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The American Caste System

The American Caste System

July 5th, 2011 // 6:57 am @

The American framers overcame domination by an elite upper class by establishing a new system where every person was treated equally before the law. This led to nearly two centuries of increasing freedoms for all social classes, both genders and all citizens—whatever their race, religion, health, etc.

During the Industrial Age this system changed in at least two major ways.

First, the U.S. commercial code was changed to put limits on who can invest in what. Rather than simply protecting all investors (rich or poor) against fraud or other criminal activity, in the name of “protecting the unsophisticated,” laws were passed that only allow the highest level of the middle class and the upper classes to invest in the investments with the highest returns.

This created a European-style model where only the rich own the most profitable companies and get richer while the middle and lower classes are stuck where they are.

Second, the schools at all levels were reformed to emphasize job training rather than quality leadership education. Today great leadership education is still the staple at many elite private schools, but the middle and lower classes are expected to forego the “luxury” of opportunity-affording, deep leadership education and instead just seek the more “practical” and “relevant” one-size-fits-all job training. This perpetuates the class system.

This is further exacerbated by the reality that public schools in middle class zip-codes typically perform much higher than lower-class neighborhood schools. Private elite schools train most of our future upper class and leaders, middle class public schools train our managerial class and most professionals, and lower-class public schools train our hourly wage workers. Notable exceptions notwithstanding, the rule still is what it is.

Government reinforces the class system by the way it runs public education, and big business supports it through the investment legal code. With these two biggest institutions in society promoting the class divide, lower and middle classes have limited power to change things.

The wooden stake that overcomes the vampire of an inelastic class system is entrepreneurial success. Becoming a producer and successfully creating new value in society helps the entrepreneur surpass the current class-system matrix and also weakens the overall caste system itself.

In short, if America is to turn the Information Age into an era of increased freedom and widespread economic opportunity, we need more producers.


odemille 133x195 custom Why are We Still in Recession?Oliver DeMille is a co-founder of the Center for Social Leadership, and a co-creator of Thomas Jefferson Education.

He is the co-author of the New York Times, Wall Street Journal and USA Today bestseller LeaderShift, and author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, and The Coming Aristocracy: Education & the Future of Freedom.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.

Category : Aristocracy &Blog &Business &Culture &Economics &Entrepreneurship &Featured &Generations &Liberty &Mini-Factories &Mission &Producers &Prosperity

5 Comments → “The American Caste System”

  1. Keith

    12 years ago

    The entrepreneur is often broken into one of three categories, the saver, the spender and the investor, most notably being called the investor. Recently, however, Dave Ramsey has taken the side of the saver (debt free mentality) and Rober Kyosaki has taken the side of the investor (the asset backed debt). The mistake here is to assume that secured capital management is always the factor that defines the entrepreneur. Truly, the spender needs to be looked at more closely as he or she is most apt to take on unsecured debt, risk total loss, and work long hours to add value. Is this not want many past founders of freedom did for us? I see no writer out there today truly speaking for the entrepreneur class.

    Five Principles for Fledgling New Entrepreneurs

    1. Have an idea that adds value
    2. Take responsibility for that idea
    3. Do no not fight the naysayers; fight for the visionary value you see
    4. For every hour you spend building the business, prepare to spend four times that in building the business model.
    5. If you find yourself spending too much time running everything, you have not properly designed your model. Consider it this way: vision, once defined, should immediately become horizontal (shared) rather than hierarchical (controlled).

    Two Principles for a Community of Entrepreneurs

    1. Not everyone is a competitor, and do not treat everyone like they are.
    2. The name of the game is networking and not rugged individualism.

    I have more, but that is enough for today.

  2. Blake Elliott

    12 years ago

    Kieth, you seem to be using entrepreneurship and financial managment as interchangeable terms. While they are related, they are a bit different. As for the article, I hope to be an entrepreneur myself someday, I hope that a lot of red tape is removed by the time i get there.

  3. Keith

    12 years ago

    The red tape will be worse in ten years, and in twenty it will be so bad that new models will finally be realized to combat the red tap. These models will not grow out of rugged individualism of entrepreneurship. They will take root in local communities rising up in quite poverty to take back some of their own responsibilities. In other words, if you are not starting a new business now (being a leader) with an understanding of how to model a business in ten years (this is statesmanship), you are too late.

  4. Keith

    12 years ago

    I made a fast comment because I had to go. I am back and want to clarify. Entrepreneurship is related to money management in that at some point you have to ask yourself, “How much pain can I take on.” In other words, how much debt can I handle?” I know Olivier once had to take on thousands in debt on his personal credit card to keep a school afloat. This is where the two are related. It is truly a lonely place. Neither the savers nor the investors talk about this, and only the those willing to spend in such a way will you find the same willing to sacrifice to ad value. I could go on but you get what I am saying.

  5. Oliver DeMille

    12 years ago

    The spirit of your comment is absolutely true, Keith, and there is a place for business debt. But for the sake of accuracy, allow me to clarify: The instance you speak of was not, strictly speaking, debt related to the school, but an employer, an entrepreneur, who was unable to pay me because of some cashflow challenges. I agreed to live on credit for a few months while he sorted things out, and twice under this arrangement he paid me promptly. The third time his business failed and it was many years before he repaid the debt I had accrued–I had long since paid it off myself. I do not consider this to have been a wise choice on either his or my part.

    As for the school I founded: it actually ran with absolutely no debt (only bills paid monthly) for its first 10 years or so, until it purchased a building with a mortgage less than 65% of the value of the property. This I considered a wise business debt. As you say, it was the sacrifice of many individuals who believed in the project and were willing to work like entrepreneurs–longer hours than their peers in other institutions, and with less pay by far, at first—that made it possible for us to do this. Our capital was the heart and commitment of our staff, and our endowment was the depth of their preparation and their ability to inspire others to come to a school that had nothing to recommend itself but a unique and personal educational offering. Later, other benefactors outside the institution played a key role, and the rest is history.

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