Introduction

It’s often been said that the Republicans (Rs) believe that prosperity trickles down and the Democratic (Ds) say it bubbles up. In other words according to the Ds, if the masses have more resources including money, the demand for goods and services will create more jobs, and businesses to supply that demand and this will create prosperity.

The Rs say that more money at the top will allow businesses to expand and this will create a demand for more workers to fill jobs.

Recently, many are beginning to believe that there is “not a dime’s worth of difference between the two parties. For many years, I used to believe that the Ds were more liberal and the Rs were more conservative. In the last year or so I have come to the belief that there is not much difference between the Rs and the Ds.

In order to understand why my mind has changed, it will be helpful to look at a little bit of history. Let’s travel back in time to The Gilded Age, the years after the Civil War.

First a little bit of terminology: it’s important to know the difference between old capital and new capital. Old capital consists of money, land, factories, stores, etc., the physical materials that are bought, sold or traded between parties. Old capital can be inherited, stolen, or transferred.

New capital is knowledge, information and ideas that are not physical or easily bought or sold between parties. New capital can belong to several people and often new ideas crop up in different places at the same time.

The Roots of the Conservative

1870-1920

After the Civil War, many Americans made fortunes in steel, lumber, railroads, oil, etc. This was called the “second industrial revolution’ especially in the Northeast and in large cities like New York, Boston, etc.

There were two types of rich people, those who had “Old-Money” and “the nouveau riche,” the middle class, who suddenly found themselves wealthy beyond anything they could imagine. The old-money folks wanting to separate themselves from the nouveau riche called them “Riff Raff.” Old-money folks copied the manners of their Victorian English cousins. They put on airs and built elaborate houses.

Old-money people kept trying to distinguish themselves from the nouveau riche (riff raff) by copying such English behaviors such as eating French food prepared by French Chefs, buying expensive French wine and riding around in private carriages. When the nouveau rich began copying them, Old-Money moved to the suburbs to get away from the riff raff. When the riff raff followed them to the suburbs, they moved further out to places like Long Island and built large estates. The riff raff followed them to Long Island like the Pied Piper and the Old-Money moved to communities like Newport, Rhode Island.

The riff raff followed them to places like Newport and the old money began to vacation in places like Europe.

Not only was there competition between classes but competition within the classes themselves.

Culturally, there were several differences between the old money and the new money. A good example is food; the nouveau riche preferred the plain American food that they grew up with rather than the French food of the old-moneyed folks.

Finally, to distance themselves from the new money, the old-money created “Proper Families” which the nouveau riche could not join except by a rare marriage. These attitudes became known as Victorian.

The important thing to remember about American Victorianism is that both the old-moneyed people and the nouveau riche had one major concern, keeping up appearances. Both had to maintain their image in two ways, having money and being well-bred or practicing manners. Image maintenance was crucial to the Victorian mindset. Manners and morality were to the same to the Victorian mind. Thus, the Victorian period, while in many ways a pretentious and hypocritical age was also a gracious age.

The Rise of the Left (Liberal)

1920-1940

Victorianism ended with the First World War. Returning soldiers disillusioned by the War and believing that the War resulted in a feud over lands, titles, and Kingship. Their rejection produced the “Roaring Twenties” the Flapper era and the great novelists like Hemmingway, Fitzgerald, and Steinbeck.

A struggle developed between the conservatives and the new left. The outcome of this struggle resulted in the election of Roosevelt (New Deal), followed by Truman (The Fair Deal) Kennedy (New Frontier) and Johnson (the Great Society) [1]

Assumptions of Liberalism

The main assumption of the liberal at this time was that capitalism works but in the following ways:

1.       The American Free enterprise system is different from the old capitalism. It is democratic; it creates abundance. It has a revolutionary potential for social justice.

2.       The key to this potential is production; specifically increased production or economic growth. This makes it possible to meet people’s needs out of incremental resources. Social conflict over resources between classes therefore becomes obsolete and unnecessary.

3.       Thus there is a natural harmony of interests in society. American society is getting more equal it is in the process of abolishing, may even have abolished social class. Managers are superseding capitalists. The workers are becoming members of the middle class.

4.       Social problems can be solved like industrial problems:

a.       First the problem is identified;

b.      Programs are designed to address the problems by an enlightened government with social science;

c.       Money and resources such as trained people are applied to the problem like “inputs”;

d.      The “outputs” are predictable;

e.      Problem solved.

5.       The main threat to this enlightened system is Marxism. The United States and its allies, the free world, must expect a prolonged struggle against communism.

6.       Apart from the threat of communism, it is the duty and responsibility of the United States to bring the good tidings of the free-enterprise system to the rest of the world.

Fall of liberalism

1950-1970

At this point it is important to notice that liberalism and the new left began to divide. Liberalism saw capitalism as the answer, (an enlightened capitalistic system that would democratize the world). It sought to work within the system.

The new left saw capitalism as “the enemy.” New Leftists wanted to restructure everything

In the late 1960s and early 1970s liberalism was caught between the conservatives and the new left. It undermined the arguments of the new left thus eliminating the one force that could counter the conservatives.

False Assumptions of liberalism 

1. Capitalism could eliminate social conflict at home. Capitalism that could be tweaked and restructured could solve our social problems like poverty, etc.

2. Communism was the most urgent danger. If we could teach other countries to adopt a capitalistic system we could destroy Communism.

Four forces that destroyed the liberalism

1.       The discovery that poverty is structural. Capitalism by its very nature requires a lower class. Somebody has to clean the toilets.

2.       The civil rights movement moving north created second thoughts on the part of many Americans. It’s one thing to laugh at those Southern rednecks. But when the movement north began in earnest, many began to have reservations. There was a film out about this time called The Man Who Came to Dinner. A black friend of the daughter of a white liberal middle-class family was invited by the daughter to visit for a weekend. The family greeted him warmly until they found out that the couple had a relationship and wanted to get married.

3.       Many anti-poverty programs failed or were ineffective.

4.       Liberalism could not overcome the failure of capitalism for many Americans.