American Economic Calamity Predicted in 1857

The Great British historian, Lord Macaulay, predicted the future unraveling of the United States economy in a letter written in May 1857. Macaulay’s prediction was based on his analysis of American institutions. Discussing the life of Thomas Jefferson with an American author, Macaulay wrote, “You are surprised to learn that I have not a high opinion of Mr. Jefferson, and I am surprised at your surprise. I am certain that I never wrote a line, and … uttered a word indicating an opinion that the supreme authority in a state ought to be entrusted to the majority of citizens [counted] by the head; in other words, to the poorest and most ignorant part of society.”

According to Macaulay the United States was becoming increasingly democratic throughout the nineteenth century. And this tendency, he argued, was dangerous to liberty and to the country’s economic well-being. As Macaulay explained, “I have long been convinced that institutions purely democratic must, sooner or later, destroy liberty or civilization, or both.”

Macaulay pointed to the French Revolution and to the tendency of democratic movements to despoil the rich. “You may think that your country enjoys an exemption from these evils,” Macaulay wrote to his American correspondent. “I will frankly own to you that I am of a very different opinion. Your fate I believe to be certain, though it is deferred by a physical cause. As long as you have a boundless extent of fertile and unoccupied land, your laboring population will be far more at ease than the laboring population of the Old World, and, while that is the case, the Jefferson politics may continue to exist without causing any fatal calamity.”

With the supreme power in the hands of a discontented multitude, what kind of government are they likely to elect? Would it be a government committed to “the security of property and the maintenance of order”? Or would it be a government that gets through hard times by robbing the rich “to relieve the indigent”?  Eventually, wrote Macaulay, the Jeffersonian bent of the United States will result in the destruction of property, the plundering of the wealthy. “It is quite plain that your government will never be able to restrain a distressed and discontented majority. For with you the majority is the government, and the rich, who are always a minority, absolutely at its mercy.”

As we see today, all levels of government in America are involved in relieving the distress of the poor and unemployed, and we also see that this is presently accomplished by taxing the rich as well as by taking on debt. Presently the United States has the most progressive income tax system in the industrialized world with the rich paying more than half of all income taxes. As for the accumulation of debt, the gross public debt of the United States exceeds 160 percent of GDP; and this figure necessarily represents the future despoliation of the rich through inflation and/or future taxation.

Here is the psychological process at work inside every communist revolution. The movement of the oppressed against the rich becomes a pathological outbreak, with dire consequences. A criminal political class gains the upper hand. Plunder takes place on an unprecedented scale. “The Communist revolution has debased man far lower than democratic collective psychology has done, because it robs him of his freedom not only in the social but in the moral and spiritual sphere,” wrote Jung. Not only is the economy destroyed, but mankind sinks into immorality. This debasement, said Jung, could bring more than economic collapse. As Jung pointed out, “It needs only an almost imperceptible disturbance of equilibrium in a few of our rulers’ heads to plunge the world into blood, fire, and radioactivity.”

It seems perfectly clear that we are presently headed for spoliation as described by Macaulay. We are already acting like people who respond to scarcity by devouring our seed-corn, “and thus make the next a year not of scarcity, but of absolute famine.” And as Carl Jung explained, the debasement that follows is not merely economic, but spiritual as well. We see all the signs around us. We see the political situation developing apace. What Macaulay wrote makes perfect sense today, especially when we are watching his prediction unfold before our very eyes.

Full article: American Economic Calamity Predicted in 1857 (JR Nyquist | Financial Sense Online)

7 responses to “American Economic Calamity Predicted in 1857

  1. Bogus, like the alleged Tytler quote that keeps getting regurgitated. This isn’t 19th century style and there’s absolutely no source cited.

  2. It’s pretty easy to see how this “prediction” lacks nuance. For instance, inflation definitely hurts the rich, but “prediction” does not mention the affect of inflation on the poor. It helps the poor even less than the rich (in fact causes more critical harm than it does the rich). Also conflating progressive taxation with communism is the best joke I’ve heard all day. This is ancient drivel masquerading as thorough analysis.

  3. Sadly, this post does not predict our current woes.

    Our current state of economic collapse was not the “poor & indigent” robbing the rich, it was the rich robbing everyone else that caused this collapse.

  4. Anyone who’s read the Federalist Papers (the designer’s notes for the US Constitution) knows that the republic was intended to be democratic, but not too democratic. The franchise was originally restricted to those with a vested interest in political and economic stability. Those restrictions have been lifted, and now no one has an interest in anything except “get what you can, while you can.” Perhaps it’s time to consider new limits on voting? What class would benefit the most from a stable society, and can be counted on to keep the very wealthy and very poor from going for each others throats?

  5. Even if accurate, which has nor been demonstrated, the above scenario fails to take into account what happens now that the 1% are themselves the “criminal political class,” as they clearly are now – far and away above the law and in complete control of the so-called “democratic” institutions. We are in fact a representative republic, not a democracy. And the 1% vets all candidates and appointees at the highest levels of government. Therefore nothing ( supposedly) written above even applies to our situation.

  6. As demonstrated within the second paragraph, and in the previous commentary:

    “The movement of the oppressed against the rich becomes a pathological outbreak, with dire consequences.”

    I’m not taking sides on the rich versus the poor, because it is irrelevant and I don’t care what the next man posses in comparison to what I might/might not have, but the article is spot on. It’s a ‘haves’ versus the ‘have nots’ and it’s getting ugly today. Both sides need to stop the petty nonsense, unite and repair the country.

  7. A fine example of a false dichotomy argument: there is only the rich and the poor.
    In reality, since the early 19th century we’ve created a robust middle-class, made possible first by the rise of skilled industrial workers, and later by professionals and then the evolution of a service economy. Wholly unimaginable circa 1830, this middle class provides a group that has a stake in restraining government handouts, maintaining a reasonable balance between the investor class and the working class (having, thanks to retirement accounts, a foot in each), and a willingness to see the wealthy maintain their assets (in the hope they or their children may one day join them).
    If you don’t believe me, take a look at what we’ve done with estate taxes in the last 50 years.