Wealth

In all stratified societies (which includes virtually all societies for which records exist) the hierarchy is significantly determined by differential access to, and possession of, wealth. To be wealthy enables one to exercise economic and political power. This exercise is frequently related to the question of virtue. Hence the resources at the disposal of Aristotle's "liberal man" stemmed from what was under his control. Sociologically this man was the head of the household whose position rested upon his command of his wife and slaves as they created the "leisure" time for him to pursue intrinsically worthwhile ends. True wealth for Aristotle consisted in a store of goods that were sufficient for life and useful for the good life. This wealth had to be secure and it was best obtained through land ownership in marked contrast to the insecure foundation of commerce and money.

This secure source of wealth sustained political independence. This association between landed wealth and political activity has been one of the most historically enduring linkages. The crux of the corruption of Rome was held to be the replacement of a commitment to the public good, which was sustained by relative equality and independence, by a devotion to private satisfaction, which followed from the emergence of the rich, who used their wealth to advance their own personal ambition. Machiavelli drew an evocative picture of this pattern as it appeared in Renaissance Italy. He depicted the gentry (gentiluomini) as "a pest" because they use their wealth to hire others to work for them. Crucially these hired hands, being dependent on their masters for their livelihood, could be used to support their selfish ambitions. The only way to end this corrupting dependency is to (re)establish equality through fostering a sense of civic virtue. To further this objective, Machiavelli advocated, drawing on Roman precedents, an Agrarian law that precluded the accumulation of large estates. Other republicans took a similar line. James Harrington (1611–1677) went into minute detail in his imagined constitutional republic of Oceana (1656). In Rousseau's legitimate polity there should be a level of equality such that no one is wealthy enough to be able to create dependents and no one poor enough to become dependent on others. With the economic structure in this way forestalling the emergence of dependency—creating differential wealth, there is more chance, he believed, that acting for the common good (or willing "the general will"), rather than out of private self-interest, will occur.

In Rousseau's republican vision political power was possessed by equal citizens, but that meant it was restricted to those who were independent. On that criterion Aristotle excluded from citizenship slaves, manual laborers, and women (also excluded by Rousseau) and, when it came to the franchise, the exclusion of the latter two categories lasted into the twentieth century. It was a received commonplace that the privilege of political citizenship (the right to vote for a representative as well as to be a representative) required sufficient wealth to ensure economic independence. It followed that those economically dependent were without a direct political voice. In the eighteenth century Edmund Burke (1729–1797) defended the restricted franchise on the grounds that only those individuals with a direct stake in the country could be entrusted with its well-being. Thanks to their economic status they were able to exhibit the crucial political virtues of "constancy, gravity, magnanimity, fortitude, fidelity and firmness" (p. 427). Burke explicitly called these masculine virtues, but their possession meant that the interests of women, as well as the bulk of the disenfranchised population, would be properly looked after. Certainly the schemes for greater equality that were fomented by the Revolution in France would be disastrous. Much of the political history of the nineteenth century concerned the continual redefinitions of what constituted economic independence (and later how women were to be accommodated).

This history, and the surrounding debates, not only saw the increasing articulation of a modern idea of democracy but also the growth of socialism. Of course, the effect of the possession of wealth on sustaining dependency was not a uniquely Western phenomenon. The jajmani caste system in southern India (especially) operated in such a way that the lowest caste, in exchange for the lease of land owned by members of the high caste, had to provide the latter with labor service and a portion of their crop output. The fact that the caste system was integral to the belief systems of Hindus did not make it immune to criticism. Some of these criticisms were internal (as by Dayananda Sarasvati [1824–1883] or Mahatma Gandhi [1869–1948]), but the challenges to such inequality that the Western ideas of democracy and socialism articulated were also influential.

The socialist critique.

The most powerful Western voice was Karl Marx (1818–1883). Marx saw the key to history in the association between wealth and power. The source of wealth for Marx lay in ownership of what he called the forces of production. These had developed over time from slaves (human labor) to land to capital. Those who owned the forces—slave owners, landlords, capitalists, or bourgeoisie—were able because of that control to rule over nonowners—slaves, serfs, the proletariat. Ownership appears to be legal title, but law for Marx is part of society's "superstructure," which is determined by the economic base. Political power, which is used to enforce legal title, also upholds the interests of the dominant economic power; in a celebrated phrase, "the executive of the modern State is but a committee for managing the common affairs of the whole bourgeoisie" (Marx and Engels, p. 475). These interests are for Marx obviously opposed to the interests of those without economic power, and history reveals a struggle between the class of the owners of wealth and the class of nonowners.

Marx devoted most attention to the contemporary struggle within capitalism. His major work, Das Kapital (1867; Capital), identified the particular form that wealth took under that mode of production. The rationale of capitalism was accumulation. For Marx, the only source for this was the "surplus value" extracted from the worker in the process of production. The exchange-value received in the form of wages by the worker for "his" labor-power is less than the exchange-value received by the capitalist for the commodity made by that power. This exploitative extraction was disguised because the level of wages appeared to be the consequence of a free contract between employer and employee. While Marx saw the initial source of the wealth in the blatant form of expropriation, forcing the landless into factories, the capitalists' ongoing accumulation of wealth was derived from this exploitation inherent to the system. However, he argued this was an unsustainable and self-defeating process that resulted in the immiserization of the workers whose labor-power was the source of accumulation. That misery, he predicted, would generate a proletarian revolution and the ushering in of a communist society. Here (though Marx was not very forthcoming) there would be equality and sufficient wealth to be shared since production would be geared to meeting needs, not accumulation.

Although Marx's predicted revolutionary trajectory did not transpire, revolutions did occur in his name. These inspired a vast literature both in lands like Russia (in the form of Leninism) and China (Maoism), where these revolutions were sited, as well as in the West, where Marx's ideas were the dominant source of criticism of capitalism. Increasingly these critiques paid less attention to Marx's economic analysis and more to his early philosophical writings, with their focus on alienation. While the issue of wealth correspondingly lost some of its salience, the association between the economic and the political was resilient. The universalizing power of capitalism, which Marx did predict, seems to have been reinforced since 1989 and the fall of the Soviet Union. One prominent expression of this has been debate on the meaning and morality of "globalization." The focus has been on the relative impotence of national governments when confronted by worldwide markets and the power of the institutions of global finance like the World Bank and the International Monetary Fund. The least powerful are the least wealthy (the most indebted), effectively the non-Western world.

Mercantilism and its critique.

Marx was not original in seeing historically a development between wealth and economic-political power. Adam Smith had argued that societies (though not universally and unexceptionally) went through four stages—hunting/herding, herding, farming, and commercial. In each case there was a system of subordination, which, although based on personal qualities in the first stage, in the next two rested on control of the dominant means of wealth, that is, of herds and land. He was explicit that government was instituted to protect the propertied (the owner of the herds and of the land) against those without property. The fourth commercial stage saw a difference because the impartial rule of law was established to provide a formal equality. In his Wealth of Nations (1776) he analyzes the basis of wealth in the modern world. Part of his task was to assault the then dominant understanding of the linkage between wealth and economic-political power.

According to this prevalent view (usually labeled "mercantilism"), as expressed by Thomas Mun (1571–1641), the way to increase wealth is "to sell more to strangers yearly than wee consume of theirs in value" (p. 125). Mun distinguished between natural wealth, essentially minerals and direct agricultural products, and artificial wealth, which was the manufacture of materials (clothing rather than wool or flax). He thought more profit (exports) could be earned from the latter source. To achieve this it was necessary—and this is central to the mercantilist view—to maintain a favorable balance of trade. This maintenance needed to be managed or regulated and, as such, had to be an item of policy, the ultimate objective of which was the promotion of the wealth, and thence of the power and security, of the state. Indeed, the very idea of the "state" as an impersonal entity emerged at this time.

Whether mercantilism ever constituted a coherent theoretical position, as opposed to practical responses, has been contested, but Smith gave it an identity. Smith judged the mercantilist method of acquiring and maintaining wealth/power as theoretically misconceived. For Smith the real wealth of a nation lay in the annual produce of the land and labor of the society. The way to increase this wealth is through what he called the system of natural liberty. This entailed removing the panoply of regulations and restrictions characteristic of mercantilism, such as those on employment, like guildsponsored apprenticeships; on the mobility of property, like entails; on consumption, like sumptuary laws; and on trade, like tariffs. Without these obstacles, a free economy would produce a growth in wealth that would benefit the entire population (the "trickle-down" effect).

Smith, although he has become by far the most famous, was not alone in reevaluating the meaning of wealth. One significant dimension had always been population. The wealthier a country, the more people it could sustain, and that in turn would provide both economic and political-cum-military clout. In the Aristotelian tradition, one of the attacks made on commerce was that it enfeebled nations because its citizens were too busily engaged in their private tasks of money-making to devote themselves to their civic responsibilities, which included fighting. For Machiavelli and his intellectual heirs, a citizen militia was the appropriate martial institution, and professional standing armies were not only a threat to civic liberty but also less effective as fighting machines. Smith rejected this. He countered that the wealthier a country was, the more resources were at its disposal to provide sophisticated weaponry and to train soldiers effectively. It was one consequence of this that population by the nineteenth century ceased to have the same value as a marker of national strength; indeed the worries were rather that industrialization was producing too many people to be provided for adequately.