What makes America great: A tale of the social contract

Old ventures like my grandparents' country store put people over profits -- it's something we can't afford to lose

Published July 4, 2013 10:00PM (EDT)

          (Photo courtesy of the author)
(Photo courtesy of the author)

My introduction to capitalism came courtesy of a 20-foot combined Pepsi-Cola and Chevron sign in my grandparents’ front yard. It advertised their small, hand-built country store Lee’s Gas & Grocery, an entrepreneurial venture that became a landmark and staple in their rural corner of southwest Georgia. It was there in that old shop baked by the summer sun that I learned about inventories, sales tax and why there’s that odd extra nine-tenths of a penny charge for gasoline. All told, by 8 years old, I was a pretty savvy consumer.

More than that, though, I learned about the importance of small businesses and the unique personal relationships they form with their communities. The connection my grandmother had with the people who bought their milk, flour and gas there was more like family than a mere company-customer transaction. She knew everyone who shopped there, and let many of them walk out of the store without paying a cent for the things they needed. As is the case in many communities around the nation, sometimes money was tight. So Lee’s was a place where families could grab necessities and run a tab that could be paid at a later date – with no interest, of course.

My grandparents put people before profit. So, most important, it was here that I learned the salience of citizenship and our responsibilities to each other over maximizing profit at the expense of one another.

Small businesses in America sit at the intersection of capitalism and community.

The prices for the products they offer are dictated by a free-market economy and its tenets of supply and demand, competition and private ownership. Yet, the way they stay in business and thrive is by offering quality services and establishing personal relationships. Small businesses that have no personal touch and rely solely on pricing rarely can compete with large corporations.

As such, it is good business to be good to people. That notion is American to its core. Or, it is at least true to the American idea, even if not readily evidenced in current narratives of government and corporate practices. The economic downturn has put renewed focus on the nation’s view of the relationship between citizenship and the economy, and the seeming stray from lessons of small business.

This century is just over a decade old and we have already experienced a range of fiscal moods, from the booming market fueled by a housing bubble to a deep recession from which the nation is still recovering. The latter caused the nation to face tough questions on growing wealth and income disparities, its economic priorities, and the role of government in ensuring the American way of life. As the nation bailed out failing banks and the auto industry, families were losing their jobs, homes and health insurance. Many around the nation asked why large corporations were being bailed out, but private citizens were left to manage on their own. The recession painted American capitalism as an uncompassionate, money-hungry machine that trampled on the people to recover its profit.

This is not a new concept. In 1831, Alexis de Tocqueville, the French historian who wrote the classic text "Democracy in America" after spending nine months here, is quoted as saying, “As one digs deeper into the national character of the Americans, one sees that they have sought the value of everything in this world only in the answer to this single question: how much money will it bring in?”

The perception that Americans value profit more than all else is, of course, quite overstated. The human rights and social progress the country has made since its founding is remarkable when considering that it happened exceptionally quickly in historical terms. Those things were not driven by profit, but instead, economic prowess followed our social progress. That is, the closer the country came to allowing all of its citizens to realize the inalienable rights set forth in the Declaration of Independence, the stronger the economy became. Again, the small business maxim is instructive: Good business is being good to people.

There remains concern, however, that the government’s focus on economy is detracting from the country’s obligation to its citizens. In an article titled “‘America’: Consumerism and the End of Citizenship,” professors Elizabeth Dore and John Weeks took particular note of how citizenship seemed to be giving way to consumerism. They observed that “the interests of capital have successfully re-defined the nature of political and social existence. In the place of ‘citizen,’ people are defined as ‘consumers’ and ‘taxpayers’.” They go on to assert, “by considering the flight attendant, teacher or nurse a fellow citizen, we accept that he/she is an equal with basic human rights, among which is being paid decently. As a commodity conveyor, the shop attendant, teacher or nurse is objectified” and interaction is purely transactional.

In the most basic terms, citizenship is essentially the connection between a person and a nation. It is an agreement that the citizen will contribute to the well-being and security of the state through taxes, military service and abiding by the laws. In return, the nation will ensure basic rights, such as freedom of speech, suffrage and property protection.  This relationship only works when the social and civil obligations take primacy. If reduced to taxpayers filling government coffers to increase outlays, citizenship becomes just another word for customer. As a result, when major policy decisions need consideration, if we aren’t careful, the human element can take a back seat to the bottom line.

One need only survey the language of the national policy conversations to see how social issues are being couched in terms of economics. The post-election season and endless news cycles are laden with concerns over deficits, debts, spending, entitlements and budgets. Major programs such as Medicare, Medicaid, military healthcare and retirement, and Social Security are billed as too expensive to maintain in their current state. The debate over environmental regulations is primarily a fiscal discussion on whether they stifle business. The defense spending talk focuses on the military’s significant budget size, and how much is really necessary to keep the country safe. Unemployment benefits and welfare programs for the millions suffering from a mangled job market are debated on the grounds of cost to keep the programs running. It’s as if society has been monetized and the type of country we are to have is based on how much money is available.

In fact, the larger debate about the role of the government in our lives is being framed as exaggerated economic arguments couched in terms of government size: Large government hinders the free market and hamstrings businesses from creating jobs and revving the nation’s economic engine; small government lets large corporations run rampant and allows the rich to unduly benefit from a labor force that it deems too expensive to provide a number of social services. No matter which side of the issue our elected leaders fall on, they are adamant that their only goal is to represent the American taxpayer, which is essentially federal parlance for a consumer of government services.

What small businesses know that our government would do well to recall is that people are willing to sacrifice to ensure the products and services they desire are fairly distributed and of sufficient quality to warrant the investment. Likewise, citizens will pay the taxes necessary, and do so with little complaint, to ensure a fair shake and quality services. When it appears the government is mismanaging investments or the populace is treated as tax receipts, the business of citizenship is tainted and the people take action.

It is second nature to Americans to expect a return on every investment. In our capitalism, the more one pays, the better service one should get. We expect better service from a $300 a night hotel than from a budget motel that only charges a fraction of that cost. Likewise, when viewed from a taxpayer perspective, those who provide the most revenue expect a return on their investment.

The Center on Budget and Policy Priorities reports that for every $100 in taxes one pays, about $55 is spent on three things the rich do not utilize or don’t need: Social Security, Medicare/Medicare/CHIP, and safety net programs such as welfare and unemployment. Moreover, the nonprofit research and advocacy group Citizens for Tax Justice determined that Americans in the top 20 percent income bracket average paying about 30 percent of their income in taxes. This equates to the top 1 percent paying more than a third of the taxes the federal government collects, yet do not utilize the services much of those dollars fund.

The reasons this progressive model has survived are many, but one of the more significant reasons is that Americans traditionally believe in taking care of each other. This belief was forged over the nation’s history as it sought to expand and protect itself from European powers across the Atlantic. The ingenuity and economic acuity required to build an industrial nation shaped our character, which became the backbone of our small businesses.

We are a nation of entrepreneurs. Over 60 million Americans are employed by small businesses and polls show 61 percent of working Americans would rather own their own business. This is aligned to the spirit of self-determination that imbues us, and is balanced by the knowledge that community and relationships are the real backbone of any successful business venture.

This translates into the nation believing it is part of the citizenship contract to care for our children, elderly, veterans and poor. We understand that the country is at its best when we sacrifice for one another and the American ideals. It benefits us all to have a steady, secure populace at all points in capitalism’s spectrum. Profits are not possible when there is chaos and instability infecting the poor and working class. So as part of our view of citizenship, no matter our income level, we expect certain services from the government in exchange for fulfilling our responsibilities.

The central question is about acceptable costs. As healthcare costs skyrocket, high unemployment remains due to a recession, and government spending increases to stabilize the economy, the country is struggling with the question of how much is too much to pay for the social services. It is at the juncture of consumerism and citizenship that we sit today, debating about which takes primacy in determining the nation’s direction.  This is a subtle, but quite significant, distinction. When Americans become the economic means to an acceptable bottom line instead of civil participants in a society, the relationship between state and citizens turns into a financial transaction instead of a social obligation. The exorbitant focus on economics has the potential to replace citizenship with consumerism, fundamentally altering what it means to be American.

The lessons of capitalism and citizenship could never be more important than they are now as the nation pulls itself out of a recession into a world where debt is astronomical, income inequality is at historic levels, middle-class net worth is down, and corporate profits are at all-time highs.  We must determine whether we are willing to fight for the nation we want, or settle for the nation we can pay for. The answer to this question lies in whether we prioritize citizenship over consumerism, people over profits. The choices we make in our personal lives, in our elected officials, and in our voice will determine the country we leave for our children.

I remain hopeful that the nation trends to the symbiotic mix of personal fortitude, community and capitalism that I learned about long ago at my grandparents’ little country store. That old sign in front of Lee’s is ragged, rusted and full of holes from years of my cousins and me pelting it with rocks, fireworks and BB guns. With both of my grandparents deceased, the store is closed, no longer selling gas or goods to the increasingly desolate community. But the sweet humanity of a grandmother allowing her 8-year-old grandson to run a tab for a soda and ice cream sandwich – but ensuring payment by summer’s end – is at the core of a people-not-profit-first capitalism that makes America great.

By Theodore R. Johnson

Theodore R. Johnson is a freelance writer, and served as a military professor at the Naval War College and as a 2011-12 White House Fellow. His views do not reflect those of the Defense Department.

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