Past Sermons by Rev. George Smith, Retired

Mired Meritocracy

June 20, 2003

Reading: The principle power in Washington is no longer the government or the people it represents. It is the Money Power. Under the deceptive cloak of campaign contributions, access and influence, votes and amendments are bought and sold. Money establishes priorities of action, holds down federal revenues, revises federal legislation, shifts income from the middle class to the very rich. Money restrains the enforcement of laws written to protect the country from abuses of wealth—laws that mandate environmental protection, antitrust laws, laws to protect the consumer against fraud, laws that safeguard the securities markets, and many more. Richard N. Goodwin, former speech writer for John F. Kennedy

Reading: “as a general rule, nobody has wealth who ought to have it.” Benjamin Disraeli

Reading: “wealth should be the servant of the people, not the master, we hold it to be a prime duty of the people to free our government from the control of money…and not only in the interest of the owner but of the whole community” Theodore Roosevelt

Reading: “ I believe in corporations. They are indispensable instruments of our modern civilization; but I believe that they should be so supervised and so regulated that they shall act for the interest of the community as a whole.” Franklin Roosevelt

Reading: “Banking establishments are more dangerous than standing armies.” Thomas Jefferson

Reading: “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.” Abraham Lincoln

Reading: “Many of our rich men have not been content with equal protection and equal benefits, but have besought us to make them richer by act of Congress.” Andrew

Jackson, veto of Second Bank charter extension, 1832

Reading: Egalitarianism is the “survival of the unfittest...millionaires are a product of a natural selection, acting on the whole body of men to pick out those who can meet the requirement of a certain work to be done…It is because they are thus selected that wealth—both their own and that entrusted to them—aggregates under their hands. They may fairly be regarded as the naturally selected agents of society for certain work. They get high wages and live in luxury, but the bargain is a good one for society.” William Grahm Sumner, Professor of political and social science at Yale.

Reading: “A society which reverences the attainment of riches as the supreme felicity will naturally be disposed to regard the poor as damned in the next world, if only to justify making their life a hell in this.” R. D. Tawney, British historian.

Reading: “The principal power in Washington is no longer the government or the p[eople it represnts. It is the Money Power. Under the deceptive cloak of campaign contributions, access and influence, votes and amendments are bought and sold. Money establishes priorities of action, holds down federal revenues, revises federal legislation, shifts income from the middle class to the very rich. Money restrains the enforcement of laws written to protect the country from abuses of wealth—laws that mandate environmental protection, antitrust laws, laws to protect the consumer against fraud, laws that safeguard the securities markets, and many more.” Richard N. Goodwin, former speechwriter for John F. Kennedy.

Reading: “The world we inhabit today, with its ruthless competitiveness, fierce consumerism, restless desire for ever wider horizons, discovery and innovation…is a world which was made in the Renaissance.” Annonymous

Reading: “More than anything else, I want to see the United States remain a country where someone can get rich.” Ronald Reagan

Reading: “Anyone who thinks greed is a bad thing, I want to tell you that its’ not a bad thing. And I think that in our system, everybody should be a little bit greedy.” Ivan Boesky

Reading: Greed was the basis of society. The challenge of social organization as to “set up an arrangement under which greed will do the least harm: capitalism is that kind of system.” Quoted area Milton Friedman and the rest of the quote from “Wealth and Democracy” by Kevin Phillips

Reading: “The evolution of government from its medieval, Mafia-like character to that embodying modern legal institutions and instruments is a major part of the history of freedom. It is a part that tends to be obscured or ignored because of the myopic vision of many economists, who persist in modeling government as nothing more than a gigantic form of theft and income redistribution.” Douglas North, 1993 Nobelist in economics

Reading: “In ‘The Theory of Moral Sentiments,” Adam Smith said that most of the world’s troubles come from somebody not knowing when to stop and be content.” Charles Kindleberger.

Meritocracy, a strange but very definitive word, is the stuff of which myths are made at least in our society. We have prided ourselves on being a nation that is meritocratic that is without an aristocracy and/or plutocracy where each person can earn his or her position in our society. It is part of the reason that anything that seems to smell, taste, or feel socialistic has a hard time winning the interest and the approval of this society. It is why we so often come close to having socialized medicine or other such social programs and then puff we get pangs of pangs conscience and say no—each needs to earn and pay his or her own way. We are by our own admission believers in a meritocracy. And it is important to add to this the sacred cant that democracy cannot exist unless each person’s vote be heard with equal weight in the hallowed halls of government. None even the elite or the moneyed interests or the power brokers should have any more power than the single voter him or her self. We have presumed that this has been, is and will be the truth for ever in our nation. And yet by almost any measure we do not quite have in any form this meritocracy.

However reality is a bit different. We have performed miserably in trying to establish a meritocracy. And yet it is one of the most cherished values of our country’s ethos. It has been the ideal since before the founding of this country. I grew up with the idea that hard work and persistence would win the day. I grew up with the old cliché that anybody could become the president of the United States. I grew up with the idea that any body given enough hard work could become a millionaire and now a billionaire. I grew up with the idea that our government was responsive to all of the people. What I have struggled with is that these ideals do not equate with what really exists in our own country today. Merit, that very simple word simply defined as to earn is why we struggle so much with the idea of affirmative action and a social safety net for our people. I can almost agree with the people who want to do away with affirmative action only if they do away with all kinds of affirmative action and leave it that any who want to get into a college do it based on a single test score and high grades in high school only. No alumni money, no rich and powerful getting substandard young people in. A complete merit based program. Certainly this is fraught with a few complications, how do you compare high schools and their grade giving, what about the students who are excellent except when they come to taking tests, etc.

It is merit that very defining notion of our Puritan background in terms of our everyday, workaday world that is the foundation upon which we believe our republic to have been built. And yet all too often it is the power of money, its influence that seems to trump the idea of merit. A plutocracy is a much better description of who and what we are today. I say this with great unease because I’m sure many of you feel very uncomfortable hearing this term being applied to our nation, that we have a moneyed power elite that has more influence than the totality of the people.

I think for the most part we can recognize that money does indeed buy you power in this nation. If you have money you have influence beyond the one person one vote ideal. Sorry to say but that is the difficult truth we need to hear. It may not though be all negative. It is very easy to decry our governmental system and the influences upon it and also by extension the economic system which gives us valuable rewards. We so often rebuke the captains of industry while secretly plotting our own economic command. What is it that we really want in this country as far as our economic and political programs and how do they then impact how we live and operate? What we are dealing with is that we value meritocracy and yet have a plutocracy. And the question is do we want to be other than what we are or do we want to continue as we are?

In order to understand how we have gotten to this point we need to consider the interrelated development of democracy and capitalism both of which have grown on the idealism based in merit. Capitalism its forms and structures had begun to development during the Middle Ages. The Renaissance with its burgeoning middle class which fell under the spell of Protestant Christianity and a simultaneous growth in the influence of humanism began to find its very own individual voice. This then was the basis for the market economy inoculated with theological and philosophical underpinnings for the creation of capitalism and also democracy. Both thrived in the western world focusing on the fact that humans can make their own choices outwardly and unashamedly and that humans by their own merit could govern and take care of themselves. They needed no superior power to guide and protect their way.

This created a struggle, a quite emphatic struggle, as the political and economic individualism competed with the social good. The developing mechanisms of both capitalism and democracy made it possible for people to exploit the markets for their own benefits and the creation of a new class of wealth. In this exploitation an uneasy relationship between democracy and capitalism developed inviting the question would wealth so influence the direction of the government that democracy would inevitably fail? It is the other side of the coin of meritocracy. It is the question, can and will the concentration of wealth destroy a democracy? This question was there at the very beginning of our nation replete with thoughts and ideas that decried the development of an aristocracy. Wealth was the first real conflict in the early government of the republic pitting the Hamiltonians and their emphasis on wealth accumulation and the Jeffersonians with their concern for the middle class development leading to a truly egalitarian society. The development of a National Bank sustained this argument for many years. It continues to this day over the influence of the Federal Reserve Bank on both our political and economic systems.

The influence and power of money can indeed affect the workings of democracy.

During the late 1800’s when Senators were chosen by state legislatures instead of directly elected railroad interests and their money influenced the elections of those legislatures. Thus assuring that legislation at the federal level would benefit them, which it did. Currently the influence of money is seen in the election process. In 1976 the winning incumbent senators raised an average of $610,000, in 1986 it was $3 million, and in 2000 $7.3 million. Now consider the results of putting money into these campaigns and lobbying efforts of various industries and it is essential a an investment from which they expect a healthy return. Look at the figures. The timber industry, spent $8 million to get a logging road subsidy worth $458 million, a 5,725 % return on their investment. Glaxo Wellcome put $1.2 million into campaign contributions in order to get an extension of 19 month on the patent for Zantac worth $1 billion to them giving them an 83,333% return on their investment And then the Broadcast Industry spent $5 million to get free digital TV licenses worth $70 billion a 1.4 million % return on their investment. The stock market move over, campaign finance and lobbying is a much better investment.

It is not just the direct influence of money that affects the democratic process. The business cycle insinuates itself into the workings of government. In his book Wealth and Democracy, Kevin Phillips describes this cycle. It begins when a new technology develops leading to outstanding economic growth in which all sectors of the society share in an increasing living standard and a more equitable distribution of the wealth. Then a decline sets in and there is a shift in the investment by the wealthy into the financial services sector such as in banks, real estate, stocks, bonds, etc and speculation begins. Usually this is reflected in the concentration of investments in the hands of the wealthy. The living standard of others either stagnates or decreases during this time. In all of this there develops a speculative bubble usually focusing on the developing technology of that time and fueled by greed. It is a time when self-interest avarice, seeking of luxury emerges as the commercial and civic virtues. The bursting of the bubble brings panic with a broad economic downturn and calls for reform as scandals inevitable are exposed. You need only review our history to see such scandals: the S and L crisis in the 1980’s, Enron, Tea Pot Dome, etc. This usually leads to various governmental restrictions on the system which then lesson the influence of wealth. In the late 1800’s trusts and monopolies controlled by captains of industry developed individual markets that needed as much freedom as possible so as to create as much profit as possible with the government there to protect the market profit with as little regulation as possible. These captains used their influence on the political system to protect their business interests. Eventually their political influence waned when progressives such as Theodore Roosevelt championed the regulation of these industrial trusts and monopolies so that benefit could accrue to the society at large. After the crash of 29 and the ensuing depth of the depression the New Deal policy was to infuse American politics with an egalitarian set of solutions. It is clear that the political system can at times rise to the fore and staunch the influence of money on the government.

All of this not withstanding, it is the Darwinian ideas of the survival of the fittest writ large in the conspicuous consumption and economic self interest that lionizes the market place drowning politics in money. But then it is social justice that fosters the taking from the rich and giving to the poor and drowning policy makers in a flood of sociology. It is a constant battle between the two positions.

So where does this leave us. Is it the case that our democracy is being derailed by money? That meritocracy doesn’t have a chance or has never really existed? Certainly the influence is there. There is much information and statistics out there to back up this contention. But it is possible that we are in a situation where influence seems to follow the business cycle. We need to work at it until we learn what we need to so that we can go onto the next level. Much as a young person needs to do when he or she is learning how to play a video game. We work at it until we get it right. For instance in the Middle Ages the Paternalistic economic system that served the developing human system well until the coming of the Renaissance and its emphasis on the development of the individual and the creation of the market system in which we are now. In which we are struggling to learn how to balance individualism with the community good. It is none to easy. It is the balancing of the concern for self with the concern for others. I would take a Buddhist view of this in the sense that every trip starts with the simplest of activities, that is the first step. It seems that what has been going on in our country over the last 30 to 40 years is a process of incorporating different structures into our societal system. We have struggled with patriarchy and still do, but are making changes. These will eventually affect the economic system. We are struggling with diversity. This too will eventually change the system creating its own disruptions and balances. To me the changes that take place in other aspects of our society affect all our society. But it is only in through these changes that we will redefine the society and its problems and issues bringing new challenges for us to confront.

It is indeed a further development of the human and of his or her awareness that will bring about the challenge to change our culture. It is not the matter of doing away with wealth that is only a temporary solution at best. It is not just a matter of doing away with poverty. It too is only temporary. It must result in the change in human self. It revolves around human self-interest and human communal interest and a way to balance the two. It is what we do in a good marriage or any good relationship. It somehow needs to be fostered in the macro system of our society.

There is a story I would like to finish with today. It is the story of a little girl who lived a long time ago. She was virtually all alone in this world. The only way she could make enough to eat was to sell matches. This one particularly cold and bitter day, she had been out selling her matches all day long without much success. It was getting so cold and to the very end of day light that she stopped to getting into a doorway so she could find some shelter. Once there she began to dream of a warm nice home to live in. But each time she would get very far into the day dream she would feel the biting cold. Soon she thought if I light just once match it will warm me and give me some light. She did so and in the flame she saw marvelous pictures of toys and candies. She said to herself I can just light one more match and so she did and this continued until she had lit them all. All she became them was more and more cold until…the next day they found this little girl frozen to death in the corner of the entrance to a building.

It is the life we struggle with. So much wealth in the hands of some and so little in the hands of others. For the want of some warmth. Some place to get in out of the bitter cold. This little girl died. For the want of an affective balance between personal and communal well being we condemn others to live lives that too seek shelter from the bitter cold. It is up to us to live a new life that balances these two very important aspects of who and what we are as human beings.