 et seq., Plato, Laws 679b, Aristotle, Pol., 1291b, 1295b, and Alexis de Tocqueville, Democracy in America. See James Madison, Federalist No. 10: “The most common and durable source of factions has been the various and unequal distribution of property.”
[5] Note that the Roman Republic and the United States are history’s only two superpower republics, making Rome the single best benchmark for comparative historical analysis. On how extreme wealth concentration destroyed the Roman republic, see Appian, The Civil Wars, I.1, Sallust, Conspiracy of Catiline, 10, 33. I; 37.3, 38, 53, The Jugurthine War, 4, Livy, History of Rome, Preface, Tacitus, Annals, 3.27, Florus, Epitome, I, XLVII, Lucan, Pharsalia, 1.63. Marcus Philippus said in 104BC that out of perhaps 400,000 citizens, only around 2,000 held any significant wealth.
[6] See Walter Scheidel, The Great Leveler: Violence and the History of Inequality from the Stone Age to the Twenty-First Century, Princeton 2018. Shows that structural inequality has only been reduced by the shocks of plague, revolution, mass-mobilization warfare, or state collapse.
[7] See a letter from John Adams to Benjamin Rush, 4 December 1805: “The Period in the History of the World, the best understood, is that of Rome from the time of Marius to the Death of Cicero.”
[8] See remarks from British Colonel Lord Adam Gordon in 1764: “The levelling principle here, everywhere operates strongly and takes the lead, and everybody has property here, and everybody knows it.” That America’s middling status was common knowledge, see Benjamin Franklin, Observations Concerning the Increase of Mankind, 1751, a letter from George Washington to Richard Henderson, 19 June 1788, Richard Price, Observations on Civil Liberty,1776, Charles Pinckney, speech of 25 June 1787, and Tocqueville, Democracy in America, introductory remarks. See also Peter H. Lindert and Jeffrey G. Williamson, American Incomes 1774-1860, National Bureau of Economic Research Working Paper 18396, 2012, showing that in 1774, New England and the Middle Colonies were the most egalitarian place in the measurable world.
[9] See John Adams, Dissertation, 1765: “Property monopolized, or in the Possession of a Few is a Curse to Mankind. We should preserve not an Absolute Equality – this is unnecessary, but preserve all from extreme Poverty, and all others from extravagant Riches,” Thomas Jefferson to James Madison, 1785: “Legislators cannot invent too many devices for subdividing property,” James Madison, Parties, 1792, advocating measures to “reduce extreme wealth towards a state of mediocrity, and raise extreme indigence towards a state of comfort” and Noah Webster, Miscellaneous Remarks, 1790: “The basis of a democratic and a republican form of government, is, a fundamental law, favoring … a general distribution of property.” Alexander Hamilton asserted that wealth concentration will cause society to “depart from the republican standard.” 21 June 1788, New York Ratifying Convention.
[10] See John Adams to Abigail Adams, 25 August 1776, on the Gracchi reviving “the old Project of an equal Division of the conquered Lands, (a genuine republican Measure, tho it had been too long neglected to be then practicable).” The Gracchan law revised the lex de modo agrorum of the Licinian-Sextian rogations, imposing hard caps on private use of ager publicus, lands acquired at public expense. Adams was influenced by James Harrington, recommending wealth caps during the English Interregnum; see Harrington, Id., advocating an agrarian law that would balance the nobility with the commoners, and cap landholdings at £2,000 annual revenues. See also John Adams to James Sullivan, 1776, advocating measures “to make the Acquisition of Land easy to every Member of Society: to make a Division of the Land into Small Quantities, So that the Multitude may be possessed of landed Estates.” See also Noah Webster’s favorable account of the Lex Sempronia Agraria in Miscellaneous Remarks: “Rome, with the name of a republic, was several ages losing the spirit and principle. The Gracchi endeavored to check the growing evil by an agrarian law; but were not successful.” In that tradition, we may justly assert caps on private fortunes whose size exceeds some rational demarcation, acquired with the benefits of public infrastructure, government subsidies, or legal rights of market exclusivity.
[11] See a letter from Thomas Jefferson to John Adams, 28 October 1813.
[12] Price, Carter C. and Kathryn A. Edwards, Trends in Income From 1975 to 2018. Santa Monica, CA: RAND Corporation, 2020, calculating the gains that would have, but did not, accrue to ordinary Americans since 1975 relative to post-World War II run rates. The abstract states: “From 1975 to 2018, the difference between the aggregate taxable income for those below the 90th percentile and the equitable growth counterfactual totals $47 trillion.”
[13] See Price and Edwards, Tables 4a and 4b: A score of 100% indicates that a given demographic group has kept pace with the post-War run-rate. At the 25% percentile of income, the scores by racial group are: White men: 4.5%; White women: 83.3%; Black men: 27.8%; Black women: 142.9%. At the 50% percentile of income, the scores are: White men: 13.3%; White women: 83.3%; Black men: 21.2%; Black women: 83.3%. The numbers show that White men have lost the greatest relative ground, followed by Black men. While the racial wealth gap should be closed as quickly and narrowly as possibly, this should be achieved via accelerated minority gains, not through stagnating majority gains. That White men started “further ahead” serves as little consolation to the fact that they’ve suffered the greatest relative stagnation: This is the stuff which nourishes populist demagoguery.
[14] Federal Reserve, Distribution of Household Wealth in the U.S. since 1989, Assets by race, Q1 2024.
[15] The common intuition of mankind is that the middle should own at least half. See, e.g., Aristotle, Pol., 1295b, Harrington, Id., and Michael I. Norton and Dan Ariely, Building a Better America – One Wealth Quintile at a Time, Perspectives on Psychological Science, Association for Psychological Science, 2011. Total national wealth is around $150 trillion. The middling share is 25.9% when the middle class is defined as the middle three quintiles (middle 60%) by income quintile (Federal Reserve, Q4 2022). The damage model works out to approximately $35 trillion.
[16] This 10,000:1 ratio today implies an initial wealth cap of ~$1.43 billion (based on last 3-year average reported national median), surpassed by about 660 American households having a total net worth of $4.2 trillion. Median figures given reflect the average of 2019-2021 Census Bureau Data.
[17] International arbitrage would be mitigated through various measures including an appropriately robust doctrine of tax nexus (disregarding renunciation of citizenship, exile, or expatriation of wealth), penalties, reporting obligations, and the satisfaction of liabilities from domestic assets. Net worth must be annually determined by independent third-party appraisal. To mitigate plutocratic fury and avoid the injustice of wealth confiscation, the amendment would grandfather preexisting fortunes to the extent located within American territory and provided their owners are not convicted of certain crimes, adding both repatriation and good behavior incentives to the underlying market and ratification incentivizes.
Property monopolized, or in the Possession of a Few is a Curse to Mankind. We should preserve not an Absolute Equality – this is unnecessary, but preserve all from extreme Poverty, and all others from extravagant Riches.
© 2024 John Adams Institute. All rights reserved. The John Adams Institute, operating as the Adams Institute for the Preservation of the Democratic-Republican Model of Government, is not a government organization or affiliated with any government organization. We do not endorse or oppose any specific candidates for public office. This website is not a government website. No statement or suggestion of government endorsement is intended or should be inferred. No endorsement of any of our ideas or activities by any person referenced on this website is intended or should be inferred unless otherwise explicitly stated. The John Adams Institute is a nonprofit corporation, is not a tax-exempt organization, and does not engage in commercial activities. No communication on this website is intended as a lobbying communication or as a solicitation for financial support but is only intended to stimulate intelligent public discourse. For full legal terms and disclaimers, visit our Legal page.
© 2024 John Adams Institute. All rights reserved. The John Adams Institute, operating as the Adams Institute for the Preservation of the Democratic-Republican Model of Government, is not a government organization or affiliated with any government organization. We do not endorse or oppose any specific candidates for public office. This website is not a government website. No statement or suggestion of government endorsement is intended or should be inferred. No endorsement of any of our ideas or activities by any person referenced on this website is intended or should be inferred unless otherwise explicitly stated. The John Adams Institute is a nonprofit corporation, is not a tax-exempt organization, and does not engage in commercial activities. No communication on this website is intended as a lobbying communication or as a solicitation for financial support but is only intended to stimulate intelligent public discourse. For full legal terms and disclaimers, visit our Legal page.
