Senate Reform for the Global Economy: part 2

The Many

“The fabric of American empire ought to rest on the solid basis of THE CONSENT OF THE PEOPLE. The streams of national power ought to flow from that pure, original fountain of all legitimate authority.” –Alexander Hamilton, Federalist 22

Alexander Hamilton and James Madison designed America to be a democratic republic, featuring filtered (indirect) representation of the people’s authority and built in monitoring provisions called checks and balances used to prevent political degeneration. Moreover, both men talk of an ‘American Empire.’ The terminology is vague and seemingly conflicting and therefore raises questions about the nature and goals of our republic. Most basically, the United States of America is a democratic republic premised on liberal notions of individual liberty and natural rights, whose power is authorized by a covenant of the people. Thomas Paine explains that,

It is wholly characteristical of the purport, matter or object for which government ought to be instituted, and on which it is to be employed, Res-Publica, the public affairs, or the public good; or, literally translated, the public thing. It is a word of a good original, referring to what ought to be the character and business of government; and in this sense it is naturally opposed to the word monarchy, which has a base original signification. It means arbitrary power in an individual person; in the exercise of which, himself, and not the res-publica, is the object (Rights of Man 17).

Every government that does not act on the principle of a Republic, or in other words, that does not make the res-publica its whole and sole object, is not a good government. Republican government is no other than government established and conducted for the interest of the public, as well individually as collectively (Rights of Man 17).

Thus, the republic, created by the people, is intended to serve the interests of those people from both a personal and communal perspective. Every American knows, however, that republican government is not that simple. Famously, Madison discussed the problem of factions in Federalist 10, the most basic problem associated with republican governments. He identifies a faction as any “number of citizens, whether amounting to a majority or a minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community” (Madison Fed 10). By definition, a dominant or ruling faction cannot be republican in nature, so long as the party offends individual liberties or communal interest (an expression of arbitrary power, usually done selfishly). To account for such factions, Madison offers “two methods of removing the causes of faction: the one, by destroying the liberty which is essential to its existence; the other, by giving to every citizen the same opinions, the same passions, and the same interests” (Madison Fed. 10). In other words, Madison believes that we can only control a faction’s negative effects, and this is best accomplished through checks and balances that monitor representative behavior. Moreover, he writes that,

It is essential to such a government, that it be derived from the great body of the society, not from an inconsiderable proportion, or a favored class of it; otherwise a handful of tyrannical nobles, exercising their oppressions by a delegation of their powers, might aspire to the rank of republicans, and claim for their government the honorable title of republic. It is sufficient for such a government, that the persons administering it be appointed, either directly or indirectly, by the people (Madison Fed. 39).

Correspondingly, Madison writes that because the otherwise “accumulation of all powers legislative, executive and judiciary in the same hands…may justly be pronounced the very definition of tyranny” the “legislative, executive and judiciary departments ought to be separate and distinct” (Madison Fed. 47). This implies that a government derived from one particular interest and a tyranny is one in the same; selfish interests are checked by providing those “who administer each department, [with] the necessary constitutional means, and personal motives, to resist encroachments of the others” (Madison Fed. 51). Theoretically, this enables the government first to “control the governed; and in the next place, obliges it to control itself;” this separation of powers is one of the most fundamental checks and balances upon which our Constitution and our liberties are contingent (Madison Fed. 51).

-Wealthy Americans

Senate Reform for the Global Economy: part 1

1. Civilizations and Progress :

“Is it not time to awake from the deceitful dream of a golden age, and to adopt as a practical maxim for the direction of our political conduct, that we, as well as the other inhabitants of the globe, are yet remote from the happy empire of perfect wisdom and perfect virtue?” –Alexander Hamilton, Federalist 6

‘Progress’ occurs when the maxims of the political institutions and prevailing sentiments in a given society are aligned with the gradual, often hidden causes of advancement. Alignment occurs once the collective behaviors and beliefs and relations of a society, products of the prevailing economic system, are manifested in the foundation of its bureaucratic structure. When discord between policy and ‘the forces of progress’ prevail, we encounter problems like corruption and despotism; meaning that an understanding of the causes of over-arching societal change are vital if we are to govern effectively.

Karl Marx’s dialectic history is the most insightful conception of civilization given the context of this research because it speaks in the language of economic forces, the forces most at work today. This theory will allow us to identify the relevant issues precipitating congressional inefficiencies. While studying the tendencies of capitalism, Marx developed a theory called “the materialist conception of history.” This theory contends that…

… People in a society, at any given time, have a certain level of productive ability. This depends on their own knowledge and skills, on the technology available to them, and on the bountifulness of the natural environment in which they live. These together are called … ‘productive forces’. Marx alleged that the productive forces determine the way people make their living and, at the same time, the way they relate to one another in producing and exchanging the means of life. These production and exchange relationships are what Marx called ‘the relations of production’. The productive forces plus the relations of production, which Marx referred to as ‘the economic structure of society’, shape the ‘superstructure’ of people’s religious, political, and legal systems and their modes of thought and views of life. That is, people’s material lives determine their ideas and their supporting institutions (Gurley 9).

This implies that “the way people make a living determines their ideas, but these ideas in turn affect the way they make their living” (Gurley 14). Therefore we can assume that…

…the economic structure of a society molds its superstructure of social, political, and intellectual life, including sentiments, morality, illusions, modes of thought, principles, and views of life. The superstructure contains the ideas and the systems of authority which support the class structure of that society – that is, the dominant position of the ruling class (Gurley 14).

The superstructure, therefore, “contains not only ideas but also institutions and activities that support the class structure of society- the state, legal institutions, etc…” (Gurley 15). Moreover, Marx asserted, “such development is not imposed on us from the ‘outside’ nor do we simply adapt in passive ways to social change. We, in fact, initiate those changes and, by so doing, make ourselves worthy of the new conditions” (Gurley 12). This implies that that the structure of a state (its governance) cannot change until the economic structure of society necessitates this structural change.

It is, therefore, the coordination of bureaucratic structure with the economic structures of the time that makes any society prosperous and thusly this coordination should be our and every state’s goal.

-Wealthy Americans

Senate Reform for the Global Economy: Introduction

“Every man the least conversant in Roman story, knows how often that republic was obliged to take refuge in the absolute power of a single man, under the formidable title of Dictator, as well against the intrigues of ambitious individuals who aspired to the tyranny, and the seditions of whole classes of the community whose conduct threatened the existence of all government, as against the invasions of external enemies who menaced the conquest and destruction of Rome”. –Alexander Hamilton, Federalist 70

WE live in a time very much similar to beginning of the 20^th century; then, industrial forces were rapidly changing (as seen in the industrial revolution and the rise of the Western nation-state) in ways that parallel our current level of economic transformations. Every day we witness the world shrink as these changes have brought the imminent globalization of our economic markets – and necessarily the emergence of our global society. Reason concludes and history shows that agency structures, legislated in 1913 and intended to combat similar economic changes from a century ago, cannot apply in our world. These are forces that our society, as with any advanced society, must account for; otherwise rhetorical slander disseminated by a privileged class, could easily undermine the Constitutionally enforced obligation between public representatives and public authority. Because the United States is (arguably) the current hegemon of the international system, its behavior will unavoidably have a great deal of influence on the development of our emerging global society. America, therefore, is largely responsible for securing our community’s liberty of self-government; a liberty essential to human rights (individual liberties) and the sustainability of collective progress and the better way of life that it usually creates. Failure will render our attempt at reaching the ideal another chapter in history textbooks, and future citizens, enlightened as they will be, will think, “almost” or “nice try” in the same way that Athenian and Roman democracy is generally perceived today.

Prudence dictates that blaming these obstacles on a scapegoat is counter-productive; in fact creating collective blame benefits such regimes by diverting public concern away from already translucent issues of structural change. This is a signifying behavior of despotic government, as seen in Hitler’s use of the final solution while attempting to revive the German economy. This and the subsequent posts aim to prove that socio-economic changes have rendered the U.S. Senate corrupt, in need of reform, and that any legislative action must represent the people’s will. Only after we understand the meaning of civilization, and how progress relates to the changes that accompany civilized life, can we rationally amend for these problems. We cannot achieve such an understanding until we comprehend what it means to be a republic, a representative, and a federal Senator. Once such knowledge is acquired, however, we can appropriately deal with any uncertainties and obstacles that arise from living and increasingly chaotic world, for together we are strong.

Integrity is a mandatory quality for any representational government because such a government transfers collective authority to individual agents, and indeed Garrison affirms that “the idea that public office is a public trust, derived from the people and answerable to the people” (228). Moreover, Garrison’s work is an argument for the first Senate reformation; he contends that the breakdown of trust between Senators and their constituents engendered a corrupting effect on the entire federal system, and most prevalently on the Senate. As public faith dissolved, the Senate went from “a model of legislative dignity, capacity, and behavior” made up of “the class competent to govern” to a “medley of millionaires, ‘bosses,’ and the representatives of selfish interests” (228). This breakdown prolonged party existence, produced artificial divisions in local matters, and made party felicity, not competence, honesty or patriotism the credential for office holding. This directly preceded and contributed to the “growth of machine rule, the purchasability of senatorships, and the decline of the Federal Senate to what we now see it…” (228). Widespread public distrust is a product of inefficient agency relations, because agency relaxations are derived from bureaucratic structures defined in a social contract. Bureaucratic structuring defines Senatorial duties and personnel, but sometimes require revisions if the relevant socio-political climate dictates such a necessity. Senatorial re-structuring has successfully occurred before; most notably seen in the legislations of 1913, which restored Senatorial trust by defining and aligning new agency relations in a way that allowed the nation to recreate a sustainable, relatively long term and productively efficient economic system.

Adjusting constitutional policy is not revolutionary by nature, as peaceful methods for amending the Constitution are explicitly provided for in the social contract. Our founders learned that, on occasion, legislative bylaws need to be re-written such that our invaluable republican principles are not usurped by a corrupting or otherwise tyrannical agent or class. The authors of the Constitution lived in a time when collective social progress rendered older and deeply indoctrinated social norms obsolete. They experienced firsthand the discomfort of unfavorable social regimes; regimes caused by unresolved issues of outdated agency relations, and perpetuated by the increasing emergence of self-interested political corruption. When corruption proliferates to the point that individual or communal liberties are violated in legislation, violent struggle and extremist factions become more prevalent. They saw, as we do now, reform as a matter of necessity – we reform bureaucratic procedure to prevent the rise of a tyranny, it is a matter of individual and national security.

A common misconception is that our Senate is merely “a club of millionaires,” and these are often the grounds upon which Senators are accused of corruption. However, examination will show that “such a consummation would not have displeased…the framers of the Constitution” (Garrison 226). Moreover, it is the violation of Senatorial trust, as was the case 100 years ago, that is the root of today’s congressional issues. Unsurprisingly this corruption has precipitated similar effects, including: the aggrandizement of parties, the growth of machine rule, the purchasability of senatorships, and most importantly, the loss of competence, honest, and patriotism in our representatives (Garrison 228). Today we see issues such as rigid, bipolar, nearly un-crossable party lines; examples of attempts to sell vacant seats; and evidence that a large percentage of Senators engage in highly profitable insider trading, which far, almost inconceivably, exceeds the returns of a normal investor (Ziobrowski, Cheng, and Boyd). (Conveniently, insider trading is not illegal for Senators.)

-Wealthy Americans

6 Thoughts on Wealth Distribution

Why are we here?

1.) We are here because our founders believed that “large governments and relatively small business both faced the same general problem, agency costs;” and that these costs could be overcome by “employing similar techniques” (Wright 70). They allowed “stakeholders to elect managers responsible for the day to day operations of the firm or polity, attempted to align the incentives of the managers with those of the stakeholders, and established procedures for monitoring the managers” (Wright 70). Alternatively, these checks and balances can be viewed as defense for personal property, as was typical for liberal discourse of the time. Indeed Locke’s belief that individuals “create government in order to reduce such property losses,” (Wright 70) seems concordant with the founders understanding of property, as is shown in Federalist 10:

The most common and durable source of factions has been the various and unequal distribution of property. Those who hold and those who are without property have ever formed distinct interests in society. Those who are creditors, and those who are debtors, fall under a like discrimination (Madison Fed 10).

2.) We are here because Madison’s fear of majority factions stems from the fact that a majority party (debtors / low and middle income citizens) has the potential to vote for property redistribution at the expense the minority party’s (creditors / wealthy Americans) property; or as the founders defined it, individual liberty. The infatuation with reducing taxes also comes from this fear, as even the most progressive thinkers expressed that lessening “the burthen of public taxes” would allow the nation to enjoy “that abundance, of which it is now deprived” (Paine, Rights of Man 37).

3.) We are here because Alexander Hamilton argued that “money is with propriety considered as the vital principle of the body politic; as that which sustains its life and motion and enables it to perform its most essential functions” (Hamilton Fed. 30). The government has “the power of creating new funds” because this “would enable the national government to borrow, as far as its necessities might require” without crippling the population with taxes (Hamilton Fed. 30). In Hamilton’s view, the power of creating new funds while keeping taxes low was best achieved by enlarging the nation’s “prosperity of commerce,” which, he argued was “the most productive source of national wealth” and therefore should be the “primary object of [our] political cares” (Hamilton Fed. 12).

This language enables us to depart from the federalist rhetoric and approach the constitution from an economic standpoint, thereby allowing us to better understand the discourse and intentions.

4.) We are here because, “From the perspective of 17th century constitutional thinkers [such as] John Locke, there is no essential difference between political corporations and business corporations” (Wright 68). “Both ‘political’ and ‘business’ governments, therefore, serve the interest of the individual” (Wright 68).

The founders saw government as an organization to promote the interests of its constituents, similar to the way that a business promotes the interests of its investors. Thus,

“The the framers saw governments officials as agents, [who] if left unmonitored, will not always act in the interest of their principals, the nation’s citizens”…“The federal form of U.S. governance itself was [intended to be] an effective means of reducing the principal-agent problem because the local, state, and national governments monitored each other closely” (Wright 59, 60).

5.) We are here because the founders', “recognition of the need to create mechanisms to reduce agency problems” in our bureaucracy are manifested as checks and balances in our constitution(Wright 66). These agent monitoring provisions ensure that leaders do not “breech the contract between government (agents) and the people (principles)” by “inducing leaders to act on behalf of the nation’s owners, the citizenry, and not in their own self interests” (Wright 71).

6). We are here because even our founding fathers had to earn their new conditions, and did so by structuring American bureaucracy such that it theoretically corresponded to the prevailing macroeconomic discourse of the time. Moreover, this alignment made possible the coming of the industrial revolution and guaranteed the maintenance of the established superstructure, most notably the dominant class hierarchy.


“In times of imminent change, our verbal and sentimental worship of the constitution, with its guarantees of civil liberties of expression, publication and assemblage, readily goes overboard. Often the officials of the law are the worst offenders, acting as agents of some power that rules the economic life of a community.” –John Dewey, Liberalism and Social Action 64

-Wealthy Americans

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