Long Live the Building Class
Would-be overseers underestimate the American love and capacity for independent enterprise.
By Karl Zinsmeister, chief domestic policy adviser to President George W. Bush
Early in my career, I was “downsized” out of a job by a financially ailing organization. I had gotten married six months earlier. My wife was four months pregnant. And I had just acquired my first house.
Though it didn’t feel like it at the time, this layoff was one of the best things that ever happened to me. That’s because I used the dislocation to launch myself in a bold new occupational direction, one that appealed strongly to me but was economically chancy. If I hadn’t been pushed off the diving board, would I eventually have jumped on my own? I think so. But absent this fateful shove it would have been easy to indefinitely postpone such a risky move.
My story is not at all unusual. Job shedding and creating, and the flexible flow of productive people from a known perch to something different, is a distinctive part of America’s dynamic economy where nothing is frozen in time. Such moves can be dizzying, even punishing at times. But the flip side is a vast opportunity to start afresh, and a continual flow of valuable skills and alternate experience to new places.
Job shedding and creating, and the flexible flow of productive people from a known perch to something different, is a distinctive part of America’s dynamic economy where nothing is frozen in time.
I’m not suggesting that the more employment churn the merrier we’ll be. I merely note that there are advantages to both individual workers and the nation as a whole, associated with living in an economy where there is active movement across workplaces and lots of new beginnings. Many nations in Europe and Asia have tried to securely lock jobs in place. This turns out to be not only damaging to the economy, but also quite stultifying for employees. Existing positions don’t evolve, and new positions aren’t created. Innovation shifts to other lands without suffocating work rules.
Is it sometimes hard to cope in a changing economy? Of course. But the individual dislocations associated with economic dynamism are less frequent and often less severe than critics claim. And the broader advantages of an economy that constantly bubbles are large. That’s why, in most years, the U.S. sets new records in the capaciousness of homes, number of vacation trips taken, amount of health care delivered, volume of goods purchased, and services delivered. An openness to continual refining mutation is the only lasting foundation for rising living standards.
Most Americans appreciate this. They don’t want an end to economic clamor, they just want an opportunity to get in the game with a chance to win. We have a master class, however, that loves to use economic transitions as arguments for damping financial ebbs and flows via management from above. Would-be overseers (most of them ensconced in bureaucracies, faculty lounges, and newsrooms far removed from the real action of our private economy) spin heart-rending narratives out of every business sunset. They ignore the new enterprises that generally grow out of bankruptcies and failures, and make the case for more control over our economy by “protective” agencies. And guess who gets to execute the protections, subsidies, and rules for flattening our business boil?
A grating assumption behind these arguments from on-high for economic stasis and central command of our financial future is the way it portrays the working men and women of this country. The message is that today’s Americans are fragile. Vulnerable. Buffeted by cruel, worldly winds. Helpless victims, through and through. Someone’s got to save the poor dears. Preferably someone powerful, like a big avuncular corporation, a brilliant intellectual visionary, or a warm-hearted national politician who feels their pain.
Journalists with an appetite for social steering and nose for sympathetic subjects have recently begun this cycle again. They are spinning tales of university lab employees whose crusades against pandemic viruses or cancer are about to be smothered by cuts in NIH grant overhead. Profiling sturdy park rangers in Smokey the Bear hats, who seem to have been cast adrift. There is fretting over layoffs at ailing Boeing and trepidation about restructuring U.S. Steel. Will employees of Intel have to sell their homes and move to a new state if that faltering firm is sold off in pieces to other semiconductor manufacturers?
The decline of a marquee firm like Intel is indeed startling. But the effortless success and perfect security that firms like that seemed to offer was always an illusion. When you grow bureaucratic and sluggish and fail to offer fresh options as speedily as other companies, you will be quickly be superseded in our country. The decline of the mighty is always big news. What often evades the headline writer is the quiet corollary rise of newcomers: AMD, NVIDIA, Qualcomm, and others are rapidly filling the customer needs fumbled by Intel, and employing their engineers and line workers.
There is a role for wise oversight and refinement of our national economy, but it’s easy to do more harm than good. Only rarely will overruling the spontaneous reorderings of natural economic flow produce an improved result. Especially when elected officials from both parties act with the view that American workers are helpless prey in need of shelter. That quickly leads to a nanny state that patronizes and enfeebles our population and empowers the string-pulling class. U.S. pipefitters, programmers, and plane builders will only become poorer and frailer if they are locked into their existing positions by pats on the head from government or big mama corporations.
American sturdiness is not just romance. When our everyday citizens are asked to choose between a secure, static world and a freer world where there is more risk but also more opportunity, most choose freedom. Survey research has, for instance, compared American workers to the Japanese (who with their guarantees of lifetime employment operate in an environment near opposite to our economic dynamism). Among Americans, 76% said “Competition is good, it stimulates work and new ideas,” while only 40% of Japanese agreed. Fully 88% of U.S. employees called their work “interesting,” compared to 58% in Japan. Americans were four times as happy with their income and four times as confident they will be able to retire financially secure. We are the land of the rich and the free precisely because we have been the home of the brave.
It’s easy to look upon the bubbling cauldron where the future is being smelted and see not fresh creation, but only turmoil. It’s easy to assume that tomorrow’s winners will be the same as today’s. In a country as yeasty as ours, though, such views are groundless. Of the blue-chip companies included in the original Dow Jones Industrial Average, only one still endures as a major company. The rest broke up, were taken over, dissolved, or shrunk. America is doing fine without them.
Or look at American dynamism from the perspective of individuals. How many of the people on the Forbes magazine tally of America’s 400 wealthiest individuals do you suppose started with some inherited fortune? Less than 30%. The vast majority are self-made.
Economic transitions are hard, and living in a system of constant change and renewal requires steely nerves and brave hearts. But the alternative is far grimmer.
Economic transitions are hard, and living in a system of constant change and renewal requires steely nerves and brave hearts. But the alternative is far grimmer.
Fortunately Americans are well positioned to cope with roil and moil. And not just because we have an elaborate safety net. We are natural enterprisers with deep instincts to adapt and go.
I have lived my entire life along the seam—stretching all across America like a juncture of tectonic plates—where middle-class aspiration meets manual striving. This zigzagging econo-cultural line steams with energy as physical laborers, enterprisers, freelancers, small merchants, independent contractors, hourly workers, the self-employed, coders, nannies, room-renters, ride-sharers, tree-trimmers, and side-gig hustlers of all sorts mix, heave, and build upon each other. Participants slide easily across boundaries, and the distinction between “owner” and “worker” in our country is often fluid to the point of irrelevance.
I remember when I first encountered Karl Marx’s black-and-white division of humanity into “labor” and “capital.” It made me laugh. Almost everyone I had grown up with in middle America knew how to labor, angled to accumulate capital and own things, and admired business enterprising. I knew plenty of low-income people, but no property-less peons. Nothing in America resembles the European template, where people are born into classes, occupations, and standards of living, and don’t easily transcend them.
Even the loose taxonomies separating “white-collar” from “blue-collar” citizens were not very useful as I looked around me. They certainly had no meaning in my own life. When I was growing up, food came not from cartons (much less from carryout containers), it came from mom’s canning jars and two large freezers, which preserved the rich output of the vegetable garden my dad worked in every day. Some of my clothing arrived not from factories or stores, but from the fingertips and minds of my mother or grandmother, working at one of their several sewing machines. A favorite hobby of my father was building electronic devices in our basement. Later, he taught himself to write computer software, so he could program certain of his creations.
For most Americans, dating back to our founding, demanding labor is an intrinsic part of life. Diligent toil has been a religious imperative, a practical necessity, and of great educational value. As a learning experience, most of us prize hard labor as highly as book studies. We see that manual work is by no means inferior to manipulating symbols at a desk in its capacity to improve, inform, and enrich.
I eventually attended a fancy-pants university, but the most seminal experience of my high school years was pulling the engine from my mom’s car, spending half of my senior year rebuilding it at our school auto shop, then reinstalling it at home with my grandfather (a farmer who could fix anything mechanical) and father (an engineer).
Men of action and historical import, I have learned, generally know how to work with hands and head simultaneously.
In college, my most educational experiences were two escapes from passive academic instruction. One was participating in an intense team sport that won me national championships in two countries. The other was spending more than a year off campus, so I could write an original thesis about an unlettered laborer, who shoveled horse manure off the streets of Dublin as his day job, then devoted nights to earnest self-education in the national library, eventually becoming a charismatic organizer of men. The grade-school dropout led some of the most tumultuous industrial and political surges of his lifetime, ending in his execution by an imperial firing squad, and culminating in Ireland’s independence from Britain. Men of action and historical import, I have learned, generally know how to work with hands and head simultaneously.
When I decided to try to make a career as an independent writer (an interesting but poorly paid occupation), I already had children—so I knew I needed a strong economic sideline to keep them in groceries. I thus stole a little of my thesis subject’s thunder, and worked at a desk for part of the day, while devoting the rest of my hours to carpentry, bricklaying, plumbing, etc. Starting with some utterly ruined rowhouses in rough D.C. neighborhoods, I reconstructed old buildings and then sold them so I could buy another wreck. By laboring solo on eight structures over a period of years (and writing during the remainder of my time), I established myself as a self-employed author without starving my family.
I have many friends and acquaintances who followed similar courses. Take Jim, a house painter. After working for someone else for several years, he set up his own business and eventually built it into quite a prosperous enterprise. During the biggest project I worked on with him, he was still a one-man band. I hired him to help me sand and then paint a whole houseful of new sheetrock. He and I worked side by side for most of a week, jabbering away until late in the night amidst thick clouds of white gypsum dust and blue country music. And it quickly became obvious that Jim was not only an excellent painter and hump-busting hard worker, but also a very smart businessman. I imagine he’s a fairly wealthy fellow today, assuming he’s still alive. (He had a disconcerting habit of power-smoking strong cigarettes while sanding ’rock, and since drywall dust and cigarettes both anger your lungs, combining them is probably no life-extender.)
Jim and I talked a lot about making it in self-employment, how to win work and price jobs, and the valuable contributions his new wife made as the bookkeeping and telephone-answering end of his fledgling company. We discussed his long-range business plan. And we touched on topics that some people don’t realize tough, young, twentysomething manual workers with high school educations care about: what makes one man trustworthy and another not, the importance of setting high goals, the ways taxes discourage ambition, how a person should hire and motivate other people, the best ways to build assets over a lifetime, and the desirability of investing in T-bills versus equities.
I admit Jim surprised me when he brought up that last topic. He was building his grubstake, and when interest rates soared, he put a lot of his savings into high-interest Treasury bonds, which he understood quite well to have been an excellent investment vehicle. Now he was shifting his money into mutual funds, and he was reading financial columns, talking to brokers, and otherwise educating himself. Eventually, much of his kitty was probably directed into trucks, sprayers, and business ads.
Hundreds of people like Jim have helped me understand how widely in the American population the love and capacity for independent enterprise is distributed. One of the most creative business operators I know is a bearded Carhartter who dropped out of 8th grade to go to work. He runs his own excavating business—laying foundations, installing septic systems, pulling blown-down trees out of rivers, carving driveways up mountains, anything he can figure a way to do with one of the half-dozen huge machines he owns and keeps running through his own tinkering. Like many hustling enterprisers, Mike is a jack of all trades. He can install new electrical service, design a building, survey a plot, lumber a forest, fix any machine, tailgate gravel, weld, heat his house with his own wood, drive any vehicle, castrate a pig, grow virtually all of his own food, make delicious Cajun-spiced jerky, make hay, make money in a dozen different ways, and make do when there is no money to be had.
Evidence of America’s deep attraction to enterprising and small business extends far beyond my anecdotes. Research by a consortium of academic institutions found that in 37% of all U.S. households, at least one person was currently running, planning, or funding a small business, or had in the past. There is no other country on earth that exhibits this level of economic freelancing and independence. And we reap many benefits from our financial courage and self-reliance. Americans have raced ahead of other nations in economic growth not because we’re better educated, better financed, or luckier, but because of the amazingly fertile, experimental, entrepreneurial culture that has grown up on our shores.
Americans have raced ahead of other nations in economic growth not because we’re better educated, better financed, or luckier, but because of the amazingly fertile, experimental, entrepreneurial culture that has grown up on our shores.
To better understand our distinctive national qualities, I like to study accounts by European writers who visited America during our formative years. One of my favorite diarists of this sort is Henryk Sienkiewicz, a Pole who later won a Nobel Prize for literature. In the later 1800s, he visited one of our booming silver mines in Nevada and got a very informative, albeit very dirty, underground tour. As he was leaving, Sienkiewicz thanked the foreman who had guided him through the operation and shown him the ropes. Then he asked that his gratitude be shared with the mine’s owner. Only then, hours into their acquaintance, did the Pole discover that his guide was the owner, a millionaire many times over who continued to be a hands-on worker as well as manager.
Asked whether they are “labor” or “capital” many Americans then and now would answer “I am both!” Very often the same person who distributes pay packets and buys expensive equipment in the morning will bend a shovel handle in the afternoon. There are of course plenty of Americans who are happy simply to occupy a position that someone else has carved out. But many of us would rather dream up and build things, happily shoveling wherever needed, rather than executing the orders of others.
Old Karl Marx has literally been stood on his head in our country. Today there are just 14 million labor union members in the U.S. (and half of those are government employees). Meanwhile, more than 47 million Americans file individual tax returns showing personal business income. Millions of others had a business in the past or will in the future. We are a land where “bosses” far outnumber “proletarians.”
There is no reason to be idolatrous about business. Exaggerated materialism, careerism that leads to family neglect, and business practices that don’t factor in moral right can also be fueled by the commercial drive. Work should be but one part of life. American businesses serve immediate needs wonderfully, but we also need non-commercial institutions to address human needs for reverence, love, beauty, friendship, and mutual aid.
But what the poorer world knows, and Americans often forget, is that those higher goods cannot be addressed until our basic needs are covered. Without deep ranks of productive, need-serving businesses, we would have neither a great charitable surplus to share with the disadvantaged, nor the luxury of time and energy for self-improving study, art, or religious contemplation. Having a washing machine in your own home, an insulin supply for your diabetic son, and a central heating system that rarely breaks down is a good beginning for a life of neighborliness, reflection, and good ethics. And if you think those material basics are normal human “rights,” you misunderstand how most people across time have lived, and indeed continue to live today.
Our hugely fecund commercial culture is a historical rarity. And it stems from our population’s deep devotion to self-reliance, disciplined labor, personal enterprising, and new-business creation. Our eagerness to provide for ourselves and our small-scale entrepreneurialism is among our most distinguishing national characteristics—as important in explaining American success as our constitutional government and our Judeo-Christian heritage.
There is an animal spirit that drives American enterprising. Business endeavors are not just practical arrangements or mere ways of funding the rest of life. For a great many of us, the commercial hunt is a fiercely involving way of testing and proving our individual worth, pursuing high principles, and finding meaning. The flow of entrepreneurial energy in the U.S. is one part of the larger dynamism that exists across our economy. And it can be an important safety valve and solution to the downsides of economic churn.
It isn’t just our tycoons who display a zest for commerce. The same impulse drives legions of small businessmen and women in this country—the kind of people who set up repair shops and burrito trucks when they get laid off, rather than seeking a post office job. The folks who dream up new ways of filling a need, then remortgage their family home to make their innovation available to others. Or take responsibility for other people’s mortgages and grocery bills by hiring employees who will have to be paid next month, even if customers aren’t buying. These are brave, risky steps. We are lucky so many of our citizens are willing to walk the entrepreneurial tightrope without any guarantee of success, or even safety.
Many Americans who shoulder these demands end up crashing. Thousands of small enterprises fail every year. Yet through sheer energy and force of will, thousands more are launched—some by first-time business creators, others by those bouncing back from prior flops. That’s what entrepreneurs do.
If we will stop thinking of American workers as victims, as helpless pawns in a vast game of thrones, and instead boost the many citizens who are attracted to the hero’s journey of economic self-reliance, we will lift up our people and our nation simultaneously. Most Americans view themselves as members of the building class, not the working class or the managerial elite. This is an unusual and precious inheritance from our origin saga. We would do well to reinforce it.
This essay is adapted from Karl Zinsmeister’s new book: BACKBONE: Why American Populism Should be Welcomed, Not Feared.