The Politics of Inequality: A Political History of The Idea of Economic Inequality in America

Restating the Case for Economic Equality

The confrontation with economic inequality in American political thought has been complex but enduring. As a political tradition, it put forth an interpretation of inequality that has been delegitimized and forgotten, one that did not recognize an absolute separation between economic and political power. Rather, it saw the effects of inequality in not only economic but political terms, emphasizing the loss of freedom that accompanied the redistribution of social power as a result of economic disparities. This is the very crux of the tradition, and it grounds a much broader political project: the elimination of hierarchical forms of social and political power and the realization that political and social freedom are inherently connected. Politically, the idea of economic inequality was associated with other forms of inequality and servitude. Economic inequality was therefore not simply an extended discussion about the “fairness” of distribution as it is so often referred to in contemporary debates; rather it was a distinct political category that was associated in the minds of most Americans with dependency, servitude, and unfreedom.

Economic inequality not only challenged the prevailing assumptions of autonomy, self-sufficiency, and liberty, it also ran counter to the republican themes that emphasized the importance of the free nature of civil society and the state. Republican institutions had always been characterized as those that would guarantee that social and political power not be used for the benefit of the few at the expense of the whole and that individuals would be protected from the randomness of power exercised by others. Through an emphasis on the dangers it posed to the “public good,” inequality was also seen as having the capacity to distort political power and redirect the activities of the state and society toward the ends desired by smaller factions. If the liberal economic ethic that was so important in the formation of American social and political thought emphasized the centrality of the labor theory of value and property and the negative freedom of noninterference, then the republican elements of this tradition emphasized the category of citizenship and the rights of a citizen of the political community to be free from the domination and servitude of others and to rid society of stratified forms of power and hierarchies that had characterized older societies from ancient Egypt through monarchical England. To be sure, this was not a tradition that carried on some abstract political discourse or tradition through the centuries; it was one that confronted interests, material forms of social power, and concrete political problems. Most of the critics of inequality in American thought did not seek an absolute or communistic form of egalitarianism but an emphasis on equality as a means to true political freedom and the absence of unequal power relations within every sphere of life.

It is important to highlight the fact that this tradition was not concerned with a crude form of leveling but rather held an antipathy toward social fragmentation and the emergence and solidification of economic and social hierarchy because this frames the calls for equality and the critique of inequality that existed throughout the development of American political thought in a new context. The prevailing conservative view that dominates contemporary discourse is that the concern with equality was always historically a function of the jealousy of the “have-nots” and that it should be seen as little more than a moral pleasantry and, even worse, a social-scientific anachronism. Since the concern of this tradition was rarely, if ever, with utopian ideals of social equality and rather with a rage against the political and social implications of inequality, we are in a better position to argue for the relevance of this tradition for contemporary affairs than we might at first realize.

But it is essential to emphasize the political dimensions of economic inequality. What is interesting about the American discourse on economic inequality is the way that the boundaries between political and economic life were in fact not at all firm. Disparities in economic power were interpreted as disparities in social and political power as well. There was no confusing the matter of how social and individual freedom would become endangered: once certain individuals or segments of the community obtained unequal power over others, this would be the beginning of the end of any kind of democratic republicanism and therefore any real sense of political freedom. Feudal institutions were still palpably felt by early American citizens, and their approach to economic inequality was tempered by their opposition to social hierarchy and their hatred of inequality and despotism. But this is precisely the political impulse that has been lost in contemporary American political thought. When applied to the way that economic inequality is now understood and debated, it becomes clear that the split between economics and politics to which American liberalism has always held obfuscates the deeper political significance of economic inequality. This is something that the older critics of economic inequality in America knew all too well, and something that needs to be recovered if a new, critical discourse on economic inequality is to emerge.

This political discourse in American thought was consistent over time in arguing for the elimination of economic disparities and the connection between the effects of unequal wealth and political power. Stemming from both classical and modern sources, the concern with inequality was deeply entwined with the concern for political freedom since the biggest threats to freedom were seen as the emergence of a new aristocracy of wealth, on the one hand, and the loss of any real possibility for economic autonomy, on the other. What informed the early period of the discourse was a dual concern with both liberal and republican themes, and it was the potency of this fusion that had much to do with the early radicalism of the egalitarian tradition. The liberal economic ethic sought self-sufficiency and autonomy in order to fight servitude in economic affairs. It was republican in its characterization of civil society and public institutions, and it privileged public welfare over the interests of the few. Within the context of a preindustrial economy, this would prove a rich ideological source to counter economic inequality in the early republic.

But as capitalism developed and transformed American economic and social life, the political assumptions and arguments that buttressed liberalism began to erode, and it would become—as an economic ethic—a degenerated argument for possessive individualism and inequality. The economic egalitarian dimension of the liberal tradition has slowly exhausted itself. The reasons were not simply reaction to the welfare state that became ascendant in the late 1970s and 1980s and that still persists. There has been a transformation of the political and economic ethic in American political culture. It is a transformation that has moved popular ideas about economic and political life away from the radical concerns of equality and freedom that characterized the egalitarian tradition. It has reinterpreted liberalism as a purely economic doctrine, replaced concerns for self-sufficiency with self-interest, and castigated the role of the state in the economy as backward and even authoritarian. The link between economic equality and freedom has also been seriously reworked. Whereas the backbone of the egalitarian tradition was its emphasis on the way that economic inequality forged relational networks of servitude and dependence as well as the corruption of the public welfare, the contemporary discourse on economic inequality—specifically since the 1980s—tells Americans something quite different: that capitalism and equality of opportunity are essentially the same and that liberty in economic terms is equivalent to political liberty as well.

It is for this reason that this study focuses on the history of the idea of economic inequality, on a political tradition as it was articulated in American political thought and social criticism by thinkers who saw the economic system as moving against the imperatives of equality and liberty that thought lay at the heart of the American political project. My assumption throughout this analysis has been that ideas inform and legitimize institutions, that they shape the way that political reality is perceived. Ideology can support or erode the institutional realities of social life, and it is for this reason that the political tradition of economic egalitarianism, which was foundational to the understanding of the American political project since its inception, needs to be reinterpreted and revived. If the implications of economic inequality were seen in explicitly political terms, it was because inequality was seen as a threat to republican values—to a harmonious political and social life characterized by the absence of domination and servitude. Economic life was always intertwined with political life—if individuals were dependent upon others, they would, as Jefferson rightly saw, become subservient to them as well. This is the crucial lesson that must be drawn from the history that I have sketched in these pages: namely, that for the contemporary discourse on economic inequality to have any real impact, it must revive the political interpretation of economic class that the American egalitarian tradition put forth. It must reconceptualize class divisions as crystallizations of social power and must argue that policies and steps toward economic equality are steps toward a more robust conception of political democracy and the expansion of social and individual freedom.

But history is not a license. The mere existence of a political tradition through time does not bestow upon it any sense of legitimacy. Rather, the past serves as a resource for the present. In this sense, unearthing the economic egalitarian tradition in American political thought can serve to illuminate aspects of economic life that have become hidden. Not unlike Plato’s allegory of the cave, the function of this exploration is to render visible what has become largely hidden in American social life: that inequality in economic terms has a corrosive force on political life and democratic culture more broadly. The egalitarian tradition that I have reconstructed here emphasized the links among economic, social, and political power; it connected a project of political liberty and its concern with the elimination of social domination and a political order based on legitimate authority accountable to democratic mechanisms. It was therefore a tradition that sought to privilege politics over economics, the public good over rapacious private interest, and a balance of social power among the members of society. At the heart of this tradition was its ability to see that economic relations were social and political as well; that the expansion of national economic prosperity but was merely a dimension of human liberty. The real essence of political freedom was contained in the absence of domination and dependence and the elimination of social hierarchies that were characteristic of preliberal nonrepublican societies as well as in the insight that only within a social and economic context that prevented such institutions and practices from arising could any kind of actual human liberty be realized.

The American economic egalitarian tradition was inspired by certain republican concepts and the confrontation with a rapidly expanding capitalist economy that made the tradition come alive. It is therefore the mixture of ideas and institutional realities—or more generally, political realities—that serves as the crucial dynamic of political history. The affinity between a set of political ideas and specific social, political, and economic realities is what brings any political tradition alive. When viewed in this way, the importance of history and tradition for the present becomes clear: new insights can be shed on the conditions of the present and new normative ideas can enliven political debate and discourse, thereby affecting political life. The relevance in the modern world of the revival of this tradition and its major insights should be clear enough. In a world marked by an expansion of economic inequality in global as well as national terms, where economic globalization comes at the price of political development and the expansion of vibrant democratic life, the American egalitarian tradition can affirm the aspirations of people to partake fully in political life and resist those social and political forces and interests that seek to pervert political life in the interests of capital rather than broader public concerns. The American economic egalitarian ethos was informed by an overriding desire to eliminate still-present feudal social and political relations. Their concern was therefore fundamentally political in nature, and it was driven by the republican desire to expand and protect political freedom.

The history sketched here therefore serves as a way to rethink and reevaluate the social world of the present. The function of the analysis of history—something known especially to Machiavelli, Hegel, and Weber—has always been to generate new insights into the present. The story that I have laid out in these pages is therefore something more akin to the recovery of a political ethos, one that refuses to allow economic life to become dominant over social and political life. Economic inequality was seen as something not only unjust in moral terms but as an expression of social power. The general argument made throughout the development of the egalitarian tradition was that economic equality was not simply an aspect of political equality but a precondition for all other forms of equality and for any substantive sense of political freedom. To deny this was, for the thinkers in this tradition, to admit the existence of a neo-aristocracy and the institutionalization of a new form of inequality. These points ought not to be lost when thinking about the dynamics of inequality today, especially in the global perspective.

Conservative economists continue to argue the merits of inequality and the actual scope of its economic effects. But, as I have tried to show in this study, it should be clear that the central concern ought to be political rather than economic in nature. The liberal economic ethic that was dominant throughout the eighteenth and early nineteenth centuries has been stripped of its political force. Liberalism as a doctrine no longer possesses an intellectual or political affinity with civic republicanism as it did in the first century of American political thought and culture. The economized conception of liberalism that predominates in American political culture still focuses on the idea of individual liberty, but in negative terms, and its justification for possessive individualism in the context of a market society has led to the justification of inequality. This is why liberalism is insufficient as a foundation for stating the case for economic equality. Liberalism’s emphasis on individual freedom and the absence of external constraint made perfect sense for a political project bent on combating feudal social arrangements and preliberal social norms and institutions (everything from racism to sexism and the like). But it has been unable to combat the problem of class and economic inequality simply because liberalism—as an economic ethos—has come to privilege possessive individualism over its previous thrust of economic autonomy. The labor theory of property was a radical one in the context an antifeudal economic context. Its emphasis on individual labor and the freedom to exchange without the interference of the state was an expression of antiauthoritarianism in the face of feudal and mercantilist institutions, assumptions, and ways of life.

As the evolution of the economy moved toward modern capitalism, the political thrust of the liberal economic ethic, once a radical idea that aimed to erode hierarchical divisions of power, would lead toward a reconciliation of capital and labor. To be sure, the radical nature of the egalitarian critics of the early nineteenth century in America rested on an understanding that the new institutions of capitalism would corrupt the ability of the liberal economic ethic to operate properly since capital could only accumulate more of itself by living off of the labor of others. The radical egalitarian critics were unable to stop the transformation and modernization of American capitalism, but their critique still harbors within it a radical message for today: namely, that the lens of liberalism is insufficient for an understanding of economic equality. Liberalism has become a justification for American social stratification simply because capitalism is no longer viewed as the generator of inequality; rather, it is seen that natural distinctions of talent, skill, intelligence, and so on, within the context of a “free” market, are responsible for market outcomes.

This transformation of liberalism, which began with thinkers such as Mises, Hayek, and Friedman, was viewed by them more as a restoration. These thinkers saw their ideas as reinvigorating the authentic tradition of classical liberalism: the minimal state, noninterference with the individual and economic affairs, a firm separation between economy and polity, and, most important, the connection of these attributes with what they saw as “true” liberty. What they achieved was an economization of liberalism that gutted the Lockean-inspired ideas of eighteenth-century and early-nineteenth-century critics of inequality of its political implications. Unlike the critics of inequality during the early republic and Jacksonian periods, the liberal economic ethic now serves to promote and justify inequality rather than critique it. The reason for this has been the transformation of the economic context: whereas an economy based on small-scale production, agrarianism, and localized economic life could utilize the labor theory of value and property as a tool to promote equality, after the industrial period, this kind of economy has been thoroughly replaced by one characterized by wage labor and the unequalizing effects of capital. The older ideal of the liberal economic ethic has turned into a narrow individualism that largely eschews the public good and instead emphasizes economic logic. We are therefore left with a situation where inequality can be justified even by the very people who suffer worst from its consequences.¹

This transformation of liberalism explains the decline of the egalitarian tradition in American politics. The narrow, libertarian understanding of liberalism—with its emphasis on negative liberty and hedonic utility maximization—has become the staple of a consumerist culture with its postindustrial work relations and an anomic division of labor. The reification of a market society has pushed politics to the periphery of everyday life, and, as a result, the implications of economic inequality become less visible. Of course, the perception of the welfare state from the late 1970s and 1980s persists: an institution that fosters dependence rather than a culture of work, and so on.² But it is not simply a reaction against the legacy of New Deal liberalism and the Great Society that we are dealing with, but a deeper transformation of the American liberal tradition itself, its depoliticization and its turning away form the former republican context within which it functioned. Indeed, there should be no mistaking the fact that the civic republican dimensions of American political thought emphasized a different understanding of human and political freedom than is commonly understood today simply because the antipathy to hierarchy and inequality at that time was so intense. The proximity to feudalism and the emergence of modern democratic politics was the reason for this, but it spills over into political culture as well.

Indeed, the way that liberalism was reassessed by the Progressive and New Deal thinkers was crucial for effecting a major reorientation of American democracy. For the first time, the idea that had been in the minds of many during the revolutionary period—that political equality and economic equality were mutually reinforcing concepts—was revived and brought to bear on modern capitalism. The traumatic experience of laissez-faire policies and the brutal effects of industrialism and inequality during the late nineteenth century had taken their toll, and the turn toward the state as the proper arbiter for a complex, developed national economy was seen as obvious. The “social liberalism” of the early twentieth century saw democracy as extending deep into the sphere of economic life. A new sense of public interest was initiated, and the emphasis on politics over the market made sure that economic ends served the public interest and not the interest of capital alone. All of this has been reversed by the libertarian transformation of liberalism. Even though the liberal economic ethic placed primary emphasis on the idea of individual effort as the source of all legitimate wealth and property, it was within an economic context that precluded corporations and the legal protection of accumulated property and profit that was not in fact garnered from one’s own labor. In this regard, the production process of modern capitalism was seen for what it was: the theft of labor from laborers for the sake of profit. Inequality was the result of the corruption of the liberal economic ethic, not its realization. By recasting the liberal economic ethic in its libertarian form, liberalism has become little more than an apologia for economic inequality. Inequality is now justified as the outcome of differentials in effort and talent rather than as the result of institutional mechanisms inherent in the production process itself.

It is for this reason that restating the case for economic equality requires transcending the political limitations of modern American liberalism and the kind of political, economic, and cultural ethos that it has unleashed. Whereas in the past, liberalism in America was able to expand political equalities in the face of entrenched irrational traditions and antiliberal doctrines and the institutions of slavery, Jim Crow, and the denial of women’s rights, it has shown itself to be consistently ineffectual in maintaining any real, enduring condition of economic equality or making a coherent case for its moral justification in the face of its contemporary detractors. What needs to be reclaimed is the political emphasis on the idea of economic inequality as the starting point for disparities in relations of social and political power. Concern for equality, antipathy toward hierarchies and, most important, concern with the absence of domination informed the critics of economic inequality throughout American political thought, and it is this interpretation of economic inequality that needs to be privileged.³ Indeed, the earliest American thinkers and writers on the topic also shared this concern, but it was largely a speculative and, indeed, theoretical enterprise. Once the intensification of capitalism began to set in, once individuals began to lose economic autonomy and the reality of class hierarchy became evident, the problem of economic inequality began to evolve as a distinct political discourse within the broader framework of American political thought.

The concern with a republican ethos is important, in this regard, because it provided thinkers with the appropriate normative framework through which to judge the evolving economic divisions and the budding aristocracy of wealth that was emerging. Although its most immediate concerns were with the elimination of patterns of social, economic, and political life such as kinship relations and patronage that were remnants of the older, quasi-feudal social and economic order inherited from Europe, the main thrust of the republican sentiment in American political thought was the thorough elimination of all forms of servitude and domination as the precondition for the realization of a true sense of human equality and freedom.⁴ And it is important to note that up until the late nineteenth century, the liberal economic ethic and these republican sentiments were part of the same project. Today, however, liberalism—as applied to the realm of the economy and property—has lost its ability to argue against the effects of capitalism, inequality, and the conditions of the workplace. It is not simply that capitalism has become ascendant, American liberalism has also accepted many of capitalism’s effects. Liberalism’s emphasis on individual labor and property right and its individualistic conception of liberty have melded with the consumptive ethic of late capitalism. Inequality has therefore ceased to be a social concern, one that touches on the very character of political life; it has become the very result of the liberal economic ethic, a renewed state of nature patterned by the “natural” outcomes of the market. The diminution of inequality as a problem that touches on more than economic concerns is one of the casualties of the modern transformation of liberalism.

Placing the argument against economic inequality in its proper historical context is therefore important. Although early-nineteenth-century critics assailed the emerging institutions of banking and capitalist wage labor, their concern was with economic autonomy: the ability of individuals to be free from the arbitrary exercise of power by owners and employers and to lead a self-sufficient economic life free from dependence and servitude. This was the impulse that informed the critique of inequality, and its political implications still have importance in an age where working people—of all varieties—have less control over their workplace and their economic future. As these radical critics of inequality saw it, there was no simple separation between political and economic equality; they would have rejected the crude distinction because of its implausibility and also because they interpreted economics as a distinct sphere of power, not a neutral mechanism of distribution and production. The emphasis on republican themes is therefore not anachronistic; if liberalism now provides a justification for individualistic economic life, republican themes can shed light on different aspects of social power and inequality. But this must be done with care—the wide array of work that has appeared on republicanism has suffered from abstraction and idealism. On the one hand, the political philosophy of republicanism rests on the notion of civic virtue and the need for citizens to act according to public rather than private ends. The critics of economic inequality and social atomization were wedded to these beliefs. But politically the problem remains that resting any political theory on the vagueness of something like “civic virtue” is to propose a political theory with little actual political power.

Rather, what I think we can glimpse throughout the evolution of America’s economic egalitarian tradition is not that civic virtue was in fact the crux of any political idea, but that the elimination of actual social and economic constraints—those that created unequal power relationships—were necessary for any substantive realization of individual liberty or full realization of democracy. But more concretely, what the critique of inequality in American political thought shows is a need to see that individuals do not exist as abstract legal-political entities. Rather, they are part of a material context—a set of economic relations—that can either enhance or erode individual freedom. In other words, it was clear that although each is an individual with individual rights, the nature of the relations of individuals to one another needed to be equally emphasized. The radical egalitarian critique of the early nineteenth century that emphasized the damaging effects that monopoly and gross inequalities of wealth would have on the public good, as well as Walter Weyl’s invocation of the idea of a “socialized democracy,” both speak to an idea that transcends the narrowness of contemporary liberalism.

The idea of a “republican modernity” would emphasize the need to move beyond a wholly individualized conception of liberty. It does not dispense with liberalism by wrongly reducing it to possessive individualism. Rather, it seeks a synthesis of individual autonomy and public aims; it links the interests of individual liberty with broader social institutions; and it sees that the individual can only attain a sense of real freedom within the context of a social organization that restrains the excesses of the market and capital and provides where the market is unable to do so. And unlike many modern interpretations of republicanism that emphasize an almost exclusive need for “civic virtue,” a republican modernity would maintain ethical and institutional imperatives that are not dependent on the utopianism of civic virtue.⁵ Instead, it would extend the assumptions and insights that many of the critics within the American egalitarian tradition held or even saw as basic and necessary assumptions. In place of an emphasis on civic virtue, a republican modernity provides a way to see modern economic society normatively and bring the political problems of domination and unfreedom to light. It also delineates those places where individual autonomy should be emphasized and those places where pubic aims and goods should be.⁶ Republican modernity works off of a set of assumptions and understandings of political and social life that see “interdependence” and the social context of autonomy as essential to a more substantive and deeper conception of human freedom.

The modern turn in political theory toward the republican tradition has rightly emphasized the importance of the normative category of “nondomination.”⁷ Indeed, this was the very category that many critics of inequality in the American egalitarian tradition brought to bear on the problems of economic inequality and the emergence of capitalism. The historical account of the discourse on economic inequality in America sheds light on the particular reasons and rationales that were used against the disparities of wealth as well as the sociology of the workplace itself. Implicitly, it glimpsed something that I think has been lost: the insight that economic inequality creates patterns of domination and dependence that are concrete and real and that these can only be usefully combated once the political impulse against hierarchy, domination, subordination, and lack of material security becomes paramount once again in political and cultural life.

When applied to the problem of economic inequality, this means rejuvenating the egalitarian tradition and breathing life into the political impulse for a deeper conception of economic rights that is more than simply an equality of opportunity, as well as extending democratic standards into the workplace itself. It would be wrong to fault liberalism as a political theory for the problems of contemporary economic inequality and the lack of resistance to it. The concern for the synthesis between personal autonomy and the importance of public goods and aims has an important lineage. Hegel’s insight was that absolute freedom would come about through the dialectical sublation of modern individualism into the community or public. He sought this through the institutional power of the state as well as voluntary civic groups (Korporationen) that would check that power.⁸ But the most immediate intellectual concerns of this synthesis with respect to economic inequality can be found in the American egalitarian tradition itself. Walter Weyl’s “socialized democracy” or John Dewey’s idea of “social liberalism” rested on the insight that atomistic, laissez-faire individualism was not only sociologically—if not anthropologically—unsound, but that it was, more importantly, politically degenerative as well.⁹

For Dewey—who himself absorbed many Hegelian themes in his social and political thought—the history of liberalism moved from what he termed an “earlier liberalism,” which grew out of resistance to oligarchic government beginning with the English revolution of 1688. This evolved into “later liberalism,” which was articulated by the demands of a “rising industrial and trading class” that sought to eliminate restrictions on the freedom of private economic enterprise and the burdens of taxation. The problem, as Dewey quite rightly saw it, was that this form of liberalism would come to justify certain forms of society that were in fact against the initial aims that liberalism sought to achieve. This twisting of liberalism Dewey called “pseudo-liberalism”: “I call it pseudo-liberalism because it ossifies and narrows generous ideas and aspirations. Even when words remain the same, they mean something very different when they are uttered by a minority struggling against repressive measures and when expressed by a group that, having attained power, then uses ideas that were once weapons of emancipation as instruments for keeping the power and wealth it has attained. Ideas that at one time are means of producing social change assume another guise when they are used as means of preventing further social change.”¹⁰

It is absurd to conceive liberty as that of the business entrepreneur and ignore the immense regimentation to which workers are subjected, intellectual as well as manual workers. Moreover, full freedom of the human spirit and of individuality can be achieved only as there is effective opportunity to share in the cultural resources of civilization. No economic state of affairs is merely economic. It has a profound effect upon presence or absence of cultural freedom. Any liberalism that does not make full cultural freedom supreme and that does not see the relation between it and genuine industrial freedom as a way of life is a degenerate and delusive liberalism.¹¹

Individual freedom therefore is the product of the context in which the individual belongs. The abstraction of the individual that classical liberalism suggests does into take into account context or class. As such, it can no longer serve as a critical impulse against the prevailing system; it becomes an apologia for the status quo.

The relevance of what I am calling republican modernity for renewing the critique of economic inequality should be obvious once we grasp that inequality and liberalism have a strong affinity with each other. Liberalism—specifically as it has evolved since the nineteenth century and in terms of its emphasis on the institution of free contract—runs into the crucial dilemma of trying to defend individual autonomy in political and economic terms simultaneously. Its emphasis on private property and contract has always been at the center of the defense of corporate interests over the interests of the public. It has also—through a process of political and cultural naturalization aided by libertarian and neoconservative social and economic thought—wedded itself to market capitalism. This has had the effect of alienating citizens from the useful role that the state can play in ameliorating inequality, conferring rights on working people, and directing the increasing prosperity of the few toward the needs and substantive prosperity of the public. Republican themes emphasizing the public good and illuminating the economic context within which individuals function are therefore essential; but they cannot be strengthened at the expense of liberal ideas of moral and political autonomy. The tension between these two opposing poles in political thought can be sketched elsewhere; the key here is to see how republican themes can rejuvenate the possibilities for a new, more robust critique of economic inequality and restate the argument for equality in an age so hostile to it.

Shifting the critique of economic inequality to its political valences means shifting attention and concern toward unfreedom, the arbitrary nature of economic constraint, and the possibility of the state enhancing and extending individual freedom rather than acting, according to the libertarian-inspired notion, simply as a constraint on individual liberties. It means drawing attention to the political dimensions of everyday economic life and the workplace and renewing institutions that will ensure economic security. It means seeing the effects of economic inequality on the problems of social fragmentation and the effects this has on creating a disinterested, apolitical public concerned more with the narrow concerns of consumerism and market imperatives. And it also means a strengthening of civic institutions to combat the socially corrosive effects of the market.¹² The need for equality must be emphasized as a path to enhancing democracy in everyday life as well as creating a material context for a richer sense of individualism. If individual liberty cannot be conceived outside of the material and social context in which the individual finds himself, then the need to emphasize economic equality for the purpose of deepening democracy takes on a renewed significance. Republican modernity is both a move toward renewing the balancing of individual autonomy and the recognition of material and economic constraints that stunt social freedom, and a reminder that modern economic life is a core contributor to the lack of political and social freedom of the individual.

These insights find reference in the historical lineage of the American egalitarian tradition. Economic inequality always constituted a transgression of fundamental political principles for most of American political thought in the sense that the common weal was being subordinated to the interests of the few. But this tradition also saw that individuals were caught in a web of economic relations of varying dimensions: at the level of the workplace itself, where employee was subordinate to the employer; at the level of wages since capital and labor reaped unequal rewards from their various inputs of labor; and at the level of society itself since the individual was now caught in an age of limited choice for work and personal and cultural development, with business interests predominating over other social, political, and cultural aims. Many of the early thinkers of America’s egalitarian tradition privileged the connection between political principles and economic conditions. They saw that the very conception of citizenship—broadly defined as the participation in the political community and the political rights that it bestowed—was put at risk once the maldistribution of material forms of life worsened. They may not have given voice to the conditions of slavery in the South, and they were indifferent to the inequalities brought about by a gendered division of labor. But their critique of class divisions, the mechanisms of inequality, and the new forms of domination that were rising in everyday life as capitalism developed and deepened its influence bristled with political insight. Stephen Simpson’s line from 1831 that America’s political and social experiment had discovered that the real ends of government were to “secure the happiness of the many instead of ministering to the benefit of the few” was an expression of this sentiment, but it also spoke to the way that economic inequality would be interpreted as going against the broader ideas of equality that American political thought had at the very core of its being.¹³

The critique of economic inequality was therefore intimately bound up with broader conceptions of social and individual equality and freedom; the ways that working people and their employers related to one another; the various opportunities that were becoming less and less available to them as a distinct social class; and how the ability to live a life of economic autonomy rather than one of servitude, which was becoming the predominant form of economic life. This concern was not liberal in the narrow sense that we understand it precisely because it aimed at more than an ideal of negative liberty, or of noninterference. These thinkers saw—as did the republican theorists throughout Western thought—that noninterference was not equivalent to eliminating forms of domination.¹⁴ This is why the radical critics of the early nineteenth century and the moral critics many decades later saw the problem in institutional terms. The concerns of political freedom (theorized as the lack of domination) were intricately involved with economic inequality.

The liberal-republican critics of economic inequality therefore saw freedom not simply in individual terms, but in social terms as well. They saw the importance of patterning institutions so that inequality would not arise since economic inequality led to dependence and the corruption of the very moral basis behind the politics of America’s republican enterprise. This was evident in the concern that the radical critics took in the problem of wage labor and the new institution of capitalism that was emerging during the early nineteenth century. They were concerned not simply with the problem of inequality, but that the institutions of society were generating these inequalities, rendering individual freedom nearly impossible. Although it is certainly true that the fight for legal rights on the part of working people took the form of liberal arguments against what Karen Orren has termed “belated feudalism,” it is equally important to see that as a tradition, as a critical political discourse, the critique of economic inequality in American political and social thought was dominated by the republican idea that freedom was not possible in mere individualistic terms; that it required not just an equality of opportunity but also the elimination of institutions that were transforming economic life; that the very social and political context was being remade by the forces of capital. In contrast to the liberal vision, the republican idea of equality and freedom saw political and social freedom more in terms of the elimination of institutions that would interfere with the freedom of individuals and the arrangement of institutions so that domination and interference of individual freedom were eliminated. Even more, they were able to see the political implications of inequality in the ways that perverted power relations would unduly affect the public good, steering democratic institutions away from their universalist ends.

The kind of republicanism that informed the views of the critics of economic inequality throughout the nineteenth century saw such inequality as the result not of merit and reward but of the emerging economic institutions of capitalism. Inequality was produced by a new economic aristocracy, and as inequality grew, the disparity in the relations of power between workers and capitalists would continue to broaden. The emergence of the wage system was particularly problematic not only because it would create a new form of economic servitude—something that the critics of inequality thought the American Revolution had eliminated—but because, as an institution, it was creating an unequal society based on the unequal division of property and wealth rather than one based on merit and reward. There were no illusions about what capital actually was and what its effects would be. The republican themes of this critique were essential because they enabled egalitarian critics to view inequality not as a phenomenon of interpersonal differences but as an institutional phenomenon that was intimately tied to the politics of human liberty.

This is why it is essential to bring the debate about economic inequality back to the very foundations of the egalitarian tradition itself. Even its twentieth-century guises as Weyl’s “socialized democracy” and Dewey’s “social liberalism” were both modern interpretations of republican themes in the sense that they privileged public interests over individual interests and a conception of the public good over economic hedonism. What they saw as “chaotic individualism” needed to be countered by the institution of the state; the market, the economy, was being revealed for what it was, just as it had been in ancient Athens thousands of years before: an institution that would atomize society and dissolve the cohesiveness of the political community. Even further, they were able to link this to concerns for social justice and a project of deepening democracy itself. It was a project that defined the laissez-faire ideology as antidemocratic and antimodern. The success of the libertarian attack by Hayek and Friedman therefore brought the narrow, “classical” liberal doctrine into ascendance over these republican-inspired themes. The curious balance between or fusion of liberalism and republicanism that characterized American political thought from its inception has become inordinately biased toward liberal ideas of property, accumulation, individualism, and self-interest.

Whereas liberalism was utilized by radicals in the nineteenth century as a means to argue for economic equality, its reliance on the notion of individual labor and the possession of the fruit of one’s labor has become the very obstacle to arguing for economic equality in the modern political context. Outside of the agrarian economic framework within which it could exert radical influence, it has become—in its own way—a defense of economic divisions. No longer are CEOs and bankers seen as idlers living off of the labor of working people. Today the reification of the economic system has placed economics over politics; it has collapsed ethics into interest; and it has denatured the idea of public goods to the most menial and insignificant institutions and services. The earlier connection seen between political rights and economic realities has been lost. Liberalism’s atomism, its inability to conjure up a notion of political goods as superseding the individualistic economic interests of social actors, has resulted in the fragmentation of the public by economic divisions.

The historical and intellectual arc that I have sketched in this study should be seen in its entirety, as the rise of the American egalitarian tradition, its fruition, and, in the end, its exhaustion and defeat. The concern for economic inequality no longer looms as an important issue in American culture or American political thought. Even among workers and the working poor, on whom the injustices of inequality continue to take their toll, there has been an erosion of the ideas and values that once informed their opposition. And although this study has also sketched an inegalitarian tradition in American political thought—beginning with thinkers like Hamilton and continuing through Sumner, Hayek, and Friedman—it is not so much the victory of this discourse over the egalitarian discourse that, in my view, explains this shift away from concerns with economic equality, as it is the way that liberalism has become predominant over older, republican-inspired themes.

The struggle for economic equality has been weakened by a gradual acceptance of liberal capitalism. The way was paved by the broader turn toward classical liberalism in nineteenth-century American political thought, which served to attenuate the critique of inequality in the sense that it steered American political thought toward being more tolerant of capitalism and its effects. This turn would also give more weight to the antiegalitarian tradition by legitimating an apolitical conception of the market and the economy, a conception that would mature into a broader ideological attack on the modern welfare state and dilute the egalitarian tradition, all but stopping it in its tracks as the twentieth century came to a close.

Apologists for laissez-faire and libertarianism have become very influential in the closing decades of the twentieth century. Their ascendance was not attributable the fact that they appealed to an outright justification of inequality—as Hamilton and Sumner had—but that they emphasized a split between politics and economics. The liberal doctrine that they developed—based on “classical liberalism” and its utilitarian presumptions—articulated a doctrine of an “equal right to be unequal” in the sense that equality was to be restricted to equality before the law, leaving the effects of the market essentially unchecked by any form of political regulation. Even more, they were able to collapse what they referred to as “economic liberty” into political liberty itself. This is a discourse that has not only become influential in the United States but has also gripped much of Europe as well.¹⁵ But perhaps most important of all, it has sunk deep into the fabric of American political culture, serving as a justification for economic divisions and a new economic hierarchy.

Renewing the claim for economic equality therefore requires not a reinvention of liberalism but rather a renewed emphasis on the republican themes that dominated the calls for social equality throughout American social history, most specifically the elimination of institutions that were fostering inequality, such as capital itself. It requires that the emphasis on class hierarchy and its ability to distort democratic politics at multiple levels be made apparent and its political effects—perhaps more than its moral implications—be brought to the forefront. There is no question that liberalism has been able to make serious gains in the areas of race and gender, but the problem of class and economic power persists. And, in many ways, this is the result of the predominance of liberalism over the republican themes that inspired the antihierarchical impulses of the radical critics of economic inequality.

Part of the reason for this is the way that economic institutions have shaped political interests and the way that institutions in America were shaped to protect property rights and the ability to accrue property and wealth at the expense of the broader interests of the political community. But the other component to this explanatory tale is the realization that American liberalism, with its insistence on the individual and natural rights grounded in property, acts as a consistent counterforce to the more radical impulse toward social equality that served as the intellectual and moral backdrop throughout American egalitarian tradition. Indeed, it should be remembered that the arguments of almost every thinker who worked within the inegalitarian tradition in American political thought were never against political equality and the equal application of the rule of law to all individuals. The problem has always been how to argue for equality in the face of individual claims to property and the vestiges of the liberal labor theory of property. This was, to be sure, something that the egalitarians saw as central to their argument against the rise of economic modernity, but it is also important to see that this persistence of the liberal economic ethic would come into conflict with the republican themes of equality and their emphasis on the abolition of domination, institutional and otherwise.

Contemporary events give evidence to these broad claims. The new inequality in America has effected a radical change in the course and direction of American democracy. From the spread of regressive tax policies at national and state levels to the deregulation of business and the defunding of social welfare programs, the assault on economic inequality has been pervasive and intense. Economic inequality needs to be seen as more than a moral dilemma over competing conceptions of “fairness.” It structures power relations in everyday life; it consigns segments of the population to destitution and servitude; and it enhances the asymmetrical power relations that distort electoral politics and the activity and function of the media, as well as redirecting the goals of social policy toward the interests of business and away from the broader needs and interests of the public. American political thought was characterized by its critique of these themes and a push for a substantive form of social equality. This study has outlined how the ideas of economic inequality and equality were conceptualized, how they were enlisted to criticize the prevailing institutions of various times, and how they were consistently informed by the project of realizing equality. Taking lessons from the insights that this tradition put forth and learning from its political impulse are therefore central to restating the case for equality and reigniting the critique of the “new inequality.”

The effects of economic inequality are by no means simple to define—they reach into subtle nuances of everyday life. But there should be no mistake about what the central concern should be: that the failure of the American struggle for economic justice—most obvious in the last quarter century—has been the result of the collapse of the political. Unlike in other areas of social life—from race, gender, and now sexual orientation—political liberalism has been unable to overcome inequalities of class precisely because it has been unable to locate the mechanism of inequality itself: that capitalism and “free” markets generate inequalities from the very nature of the production process and that an “inalienable right” to property—as unequally distributed as it is in modern capitalism—needs to be held accountable to democratic or public ends. Indeed, this was pointed out by the earliest American critics of economic inequality, and it is something that ought not to be lost in contemporary considerations on the subject.

Although the specific fears of social dissolution and tyranny that the Western tradition and early American thinkers possessed may not be on the horizon in the near future in the United States, it should be clear that contemporary inequality, and the transposition of the ideas of liberty and freedom to mean mainly economic freedom and liberty, has led to a society of dependence. The economization of American society has resulted in the forfeiture of political principles to economic ones. American thought has always been based on economics. The political ideas of liberty and equality were fundamentally bound to the material referents of property and labor. These material extensions, if you will, of those concepts buttressed political concepts. But now this situation has been reversed: the political concepts have become subordinate to the economic concepts.

Much of the problem with the liberal assault on economic inequality is that it was never able to grasp the mechanisms of inequality. The focus on redistribution often belonged to the egalitarians. John Pickering advocated a radical redistribution of equal shares of property, and Henry Demarest Lloyd argued a similar program. But even they were unable to see that inequality was not simply the result of privilege or monopoly power. Without question, the anti-aristocratic impulse that stood behind these radical critiques were unable to see that inequality is endemic to market systems and that it is the production process itself that is the engine for inequality. However, the early labor radicals from Langton Byllesby to Orestes Brownson and John Pickering saw capitalism in those terms, and their critique was motivated by what they saw as the corrosive effects of these new economic arrangements on the kind of economic life that, in their view, was constitutive of the political ideals of equality, justice, and liberty. It was motivated by political concerns and not by ideological ends that were imported or derived from non-American sources. And this is significant since it was the political impulses of the American republican tradition that inspired the critique of inequality and sustained the discourse for well over a century as capitalism continued to mature and develop.

The kind of economic individualism that has evolved in contemporary political, economic, and social thought has eroded the foundations of the kind of intellectual, political, and moral assault on economic inequality that marked most of American history. This move has been the result of a certain triumph of economic liberalism. What is curious is that American tradition of criticism has become largely mute. The persistence of inequality is not simply the result of economic factors. The moral critics of inequality knew all too well in the late nineteenth century, although this has been lost on contemporary thinkers, that only a consciousness of the political dimensions of economic divisions can lead us to glimpse the full implications of inequality’s effect on political freedom. This was, to be sure, inspired by the requirements of social welfare and the democratic principles of an egalitarian social order that were influenced by Enlightenment ideas countering hierarchy and privilege, but it was also motivated by what we now call the republican themes that emphasized a very different understanding of equality, which was fearful of the fragmentation of public life that would result from economic divisions of power. Restating the case for economic equality therefore requires that we look back to the political dimensions and implications of inequality itself, to resurrect the political project that once pervaded the minds of the American critics of inequality and their radical emphasis on freedom as the absence of inequality. Only then will a renewed egalitarian project become possible, resurrecting the political spirit of the past within the possibilities of the politics of the present.