Future History, page 6
The proposed solution? Have the government get into the banking business by lending money to farmers (holding crops as collateral), nationalize the railroads, debase the currency by switching from a gold standard to a gold and silver standard, steal money from the rich, and stop the influx of immigrants to keep out any more Jews. The problem with the proposed solution? It not only had nothing to do with capitalism, it also violated some of its principle tenets.
The Populists (technically, the People's Party) ran a candidate in the 1892 presidential election, and received about one million votes (out of about twelve million), and 22 electoral votes (out of 444.) The Democrats adopted much of the Populist agenda in the elections of 1896 and 1900, especially the currency debasement, and were soundly defeated both times. But the fact that any sizeable number of voters supported these ideas at all was indicative of a dangerous trend that was to become increasingly serious with the passage of time, namely the growing disconnect between the American mentality and both the traditions and the underlying assumptions of American democracy.
Enter the Progressives. Their concentration was on urban problems, but their approach was the same. Problems are caused by villains, and can be solved by an increase in the power of the State so as to combat those villains. Their ideas were fueled by the writings of social critics collectively referred to as Muckrakers, a term which eventually became high praise, but was originally an insult.36 Their themes were simple: all wealthy people are thieves, all businesses are replete with corruption, all businessmen are liars, all state and local governments are evil (but not the federal government), all religious institutions are tools of the rich, American society is inherently unfair, etc. Their solutions were stunning in their recklessness. Let us concede sincerity of motives, but we must remember what paves the road to hell.
A prime example of this was one of the pet Progressive causes, reforming the civil service by destroying the so-called "spoils system." Whenever an election resulted in a change in the party in power, the new administration fired as many civil servants as possible and filled the positions with its own supporters. ("To the victors belong the spoils.") This practice began in 1801, when the Jeffersonian Republicans replaced the Federalists, occurred again on a larger scale in 1829 when the Democrats replaced the National Republicans (later called the Whigs), and continued without interruption for the next few decades. Increasingly shrill calls for reform (usually voiced by the party that had just lost an election) seemed dramatically vindicated when in 1881 a mentally unstable man who had supported the Republicans in the 1880 election, and was then not given a job, assassinated the president.37 Public revulsion led in 1883 to the passage of the Pendleton Act, which created the Civil Service Commission and established the practice of administering civil service examinations. Scoring well on these tests was the means of access to civil service jobs, and the jobs remained in the hands of their holders permanently, regardless of election results. With every passing decade, more and more civil service positions on the federal, state, and local levels were filled in this manner. When the civil service system reached its final form, only the very highest positions (or the very lowest and least important) remained spoils to be handed out. For example, a new president appointed a new secretary of state and new assistant secretaries of state; but the staff of the State Department remained intact.
Applauded at the time as an absolute good, the civil service system had in the long run a horrific result: the creation of an entrenched and immoveable bureaucracy which, as hitherto mentioned, became part of the ruling class. It grew and spread until it reached into every corner of human life, and successive "reforms" over the centuries effectively meant little more than the establishment of yet another branch of the bureaucracy.38
The next "reform" targeted the constitutional structure of the government. The self-styled "Progressives," either unaware of or disinterested in the philosophy underlying the Constitution, were offended by the fact that the upper house of the Congress, the Senate, was chosen by the state legislatures and not elected directly by the people. (One of the shibboleths of the time was "fighting corruption," and this was applicable to the Senate issue because many of the state legislatures were corrupt. An even cursory examination of 19th and 20th century politics indicates that corruption was pervasive on all levels, in all branches, in all divisions, and would remain so for as long as the American political system survived, especially in Illinois, New Jersey, and Louisiana.) Some of the Progressives actually objected to whole concept of a bicameral legislature and of any sort of representation not reflecting a direct enumeration of population;39 but inasmuch as an amendment proposal sent to the states that would abolish the Senate would have required the permission of the Senate, which was obviously not going to happen, they settled instead for changing the way in which the Senate was chosen.
The consequent 16th Amendment retained the equality of the states in the upper house (two each, regardless of state population,) but provided instead that the electorate in each state elect the two senators directly, rather than having them chosen by the state legislatures. On the surface, this seems a minor, even a positive change, bringing the Senate closer to the people. But the Senate was not designed to be close to the people! It was designed to represent the state legislatures in a federal system! Senators, hitherto by and large personally unimportant political non-entities (there were exceptions) who were representatives of the state legislatures (as opposed to members of the House, who, representing the people, were dominant figures), now became major political personages.40 The first principle of Aristotelian government had been abandoned, in the name of "progress."
The presidencies of Theodore Roosevelt (1901-1909) and Woodrow Wilson (1913-1921) saw, again in the name of "progress," an expansion of the power of the federal government undreamed of until that point in history. The two men were quite different from one another. Roosevelt was inclined to executive activism by his mercurial personality and Wilson similarly inclined by ideological conviction (and they also detested each other,) but they shared one cardinal principle which became, in the words of a Libertarian Conservative journalist of the late 20th/early 21st centuries, "the source of much modern mischief"41: the president must not merely be the government's chief federal executive officer; he must be a visionary leader whose vision transforms the nation. Washington, Jefferson, Madison, Monroe, even Jackson and Lincoln, would have been appalled by this notion. But the notion became accepted as tantamount to orthodoxy.
(The slide in the direction of Statism subtly preceded both the 16th Amendment and the often referred to "reign of Roosevelt" by two decades. In 1887, under pressure from state legislatures and populist agitators, Congress passed the Interstate Commerce Act which created the Interstate Commerce Commission. It was a weak agency designed to prevent secret agreements among railroad companies to fix prices and engage in other activities that interfered with competition. In 1890, Congress passed the Sherman Anti-Trust Act, which declared illegal anything that operated "in restraint of trade," i.e., monopolies, trusts, etc. Both of these laws had their hearts in the right place, and both had solid capitalist assumptions behind them; but they established the dangerous precedent that government can interfere in the way businesses conduct business.)
Roosevelt oversaw further expansions of federal power with willing support of "progressives" in Congress. For the first time the president intervened in a labor dispute, helping to settle a strike largely to the benefit of a labor union.42 By two laws, the 1903 Elkins Act and the 1906 Hepburn Act, the railroads were effectively deprived of self-management. He mounted assaults upon corporations, supposedly because they were monopolies, but in reality because they were large, wealthy, and powerful. The Roosevelt administration saw 125 million acres of land set aside as a nature preserve. (A noble goal, and the beginning of the conservation movement, but without constitutional warrant.)
It is interesting to note that during this period the "progressives" in many state legislatures adopted some of the old Populist ideas of initiative, referendum, and recall. Initiative refers to the process whereby signed petitions can compel the legislature to vote on a bill that it had not itself introduced; referendum, to the process whereby the voters themselves can pass or defeat a bill; and recall, to the process whereby then voters can undo the result of a previous election. Again, all this seems positive, an expansion of democracy. In reality, it provided a method for well-organized special interest groups to manipulate popular emotions so as to bypass the constitutional process of legislation and election.
After Roosevelt (with a brief Taft interlude) came Wilson, during whose administration the power of the State assumed a larger, ultimately more sinister character. As usual for the "progressives," his goals were laudable; as usual, the methods were questionable; as usual, the results were ultimately destructive.
Under Wilson's leadership, Congress adopted the Populist idea of the government becoming involved in the banking industry via the Warehouse Act of 1916, which authorized loans to farmers using stable crops as collateral. The government became involved in the insurance industry via the Workmen's Compensation Act, with coverage limited to federal employees, but soon extended by state law to state employees and eventually to all employees. The government moved from regulation of interstate commerce to the oversight and investigation of interstate commerce with the creation of the Federal Trade Commission. And the creation of the Federal Reserve System created a federal agency with the power to regulate the money supply in a variety of ways, most importantly the right to print it. The printed money was at first backed by gold, then later by silver, and eventually by nothing at all.
To these congressional and executive actions must be added a fatal error made by the people through their state legislatures, albeit at the behest of Congress. During the First Civil War the federal government had raised much of the money needed to fund the conflict by levying an income tax, a practice which ended when the War did. When a few decades later Congress attempted to reintroduce an income tax, the Judiciary overturned the law because the Constitution specifically prohibited any taxes not proportional to population. In 1909 Congress proposed, and in 1913 the states ratified, the 17th Amendment, which authorized Congress to tax incomes without regard to enumeration. The foolish willingness of the people to accept the income tax was predicated upon the belief that very few of them would actually pay it. As first implemented the income tax was very, very limited, a mere $10 per $4000 earned to a maximum rate of .025%. In other words, in an age when the average worker earned less than $1000 per year, only the extremely wealthy would pay income taxes, and even they would be only lightly touched.
Subsequent events should have been expected, but was not because the people consistently refused to be forewarned that any government promise of fiscal responsibility or limited cost is always at best a self-delusional error, and at worst (which was most common) a bald-faced lie. Within thirty-five years of the ratification of the 16th Amendment, almost every working American was paying income tax. And to make certain that it would be difficult to avoid paying the tax, the government obligated employers to withhold a certain amount of money from each paycheck and send it directly to the federal bureaucracy. The people had thus, through their state legislatures, authorized Congress to plait a noose with which to hang them, and then supinely offered the government their necks.
These dramatic extensions of the power of the State were justified by the claim of "progress," and it is obvious that much of the intent was benevolent. But this fact is irrelevant. The elastic clause would have to be stretched to the breaking point to justify any of this constitutionally; but in the heady, fervid atmosphere of Progressivism, the question was rarely posed and usually ignored. The other extensions of State power, however, were even more dangerous, because they were justified by war.
On Good Friday, 1917, at Wilson's behest, Congress declared war on Germany. The declaration was entirely justified, a response to the German policy of attacking our merchant vessels on the high seas.
But popular reaction to the declaration of war was not overwhelmingly positive. Our immigrant population, first, second, and third generation, included many German-Americans and Irish-Americans, neither of whom were sympathetic to the Allies; our isolationist tradition, going all the way back to Washington in goal and to Monroe in practice, inclined us a "plague on both your houses" mentality relative to European conflicts; there was partisan bickering; and not least importantly, other than vindicating the idea of freedom of the seas, there was uncertainty about what exactly we were hoping to accomplish with victory. To this Wilson responded with the creation of the Committee on Public Information, the purpose of which was in essence to manipulate the emotions of the population so it would support the war effort. In an avowed dictatorship this would have been called a Propaganda Ministry.
Next, Wilson sought to "organize," "coordinate," "restructure" the country to advance the war effort by creating executive agencies with broad powers. The Food Administration coordinated and allocated agricultural resources; the War Industries Board coordinated industrial production for military purposes; the War Finance Board found credit sources to facilitate the conversion of factories to munitions production; and the National War Labor Board kept the workers working and prevented strikes.
Next, Wilson took steps to hobble the opposition. In May of 1917 the Selective Service Act began the process which led to millions of men being pressed into military service, a process that was, needless to say, quite unpopular. The next month the Espionage Act made it illegal to oppose the draft, interfere with it, or "encourage disloyalty." Violators were threatened with 20 years in prison and/or a $10,000 fine. One year later the Sedition Act provided grounds for the prosecution of pacifists and socialists (many socialists were internationalists) and for the censorship of the press. In 1919, in the case of Schenck v. the United States, the Supreme Court upheld the Espionage Act, citing the "clear and present danger" idea for justifying the violation of human rights. Of course, this precedent allowed the State to decide when it is in danger, as well as the degree to which rights can be violated. This idea was to have fatal consequences a century later.
True, the coming of peace saw the dismantling of the war agencies and a partial return to isolationist policies, but after a relatively tranquil decade (1919-1929), the First Great Depression and the Second World War saw Liberal Statism return with a vengeance, and there was from that point on no turning back.
It should be noted that there was always vocal and serious opposition to these developments, and the struggle of the Liberal Statists for the consolidation of power was condemned by Libertarian Conservatives at every step along the way. But by the early 21st century the cause of freedom was fatally undermined by an intellectual deterioration as profound as the concomitant moral deterioration; and that brings us to our next reflection.
DIALOGUE WITH TRYPHOIDIA
(Location: The Esplanade, Brooklyn Heights, Brooklyn, New York City)
GOTTFRIED: Tryphoidia my dear! Your uncle Tryphoid told me you would be here today. How pleasant to see you again. There is something I wish to discuss with you.
TRYPHOIDIA: Don't call me "my dear," Gottfried. It objectifies and demeans me. Don't force me to have you arrested as a hate criminal.
GOTTFRIED: Apparently you haven't changed. Still spitting at men who hold the door open for you?
TRYPHOIDIA: And don't caricature me either. I never did that.
GOTTFRIED: Oh, that's right, I was thinking of someone else. But when a man offered you his seat on the public transport, you did punch him and break his nose, didn't you? You were arrested, as I recall.
TRYPHOIDIA: And released, and he was fined by the court.
GOTTFRIED: I didn't know that. Fined for what?
TRYPHOIDIA: Objectifying and demeaning me. Because I am female, he made the presumption that I am a weakling in need of care and deference.
GOTTFRIED: He thought you were pregnant.
TRYPHOIDIA: So what? I wasn't pregnant. I just used to be chubby. And besides, that doesn't excuse demeaning objectification.
GOTTFRIED: Whatever. If you have a few minutes, I'd like to hear your thoughts about something which has been much on my mind. May I buy you a cup of coffee?
TRYPHOIDIA: Don't be condescending. I can buy my own coffee if I want some, which I don't.
GOTTFRIED: Of course, of course. I was wondering if I could ask you about the European-American Deng Society. You have just been appointed regional chairwoman, correct?
TRYPHOIDIA: Chairperson. Why do you insist upon using antiquated, sexist, hateful, exclusionary language? It is very offensive.
GOTTFRIED: Well, because I am offended by language patterns that are designed to diminish precision of meaning. Words should as precise and as explanatory as possible, and I find the ongoing Sinization of English to be a deplorable development.
TRYPHOIDIA: Sinization?
GOTTFRIED: Adoption of Chinese speech concepts.
TRYPHOIDIA: But why? Mandarin Chinese is wonderfully inclusionary. For example, there is only one word for the third person pronoun of either gender or number, the word ta. It means he, she, it, they, him, her, them ...
