Wealth and Democracy can be seen as a follow-up to Kevin Phillips’ 1990 book, The Politics of Rich and Poor. It is not, however, a mere update, because it extends its vision to cover a number of other facets, including the disparities of wealth in American economic history from the 1790s to the present.

The book has considerable substance and extensive factual detail about several themes that are interesting in themselves. Leading among these is his phase theory about major economic powers. “The similar trajectories of the previous leading economic powers present a powerful argument for stages of development that the U.S. is itself following,” Phillips claims. The phases can be seen in the rise and fall of sixteenth century Spain, seventeenth century Holland, and nineteenth century Britain. In the United States and the others, Phillips sees a progression from initial vitality and commercial expansion to erosion and weakness, accompanied by complacency during a period of economic, ideological, and military triumphalism. He especially describes this latter phase in which each society has lived off its accumulated strengths, has transferred capital and technology to others, has moved strongly into finance rather than continuing with actual production, has seen the rise of powerful competing economies, and has experienced an ascendancy of the conspicuously rich while at the same time unemployment has risen, and the workforce is sullen.

The concern, of course, is that the United States is in its terminal phase as a leading economic power. Readers are advised, however, to keep in mind the speculative nature of such historical analogies. The idea that “Financialization” leads to vulnerability and decline may well be true, but Phillips himself notes that it was actually an exhausting war that brought Spain, Holland, and Britain off their respective pinnacles. This mixes and confuses the causal message. The present-day United States, involved in a “war against terror” and extended throughout the world in a melioristic interventionism, may well become involved in exhausting warfare, completing the analogy. But that remains to be seen. The United States’ economic progression is something that anyone attentive to American well being will want to follow closely, however, and Phillips’s book gives much to ponder.

Another theme is the polarization of wealth and income, which Phillips traces in its ebb and flow from 1790 to the present. His comparison is especially of the “top 1 percent” to a variety of segments of the remainder of the population. Most pertinent to us today is that Phillips sees an extraordinary expansion of wealth by the top few in the 1980s and 1990s while there has been “a relative stagnation of the middle class and a decline in the net worth of the bottom 60 percent of Americans.” The quality of life of the average American, he says, has declined dramatically, with wives working to help maintain family income, longer working hours, decreasing job benefits, longer commutes, and a shift to temporary and part-time employment.

This is a theme the American Left has stressed in a number of books during recent decades. The hue and cry about the polarization became muted during the boom psychology of the late 1990s (re-enforced, almost certainly, by an unwillingness of the Left to attack while Clinton was president). Phillips’ contribution to what the Left has already said is largely to bring the data up to date.

Most conservatives, whose thought centers on the purist forms of libertarian and free-market ideology, will consider the subject of economic polarity a non-issue. Wealth is the hallmark of energy, ability, and entrepreneurial insight—and there is no such thing as “too much” success. Those who do not fare as well are perverse if they see the cause of their failure in the achievements of the rich.

A third theme of Wealth and Democracy is that government has at all times played a substantial role in the economy and in the creation of wealth. This means that laissez-faire has not been the characteristic feature in American reality. This relates closely to Phillips’ rejection of pure free-market ideology, which he sees as “market idolatry and economic Darwinism.” He would assign the market an essential but subordinate role: “Markets must be reestablished as adjuncts, not criteria, of democracy and representative government.”

Again, the American Right will disagree over this. The conservatism of Russell Kirk and Richard Weaver and their successors, for example, has never been centered on market theory and has, in fact, opposed much of the vision of a commercial civilization. I have been a classical liberal all my life, but this has not kept me from thinking it unfortunate that classical liberalism in the nineteenth century permitted itself to be primarily an economic doctrine rather than a completely elaborated theory of civilization. I have considered it even more unfortunate that classical liberals in the 20th century, pushed off onto an ideological margin, have become increasingly doctrinaire, leading to a reductionist philosophy that leaves much out of account. I would go much further than Phillips, in fact, in emphasizing the prospective crisis faced by capitalism as technology and global markets advance and undercut the hundreds of millions of people who inevitably will not and cannot have the skills that will be demanded.

If there is something to this (and many deny that there is), those who wish to conserve the institutions and values of a free society will have much radical thinking to do in the years ahead. And they will face this challenge in a context where the world and even the American population are little inclined to care about their thinking one way or the other.

If we are to be critical of Wealth and Democracy in any fundamental sense, it should be for what the book does not explore. Phillips expresses apprehension over polarization and American economic decline, but it seems to me that that is just one of at least four major challenges to American success and even America’s existence. The other three challenges are the United States’ post-1898 self-assigned mission to intervene throughout the world for the world’s self-improvement, which is an impossible and quixotic task; the willingness of America’s and Europe’s ruling class to flood the West with Third World immigrants, changing forever the flavor and content of our societies; and the lack of will on the part of the American people to stand up in the culture war that is carried on relentlessly against them by the Left and the countless trucklers who conform themselves to it.

All books cannot address all subjects, however, and it is perhaps not to be expected that a given book do more than present its portion of the truth. Phillips’ book does a provocative and informative job on the part that it addresses.  
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