 Good afternoon ladies and gentlemen. This morning I touched on a number of developments in the 19th century with an eye more to disclosing some of the ways in which government was never as limited as many people take it to have been at that time it operated differently in the 19th century, but It was not inert. It was not inactive This country never had laissez-faire although The 19th century situation does Reveal a much smaller level of government activism than the 20th century by far. So there's certainly a difference, but perhaps not as stark a difference as Some people believe and some data suggest so we need to be aware of Of those aspects of our history They help us to understand better some of the things that continue to Take place right up to the present day in this country. I want to now move into the 20th century and Talk this afternoon about the so-called progressive era. I've already touched upon this to some extent Yesterday when I gave a very quick and dirty sketch of some contours of ideological history in the United States, but I want to Get into a little more detail about the progressive era and not only deal with some ideological developments, but with some of the Economic and political events of that time This is a critical period of 15 18 years It constitutes as I've called it a bridge to modern times and I've I've got a Just a a few names thrown up not quite at random here to suggest some of the landmark personalities that are involved in not only making that transition but To suggest that it took place along two tracks both with regard to the government's role in foreign policy the role of the United States in the world and in domestic policy so We can think Crudely speaking of the 19th century is the old regime in the sense that US foreign policy adhered for the most part not perfectly but for the most part to the direction given by George Washington and Thomas Jefferson Who advised that the country should should stay out of foreign? quarrels specifically those of the European nations With whom we had many ties of commerce and friendship and culture and other things No one ever No one of any importance ever urged isolationism in a in a literal sense No one said we should withdraw from the world and be as as Japan was before Commodore Perry forced them to open up their trade We had lots of connections and the Jeffersonians were always glad to have those connections of culture and commerce But what they didn't want was that for the government of the United States to project this nation Into the endless intrigues and bloodshed That had marked the history of Europe. He said we've got plenty to do here. We've got a continent to develop we Got lives of our own the lead Let's do that. Let's let these people stew in their own juices as it were if they must cut one another's throats Let them attend to it all by themselves And so that was as I say for the most part the sort of foreign policy that the United States conducted for more than a century now there were always some people who wanted to get involved in in Foreign affairs militarily or or in some other way that deviated from Jeffersonian conservatism and Occasionally Something would happen as Jefferson himself authorized Naval expeditions to to suppress Barbary pirates so one can certainly if one tries go back and create a a Fairly long list of Events and deviations from that general policy stance But I would still insist that they they are Anomalies their exceptions to the general rule of foreign policy but beginning With the Spanish-American War in 1898 We move into a new era of of American foreign policy and from that time forward the United States has been actively and repeatedly and significantly involved in the Military and political affairs of many other parts of the world and eventually to Virtually all other parts of the world No one by the post-World War two period could could really be immune from some American interest or involvement or intervention or Influence of some kind that was carried out deliberately by the US government. So we eventually Arrived at global interventionism after World War I forgot my numbers here. We're a war two Which put the country in a completely different position than it had been in with regard to foreign policy in the 19th century and And it only gets worse Lately domestically We we never had as I say laissez-faire, but we had limited government We know it was limited because we we know now that in the 20th century it got much bigger much bigger so It might have been bigger in the 19th century as I've stressed there were lots of people seeking government intervention of all kinds in the 19th century and Many of them simply failed to get what they wanted. They didn't achieve the enactment or implementation of the government policies they They they wanted to to do all sorts of things subsidize various industries make tariffs even higher than they were already or Provide emergency employment projects for people during industrial slumps all sorts of Proposals were were being made all the time for some kind of additional government action in the 19th century, but but In most cases no response came forth and When we look back and say well, why was that why was it that? kinds of proposals that seem to go through much more readily in the 20th century had so much trouble making their way to fruition in the 19th that I have concluded that that an important part of the answer and Probably not the whole of it, but an important part is that the dominant ideology was one at that time That was much closer to what we would call a classical liberalism many more people had a view of the proper role of government in in economy and society as a closely limited role And people talked that way it was something you could read in newspaper Editorials you could even hear members of Congress saying things you'd never hear them say nowadays such as we can't do such and such because We can't take money that doesn't belong to the Congress and use it to benefit these people. It's not our money well Actually that kind of talk was revived by a Few people in the last 20 years in Congress, but they don't mean it The difference was in the 19th century when some guy stood up in the floor of Congress and said that he really meant it Said look, it's not our money. We can't just do anything. We think would be nice With that money. It's not ours to dispose of that way We're constrained by the Constitution this Congress only has certain limited enumerated powers Well, eventually that kind of that kind of belief system dissolved and we got the kind of dominant ideology that has has been Friendly to unchecked exercise of government intervention in countless varieties of forms In domestic policy now now I put up some presidents here who were As it were at critical junctures of making this transition from the old regime to the modern regime and Teddy Roosevelt and Woodrow Wilson. I would call they The the mothers of all pernicious 20th century policy whether it's a domestic or foreign These were really bad guys. Anyway, you slice it that talk about misfortune Roosevelt was a Psychopath for starters. I mean, I'm not exaggerating here. The man was a complete nut He he relished Killing people there's an interesting account of the Spanish-American war when he is Described by someone who came upon him dancing a little jig around a dead Spaniard Well, you cogitate on that one for a while What kind of a person dances a little jig around a slain human being He loved to kill any kind of living creature an avid hunter up to and including human beings so That was one element of his personality Unfortunately He was a complex figure. He wasn't just a psychopath He was he was a in many ways a keenly intelligent man Which made him even more dangerous He he wrote a great deal. He wrote many books. He was a successful author And and they're not bad books. They're not terrible books. She Go read read some of that now and you'll find he's quite literate. He had a flair for writing He obviously had a keen intelligence at work now You may have problems with the kinds of thoughts he was Processing with that intelligence With some of the values that underlay his views and interpretations, but he certainly was not a dummy and he had a Virtually unbounded lust for power of the kind that demagogues exhibit he loved public adulation he loved to hear the people cheering for him and That's one of the things that makes all politicians so dangerous that they're that that sort of person They get their jollies from Leading people because the next thing you know, they're leading them over a cliff So there was Roosevelt who who inadvertently became president at night, you know one when when One of Ralph Raco's conspirators up in Buffalo polished off president McKinley And He stuck around for the rest of that term and one more And then he left office leaving his handpicked successor Taft who proved to be a great disappointment rather quickly Taft is also a complex figure. I think a more admirable man, although not wholly admirable himself a Man of judicial temperament whether you like his judicial doctrines or not at least that was his temperament He didn't really like being a politician. So you have to say well so far so good He didn't like campaigning. He didn't particularly get a lot of joy from from having public adulation He he was a thoughtful man, I think and and eventually he was much happier later on Being chief justice of the US Supreme Court than he ever was being president of the United States But he but he did advance in some ways the program that Teddy Roosevelt had said in motion For example, any trust prosecution was carried out much more actively On a on an annual rate basis under Taft than it had been Under Roosevelt. So even though Roosevelt is sometimes described as the trust buster Taft was a more active Prosecutor of antitrust cases Than Roosevelt and and that was not good because as I suggested this morning antitrust law was a Was a a dreadful form of law It imposed all kinds of uncertainty hanging over the conduct of business particularly large business in this country And even though the government in those days had limited enforcement resources So chances were pretty good if you violated the antitrust laws you'd get away with it Still you didn't know for sure and if you were unlucky and were prosecuted and lost the case in court It could be extremely costly And potentially even devastating to your enterprise So it was it was not a good thing that Taft was himself a big trust buster But Taft looks looks like something we have sweet dreams about compared to Woodrow Wilson If if if Teddy Roosevelt was a kind of psychopathic proto fascist then Wilson to my way of thinking was more akin to Lenin a zealot a Humourless man so far as his engagement in public affairs went utterly convinced of his own rectitude What could be more dangerous than a man in power utterly convinced of his own rectitude? That's what we had to deal with with Wilson now Wilson never would have become president in 1912 election have been elected then become president the following year, but for Teddy's revived ambition Teddy having been out of office and and and slain enough large mammals in Africa to carry him for a lifetime Just couldn't stand being out of the public eye Especially when he was so disappointed in the way Taft was carrying on as president so he along with the sum of his politically influential pals Decided that they needed to put him back in office But it didn't seem to be workable to do that via the Republican Party so they said well if If that won't work we'll just so we'll take our political football and go home and create the progressive party and Teddy Roosevelt will be our candidate and he'll run and be reelect We're often running again. So that's what they did in 1912 and as a result of that Political shenanigan they split the the non-democratic vote in such a way That Woodrow Wilson got a majority of electoral votes and was elected believe his Popular vote was 43% if I recall proper correctly is in that neighborhood. I think it was Well at all events it was in in that neighborhood. He did not get a majority of the votes, but But he won in the Electoral College. So when Roosevelt when Woodrow Wilson took office he he Seemed I think to many people to be you know a Democrat of the sort they had seen before He had sometimes made noises about believing in Incompetition and believing in the market economy and believing in low tariffs and free trade and That those seem like a traditional democratic positions If you'd actually looked a little more closely into what what he had to say For example by by reading the collection of speeches published in 1912 called the new freedom You would have found that actually he was not any kind of Grover Cleveland Democrat that he was already Deviating off into much more interventionist directions with regard to domestic policies Foreign policies, you know he didn't have any experience experience with and nobody seemed to be terribly interested then in them in 1912 anyhow, so the election was really decided on the basis of the candidates positions on domestic policies and and And it was expected I think that Wilson would revert to some extent to to democratic positions and indeed in a few ways he did such as lowering tariffs 1913 But but he had more in mind. He was already Developing a kind of megalomania and It was going to be expressed in domestic policy by making the government a much more decisive arbiter of Economic events than it had been before he Said in that book I mentioned that that under modern conditions. We can no longer rely on a government That promotes liberty in the old and negative sense of just leaving people alone We now have to have a government that that actively intervenes on behalf of the individual as against powerful entities such as the trusts So this was this was more like the kind of demagoguery you were getting from Teddy Roosevelt who by that time had become Full-fledged fascists who was who was campaigning for complete government control of big business and Was was making terribly menacing noises About almost you know acting as a dictator So I guess we should be glad in a way that Teddy didn't have another run Though it's hard to conceive of anything that would have turned out worse all in all than Events as they turned out under Wilson The great disaster of Wilson, of course was that he ended up plunging the nation into World War one in a way that Affected decisively the outcome of the war, but for American entry It seems quite likely that the warring powers in Europe would would have it ultimately in a state of exhaustion Concluded a peace with one another on very different terms than the Treaty of Versailles Which loaded the guilt and heavy reparations? liability on to Germany which busted up for large political empires and and created a Jerry built arrangement of new nations and mandates and and and divvied up loot between the French the Italians and the English and and and Created a situation in which a renewal of the fighting in Europe was well Not guaranteed as many people saw quite plainly at the time Mises wrote about it John Maynard Keynes wrote about it many people who had heads on their shoulders could look at that treaty and say this is a disaster this is guaranteed to To produce renewed warfare in the future as as it did just 21 years later, so That was Wilson Wilson created the outcome of World War one as it happened I'd say almost single-handedly if Wilson personally had not decided to ask for a declaration of war I don't believe the United States would have entered World War one so If ever we could blame one man for so much horror That's the man Well, he had descendants and a lot of them and I've just sketched in one of his Apostles as it were Herbert Hoover Hoover himself was something of an author who wrote a number of books The last book he wrote was an adulatory book about Woodrow Wilson Because he idolized Wilson as many of the people who worked in Wilson's cabinet did and He was a Wilsonian Later on of course the Democrats tried to tar Hoover as a Some kind of a callous throwback to old-fashioned laissez-faire Republicans, but that was complete hogwash He wasn't anything of the sort. He didn't believe in laissez-faire He believed in all kinds of government active involvement in the economy business government cooperation of various sorts a Government assistance to farmers to industrialists Transportation banks so Hoover was anything but a proponent of laissez-faire In fact, he thought laissez-faire was an outmoded idea and the government had to act differently He was very much a Wilsonian in regard to Domestic policy he was somewhat less of a Wilsonian. I think in foreign policy He's not quite so keen to have the United States try to become the Arbitr of the world's affairs But again not a perfect figure But when we get to FDR now we get someone who's a full-fledged Wilsonian domestically and internationally And we get him at the worst possible time 1933 when we're at the pit of the great contraction and many people in this country are Desperate for some kind of assistance that they see no way to get except from the federal government So we'll come to that later on and talk about FDR and his leadership of the New Deal and the US during World War two which was Which was so So terribly destructive and prolonged the war as John Denson will tell us later by his policy of Unconditional surrender causing millions of unnecessary deaths Followed directly by the pygmy Truman who Strange to say eventually became a popular almost mythical figure To the American people there's just no accounting for the tricks that memory can play Because when Truman left office in 1953 he was one of the most unpopular People who had ever held the office of the presidency and for perfectly good reasons His administration had been domestically corrupt and in foreign affairs disastrous And and so he deserved all the contempt anyone could heap on him But eventually people look back somehow and found his kind of bluntness So appealing that they overlooked all of these important Shortcomings in the man and his policies But he was kind of a continuation in many ways not every way I've argued elsewhere that at least he wasn't so menacing to the Businessmen and investors of the country as the new new dealers proper had been and so at least we were able to revive the economy after World War two but But in but in many respects he he's a follow-on of FDR and then after some kind of quieter times under Eisenhower we get this succession of figures Which all need to be lumped together In fact and Nixon was many would just like these other guys Extreme proponent or at least a tolerator Domestic activism of all kinds the wealth the regulatory state probably took a bigger leap under Nixon than any other President in any four-year period And so we have these guys in the 60s and early 70s who who then put in place the The modern welfare state and up to and including its embeddedness in the medical care system Which is proving so disastrous by the day So this is this is a kind of overview of figures There's a lot more in that story of course, but but the the key here again for present purposes Is that we get here via progressivism? Now one of the things that I was not happy about and some readers of my book crisis and Leviathan were Equally unhappy about I think was was that when I discussed progressivism I treated this Crucial ideological change As exogenous, you know, I say we must recognize these things happened But I didn't give a compelling explanation even attempt to give an explanation of why Why was it that? progressivism Occurred that that we moved from the dominant ideology of limited government which had been in place With some resilience for more than a century to this very different kind of dominant ideology of Government activism both domestically and in foreign affairs I Don't know that I have ever arrived at anything. I would characterize as a simple explanation I have no confidence myself that that I can put down in a few lines Why though that transition took place? Because I think it has various sources What I have tried to do to to get a better mental grip on it myself is is to consider the context in which it took place Some of the background some of the main ideas that composed it and and try to link all these things together How do they connect up? Some of them seem as I said yesterday to be at odds with one another progressivism seems in some respects to be Internally contradictory, you know, it's for more politics and for less politics, for example, but But ultimately it it's for more statism In every dimension It's just a question of the progressives view of the the mechanisms by which that statism would be brought into play and this belief that they They had in expert management I think is one of the keys because that's really different. You don't find in the 19th century Anybody to speak of who who touts the idea that will all be better off if we have a government expert running things in fact That would have been I think viewed almost universally as a Preposterous idea in the 19th century. I mean people recognize that politics happen that you Couldn't stop it that sometimes it produced bad outcomes, but but they didn't say this is grand They didn't say that's the way to run a railroad To twist an old expression They they would have said Government Commission setting railroad rates. Well, what an idiotic idea. What do they know about that? You know, they don't know anything about railroad business Running banks. Well, we've already been there. That was terrible. They already demonstrated they can't run banks Running agriculture running the manufacturing industry Stupid, you know, these guys don't know how to run anything. They're just politicians All they know how to do is tax and and make rules and shake people down That's what politicians do and some people accepted that that's like the sun rises in the east. You're gonna have politics Okay Americans are rarely anarchists, you know, they very seldom did they say we got to eliminate politics They said, you know, you can't do anything about that except throw the rascals out at the next election or Or or or maybe keep a closer eye on them or or something of that sort but But they certainly didn't often believe that that that that they knew what to do to make the world a better place And that if you if you assign them that task, they would do it So in those respects, I think our our forebears were a lot more astute Then then we have been in the 20th century to fall for the kinds of assumptions we've fallen for But we got there for a reason the the ground was plowed as it were prepared in the late 19th century by intellectuals opinion leaders People who in some cases as I mentioned yesterday had picked up ideas in Europe especially in Germany where government Control and the early welfare state were much more in evidence and they had Decided that these highly educated Germans thought these were good ideas then they must be so we we had a lot of these young Political scientists and historians and economists coming back to the United States in the late 19th and early 20th century with their heads full of status nonsense they acquired in Heidelberg and Then they had students and their students had students and eventually these things began to have a serious impact on the thinking of lots of Americans some of the some of the figures that that Are are pretty much forgotten now people such as Lester Ward Charles Cooley Edward Ross usually called EA Ross These guys wrote books that were big sellers by the standards of academia at the turn of the century and They trained people at leading universities Richard E. Lee probably the The kingpin of them all Taught for example John commons and then commons taught a legion of students including Man named witty WITTE Who was the principal author of the Social Security Act? and if you like you can track any number of threads like that from a veritable handful of these German-trained Professors in the United States whose students ended up getting involved in policy making Especially in Wisconsin where John commons was the leader of a whole school of thought about government interventionism Besides the E. Lee and the ones I mentioned John Burgess Albion small Simon Patton at Pennsylvania These guys Were very influential Simon Patton for example was the professor who taught Rexford Tugwell and Tugwell was one of FDR's brain-trust guys in 1932-33 And then he remained in the government later in the 1930s. So so It's it's not difficult at all to find out Where bad ideas are born? Hey Heidelberg But they were carried here and disseminated so that's one thread and I think it's a it's of some importance although It's sometimes hard to tie down its importance because you you need more than just an idea Proposals not enough. This has to be sold. It has to be carried through the political process and so forth So there's more to it than just some pernicious ideas being imported into the United States But the point of this is that it was changing the climate of intellectual opinion at leading places and Even people who weren't in universities people like say Walter Lippman Who was very much an intellectual and learned at Harvard these kinds of ideas became a socialist in his early life And a proto socialist for the rest of his long life Very influential writing columns way up into the 1960s Conspiring with politicians and diplomats all along the way this guy tremendous influence and He's simply one more of this group Who who are shaping? Political action and moving it in the direction of collectivism and away from from the old regime so Irving Fischer John Dewey everybody's heard of John Dewey because he's the guy who who did more to destroy education than anybody else but propounding Very bad ideas that were wildly popular among people who who went to teachers college for decades These guys besides being Collectivously inclined Along the lines of the German trained professors Also had another trait that was coming into play here And that that is that they came out of the post millennial pietus religious Channels In which the dogma includes the idea that that we have an obligation to God to Bring about the heaven on earth that That Christ isn't going to come and then produce heaven on earth. We're going to produce it and then Christ will come back So if that's your if that's your religious tenant You're motivated to get out there and start creating heaven on earth And these people believe that the power of the state would be mighty useful and helping to do that so Murray Rothbard has written a great deal about the influence of post millennial pietus and I come in to you His writings on that topic. He knew more about it than anybody I've run across So we've got as it were on Intellectuals on one side, but they're not separate from these religiously inspired currents going on at the same time Tied up with movements that go way back in the 19th century such as prohibition of alcohol prohibition of Sunday trading blue laws Various schemes to force people to be more virtuous than they'll be if left alone And eventually These ideas were also carried into into practice in the form of the prohibition amendment to the US Constitution Very curious kind of thing to have a constitutional Amendment about but but it was done and of course we all know how that worked We learned so much from it that we've been duplicating it for the last 40 years with another substance with the I Would say even more disastrous effect But we're not giving it up So once again, there's evidence that people are getting stupider as time passes not smarter What happened to to the theory of evolution took a wrong turn somewhere Well, this is kind of the intellectual and popular religious background that feeds into the Progressivism proper that we get to between 1900 and 1918 and This is occurring in a socio-economic context That I think is no longer very familiar to two people and even historians I think a loose track of what what it was like in in that period The economy was growing rapidly So sometimes people think well everything was hunky-dory We were having rapid economic growth, but if you go back and look at the actual year-to-year Records what you find is that the the growth of the US economy in that period was extremely erratic We'd have a year when when when GDP real GDP would grow 10% in one year and then we'd have a year when it didn't grow at all or a year of 5% growth followed by actual fall in GDP I mean On the average The economy was growing three or four percent a year in that period but the average doesn't mean anything because the variance was so great and The importance of that was that this created a lot of uncertainty and apprehension It made people nervous about what the future held correctly so As you know, even if you can expect for example demand for your product to grow and you're in business Well, it collapses next year. You could be wiped out One bad year is plenty in a lot of business situations So businessmen were nervous a lot of ordinary people were nervous They never knew when their employer might lay them off and when they might have trouble finding another job nearby So this was a this was a time when many people were were more apprehensive than you might think From the trends that characterized it financial panics Happened every few years Banks would close Composers would be running down to get their money out and and unable to do so and that would put them in in a Difficult situation because they couldn't pay the debts. They owed and so forth So so people were worried about the financial Condition of the country not least of the warriors were the bankers themselves Because they didn't like the setup they had at that time Many business people had been badly stung by the depression of the 1890s And it was foremost in their mind throughout this whole progressive period That a lot of businesses had gone bankrupt in the mid 90s Even those that hadn't gone bankrupt had lost money for years on end in many cases and So they knew something was wrong. They said something about this Economic setup we have here is not giving us good results If we if we have events like that great depression We just had and now when we even now when we look back. It's the second worst depression of American history unemployment rates for industrial employees probably got as high as 30 or 35 percent at times in the 1890s, so it was it was a Terrible slump And it put a lot of business people and bankers in a frame of mind to look around for reforms of some kind and We can in fact draw Not a straight line, but a fairly direct line from that depression and people's responses to it Through a number of meetings of the bankers and others interested in financial reform ultimately leading up to the creation of the Federal Reserve System in 1913 so Financial instability economic instability labor relations were Horrible at this time Not just that there were strikes there were strikes fairly frequently in some industries not Great many workers were organized in the unions then not even 10% of the whole labor force Belong to labor unions, but in some industries that just mining And the railroad industry Lots of people did belong to unions and in some places such as out in the western part of the country There were radical unions like the industrial workers of the world, which is almost the radical socialist Organization more than a labor union Yeah, that's a that's a fair description But the thing the thing that scared people about the wobblies as people call them was was that the violence often followed them around And they didn't always instigated either, but they weren't they weren't afraid to respond in kind and so there were events every once in a while such as the The governor of I guess it was Idaho who who walked out of his house one morning was blown to smithereens by dynamite That was not an accident And on more than one occasion police or the militia would be brought out and would gun down some of these people There was a massacre in Centralia, Washington before World War one or Maybe it's just after actually Around the World War one period and right up the road from where I used to live in north of Seattle in Everett There was another great massacre involving the wobblies who showed up on a boat from Seattle and were met by the mill owners and their Their local sheriffs and thugs Heavily armed and they had a huge gunfight right there on the wharf So this is this is what we call labor relations in the progressive era But that is not quite the way we model it in neoclassical economics, you know, and it made a lot of people apprehensive In 1914 probably the worst episode was out in Ledlow, Colorado There's a big mining camp and the miners went on strike Rockefeller owned this Corporation and so they got the state militia in there and they they got them in complete with machine guns And they set up their weaponry and they set this a tent city where the strikers were living on fire and Proceeded to to burn a bunch of the people to death including women and children and to shoot down some of the others and And they inspired more than a week of civil war Right there between the state authorities and the striking miners well Something else to make people nervous to make them think there maybe there's a reform that's needed here Maybe capitalism at least in this form isn't working So what I'm doing here is I'm trying to suggest the kinds of context in which Progressivism developed and to suggest to you that that this was not a golden age this was a period in which a lot of uncertainties had we're hanging over people and Putting them in a frame of mind to look for some more secure arrangement If there's one promise that government makes to people, it's that they're the ultimate provider of security And so here were a lot of Americans feeling insecure and therefore becoming more amenable To some proposal to use government power in a way that would enhance their security That's the that's the ultimate good deal people want from government. It never gets it But it's always a deal. They're willing to consider Immigration rates were very high at this time on average about a million foreigners entered the country every year Now the population of the United States in 1900 was 76 million so that put that in context That's a more than 1% Being added to the population by by gross immigration flows every year But between 1900 and 1914 When the war started the shipping wasn't available and the immigration flows almost stopped but But up until the war there was heavy immigration every year and Fell back a great deal during the depression years because word passed very quickly between Europe and the United States and so people knew There's no point moving to Pittsburgh in 1908 because there's no work to be had there Right yes, yeah Well what this did again was create situations in many of the big cities of the east and northeast where Where people found life more uncertain not just the immigrants, of course, they they frequently didn't know what was going on It didn't speak the language didn't know the local rules and customs and laws But the local people didn't know what to expect from all these newcomers You know What kind of people were they could you could you work with them? Could you trust them? Could you could you hire one in your business if you did? How would you how would you give orders what would you expect from them now? Of course the market was ingenious about working out ways to incorporate these people and lots of people became essentially middlemen and translators and and what have you so there was a huge number of Institutional innovations that came forth to accommodate the assimilation of all these strangers into American society And I think in retrospect we'd have to say that that they worked quite well But that didn't mean they worked instantaneously or that they always worked and so there were there were conflicts ethnic conflicts that that Took place Throughout the industrial areas of America and in these even in the west in places with mining and lumbering camps Employments of that sort That was another part of the context and then there was on top of this as I mentioned earlier this morning the growth of big business which continued during the progressive era quite rapidly and Had a lot of people scared particularly small business people who were apprehensive that they'd be able to meet the competition By that time we not only had big Manufacturers and big utilities and big railroad companies, but we're even beginning to see such things as big retailers people like the mail order Sellers a Montgomery Ward and Sears were starting to provide serious competition to a lot of small Storekeepers in rural areas because they were they offered low prices and they Delivered reliably and and so they were serious competitors and people didn't want to go down to the local store and pay 50% more so so this kind of Development of big business was occurring as well. So in this context Schemes to have the government do something it looked as if it would provide more security or hold and check some of these emerging threats gained a new credibility and more political support among the public and and and and thence among Representatives in legislatures and in Congress in 1903 Now we've got Teddy Roosevelt as president his sort of desire to Dictate to big business took the form of the creation of something called the Bureau of Corporations this was the Beginning of any kind of general interest at the federal level in overseeing Big business we already had the ICC which is so-called independent regulatory commission but the Bureau of Corporations was a part of the executive Division of the federal government and and it didn't have great ambitions Although some people wanted to go so far as even having a federal license for Corporations doing interstate business that that didn't go through but the Bureau of Corporations was supposedly going to Discipline big business by collecting information about business and disseminating it to the public So that the power of public opinion would be mobilized if if businesses were behaving badly The Bureau of Corporations is the the germ from which we then got later on Department of Commerce and Labor which evolved into the Department of Commerce which is sort of the government's Busybody subsidy office that we have to put up with now as well So this is where it began The antitrust laws didn't satisfy a lot of people not just the businessmen who had to endure the uncertainty, but others as well and eventually they were amended in 1914 the Clayton Act was an amendment to the Sherman Act and Try to clarify a little bit exactly what the reach of the antitrust laws Were what things were Criminal and what things were not I don't know that it provided a great deal of clarification But it moved in that direction perhaps the same time the Federal Trade Commission Act was passed And that created another commission Sort of duplicating what was being done already by the antitrust division of the Justice Department which was looking into into any competitive actions by business and So we've been stuck with that outfit for the last 89 years as well again creating more uncertainty for businesses You never know when FTC might might come down on you with some kind of complaint You'll have to deal with it and perhaps even be penalized when the dust has settled in 1906 the two laws were passed having to do with security of food and drug supply the meat inspection act and the Food and drug acts sometimes called a pure food and drug act of 1906 These these are interesting in various regards in some ways they They're they're they're quite typical of progressive Lawmaking in the sense that they were preceded by quite a lot of muck raking journalist exposing supposedly terrible practices especially in meatpacking plants were unsanitary conditions were being tolerated and contaminated Products were being marketed and what have you Much of this was fiction Literally fiction such as Epton Sinclair's book the jungle which may have had the biggest impact of any of the muck raking But some of it purported to be reporting as opposed to to fiction, but I Think much of it was bad reporting Later on it became fairly clear that that the worst offenders in this regard were not the big meatpacking companies Indeed, they were probably the best Performers, but the worst offenders were the little fly-by-night outfits Who were usually able to escape any kind of supervision whatsoever? But even they were disciplined by market competition, so I don't want to make too much of Their sins at all events the legislation was misdirected Both of these acts were how it were also typical of progressive legislation in that they are not what they seem Historians used to write about them in a very naive way. They'd say The capitalists were were committing sins the muck rakers Discovered it and told the public the public demanded that the government clean up the mess and they did and they passed these laws into story well Actually, there was a long long background to the Food and Drug Act for example that involved lobbying and politicking and Organizing going back at least the 1880s and Particularly central to this background was one Harvey Wiley Who started on the 1880s in a position? called the chemist of the Department of Agriculture and That's interesting that chemist they had only one in those days. That's why they're known as the good old days but But Harvey Wiley was an ambitious bureaucrat. He was a kind of a Model for bureaucrats everywhere at all times. He wanted to expand his power He wanted to build a size of his bureau and his budget and the scope of its actions And so he worked tirelessly never gave up And he realized that if he's ever going to get anywhere he needed powerful allies in the political process so He went out and allied himself over the years, especially with sugar producers Who were who were concerned about competition from the saccharine which was an artificial sweetener that had come into use in the late 19th century and Whiskey producers who were fighting against a rectified whiskey as opposed to whiskey aged in barrels the old-fashioned way and And so Wiley although he was an ambitious bureaucrat was all also a bit of a net He believed he believed in purity Always makes me think of the The the code phrase in Dr. Strangelove, you know purity of essence Wiley seems to really believed in that idea Because he had the notion that only certain foods were pure and ought to be consumed by human beings They were the natural ones sugar say as opposed to the impure or artificial ones saccharine I Don't know quite how he got the idea that old-fashioned whiskey was pure and rectified whiskey not but he did And Same with butter and margarine he tied himself up with the butter producers who were concerned about competition from the margarine producers Margin was impure In fact federal government actually placed a tax on the excise tax on margarine in the late 19th century of all things and State said laws that wouldn't allow producers to color yellow And they had that for ages in fact in my lifetime You could still buy white margarine in the other package of coloring when you bought it and you could take it home and mix up the coloring with With this white stuff And make it look like butter but that was all because of government regulation and Wiley joined forces with these protection seeking Manufacturers and they lobbied Congress year after year after year To get a law enacted that would basically outlaw or somehow penalize these impure foods And ultimately that law they got in 1906 with the Food and Drug Act Which? Began fairly innocently and almost as a labeling law it required producers of price Pro of drugs and processed foods to Reveal their ingredients and to say exactly it was in the package and not to say something was in there that wasn't in there So that didn't seem like to burden burden some a law at the time But again, it was a foot in the door and from that beginning The power of the federal food and drug regulators grew and grew and grew from Episode to episode as some big public health disaster took place involving particularly drugs That might kill a lot of people So eventually we got a kind of Draconian regulation of food and drugs in this country that goes back to the progressive era Well, let me say a little about one more kind of progressive Attempt to get security and and and this is one that that has resonance for those of us who who still remember Well the events of the 1970s and the 1970s many people became concerned with With running out of raw materials with energy insecurity Remember how Nixon and Carter and those guys used to try to sell the country on their energy policies as national security issues And people still talk like this sometimes we were reliant on The Persian Gulf for oil people claim and therefore we're at risk. It's a national security thing. We have to kill all the Arabs Some such non sequiturs rarely far behind well a Lot of people in the late 19th century and even more in the progressive era began to fear We're always dealing with fear here. I reiterate Fear is the best thing to use if you want to do something in politics They began to fear and to try to persuade other people to fear that we were going to run out of various natural resources and One reason we were going to run out of them is because currently they were being used unwisely By whom hope by their owners by for example people who owned forest land and Had the audacity to go into that land and cut the trees down and turn them into to lumber Now in the process of doing so they sometimes use the methods that In a very naive or vulgar sense seem to be wasteful They might not cut all the trees for example. They might cut only certain sizes They might not process the wood very carefully so they might build up a huge amount of Biproduct that they didn't set a fire I remember when I was a kid going up into Northern California in Oregon and Washington all these lumber mills used to have these These funny-looking teepees where they would burn sawdust and wastewood from the lumber mills and No, I never see that anymore Maybe it's because they've moved all the timber making to Canada But at all events that was a sort of thing that some of these early conservationists would see and they'd say well Look at that good product going to waste They were very much attuned to the physical fallacy of waste When they thought of waste they thought of stuff of things They could see being not used for any productive purpose Ergo They thought they were seeing waste What they didn't understand and indeed what conservationists to this very day have never understood Is that waste is everything to do with a value? It's not being appropriated with value and that when we talk about something that has value not being used Because it would be more costly to use it than to let it go to quote waste That's not really waste at all. That's economic behavior So if some guy in Wisconsin or Minnesota cut all the trees on his wood lot It might look as if somehow they were devastating nature's bounty But what these guys understood perfectly well Was that from the Rocky Mountains to the Pacific Coast? there were Countless thousands upon thousands of acres of perfectly good trees waiting to be cut at fairly low cost in many places And it didn't make a lot of sense to use German conservation methods in Wisconsin It wasn't worth the cost of the resources required to do it If you wanted to replace the wood you just cut down in Wisconsin go to Colorado and cut some trees there Now you didn't have to explain this to lumbermen they knew this already that was their business But the conservationists looked at the cut over district of the northern Midwest Upper Michigan of Wisconsin and Minnesota and they said look they're wrecking this place. They're just destroying it We've got to stop them somehow capitalism is just raping the land They they thought any number of other resources were going to be overused misused used up as well Let me read you just a brief section from a book written by one of the leading early conservationist Gifford Pinshow An important progressive figure And he wrote in this 1910 book We have a limited supply of coal and only a limited supply Whether it is to last for a hundred or a hundred and fifty or a thousand years the coal is limited in amount Unless through geological changes, which we shall not live to see there will never be any more of it than there is now But coal is in a sense the vital essence of our civilization If it can be preserved if the life of the mines can be extended if by preventing waste There can be more coal left in this country after we of this generation have made every needed use of this source of power then we shall have deserved well of our descendants and Later on in the same book he wrote The five indispensable essential conditions or materials of our civilization are wood water coal iron and agricultural products We have timber for less than 30 years at the present rate of cutting 1910 the figures indicate Expert speaks The figures indicate that our demands upon the forest have increased twice as fast as our population We have anthracite coal but for 50 years and bituminous coal for less than 200 our supplies of iron ore mineral oil and natural gas are being rapidly depleted and Many of the great fields are already exhausted Mineral resources such as these when once gone are gone forever You can take this passage Unchanged and insert it 20 years later 50 years later Or tomorrow and you'll find somebody willing to sign at the bottom This is what conservationist slash environmentalists have been saying from the beginning They've been talking about misuse Waste All subscribing to physicalist fallacies and all proposing that the answer To this dire problem is government control of natural resources Now this control had already begun to be expressed as early as 1891 When the federal government first created forest reserves Which is to say it took some of the areas that were still in the public domain And it said we're never going to sell these or let somebody come in and use them These are going to be set aside as protected forest reserves 1891 was the beginning of the forest reserve system That would be President Harrison's term although I don't know that he had much personally to do with this But but this was something that Teddy Roosevelt latched on to and made one of his Political claims to fame and he was the great conservationist He was going to save our natural resources from rapacious capitalist and again This fits right into the to the atmosphere of thinking in the progressive era So Roosevelt greatly expanded the number of forest reserves From 41 that existed in 1899 to 159 when he left office Which increased the area from 46 million To a hundred and fifty million acres in forest reserves and later on even more land was added And and you can find people today that want to set aside still more forest land to be Overseen controlled by the federal government Accountless forest economists have demonstrated that the government's management of these lands is a disaster That it gives them negative value And I'm not saying it reduces their value. I'm saying it makes them worthless The costs being incurred are greater than the benefits being yielded And if you add that up over a stream of future years, you get a gigantic negative current present value For what the government is getting out of this property. It's squandering the property It's been squandering it all along. These were senseless reserves in the beginning Forests were vast in 1908 in this country. There was no running out of wood Forestry companies know perfectly well how to replant forest when it pays to do so and some of them eventually began to do that When it made economic sense, but meanwhile the government Insisted on embedding itself in the whole management of the forest and not just the forest But a lot of other natural resources as well But we have these progressives and the progressive conservationists to thank for this kind of policy Which has become characteristic of modern environmentalism along the way Well, let me stop at this point We've got about 15 minutes left in this session and we have more time now for questions Don't confine yourself if you want to ask about some other topic that's come up in the past four sessions Ask anything you feel like or or make comments Yes, sir From a book It's called the new freedom it was really a collection of speeches that he gave in 1912 when he was Angling to become president I don't know that it even has an editor. I think it's just Back-to-back essays As I remember Yes Yes, I will Martin sclar is the author's name sklar And The title of that book is the corporate reconstruction of american capitalism Sklar is One of the members of the Koizai marxist corporate capitalism school of history writing and It means that It means these are not exactly full fledged marxists. They don't spout the you know the full panoply of marxist doctrine but They use a species of class analysis that clearly springs directly from marxism And they They don't understand much of anything about how markets work They have Very crude ideas at best sclar himself Actually ends up going wrong partly because he did look at some neoclassical economics and learn all the wrong lessons So he comes away arguing That what business was trying to do Big business in the progressive era was find a way to administer prices That's an expression that goes back particularly to to burley and means in the early 1930s administered prices meant sort of Prices fixed by the businesses themselves or by trusts or combinations of businesses at all event not competitive prices Somehow administered and he he's got the idea that Whether businesses set prices A big business sets the price or the government sets the price. It's just different ways of administering the price So he he's basically an ignoramus when it comes to understanding the working of markets But but but in other ways, he's a meticulously careful historian And as I said his reading of the jurisprudence of the Sherman act is superior to anything I know So I'm I'm quite happy to give him his due If you happen to be interested in other aspects of of his work It's it's a huge work very interesting about the politics of the progressive era He goes through all of the presidents and tracks the major policy making and gives a lot of detail about who did what Who said what who conspired with whom so I actually recommend this book despite what I've said about it I wrote an essay actually a kind of review essay about it in in a journal called critical review in 1992 And my essay is called origins of the corporate liberal state And I believe it's online at at on power.org if you if you'd like to look it up Yes, sir. So basically this squarer fellow Belonging to a school thought that uh uses a semi socialist framework But doesn't spout any track about dialectical materialism or anything He's got a kind of not exactly dialectical materialism, but he's got again something But he's got something of verges on it He's got he's got ideas about how historical change is brought about by sort of changing forces of production and those giving Life to political pressures And therefore therefore bringing into being new property relations That's all. I mean It's as if you're having you're having a dream of Marx But it's a fuzzy dream Uh, then you know, it's really sclar you're dreaming about because it's not Really marx, but it's so marxian in flavor and tone That uh, you can't quite shake the feeling that you're in that other dream Yes, sir You mentioned that you talked about in the early 1900s like The wobblers and the rock and filler violence and whatnot. Yeah, um Those all seem to be like exogenous and outside of anything fueled directly by the government whereas today's apprehensions of terrorism and The drug war and yeah big scary cigarette companies and whatnot are all pretty much fueled What do you think about that? Well, I think I think it's certainly the case that the government is Much better equipped nowadays to keep the pot boiling I I wrote a little piece a few years ago in which I I just listed all the members of the Turned out to be the Reagan administration because I pulled this uh this federal guidebook off my shelf and it went back to the 80s when Reagan was president some of these places where you can look up who is who in the in the government and what positions they occupy formally and and uh in the reagan administration there were Dozen or more of these deputy assistant under some things for something All of whom were basically spin doctors I mean it's just hosts of these guys Highly paid on the federal payroll and they exist in every department. It's not just in the in the executive office of the president They're everywhere the government has equipped itself over time to constantly feed disinformation To the public to promote well itself. That's what it's promoting. It's drumming up Uh business demand artificial demand for what it purports to supply Some form of service or security to the public That didn't exist in teddy Roosevelt's day politicians made speeches and But they didn't have vast staffs of flags running around Telling tall tales like that. So you had hey had to do your own dirty work More directly if you were a politician in those days That's this apparatus is pretty much something it has developed since the new deal Giant bureaucracies Yes In fact, they do so much advertising That the media is almost beholden to it because the film someday says We're not going to give you our anti-proc laws or whatever You'll go broke. Yeah, I I I have an exercise. I suggest to the reader Sometime when you listen to the news just keep a tally as you go along of the stories and and note how many of them Go to sources in the government Okay, is it you know the president's press spokesman is it is that Joe blow at the department of defense You know who where do these stories come from and I think you'll find That the majority of what pretends to be news nowadays is nothing but propaganda being propagated through the mouthpieces of People who pretend to be journalists but They're just retelling the tale and and because they're Supposed to be independent. We're supposed to believe that's credible once they repeat it Uh, but they're they're carrying away press releases and they're carrying away Leaks that are given to them and They are indeed beholden because if if they cross Their masters they'll get cut off. They won't get any more leaks. They they won't even be treated Civilly they they won't be called upon at a presidential press conference every once in a while Something happens the mic is on when the president doesn't know it, you know, I mean he makes some crack about A jerk over there, you know, I'm never going to call on him So it's just a fact of life that that's the way journalism operates in the era of massive government that that the news media Not entirely of course. They're all kinds of fringy news sources In existence and thank goodness for the internet because we can all get at them now but the the major media are I believe pretty much just unofficial arms of the government Yeah, they all their stories They're all their main stories seem to either involve one of the governments already ongoing wars against You know social crusades wars against one thing or another war. There's something that the media wants To extend the if it's not about that if it's in the private sector, then it's something that calls for Intervention or calls for further regulation. I also like to keep a tally of the of the uh, fright diger If you check CNN's headline news for example, just about every half hour You'll see, you know, what is today's announcement of some horrible thing that may be killing us in the food or the water or the You know the birds flying over Who knows where it could be but but but actually the government is looking into it This will be dealt with it's not just the news though. It's crossed over into pure entertainment media too because um, the drug enforcement administration and the drug policy offices were Betting scripts from network entertainment shows and giving money Providing support to tv shows that toed the line on their anti drug policies. So it's It's probably worse. I think because it's more insidious This kind of the government the disinformation Uh Has its origins. I think in this country in wartime During world war one the government went to great lengths to To feed its line to one in all the movies the theater the school teachers Preachers you name it and then in world war two They operated a little more subtly but similarly and they worked through the movie industry Up to and including or maybe I should should say down to and including cartoons In which cartoon figures were uh, we're talking about the importance of paying their income tax And obeying price regulations And buying bonds of course So so the wars have been real, uh schools for government Uh manipulation and control of media including entertainment media Luke I was going to say starting in the late 30s, hollywood started to make movies about the Uh, the magnanimous and british heroes of the empire Victoria Of British troops in india and all the glorious british civilization Preparing us to uh be their allies before the war. Yeah. Well. Thank goodness. We've now got A new generation reminding us of the glories of the british empire and our duty to To uh to recreate it