The 1%’s Doctrine for the 99%

Exclusive: Many on the American Right insist federal actions from the Civil War to recent banking regulations were encroachments on states’ rights and personal liberties, but underlying these claims in the 1860s and today is the greed of the richest 1 percent treating the 99 percent as chattel, writes Mark Ames.

By Mark Ames

A little over a year ago, while researching the Confederacy’s economy, I stumbled across this unnerving graph charting the value of America’s “stock of slaves” in the last decades before the Civil War.

This graph tells the real story behind the South’s secession: the value of the South’s “slave stock”,the property of the ruling class, soared as secession approached, reaching an almost 90-degree angle in those final years before Harper’s Ferry. The South’s ruling class seceded to protect their riches, period:

From afar, if you didn’t know that human “slave stock” was the asset being charted, you could easily mistake this graph, and its parabolic trajectory, for one of the many destructive asset bubbles this country has suffered right up through our own time.

Up close, this graph drips greed, mass murder and shame, it strips away the historical revisionism that falsely ascribed the South’s “cause” to an almost selfless, tragically romantic attachment to “tradition” and “culture”; it gives lie to the myth that slave owners kept their slaves to the detriment of their own bottom line.

Like the worst wars and the worst of history’s villains, the Confederacy’s one percenters seceded and fought in order to continue profiting from their most valuable investment properties, their human slave stock.

The graph comes from a grim working paper, “Capitalists Without Capital,” written in the late 1980s by a UC Berkeley economist, Richard Sutch, and a UC Riverside historian, Robert Ransom.

As they showed, slavery produced huge profits for southerners who invested in slave capital, to the detriment of all other portfolio investments, as the value of slaves soared in the mid-19th century. By that time, by far the largest cotton-growing states’ wealth was in slave stock, not in real estate or other investments.

The slave trade was outlawed in 1808; but the slave population quadrupled from 1 million in 1800 to 4 million in 1860, encouraged by slaveowners who “bred” their human stock, thereby multiplying their profits as the value of each slave rose.

Slavery is often portrayed by revisionist historians as somehow antithetical to market capitalism; in reality, slavery was a winning portfolio investment, the very incarnation of just how evil “free-market” capitalism can be. As the authors write:

“If slaves … were an investment included in the asset portfolio of the planter/entrepreneur, they helped satisfy the owner’s demand for wealth. But unlike most other forms of capital, which depreciate with time, the stock of slaves appreciated. Thus, the growth of the slave population continuously increased the stock of wealth.”

What makes this graph so disturbing for us in 2012 is what it suggests about today’s “1 percent”, and how they view the rest of us. It gives form to the brutal crackdown on the Occupy protests, and suggests darker things to come as we try to free ourselves from their vision of civilization, and our place in it.

Contrast that with this McKinsey report put out a few years ago by the director of the consulting group’s New York office. Titled “The New Metrics of Corporate Performance: Profit Per Employee,” the report argues that the best performing firms in our increasingly financialized era are those companies that have learned to squeeze ever-larger profits out of each employee, and not by the more traditional “return on investment” metric.

The McKinsey report looked at the world’s 30 largest companies between 1995 and 2005, and found that their return on human capital more than doubled, from an average of $35,000 profit per employee to $83,000, leading to this rather frank and nauseating conclusion:

“If a company’s capital intensity doesn’t increase, profit per employee is a pretty good proxy for the return on intangibles. The hallmark of financial performance in today’s digital age is an expanded ability to earn ‘rents’ from intangibles. Profit per employee is one measure of those rents. If a company boosts its profit per employee without increasing its capital intensity, management will increase its rents.”

Extracting rent from “employees” as a business strategy: This is supposed to be the language of feudalism, not modern advanced capitalism, and yet this is the cutting edge in 21st century capitalist thinking, unashamed and unvarnished:

“One way to improve a company’s profit per employee is simply to shed low-profit employees. But if they generate profit greater than the cost of the capital used to support their work, shedding them actually reduces the creation of wealth.”

As with slave stock in a Southern investor’s portfolio, the McKinsey report argues that as a corporation learns to successfully extract rent from its employees, the more employees it extracts rent from, the greater its aggregate profits.

To compare “the 99 percent” to African slaves would be crude; but the mindset of “the 1 percent” then, as now, is eerily consistent. They view the rest of us not as human beings with rights, but as livestock whose meat is “rent” to be extracted.

This is the language of plutocratic capitalism, a brutal system totally incompatible with democracy and antithetical to republican government and civilization. It is the language of misery, and misery is what “the 1 percent” is promising “the 99 percent” for years to come, in ever-greater doses.

Mark Ames is editor of The eXiled Online and author of the book Going Postal: Rage, Murder and Rebellion from Reagan’s Workplaces to Clinton’s Columbine and co-author with Matt Taibbi of The eXile: Sex, Drugs and Libel in the New Russia

30 comments for “The 1%’s Doctrine for the 99%

  1. March 28, 2012 at 11:09

    A friend wanted more specifics, so …

    His lead point, hence the graph at the beginning, is that the “parabolic” rise in the increase in the combined value of all slaves over time is the reason the wealthiest 1% in the South didn’t want to lose their property (slaves). He makes several errors here:
    1.Slave owners would not want to lose their property no matter what its value was, so an increase in value would not change their decision.
    2.Slave owners would have wanted to breed slaves as much as possible to maximize their profit – hence the parabolic curve is normal and expected.
    3.It was not just the 1%, many people in the South owned slaves. Most slave owners owned 1 – 5 slaves and needed no “foreman” to keep them in line. The real story (the real outlier) here is that if slaves in the South had been just a little more rebelious, slavery would have been untenable here like it was in other British colonies. As another strategy, Slaves could have simply not reproduced – while pretending to try and pretending there was a sterility disease going around.
    4.Even those in the South who did not own slaves supported secession. This is also an outlier, and thus must have a valuable lesson to teach us.

    Therefore, his graph tells us nothing useful to substantiate his point, and yet it is the lead in his story. Nevertheless, here is how he describes this banal useless graph …

    “Up close, this graph drips greed, mass murder and shame”


    Then he makes the point that corporations ar so stupid that they will get rid of employees who increase profit, and who thus more than pay for their compenstation, just because the corporation wants to maximize its ratio of profit to employees. He says:

    “One way to improve a company’s profit per employee is simply to shed low-profit employees. But if they generate profit greater than the cost of the capital used to support their work, shedding them actually reduces the creation of wealth.”

    Now this doesn’t pass the smell test, but if it were true, then the only possible explannation is that some non-market force, in other words government, has created perverse incentives – for the thousandth time. In this case, it is more likely that this author just got it wrong – again.

    As if we needed another example of the author’s lack of credibility, after making no compelling arguments, he feels justified to conclude:

    “…the mindset of “the 1 percent” then, as now, is eerily consistent. They view the rest of us not as human beings with rights, but as livestock whose meat is “rent” to be extracted.”

    This author is just telling the OWS crowd what they want to hear, and apparently he thinks they don’t need facts or logic. Apparently he is right.

  2. March 28, 2012 at 01:00

    I think this author may be beginning to stumble towards the narrative at, which is a must watch for OWS and the Tea Parties alike.

  3. March 28, 2012 at 00:55

    I am SHOCKED that rich people would not want their wealth confiscated. SHOCKED and APPALLED!
    This BS alone should cost the author his his credibility.

    He says it was the 1% in the South who owned slaves and who wanted to secede. He is very wrong on both counts. Thus he again proves that he doesn’t know what he is talking about.

    The graph is irrelevant for two reasons. Whether slaves were more valuable or less valuable would make no difference. Just the population growth would account for most of the increase because population grows exponentially. Even in the sixth grade I would have know better. Was this written by a kid?

    He is also saying that coporations want to get rid of employees who are adding to the company’s profit. Pure BS. Doesn’t pass the smell test. No credibility.

    It is true and not really debated that the biggest reason the south left was because they didn’t want to lose their property (slaves), although there were other big reasons like tariffs placed on them by the north. The biggest story there is why the north wouldn’t let them go. Why was Lincoln willing to imprison legislatures, kill all the men in the South, and sacrifice 3 times as many men in the north if necessary. This is when the US invented total war, and the north was NOT trying to do it for a noble reason like ending slavery. The US invented total war just to prevent secession – pure evil.

    LEarn more at

  4. sulphurdunn
    March 27, 2012 at 17:45

    Every decade or so the structural (permanent) unemployment rate goes up a couple of percentage points while the working age and retirement age populations increase. All the ante-bellum South comparisons and Libertarian posturing aside, if this trend is not reversed the consequences will extremely unpleasant for everyone, and that includes the “1%”.

  5. Robert Michaels
    March 23, 2012 at 10:11

    While I understand the premise of this article, (and the bazillions like it), I’m not really sure what it is the author, nor most of the commenters want.

    Let me surmise:

    Worker/99%’er: “I am an individual without skills except able body-ness. I cannot start a company myself, I have neither capital nor skills. Mr. Corporation, will you give me a job?”
    Corporation/1%’er: “Yes, but you will get low pay, and we will work you hard (extract rent) from you because you can be replaced easily.”

    Am I missing something? What exactly do you want the 1% to do? Give everyone the same wage regardless of skills, ability, or productivity? Bonus: pay back reparations to every descendent of slave in history. Guess what? Not everyone that is in that 99% are willing to work hard nor earn their pay! Some people work harder than others! Others make money off of others because they have ideas and can implement them! Why is rich capitalists and poor workers new to talk about – is forgetting the Industrial Revolution deliberate?

    How will you enforce getting what you think that 1% broke in their promise to you? What exactly was that promise anyway?

    I’m sorry I don’t understand what it is you want or are complaining about. There is work out there if you are willing to do it. Yes – work. Not yachts, limos, or gold. No it doesn’t pay 6, 7, or more digits of dollars a year. Is everyone in the 99% qualified to earn that much? Insight: Because someone in the 99% does not mean they have been exploited. Idea: Create or provide something that others will want and pay for, and then employ others to do this for you furnishing them with a living wage while giving away your profits to those that are needy.

    • John Barleycorn
      March 25, 2012 at 09:14

      The point of the article is that the 1% don’t work harder or have better ideas. They simply reduce employee compensation to increase profits. Anyone who has been around the corporate workplace over the past three decades has seen this steady trend. People are worked harder, benefits are sharply reduced, jobs that were once salaried become hourly, hourly jobs that went to employees are outsourced.

      The McKinsey study describes this extra income as “rent”. According to Wikipedia, in economic terms, rent is “‘excess returns’ above ‘normal levels’ that take place in competitive markets”. This simply means that more is being squeezed out of each employee. Since this is a trend that exists across all industries in the US, the worker has little s/he can do.

      No doubt this narrow focus on increasing output per employee results in some reduction of cost to the consumer, but a far greater share goes to upper management, and to the profits of those who own the company. This share isn’t due to development of creative new products.

      Your romantic description of the 1% is closer to the fantasies of Ayn Rand than how things actually work. Nobody says that everyone should be paid the same. However, laws restricting labor organizing and sharp reduction in the minimum wage over decades have resulted in compensation that’s increasingly unfair. Pay and wealth are steadily worse for the 99%, and better for the 1%. How does this benefit society?

      I’m currently a contractor at a Fortune 100 health care company. Since I’ve been there there has been a series of employee-initiated departmental fund-raisers for a former employee who has cancer. Recently it was announced with pride that $1000 had been raised by selling wristbands, bake sales, etc. Now, I give full credit to the warm-heartedness of the people who contributed. I’m sure that the gesture meant much to their former colleague. But wouldn’t it be better to have a system that takes care of people who get sick? That would be an excellent use of new tax money raised from those corporations, their owners and managers who have been taking more and more from workers over the years.

  6. March 22, 2012 at 17:23

    With Corporate personhood, bailouts, tax breaks for the rich and entitlement cuts for the rest, it’s clear that the 1% are waging class warfare against the common man by corrupting government and rigging the system. I’m fighting back. I’m the artist who has posted the youtube video called “The Art of Corpocracy.” The video utilizes thought provoking art to illuminate the government’s servitude to the corporate elite.

    The rich and powerful have used their vast resources to promote their agenda. This video is a creative tool to motivate people to stand up to special interests’ stranglehold on government representation. In defense against the class warfare being waged against the 99% , I ask you to pass the ammunition by sharing this video.

  7. doneck
    March 21, 2012 at 18:22

    You mean that the gallant defenders of the Alamo were not patriots, but just callous capitalists fighting to retain their slave holdings? General Santa Ana, the scoundrel, led the Mexican freedom fighters who sought to abolish slavery in Texas, just as it had already been abolished in Mexico.

    • T
      March 22, 2012 at 12:38

      There is a stark difference between who fought the war valiantly and who imposed the war. Do you think the men who had the majority of slave capital were the ones in the battle field? Many of the men fought because of national/regional loyalties, not because of a belief in one cause or the other.

  8. Morton Kurzweil
    March 21, 2012 at 17:15

    Ownership of property has been the basis of religious and political authority in every tribal society. The religion of politics and the politics of religion have one purpose: behavior control. The method is through faith and fear, belief in group values, and paranoia, the fear of non-believers. The values of good and evil, right and wrong are arbitrary and delusional. The offer of certainty is offered to feed the madness of crowds.
    Reason alone seeks truth and fallacy based on unprejudiced observation and real evidence.

  9. Roddy McCorley
    March 21, 2012 at 17:11

    Last year I read a rather eye-opening book entitled “A People’s History of the Civil War.” It made the rather interesting assertion that not only had secession been engineered by the plantation owners for their own benefit – which is something of a no-brainer – but the majorities in several of the seceding states had actually voted against secession. The governors of the states in question obligingly fixed the tallies to reflect the desired outcome.

    The other intriguing fun fact was that the plantations continued to plant cotton throughout the war, instead of food crops that could be used to feed the Confederate troops.

    The more things change…

    • Holic
      March 24, 2012 at 19:37

      Guess the HISTORY prior to Lincoln’s War on the Republic doesn’t EXIST in the Universities today. Not to say the Author’s take has no merit but his assumptions supporting it fail the tangibility test.

      I’ll open a few more eyes: his graph is a LIE.

      History revisionists always commit the same error: Facts arise they missed wiping out during their rewrite but the Math never lies: Using very conservative numbers, were the Slave population been at 4M then then today there would be 80M US Black residents. We are at ~300M for discussion purposes today, so WHERE are all the Black folks? How many Millions have immigrated here since, yet the only 37.7M are accounted for?

      Exploitation of Labor, the gist of the article, is as old as our Species. It is no more or less heinous today but it is a hell of lot better appreciated by those of us being exploited today.

      And Mick….never venture Outdoors for the Sky is STILL BLUE.

    • Holic
      March 27, 2012 at 11:42

      Oh Roddy….pray tell, did that tome bother to state what item was nearly the soul means of capital generation for the South? And did that tome explain how the Moneychagers i.e. THE BANKS, which were owned and controlled by the Political Elites (oligarchs), scuttled the ability of the Southern producers to sell to European customers?

      Nope. The South had food enough, it simply lacked the materiel needed to finish off the North. But as that has been accomplished now, as over HALF of Americans call the South their Home, the Electoral advantage will swing against those who have profiteered off everyone else and who today loot the People at will. And without fear of sanction.

      Learn the subject. Fascinating is the dirty stuff you will discover that is still in use today. All you have to do is OPEN your EYES. But today it isn’t about a human issue, it is about abuse and the acquisition of power over the Whole.

      “All propaganda must be so popular and on such an intellectual level, that even the most stupid of those toward whom it is directed will understand it… Through clever and constant application of propaganda, people can be made to see paradise as hell, and also the other way around, to consider the most wretched sort of life as paradise.“
      –Adolf Hitler

  10. Bill Jones
    March 21, 2012 at 17:04

    “The South’s ruling class seceded to protect their riches, period:”

    The Bullshit never ends, does it.

    From Lincoln the mass killer’s first Inaugural Address

    “I have no purpose, directly or indirectly, to interfere with the institution of slavery in the States where it exists. I believe I have no lawful right to do so, and I have no inclination to do so.”

    • Roddy McCorley
      March 21, 2012 at 18:52

      And your point is…?

      • brad league
        March 22, 2012 at 11:29

        Can you read?

        • ff
          March 23, 2012 at 13:24


        • good2go
          March 26, 2012 at 14:59

          “…in those final years before Harper’s Ferry.”

          Yes, I can read. Unlike Bill Jones, I choose to exercise that skill.

    • Mick
      March 21, 2012 at 18:59

      That statement was true. The problem happened over the question of the so-called new states. There never was a question of taking away slavery from the slave states. That is until the South attacked the Fort in South Carolina. Personally I wish we would have let the South go. We have been paying a price ever since. Without the South we would be a country much closer to a Canada type mentality.

      • March 22, 2012 at 19:23

        Goes back to the Marxist concept of “surplus value”, one of the insights that proves that Marx understood capitalism better than anyone else since. It is the surplus value produced by the worker
        (free or slave) that is the source of profit for the capitalist. If one is to understand capitalism, one must read Marx despite whatever your political beliefs are. He is not the easiest of writers to read, but his insights into the true nature of capitalism have never been surpassed or refuted.

        It was the Republican North that fought the Civil War against the Democratic South. Of course today the two parties have to a great deal switched places. Today the South is “Republican” and the North is “Democratic”. So it is possible that without the Republicans around, we’d have a national system of health insurance. Most likely something like the Clinton Plan which would have forced the private insurance industry to compete on cost with the lowest bidder being the one who gets the contract to provide health insurance under a community rated group plan. This would have held down costs, given the US a system like Germany’s.

      • D. K. H.
        March 24, 2012 at 09:02

        Like anybody didn’t know this? But it WASN’T true of just the south, where agriculture was the main necessity for labor, but for the whole country, regardless of the industry. You think Pennsylvania and Chicago and California didn’t have slaves? Dream the fuck on.

        The south actually ended up winning the war for state’s rights, more’s the pity. Without this state’s rights bullshit, we could have cut the number of congressholes and legalized marijuana long ago. Instead we have a stupid piece of crap like New Hampshire with equal representation.

        And people still have this dumb-ass idea that the slave owners lived in luxury while the slaves lived in “horrific conditions.” Bullshit, bullshit, bullshit. The “mansions” were places of business, where the paperwork was conducted, and they didn’t have air conditioning or flush toilets either. The “slave shacks” were mobile for convenience, so that they could be put close to whatever area was being worked, and when there’s a hundred acres to be planted and harvested, trust me, nobody minded having their mobile home close by. I worked a field myself, and even on horseback, I slept on the horse half the time. We didn’t exactly have grocery stores, ya know?

        The one-percenters, on the other hand, are billionaires, and the slavery they want is economic. “Raise the minimum wage? Horrors! We’ll have to fire people!” Not that they pay a minimum wage to begin with. At my favorite little pub, they get paid NOTHING AT ALL. But they do get taxed 25% on what they’re EXPECTED TO MAKE in tips. Not what they ACTUALLY make — what they’re EXPECTED TO MAKE.

        The only way we’re going to end THIS kind of slavery is to get rid of the repukelican-baggers. ALL of them, not just a “simple majority.” Because they are so greedy, so mentally ill, that the ONLY thing that matters to them is having more money than the guy one table over at the fanciest restaurant, so they can show off.

        For them to call themselves “conservative” is not just a contradiction in terms, it’s an obscenity. They’re only “conservative” when it comes to THEIR money. When it involves anyone ELSE’S money, they’re THIEVES.

        The pre-civil war south did not have a “ruling class.” They had a BUSINESS class. What we have today is lip-flappers and bored inheritors who do no work at all, for FIVE THOUSAND TIMES what the workers get paid — when we get paid at all — so don’t try to pull this “Confederacy slavery” bullshit on anyone standing in line for a job as a cashier or maid.

    • A.R.
      March 22, 2012 at 14:26

      What exactly does this quote have to do with your claim of “bullshit” on the author’s part? Be coherent, please.

      • Bill Jones
        March 23, 2012 at 13:27

        Well, obviously, since politicians never lie, the Lincoln quote refutes the claim that the civil war was principally about slavery.

    • Arakiba
      March 26, 2012 at 14:29

      Go back to Confederateland…oh wait, you can’t, because the South lost!

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