Capitalism & Entrepreneurship

Reconstruction

Tocqueville is not arguing that Americans are greedy in the way you would think, for example, a corrupt official is greedy. He instead argues something stranger and more interesting. His point here is that American democracy structurally produces a specific psychological mindset. This mindset includes restlessness and a kind of permanent dissatisfaction. He argues that it is not a result of individual people but an innate characteristic of equality. The American is not unhappy because they lack things; they are unhappy because the very democracy that gives them things makes complete and total satisfaction impossible.

2.2.13This chapter acts as the philosophical foundation for everything else. In traditional aristocratic societies, the poor man does not think of the goods he lacks because of birth and a fixed hierarchy that predetermines his condition. But in democratic societies, in principle, everyone is equal which means every difference is supposedly felt as a personal failure, or a difference from what should be. Tocqueville’s line here is precise: “When inequality is the common law of society, the strongest inequalities do not strike the eye; when everything is nearly on a level, the least of them wound it.” Essentially, the desire for equality becomes more insatiable the closer one gets to it because equality makes the reference group smaller since you compare yourself to people nearly identical to you. And, the gap between where you are and where they are is always apparent. Additionally, every profession is open to everyone, meaning ambition has no limit. The American creates “vast hopes” but then finds that equality “limits their strength in all regards at the same time that it permits their desires to expand.” The competition is now with everyone, not just the person in the next class above you. As Tocqueville says, the barrier has “changed form rather than place.” I think this is a very important observation about meritocracy in that it creates widespread anxiety.

2.2.18In aristocratic societies, work is separated from gain because of social aspects. For example, the nobleman works for glory or honor, and the fact that he gets paid is basically ignored. This is wildly the opposite in democracy. Work is not shameful, and even further, working for money is not shameful. The President works for a wage the same way a waiter does. This may seem like simple, normal progress, and it is in many ways, but Tocqueville is talking about something a little bit more subtle. When all labor is measured under a wage perspective, every job gets measured against the question, “but how much does it pay?” Art, civic service, philosophy, and every other field gets evaluated through the same lens. This significantly changes how we think about work and how we think about whether or not something is even worth doing.

2.2.19Tocqueville represents a change in economic thinking here. Agriculture promises slow but steady returns. On the other hand, industry promises fast, but uncertain ones. For a person in democracy who is not poor enough to need certainty and not rich enough to be happy enough with what they have, they become attracted to the uncertainty itself. The “democratic instability” that he describes creates the image of chances at succeeding for everyone to see, and thus people start to love every opportunity where chance plays a role. This highlights that Americans are compulsive. An American entrepreneur is attracted to both profit and the game around making a profit. Tocqueville describes the result of this in Americans. They began clearing agricultural land to sell it, and building farms because they speculated it would be good real estate. The entire mindset oriented towards gain and risk infiltrated the entire culture such that even farming became venture capitalism.

2.2.20This is perhaps the most foretelling thing Tocqueville does, and he calls this chapter more politically important than any others. The logic is that the division of labor degrades the worker (because his intelligence becomes narrower) and elevates the master (because they have to look at the bigger picture). So while democratic conditions make society equal at the larger level, industrial organization could be inherently reinstating it at the micro level. This new social stratification is the important difference from old aristocracy because the industrial aristocrats have no shared identity and no hereditary obligations to those below them. Old aristocrats had this, they had permanent relationships with people dependent on them. Now, the factory owner simply sees his worker as temporary. As Tocqueville states, there are “members, but no corps.” Tocqueville’s worry is that feudal aristocracy was brutal but it was embedded in society and created genuine bonds, even if they were formed just because of the hierarchy. Industrial society creates division without bonds and higher classes that don’t bear a responsibility to the lower ones. This relationship is not personal and therefore doesn’t come with any of the obligations or loyalties that the feudal system came with.

2.3.17In an aristocracy, society is “still” but individuals are varied (each class has its own passions, habits, etc). In democracy, society appears constantly changing, but individuals are actually unvarying because they are all motivated by the same quest for wealth, just expressed in a million different ways. “The same successes and the same reverses come back continually, the name of the actors alone is different, the play is the same.” Tocqueville also makes a nuanced point here: the extremeness of American desires is what makes them so methodical. The constant pursuit of wealth does not go with disorder. Industry requires “a long succession of very uniform little actions.” I had thought that a society of restless and striving people would be chaotic, but Tocqueville sees the complete opposite in that the passion for wealth actually disciplines democratic society more than any other factors would.

Evaluation

I think the equality trap is by far his most powerful observation. It is strongly supported in social science papers on relative deprivation. Income inequality causes unhappiness through comparison effects, not absolute deprivation. The wealthier a society gets, the more people compare themselves to their immediate peers rather than to historical standards. After all, statistically speaking, this is the safest time to be alive. This is exactly what Tocqueville describes. If anything, this has become even more intense in modern times because social media gives everyone a real time feed of people like them who appear to be doing better. The industrial aristocracy argument is also valid and exactly what Tocqueville feared. Take the gig economy in which there is a class of workers dependent on platforms like Uber or Amazon with no reciprocal loyalty or company culture. These corporations treat workers as always replaceable without any ideology of mutual dependence.

One of the areas where the argument struggles a bit more is when he explains there is basically no non-monetary motivation within democratic societies. He acknowledges some edge cases but still treats them as the exception. However, democratic societies like the US have produced loads of volunteer work, nonprofits, etc. He may have also underestimated the extent to which industrial aristocracy would actually become a corps. For example, Silicon Valley venture capitalists and the tech billionaire class arguably do have a shared culture and interests. But, it could also be argued that this underestimation proves his worry about the combination of stratification and lack of obligation. It's interesting to think about whether Silicon Valley billionaires have noblesse oblige. Another strain on his arguments is when he talks about the restlessness caused by American dissatisfaction. But, I could argue that maybe this restlessness is exactly what caused happiness instead of destroying it. What if the American who builds a dwelling and sells it before the roof is laid is having a good time?

Application

A lot has changed from Tocqueville’s time to ours. What equality looks like now versus in 1830, when this was written, has changed significantly. In 1830, the ultimate entrepreneurial goal may have been becoming a factory owner. In 2026, equality means that in addition to anyone theoretically being able to become a billionaire, anyone can access the “instruments of trade” (publishing a book, starting a company, releasing a song). I think this expansion of equality means that restlessness is even more severe because the sky is higher and the barriers are lower. I can see this with just how increasingly available my opportunities have become at Alpha. To answer the question about whether the rich have become the new aristocracy, I think it should be posed differently because there are obviously very rich people. Instead, we should ask whether they are a corps. There is a movement among tech executives towards “effective altruism,” and many billionaires like Buffett have pledged to give away a portion of their wealth. I could see these as obligations. However, I could also see them as a coverup for a class to escape accountability to the people that made them rich. That’s what makes the answer to this question complex. Finally, I could relate Tocqueville’s personal challenge in 2.2.13 where he talks about where the American dissatisfaction comes from. Being in high school, and on top of that in a competitive school with high standards, I think there are definitely times where restlessness comes from what I think my peers have, in addition to hunger to succeed. Realizing that in yourself keeps you from falling into that trap because it certainly isn’t productive.