Will the left dominate the ‘New Economy’?

There have always been rich leftists, people who have either inherited money or have made money in business, and yet choose to subsidize groups and individuals who wish to increase taxation, government spending and regulations – but there seem to me to be more of these rich leftists than there used to be.

To some extent this can be explained by the dominance the left have in such things as the ‘education system’, including most private ones, and the broadcasting and, in the United States anyway, the print media. If the political atmosphere is dominated by ideas supporting such things the Welfare State, high income tax rates, inheritance tax, endless regulations and so on, even some of the people most directly hit by such policies will support them.

It is also the case that some rich people will, in public, support such ideas hoping that, in private, they can avoid their effects. For example some rich people controlling powerful corporations supported the New Deal of President Franklin Roosevelt (although most wealthy people did not) hoping to both avoid high taxes personally and even to direct government subsidies to companies they controlled, and to direct government regulations to destroy their competitors – this has come to be known as “corporate welfare”. And this attitude can be traced back to those businessmen who supported ‘anti trust’ regulations (hoping to use them on their competitors) and, long before this, the passage of a ‘national bank’ for ‘cheap money’, ‘internal improvements’ (i.e. pork barrel road projects and the like) and a ‘protective tariff’ , which is to say a tax on competitors, that were suggested from the time of Henry Clay and before.

However, such wealthy business men did not tend to support high taxes on themselves or regulations that would hit their own companies – let alone a Welfare State to provide everything from ‘the cradle to the grave’ for the general population.

One can be cynical and point out that, for example, the Kerry family (Mrs Kerry having inherited the Heinz fortune from a her first husband) avoided the high taxes that they demanded others paid, and many of the billionaire backers of Senator John Kerry in 2004 also found one way or another to get collectivism to work in their interests (such as Warren Buffet’s use of the threat of inheritance tax to get family owned business enterprises to sell out to the corporation he controls). But there is not just cynical calculation here – many of the super rich really do seem to believe in the modern ever expanding tax-and-spend Welfare State and seem to believe that regulations (what they think of as laws) can make various ‘social ills’ better rather than worse. In these days of the ‘social gospel’ many very wealthy people seem to have a faith in government, as long as this government is in ‘Progressive’ hands, that many ordinary ‘Red Necks’ and the like think absurd. Unlike in Latin America, the American poor, at least the ‘Red Neck’ part of it, do not tend to look to government and ‘redistribution’ to make their lives less hard.

“It is the war stupid”. No, with respect, this was going on long before the Iraq war, and support or opposition to the Iraq war cuts across people who oppose or support ‘Progressive government’. Many ardent libertarians and conservatives oppose the Iraq war and some socialists, such as Christopher Hitchins in the United States or Nick Cohen in Britain, support the war.

If there was no Iraq war such mega rich people as George Soros, Peter Lewis and Marc Cuban would still be supporting every ‘Progressive’ group they could find, so “it is the war” will simply not do.

To some extent one can look at structural factors.

People who actually make things, what Marxists used to call ‘industrial capital’, are far less likely to be leftists than people in the world of banking and related activities…what Marxists used to call ‘finance capital’ – although many people in the financial world are certainly not leftists. Especially if the person one is talking about either built up or inherited a single manufacturing company in a certain line of work rather than just buys and sells companies that do anything or nothing – a Mike Dell is much less likely to give money to leftist groups than a Warren Buffet, and even Warren Buffet is not the same sort of person as a George Soros, perhaps being closer to actually making things has an effect. A Mike Dell is no more likely to be a leftist than the founders of Ford, Goodyear, Du Pont or the other manufacturing companies.

Manufacturing companies may indeed like ‘cheap money’ (i.e. low interest rates created by the credit money expansion of central banks) but they are less closely connected to the process that certain people in the financial world and the head of a industrial company is less likely to benefit personally from such things (at least not in a huge way) than a partner in a finance house. ‘Progressive’, ‘compassionate’ judgements from the Federal Reserve are not likely to give the head of a manufacturing company enough personal money to buy himself the Governorship of New Jersey – for a man who is a partner in a finance house it is a different story.

People do not tend to like to think of themselves as corrupt, so a person who benefits from ‘Progressive’ policies may hold, even to himself, that he supports them out of compassion for others – and show other ‘compassionate’ political opinions. But it is, as I mentioned above, much more than this. Many of these people really do support various ‘compassionate’ and ‘Progressive’ political policies even if there is no way at all these policies benefit them.

And nor is it just the people in the financial industry.