19th Century Social Gospel Against Wealth Accumulation: “an anti-Christian phenomenon, a social monstrosity, and a grave political peril.”

“In a really Christian country—that is to say, in a community reconstructed upon a Christian basis—a millionaire would be an economic impossibility. Jesus Christ distinctly prohibited the accumulation of wealth. I know that expositors can prove anything, and that theologians can explain away anything. But if ‘Lay not up for yourselves treasures upon the earth’ does not forbid the accumulation of wealth, the New Testament was written on Talleyrand’s principle and was intended to ‘conceal thought.’”
~ Hugh Price Hughes

“More About Trusts” by R. L. Ragland
The Henderson Gold Leaf, May 14, 1891

The Rev. Mr. Kaufman says, “in Europe the desperation of the poor is fast driving men into atheism.” In the United States, says Professor R. T. Ely, “the methods of millinoaires are alienating wage-workers from Christianity.” “They cannot,” says Cardinal Gibbons, “reconcile Godliness with greed; and one sanctimonious miserly millionaire in a community works more deadly harm to Christianity than a dozen isolated cases of burglary or drunkenness.”

“Irresponsible Wealth” by Hugh Price Hughes
The Twentieth Century, Vol. XXVIII, No. 166, July-December 1890

MR. GLADSTONE has rendered an immense public service by calling attention to the ethical issues involved in the accumulation and possession of wealth. He is one of the very small number of persons who have the ear of the entire English-speaking world, and he could not use that awful gift more usefully than by raising the discussion contained in the last issue of this Review. The Social Question, as the Prime Minister of Italy recently stated, is rapidly superseding every other, even the question of nationalities, which in the days of our fathers changed the face of Europe. The astonishing action of the German Emperor in convoking an International Labour Congress at Berlin indicates that we have entered upon a new era, in which the equitable distribution of wealth will determine the fate of dynasties and peoples. The way in which at this moment bishops and actors, Quakers and atheists, princes and journalists are blessing and backing General Booth is an unprecedented sign of the times. Sir William Harcourt is right: ‘We are all Socialists now.’ But what does that mean? It means that we are all, consciously or unconsciously, taking to heart, as never before, the social problems involved in the use and abuse of money. The portentous growth of organised and revolutionary socialism in Germany, the vast popularity of the writings of Mr. Henry George and Mr. Edward Bellamy, the sudden widespread demand for an Eight Hours Bill in this country, the marked success of Socialistic plays on the modern stage, the growing contempt for the old individualistic political economy, and the changed attitude of the Christian pulpit, as illustrated by Bishop Westcott, Bishop How, Cardinal Manning, Dr. Clifford and others, all point in one direction. The terrible struggles between labour and capital, with the appalling prospect of world-embracing organisation on both sides, are the darker aspects of an irresistible tendency. Now at the bottom of all this ferment of the public mind, which in some directions has worked calamitous bitterness, lies the question which Mr. Gladstone invites the wealthy to discuss. It is of transcendent importance. It is, for this generation, the question of questions. I greatly regret that ceaseless activity in all parts of the country, while it doubtless forces this issue on my constant attention, and in some degree enables me to speak about it, at the same time makes it impossible for me to choose the ‘picked and packed words ’ in which I should like to discuss it. I have no time either to look up authorities or to collect impressive illustrations. I must write, if I write at all, currente calamo, but the substance of the ‘comment ’ you invite is the fruit of a quarter of a century of observation and reflection.

I am quite unable to let off Mr. Carnegie in the pleasant and approving way in which Mr. Gladstone dismisses him. I have always believed that Mr. Carnegie is personally a most estimable and generous man, who sets a splendid example to the unhappy class to which he belongs, and is entirely worthy of Mr. Gladstone’s hearty praise. But when I contemplate him as the representative of a particular class of millionaires, I am forced to say, with all personal respect, and without holding him in the least responsible for his unfortunate circumstances, that he is an anti-Christian phenomenon, a social monstrosity, and a grave political peril. Mr. Gladstone tells us that Mr. Carnegie is of opinion that ‘ rank, as it exists among us, is a widely demoralising power.” I am bound to say that an American millionaire ironmaster, the artificial product of such measures as the McKinley Bill, is a far greater ‘demoralising power.’ In a really Christian country—that is to say, in a community reconstructed upon a Christian basis—a millionaire would be an economic impossibility. Jesus Christ distinctly prohibited the accumulation of wealth. I know that expositors can prove anything, and that theologians can explain away anything. But if ‘Lay not up for yourselves treasures upon the earth”1 does not forbid the accumulation of wealth, the New Testament was written on Talleyrand’s principle and was intended to ‘conceal thought.’ No one now argues that millionaires are needed to carry out great public works like the Bridgewater Canal, because modern joint-stock enterprise, and the ever-increasing activity of the State, make us entirely independent of millionaires, and, indeed, capable of enterprises which no millionaire could attempt. They have now no beneficent raison d’étre. They are the unnatural product of artificial social regulations. They flourish portentously in the unhealthy forcing house of Protection, but everything else fades and dies beside them. We prefer the fresh air. Millionaires at one end of the scale involve paupers at the other end, and Hen so excellent a man as Mr. Carnegie is too dear at that price. Whatever may be thought of Mr. Henry George’s doctrines and deductions, no one can deny that his facts are indisputable, and that Mr. Carnegie’s ‘progress’ is accompanied by the growing ‘ poverty’ of his less fortunate fellow countrymen. I say ‘ less fortunate ’ because I am sure Mr. Carnegie is much too sensible a man to suppose for a moment that his vast fortune represents a proportionate superiority over the rest of his fellow citizens, or even over those who combined to create his fortune. Thanks to unrestricted competition and the tariff, he has pocketed much more than his equitable share of the joint product of Labour and Capital. If he thinks that he has made this great pile, so to speak, off his own bat, let him set up business on a solitary island, and see how much he can net annually without the co-operation of ‘ his twenty thousand men ’ and the ceaseless bounties of the vanishing Republican majority in Congress.

In no sense whatever is a Pennsylvanian millionaire ironmaster a natural, and therefore an inevitable, product. There is a total fallacy at the very foundation of Mr. Carnegie’s argument. He assumes that millionaires are necessary results of modern industrial enterprise, and that consequently the only question ethical writers can discuss is the best way of enabling these unfortunate persons to get honestly and beneficently rid of their superfluous wealth. But there is a much more important prior question—how to save them from the calamity of finding themselves the possessors of a huge fortune which is full of most perilous temptation, both to themselves and to their children. I think it was in this Review that I read a characteristic and admirable article by the late Matthew Arnold, in which that great writer declared England needed nothing so much as a more widespread distribution of wealth, and traced the social comfort and refinement of France to the legislation which compelled owners of property to distribute their wealth in almost equal proportions among their children. I am greatly surprised that Mr. Glad stone quotes, without demur or protest, Mr. Carnegie’s extraordinary delusion that he is a ‘ normal process,’ ‘an imperative condition,’ and an ‘ essential condition of modern society.’ Nothing of the sort. Free trade, free land, and a progressive income tax would relieve him of the greater part of his anxious financial responsibilities, and such a death-duty as he himself wisely advocates would complete the emancipation of his children. We must not for a moment forget that all the evils of excessive wealth which Mr. Carnegie laments, and from which he nobly desires to protect his children, are artificial and not necessary evils. Indeed, the number of ‘ necessary evils ’ in this world is very much smaller than is commonly supposed, and all human progress consists in practical illustrations of that fact. Mr. Gladstone reminds us that Moses was an ‘adversary of the accumulation of wealth;’ and even modern economists would lose nothing by a careful study of the drastic legislation by which Moses tried to prevent the manufacture of Jewish millionaires. I admit that the modern representatives of that great law giver have not lived up to the ideal he set before them; but that is doubtless the result of Gentile corruption. No thoughtful persons from Moses and Lycurgus to Matthew Arnold and Edward Bellamy have ever constructed an ideal state without trying to provide against that accumulation of wealth which our Saviour prohibits. Some wealthy persons who read these sentiments may feel very angry, and may imagine that they spring from envy or ill-will. But they are themselves the chief victims of the artificial social arrangements which have generated them. One of the most interesting and instructive books Mr. Herbert Spencer has written is his Study of Sociology, and one of the wisest passages in that book is his exposure of the sad delusion of those who imagine that their great wealth is a great blessing. His words are so striking and so pertinent that I must quote them. […]

Christian casuists have long argued and differed with respect to the standard which we should put at once before the unbelieving. I confess that I am always inclined to believe that, in a country where Christianity has been preached for a thousand years, the highest standard is really the easiest and the best. Let us tell all men frankly, on the authority of Jesus Christ, that they really possess nothing, that they are not owners but trustees, and that for every penny that ever passes through their hands they will have to give a minute and exact account, not to a harsh and unreasonable judge, but to One who wishes them to enjoy richly what He has lent to them; but, at the same time, will not overlook a gross neglect of their duty to their neighbour. The real question is, not how much we ought to give away, but how much we dare retain for our own personal gratification. I argue for no unnatural asceticism. That is inconsistent with the bounty of Nature, and with the sacred instinct of Beauty, which God has planted within us. But it is astonishing how little we need, after all, for the culture and development of all that is best in our complex nature; especially when the municipality and the State provide the ‘ free library ’ and the other institutions for which we have hitherto looked to such amiable and benevolent millionaires as Mr. Carnegie. The Christian pulpit has grossly neglected its duty in relation to Mammonism, or the love of money. I have never heard of a rich man being excommunicated because he was too fond of his money-bags, although that sin is as severely condemned in the New Testament as drunkenness or adultery. By all means let us all co-operate with Mr. Gladstone in starting another society. But I am disposed to think that he must look mainly to the Christian pulpit to make the best of the transition period be tween ‘ the cruelty and waste of irresponsible competition and the licentious use of wealth,’ which have disgraced the nineteenth century, and the Golden Age when no man will have too little, because no man will have too much.

Concentrated Capitalism

The concentration of the economy isn’t only happening in certain sectors, such as media. It’s becoming the norm for only a handful of mega-corporations to control their respective markets and eliminate competition.

Is it unsurprising that at the same time that the US government has become increasingly corporatist, probably already having fully become inverted totalitarianism? No, not surprising at all. This is why the majority of Americans have positive opinions of free markets and small businesses while having negative opinions of capitalism and large corporations. The problem has become obvious to the average person.

This was researched by Gustavo Grullon, Yelena Larkin and Roni Michaely, in “Are US Industries Becoming More Concentrated?“:

“More than 75% of US industries have experienced an increase in concentration levels over the last two decades. Firms in industries with the largest increases in product market concentration have enjoyed higher profit margins, positive abnormal stock returns, and more profitable M&A deals, suggesting that market power is becoming an important source of value. In real terms, the average publicly-traded firm is three times larger today than it was twenty years ago. Lax enforcement of antitrust regulations and increasing technological barriers to entry appear to be important factors behind this trend. Overall, our findings suggest that the nature of US product markets has undergone a structural shift that has weakened competition.”

Jason Zweig wrote about it in the Wall Street Journal, Disturbing New Facts About American Capitalism (full access to the article can be found on his website). The amusing part, as expected from a WSJ article, is the optimistic note it ends on:

“Still, history offers a warning. Many times in the past, winners have taken all — but seldom for long.

“Perhaps the laws of creative destruction finally have been repealed once and for all. But sooner or later, capitalism has always been able to turn yesterday’s unstoppable winners into the also-rans of today and tomorrow.”

Don’t worry, folks! Capitalism is doing just fine. Or rather, capitalism is doing what it always has and will do, until something stops it. But what is to stop capitalism from its inevitable move toward concentration, if not some even more powerful force such as a functioning democratic government not beholden to capitalist interests? Don’t look for answer to that question from the concentrated corporate media.

* * *

Look, Ma, no competition
by David Ruccio
Real-World Economics Review Blog

The business press may have changed the language—they like to refer to such corporations as “superstar firms”—but the problem remains the same: corporations are growing larger, both absolutely and relative to the industries in which they operate.

What mainstream economists and the business press won’t acknowledge is those tendencies have existed since capitalism began. The neoclassical fantasy of perfect competition was only ever that, a fantasy.

Certainly one mid-nineteenth-century critic of both mainstream economic theory and capitalism understood that:

Every individual capital is a larger or smaller concentration of means of production, with a corresponding command over a larger or smaller labour-army. Every accumulation becomes the means of new accumulation. With the increasing mass of wealth which functions as capital, accumulation increases the concentration of that wealth in the hands of individual capitalists, and thereby widens the basis of production on a large scale and of the specific methods of capitalist production. The growth of social capital is effected by the growth of many individual capitals. All other circumstances remaining the same, individual capitals, and with them the concentration of the means of production, increase in such proportion as they form aliquot parts of the total social capital. At the same time portions of the original capitals disengage themselves and function as new independent capitals. Besides other causes, the division of property, within capitalist families, plays a great part in this. With the accumulation of capital, therefore, the number of capitalists grows to a greater or less extent. Two points characterise this kind of concentration which grows directly out of, or rather is identical with, accumulation. First: The increasing concentration of the social means of production in the hands of individual capitalists is, other things remaining equal, limited by the degree of increase of social wealth. Second: The part of social capital domiciled in each particular sphere of production is divided among many capitalists who face one another as independent commodity-producers competing with each other. Accumulation and the concentration accompanying it are, therefore, not only scattered over many points, but the increase of each functioning capital is thwarted by the formation of new and the sub-division of old capitals. Accumulation, therefore, presents itself on the one hand as increasing concentration of the means of production, and of the command over labour; on the other, as repulsion of many individual capitals one from another.

This splitting-up of the total social capital into many individual capitals or the repulsion of its fractions one from another, is counteracted by their attraction. This last does not mean that simple concentration of the means of production and of the command over labour, which is identical with accumulation. It is concentration of capitals already formed, destruction of their individual independence, expropriation of capitalist by capitalist, transformation of many small into few large capitals. This process differs from the former in this, that it only presupposes a change in the distribution of capital already to hand, and functioning; its field of action is therefore not limited by the absolute growth of social wealth, by the absolute limits of accumulation. Capital grows in one place to a huge mass in a single hand, because it has in another place been lost by many. This is centralisation proper, as distinct from accumulation and concentration.

Those of us who have actually read that text are not at all surprised by the contemporary reemergence of the concentration and centralization of capital. We have long understood that the forces of competition within capitalism create both the incentive and the means for individual firms to grow in size and to drive out other firms, thus leading to the concentration of capital. The availability of large amounts of credit and finance only makes those tendencies stronger.

And the limit?

In a given society the limit would be reached only when the entire social capital was united in the hands of either a single capitalist or a single capitalist company.