The Protestant Ethic, the Spirit of Capitalism and the Inherent Flaw in the American Dream and Why It Has Become a National Nightmare. (Part Two)

Now that we’ve studied the early histories of the United States and France, I thought I would bring us up to the late 20th century. Remember both these countries were Republics in the strictest sense of the word, born out of revolutions, yet different in philosophical bents. Whether you buy into the Weberian and Marxist theories that explain their divergent paths or not, it is clear that both countries were radically different when it came to their internal and external affairs. In Part Two I wanted to concentrate on the U.S. from the 1970s up to the ‘90s. Part Three will conclude this series.



The 1970s had not been kind to the United States. In America, the country was still reeling from the embarrassment of Watergate and the shame of Vietnam. The Carter Administration was viewed by many as impotent, especially during the Iran-hostage crisis which gripped the nation for more than a year before the 1980 election. Add to that the rising rate of inflation and a general feeling of malaise within the populace and it is not so surprising that Ronald Reagan won handily over a beaten and badly demoralized Jimmy Carter.

More than any other economist of his era, John Maynard Keynes understood that workers were more than just a drain on corporate profits; they were also the consumers who would purchase those products, which were being manufactured by them. If these consumers could not afford to consume the goods they were producing, then the businesses that hired them, faced with a loss of revenue, would have to reduce their overhead, which usually meant layoffs for the workers. Those unemployed workers would represent still more consumers unable to consume, which would necessitate the letting go of still more workers. This vicious cycle would go on until the country would inevitably be plunged into recession or depression. The only antidote for this calamity, according to Keynes, was high wages, which would lead to increases in production as consumers purchased more goods. While inflation was always a risk, it was a risk Keynes considered acceptable. At the conclusion of the 1960s the United States was enjoying the fruits of Keynesian economics.

Then things fell apart. Most commentators agree on the list of factors that pulled the system down: export rivalry from newly industrialized nations where labor unions were weak or outlawed; inflation exported around the world by the United States as it tried to pay for the Vietnam War; slackened commitment to full employment because of that inflation; weakening of the U.S. dollar and, consequently, of U.S. hegemony. Instead of carrying out a Keynesian mission to facilitate growth, the World Bank and the International Monetary Fund became the international debt police. They squeezed second and third world economies, constricting global demand. In 1973, the Nixon administration threw out the fixed exchange rates - established at the Bretton Woods conference of 1944 - and over the next few years, the United States pressured other countries to decontrol their financial systems. U.S. elites believed that given complete freedom in international finance, they could reestablish their hegemony. Instead they made instability a key characteristic of the period.[1]

Supply-side Economics and the American War on the Poor

The Reagan revolution - as it was called then - swept the United States in 1980. It was, for all intents and purposes, a direct response to the general malaise, which had been gripping the nation for over a year and a half. Many have singled out the ineptness of the Carter Administration as the impetus behind the movement. The reality, however, was that the origins of Reaganomics (a.k.a. supply-side economics) went back much farther, all the way back to the 1960s. The welfare state of Keynes had, according to conservatives, gone too far. Instead of helping the poor and underprivileged of American society, welfare had robbed them of their self-respect and dignity. As early as the late 1960s and early 1970s, conservative politicians were calling for an end to the "Great Society" as it was known to Americans. By the late 1970s, with the country in the middle of an economic downturn that saw interest rates hovering at just over 22 percent and inflation almost as high, the conservative wave had turned into a tidal surge of unprecedented momentum.

Supply-side economics rests on two underlying principles. The first of these is that government is not the answer to our problems, government is our problem. All we have to do is reduce - or eliminate altogether - the government and allow the capitalist system to do what it does best - provide jobs for everyone. The second principle was that since the rich within this system were the ones who created jobs through their investments, the government should do all that it can to ensure their continued good fortune, including, but not limited to, reducing the maximum tax rate on them. On both counts did the Reagan administration make good its promise. Welfare spending was cut and the richest one percent of the country received a tax break which increased their real income by 73.9 percent, while the bottom fifth of the country suffered a 4.4 percent decline.[2]

Additionally, that top one percent owned and controlled 41.8 percent of the wealth; 35.1 percent in the first half percent alone. That figure was up from 1963, where the top half percent of the population controlled 25.4 percent of the wealth. As if that were not bad enough, data shows that the middle class shrank as a result of the movement of capital from the working poor to the super rich. From 1963 to 1983 the percentage of wealth in the remaining 99 percentile went from 67.2 percent to 58.1. Not since 1929, when it was estimated that the richest one percent owned almost 43 percent of all wealth, has there been such a gap between the rich and the poor.[3] While not all of this can be attributable to Reagan administration policy - the Kennedy administration actually began the process in 1962 when it cut the top tax rate from 88 percent to 70 percent[4]- most of the damage was done during its watch.

Those most victimized by the Reagan Administration cuts in welfare and social spending were African Americans. Traditionally blacks had been a highly class homogenous group, first as slaves, then as sharecroppers and domestics in the South, and then, in the first generation of migration to the North, as workers in the menial services, domestic labor, and lowest level industrial jobs. Out of this traditionally class homogenous group three distinct and qualitatively different black social classes appeared to be crystallizing: a privileged black petty bourgeoisie, a black industrial proletariat, and a black urban underclass.[5] The latter two of these classes would be at the focal point of race relations in the 1960s.


In 1947, the median income of non-white families was 51 percent that of white families; in 1957, it was 54 percent.[6] The economic deprivation, social isolation, and psychological alienation produced by decades of segregation bore bitter fruit in a series of violent urban riots during the 1960s.[7] Between 1963 and 1968, riots broke out in sixty U.S. cities, among them Birmingham and Los Angeles. In the case of the latter, which occurred in the summer of 1965, the city suffered 35 million dollars in damages, and there were 4,000 injured and 34 dead. Riots in Chicago, in 1968, followed the assassination of Dr. Martin Luther King, Jr. in April of that year.

Unlike the communal race riots of the early 1900s, these disturbances arose from within the black community itself and were "commodity riots," directed at property rather than people. Attacks were confined largely to the ghetto and were directed at white property, institutions, or authority symbols. The participants did not express a racial hatred of whites per se, but an anger with the conditions of racial oppression and economic deprivation that had been allowed to fester in the ghetto for sixty years.[8] The country was in the grips of a racial meltdown, the likes of which threatened to tear asunder the economic order of those who had both the most power and the most to lose. Clearly, a response was dictated to restore order and stability within the black underclass.

The Civil Rights Act of 1964, which outlawed racial discrimination in employment, and the Fair Housing Act of 1968, which banned discrimination in housing, were touted as emblematic of the commitment of the United States to justice and equality for all its citizens. In truth, however, both were little more than paper tigers designed to appease the discontented. America had passed anti-discriminatory legislation in the past - the 1866 Civil Rights Act stands as a monument to deceit and chicanery - but in spite of the legislative initiative, blacks were still victims of its perverse grip.

The inherent problems in both acts lied not in their intent, but in their almost complete impotence in matters of enforcement. To put it bluntly, they had been stripped of every ounce of their testicular fortitude. For example, under Title VIII of the Fair Housing Act, the U.S. Department of Housing and Urban Development (HUD), established in the 1950s during the Eisenhower administration, was authorized only to investigate complaints of housing discrimination made to the Secretary by "aggrieved persons;" it then had thirty days to decide whether to pursue or dismiss the allegations. If it decided to pursue, it was empowered only to engage in "conference, conciliation, and persuasion" to resolve the problem. Moreover, if the alleged violation occurred in a state where a "substantial equivalent" fair housing statute existed, HUD was not required to pursue the case at all - it was instructed to refer the complaint to state authorities.[9] Without any way to force compliance with the law or to assess damages, HUD was reduced to the role of ostensibly slapping the wrist of offenders.

The same was true with the Civil Rights Act. Though Title VII specifically prohibited employment discrimination in the private and public sectors on the basis of race, color, religion or sex, it could not provide high-paying jobs to poorly educated minorities when there were no jobs to give out. Thus, complaints by blacks of discriminatory hiring practices by employers were met by the obligatory "applicant not qualified for this job" retorts. As a result, the class structure of the black community bifurcated into an affluent class whose fortunes were improving and a poverty class whose position was deteriorating.[10]

No decade was more cruel to African Americans than the 1980s. The Reagan administration sought, with the help of a Republican controlled Congress, to turn back what little progress had been made by the Civil Rights and Fair Housing Acts. It also worked closely with the National Association of Realtors (NAR) to undermine HUD's already limited enforcement authority.[11] But the cruelty did not end there. Even when the mood of the country towards the end of the decade began to swing closer to the center, opposition to ending discrimination remained fervent. Each time that a legislative or judicial action was undertaken to ameliorate segregation, it was fought tenaciously by a powerful array of people who benefited from the status quo (realtors, bankers, politicians); and these actors, in turn, relied on the broader indifference and hostility of most white Americans.[12]

Growing up in these impoverished ghettos severely hindered employment opportunities for African Americans. Those who did manage to find work, continued to be hampered by vast inequities in the rate of pay. In 1967, the median black family income stood at $16,595 in 1987 dollars, compared to $28,029 for whites, which meant that black families had about 59 percent of the median income of white families. In 1977, it was 57 percent and in 1987, it was 56 percent.[13] Not only had the condition of black families not improved since the 1960s, it had actually worsened.

In earlier times, the elder statesmen of urban ghettos acted as a kind of "guidance counselor," admonishing the young to stay out of trouble. The latter readily deferred to the former's age and "worldly experience." In contrast, today, as economic and social circumstances of the urban ghetto have changed, the traditional old head has been losing prestige and credibility as a role model. When gainful employment and its rewards are not forthcoming, boys (and girls for that matter) easily conclude that the moral lessons of the old head concerning the work ethic, punctuality, and honesty do not fit their own circumstances.[14]

Over time, as intense racial isolation and acutely concentrated poverty have continued, ghetto attitudes, values, and ideals have become progressively less connected to those prevailing elsewhere in the United States. As conditions worsen, and the social environment grows more hostile, the original connection of ghetto culture to the broader values of American society - even if only in opposition - has faded. The new culture of the ghetto rejects the values of American society as a farce and a sham, and traits that were once clearly oppositional and therefore somehow linked to the rest of American society have become ends in themselves, esteemed in their own right and disconnected from their relationship to the surrounding "white" society.[15]

The story of Rodney King was a case in point. What happened in Los Angeles in April of 1992 was neither a race riot nor a class rebellion. Rather, this monumental upheaval was a multiracial, trans-class, and largely male display of justified social rage. For all its ugly, xenophobic resentment . . . and its downright barbaric behavior, it signified the sense of powerlessness in American society.[16] It transcended the mere verdict of the case completely. What we witnessed in Los Angeles was the consequence of a lethal linkage of economic decline, cultural decay, and political lethargy in American life. Race was the visible catalyst, not the underlying cause.[17]

At the heart of the matter was a prevailing attitude among African Americans that regardless of which political wing was in power, they would always be on the outside looking in. To liberals, blacks had to be "helped," "encouraged," and "integrated" into white society; to conservatives, they must be "well behaved" and "worthy of acceptance" into it. Of crucial importance, however, was the fact that it was a "white" society after all, and that blacks represented the problem in it. Worse, yet, black politicians fell victim to this creed. Though they continued to call for more government relief, believing as they did in the benefit of such programs, they avoided both any attempt at serious dialogue on the causal factors of racism and, to a greater degree, any public criticism of one another over it.

To talk about the depressing statistics of unemployment, infant mortality, incarceration, teenage pregnancy, and violent crime was one thing. But to face up to the monumental eclipse of hope, the unprecedented collapse of meaning, the incredible disregard for human (especially black) life and property in much of black America was something else.[18]

Because all people, especially those who are oppressed, hunger for a sense of self-worth, as well as for food, no discussion of inequity can transpire without both spheres, mind and body, being present. Liberals excuse black acts of transgression as emblematic of a people deficient in values and work ethic. By throwing money at the problem, they enable the symptoms without finding a cure for the disease. Conservatives are worse still; they blame the victim for the disease, refuse even to acknowledge the symptoms and, like the proverbial ostrich, hide their heads in the sands of ignorance, believing as they do that the problem of poverty is a matter of self-will, or lack thereof.

Black people have always been in America's wilderness in search of a promised land. Yet many blacks now reside in a jungle ruled by cut-throat market morality devoid of any faith in deliverance or hope for freedom. Contrary to the superficial claims of conservative behaviorists, these jungles are not primarily the result of pathological behavior. Rather, this behavior is the tragic response of a people bereft of resources in confronting the workings of U.S. capitalist society.[19]

Like all Americans, blacks are influenced greatly by the images of comfort, convenience, machismo, femininity, violence, and sexual stimulation that bombard consumers. These seductive images contribute to the predominance of the market-inspired way of life over all others and thereby edge out non-market values - love, care, service to others - handed down by preceding generations. The predominance of this way of life among those living in poverty-ridden conditions, with a limited capacity to ward off self-contempt and self-hatred, results in the possible triumph of a nihilistic threat in black America.[20]

In place of traditional mores that assign value to steady work, family life, the church, and respect for others, a drug culture and its economy have arisen, with profound effects on community well being. The proliferation of the drug culture within the ghetto has exacerbated the problems caused by segregation and its concentration of poverty, adding a powerful impetus to the cycle of decline.[21]

Disillusioned young blacks, who see little hope for improvement through the conventional methods of hard work, education, or staying out of trouble, employ the same "aggressive" marketing strategies as their "legitimate" white counterparts to get over on society. With the potential for a young black man to earn in a day what most people, white and black, earn in a month, it is a small wonder that the crime rate in urban America has skyrocketed over the last twenty-five years. Here, the lyrics to Ice-T's song, New Jack Hustler are alarmingly prophetic:

"I had nothin' and I wanted it;
You had everything and you flaunted it. Turned the needy into the greedy;
With cocaine, my success came speedy!".


This song, and others like it, epitomize the ghetto world of the 1980s and '90s. Rap culture depicts the demise of conventional family values in black America. Its rage is the rage of its listeners. It embodies the hopelessness and frustration of being black in a "white" America. From a sociological point of view, the specific content of these works is less important than what they illustrate about the state of race relations in America. By confining large numbers of black people to an environment within which failure is endemic, negative role models abound, and adherence to conventional values is nearly impossible, segregation has helped to create a violent counterculture sharply at odds with the basic values and goals of a democratic society.[22]

If the Great Society, at least on paper, waged war on poverty, the 1980s and '90s have witnessed a war on the impoverished. To be poor in the United States is to be without hope. The law of supply-side economics targeted for elimination the great welfare state Keynes envisioned more than forty years earlier. Unfortunately, neither conservative nor liberal politicians put in place any viable alternative to take its place. The poor today, both black and white, have become the scourge of contemporary society. We have become frightened not only of who and what they are, but of what they represent. Like our worst nightmare come true, the impoverished remind us of how much farther we must go to achieve a civilized society.

In the early twentieth century, racist sentiment in the United States was heightened by the Eugenics Movement, which had at the center of its argument the belief that the white race, specifically the native, mostly Protestant, white race, was being overrun by inferior blacks from the South and immigrants from Southern Europe (Italians, Spanish, etc.). This unsubstantiated fear was fueled mostly by the rising flood of migration from the South and immigration from Europe of lower-class workers desperate for the employment opportunities afforded them in the industrialized North. It also served as the impetus behind the race riots of that era.

In the 1920s, anthropologist Franz Boas spoke out forcefully against the racialist theories being propagated at the time, and by the 1930s and '40s, other important scientists joined him in attacking the idea that blacks were inferior to whites.[23] By the 1930s, the Eugenics Movement had all but run out of steam. Though discrimination continued thereafter, the majority of scientists and political pundits had little use for it as a theory.

Today, however, Eugenics has returned with a vengeance. Though its proponents skillfully avoid mentioning it by name, the dialogue of such demagogues carefully reveals their covert, racist agenda. Fueled by centuries of mistrust, and the white ruling-class controlled media, conservative politicians today capitalize on the fear of millions of white Americans with race-baiting statements concerning crime and welfare.

During the 1988 Presidential campaign, Republican organizations supporting George Bush put out advertisements about a black murderer who, while on furlough from a Massachusetts prison, raped and brutalized a white wife and husband. The "Willie Horton" ads became infamous for exploiting white fear of black criminals for political gain.[24] The fact that most violent crime is committed, not by blacks, but by whites, or that white-collar crime is by far more prevalent in America, was deliberately omitted from campaign coverage.

The depiction of "welfare mothers" in the media is still another example of Eugenics revisited. Welfare is an easy target for both racial and non-racial smears because it has come to symbolize a sort of anti-American Dream, a complete lack of work ethic and responsibility.[25] This symbol of work ethic was precisely what Max Weber was referring to in his book The Protestant Ethic and the Spirit of Capitalism. It is here that Weber first distinguished the deep-seated belief that to work hard and be successful was a sign from God that one was chosen to be saved. One served God through one's works. This ethic eventually became secularized in contemporary beliefs and mores. Today, it is no longer God that capitalists serve, but the image of success.

Thus, disadvantaged blacks suffer the pains of two stigmas. First, they have none of the signs of success - status, esteem - needed to attain respectability in the eyes of most Americans; then, as if to add insult to injury, they must seek help from those who do, providing proof of their lack of pride and responsibility. The image is thus cemented in the white populace's consciousness that black people are lazy and irresponsible. When this image is allowed to cultivate still further, it expresses itself in the usual forms of myths and propaganda that are the stuff of contemporary journalism in the United States today.


The misrepresentations do not end simply with assaults on welfare recipients. They go right at the heart of race in general. More than a hundred years after they were granted their freedom, and more than thirty years after the first legislation was passed to end discrimination against them, African Americans are, once more, having to prove they are worthy of the same rights accorded whites. The latest trend of discrimination concerns the "gains" blacks have made at the "expense" of whites.

Affirmative Action is now being targeted by conservative whites (and, sadly, conservative blacks) as being discriminatory to white Americans. The argument goes like this: Discrimination may have been a problem once in this country, but now it has been rooted out. The only victims of it are whites, predominantly white males, who are locked out of positions of employment to accommodate a quota of minorities and women who are not nearly as qualified as the white male applicants.

This twisted logic has become a paradigm for populist thought in America and poses the greatest threat to any hope of an equitable sharing of the land by whites and blacks. It makes two thunderous, yet calculated, lies. First, by suggesting that discrimination "may have been a problem in the past," it dares to imply that racism was more a figment of reactionary bleeding hearts than an economic and social fact. This yarn is spun by countless white-supremacist groups throughout the country, particularly the American Nazi Party, which has vehemently maintained that the holocaust never happened. Secondly, the contention that discrimination has been "rooted out," is offensive to both the researchers who continue to document its presence and, more importantly, those of African American decent who are still caught in its grip.

In The Case for Affirmative Action, Roger Wilkens illustrates perfectly what is really at work here:
"In a society so conceived and so dedicated, it is understandable that white males would take their preferences as a matter of natural right and consider any alteration of that a primal offense. But a nation that operates in that way abandons its soul and its economic strength, and will remain mired in ugliness and moral squalor because so many people are excluded from the possibility of decent lives and from forming any sense of community with the rest of society."[26]


The perception that welfare increases dependency of minorities on the state under-scores the cyclical nature of politics in this country. A look at the last sixty years will be revealing. During the 1930s, large-scale federal relief programs were established to ward off the deleterious effects of the Great Depression. The 1940s and '50s saw cutbacks to these programs, once it was deemed that the crisis had subsided. However, as a response to the civil unrest of the 1960s, federal legislation and programs, once more, were stepped up. By the 1970s, this trend began to be reversed yet again; it was accelerated mercilessly during the Reagan and Bush years. We are now witnessing the implementation of punitive workfare programs at the same time that relief and other programs for the poor are being cut back.[27]

We are living in dangerous times these days. Polarizing elements abound everywhere. In a time when we should be looking to forge relationships of common interest and mutual respect, we are, instead, heading backwards in time. We have witnessed but only a harbinger of things to come. The riots of Los Angeles should serve as a reminder of the fuel of discontent awaiting the spark of opportunity to ignite it.

As Cornel West so eloquently put it, "Whoever our leaders will be as we approach the twenty-first century, their challenge will be to help Americans determine whether a genuine multiracial democracy can be created and sustained in an era of global economy and a moment of xenophobic frenzy. Let us hope and pray that the vast intelligence, imagination, humor, and courage of Americans will not fail us. Either we learn a new language of empathy and compassion, or the fire this time will consume us all!"[28]


[1]Barkan, p. 72.
[2]Kelly, p. 38.
[3]Hurst, p. 28.
[4]op. cit., p. 38.
[5]Szymanski, p. 451.
[6]Hurst, p. 93.
[7]Massey and Denton, p. 58.
[8]ibid., p. 59.
[9]ibid., p. 196.
[10]ibid., p. 219.
[11]Massey and Denton, p. 208.
[12]ibid., p. 212.
[13]Hurst, p. 93.
[14]op. cit., p. 173.
[15]ibid., p. 172.
[16]West, pp 3-4.
[17]ibid., p. 4.
[18]ibid., p. 19.
[19]ibid., p. 25.
[20]ibid., pp. 26-27.
[21]Massey and Denton, p. 174.
[22]ibid., p. 177.
[23]Hurst, p. 91.
[24]Chideya, p. 6.
[25]ibid., p. 36.
[26]Wilkens, p. 416.
[27]Schram and Mandell, p. 478.
[28]West, p. 13.