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In 1980, Ronald Reagan said, It is time to check and reverse the growth of government, which shows signs of having grown beyond the consent of the governed. A little more than 25 years later, Barack Obama declared the Reagan Revolution over. This book surveys the highlights and low points of the nearly 30-year struggle to limit American government, set against the big-government world of the New Deal and the Great Society. The book assesses Reagan's successes and failures, and looks at the 1994 election as a ...
In 1980, Ronald Reagan said, It is time to check and reverse the growth of government, which shows signs of having grown beyond the consent of the governed. A little more than 25 years later, Barack Obama declared the Reagan Revolution over. This book surveys the highlights and low points of the nearly 30-year struggle to limit American government, set against the big-government world of the New Deal and the Great Society. The book assesses Reagan's successes and failures, and looks at the 1994 election as a mandate to resume Reagan's efforts. It explores George W. Bush's rejection of limited government in favor of high spending, a mixture of religion and government, and a floundering crusade to bring democracy to the Middle East. Finally, it asks whether the elections of 2006 and 2008 were a rejection of the limited government message or just a repudiation of the failed Bush presidency.
The politics a president seeks to make must start somewhere. Ronald Reagan sought to limit government. Before his presidency, government had grown in an era dominated by progressive ideas, institutions, and policies. These institutions and policies-what I call here the progressive regime-had persisted for more than two generations before Reagan's coming. That persistence was not a political accident. Master politicians constructed the progressive regime. Their handiwork would challenge and constrain Reagan's effort to limit government. A history of the renewed effort to limit government should begin by understanding how government got too big and why it tended to stay that way.
The story of progressivism does not begin with politicians like Franklin Roosevelt or policies like Social Security. It begins with men and women of ideas moved by a desire to profoundly change the United States. Progressivism goes back to the 1880s. Its advocates included many prominent academics, journalists, and preachers. We need not read them all. In 1909, a leading progressive journalist, Herbert Croly, published The Promise of American Life, which summarized the previous two decades of progressive thinking. This book influenced presidents, including Theodore Roosevelt, who plumped for a New Nationalism that reflected Croly's ideas. Progressivism informed what would later be called the "religion of government" espoused by the New Deal. In a word, progressives sought to reconstruct America.
What was Herbert Croly against? The American past: "The bondage from which Americans needed, and still need, emancipation is ... from the evasions, the incoherence, the impatience, and the easy-going conformity of their own intellectual and moral traditions" (p. 426). Croly identified that tradition with a Jeffersonian aspiration to equal rights and liberty under law. That aspiration implied a political culture. Individuals create government to protect preexisting rights. Government is limited by that delegation of power and by constitutional safeguards for those rights. Government exists to protect liberty so that individuals might pursue the good life as they see fit. Life is not lived for collective ends or collective goods.
Croly recoiled from what he saw as the rampant individualism and purified selfishness fostered by Jeffersonian ideals (p. 49). Jeffersonian liberty did not lead to the correct pattern of economic outcomes: "the traditional American confidence in individual freedom has resulted in a morally and socially undesirable distribution of wealth" (p. 22). The wealthy did not morally deserve their wealth. Businessmen enjoy "economic privilege which enable them to wring profits from the increasing American market disproportionate to the value of their economic services" (p. 115). Society creates profits, and the state taxes citizens "to secure for the whole community those elements in value which are made by the community" (p. 380). More unjust still was the perpetuation of such inequality through inheritance. The son of the rich man did not earn his wealth. Such unearned largesse makes for men of "very inferior intellectual and moral caliber" who contribute little to the economic efficiency of the nation (p. 203). Croly also believed inequalities of wealth loosened the social bond, a bad thing in itself in a democracy (p. 204).
Croly thought America corrupt. The sins of the wealthy and businessmen polluted politics: business tries to corrupt government and sometimes succeeds (pp. 116-17, 130). Business is a symptom of a more general problem: Americans are motivated by self-interest in politics rather than a concern for others or for the national good. Politicians and their party machines run legislatures on the fuel of self-interest while ignoring the public good (p. 330). State legislatures were particularly corrupt (p. 320). Croly called labor unions "powerful and unscrupulous and well-organized special interests" that threaten the national interest (p. 131). The public was also corrupted by tradition and history. Americans remained devoted to Jeffersonian individualism. Public opinion obstructed necessary changes in the United States (pp. 120-21).
Croly wore two masks, the prophet preaching moral decay and the intellectual promising reasoned renewal. Both the prophet and the intellectual went unheard by the people who remained attached to their prejudices received from old Jefferson long ago. Jefferson's shortcomings were the shortcomings of American institutions and political culture. Americans had built their political house on an old and morally unstable foundation. The house needed to be reconstructed. It should become, as Croly's magazine proclaimed, a New Republic.
Americans wanted, according to Croly, "to become a worthier set of men" (p. 12). Such improvement would not happen by itself. Croly thought moral betterment should be planned rather than an outcome of "the chaotic individualism of our political and economic organization." The American state should become responsible "for the subordination of the individual to the demand of a dominant and constructive national purpose" (p. 23). Croly identifies the national purpose as realizing the democratic ideal (p. 6). This nationalism in turn depended on reconstruction: "human nature can be raised to a higher level by an improvement in institutions and laws" (p. 399). The new American would be a person with a "special purpose" in life. Such a purpose would become "exclusive for the individual who adopts it, because of the single-minded and disinterested manner in which it is pursued" (p. 411). The word "disinterested" is crucial here. Quoting a fellow progressive, Croly says democracy ultimately demands that every man "shall think first of the state and next of himself...." This subordination of the self to the collective is described as "the perfection of human nature" (p. 418).
Could humans be improved? Croly called for expanding the powers and activities of the central government (p. 152). The state should "increase the national spirit," and its leaders should consciously "promote the national welfare and those ideas and tendencies whereby it was imperiled" (p. 40). The state should constrain the selfish pursuit of wealth. Taxing inheritances both seizes undeserved gains and improves the character of the heirs (pp. 381-85). Croly says reconstruction permits "the preservation of the institution of private property in some form." The words "in some form" should give us pause, not least because Croly immediately demands "the radical transformation of [private property's] existing nature and influence." The state must assume "many functions now performed by individuals" and improve the distribution of wealth (p. 209). He looked forward to a time when "industry became organized under national control for the public benefit ..." (pp. 415-16).
Then there was the value of a good war. Croly believed that nationalism and the national spirit might be enhanced in struggle against a foreign enemy; the War of 1812, for example, had increased a sense of national community among Americans (pp. 54-55). Later the Spanish-American War engendered a strong national feeling and "made Americans more sensitive to a national idea and more conscious of their national responsibilities" (p. 169). The war that forged the German nation in the 19th century brought "increased security, happiness, and opportunity of development for the whole German people." Croly concludes, "A war waged for an excellent purpose contributes more to human amelioration than a merely artificial peace ..." (pp. 255-56). Croly is not an extreme warmonger; he does sense the costs of battle. Yet war had its advantages-"war may be and has been a useful and justifiable engine of national policy"-not least in forging a sense of national purpose (p. 255).
The nation also needed an elite to overcome its past. American political culture had fostered a "cordial distrust of the man of exceptional competence, training, or independence as a public official" (p. 170). These men of special vocation-progressives like Croly-acted from disinterested motives and thus embodied a "higher type of individuality," which itself was "indispensable to the fullness and intensity of American national life" (pp. 64-65). Croly wrote that "in a national state, it is the man of exceptional position, power, responsibility, and training who is most likely to be representative and efficient" (p. 57). "Training, special ability, or long experience" establishes a special claim to public office. The task of reconstruction itself offered such higher types a chance "for all sorts of stirring and responsible work, which would be demanded of individuals under the proposed plan of political and economic reorganization" (p. 406). These efficient and disinterested men would run the state and the economy as a way to build a national democracy. But what of public opinion and its devotion to individualism? Croly called for education: the nation should engage in a hands-on experience of national reconstruction: "its schooling consists chiefly in experimental collective action aimed at the realization of the collective purpose" (p. 407).
Croly hoped these leaders would transform the political culture and institutions of the United States. His new republic would not be a limited government. The national government would have the exclusive responsibility for "the regulation of commerce, the control of corporations, and the still more radical questions connected with the distribution of wealth and the prevention of poverty ..." (p. 350). More generally, the federal government would be responsible for the national welfare.
Croly believed politics should raise human nature above its normal course by fostering a higher type of person who served the collective from disinterested motives. Such a person reveled in political engagement and government service. In contrast, the lives people live at liberty might turn out to be average, stuck in materialism and selfishness. They too would need to be improved. Government and politics should tend not only to the welfare of citizens but also to their souls. The "higher self" that he hoped would follow the triumph of progressivism showed little respect for the lives chosen by those who did not wish to join his new republic.
It is difficult not to see a religious impulse lurking in Croly's aspirations. The national purpose-the realization of the democratic ideal-was for him a sacred cause that "must be propagated by the Word and by that right arm of the Word, which is the Sword" (p. 21). What is the Sword? The Sword was the American state undertaking "official national action" (p. 24). This talk of the state (the Sword) pursuing a religious task (the Word) may disquiet readers in the 21st century, especially coming from an author who believes the "righteous use of superior force" brings order and peace to domestic politics (p. 312). But Croly was not a sectarian bent on suborning government to Christianity. He was far more interested in a new earth than a new heaven. The transformed nation of his imagination would serve as a substitute for the older biblical religions; philosophers would replace churchmen, and the older creeds would give way to a democratic faith.
Croly assumed his progressive vision could be imposed on the struggle of interests that constitutes politics. He hoped to create a national identity for Americans that would transform their conception of their interests. The means to this transformation would be institutional reform, broadly understood. Croly understood that the progressive turn in American politics would not be merely a reform of this or that abuse. It would be the founding of a new set of institutions and policies, a new American regime, a reconstruction that would change the United States from a nation of individualists under a limited government to a progressive polity inhabited by disinterested citizens devoted to the nation.
Progressives in Power
Historians sometimes say that Franklin Roosevelt followed no guiding ideology in creating the New Deal. He is said to have been a pragmatic problem solver focused on the economic contraction that began in 1929. But Roosevelt worked in a political context informed by the ideas of progressivism, which has been called a foundation of the New Deal. The profound economic problems of the early 1930s provided the atmosphere of crisis needed to turn progressive theories into New Deal practice. Croly had called for transforming the nation through institutional reform. Franklin Roosevelt and his allies sought to make good on that promise. In the 1930s, progressive ideals became a progressive regime.
A New National Purpose
Herbert Croly had admired war as a means to nation-building. In his inaugural address, Franklin Roosevelt compared fighting the economic crisis to "the emergency of war" and asked "the great army of the people" to fight the contraction "with a unity of duty hitherto invoked only in time of armed strife." The appeal to war was more than a metaphor. The New Dealers believed the War Industries Board of 1918 had controlled and rationalized the economy. They "envisioned a much more forceful kind of national planning, rooted in the progressive era's faith in system, process and expertise."
Congress responded by enacting the National Industrial Recovery Act in 1933. The law included a Public Works Administration and a right to organize labor. NIRA sought to imitate government management of the economy along the lines of the War Industries Board through a new agency, the National Recovery Administration. The new agency asserted control over large sectors of the economy by setting prices, wages, and production quotas.
A similar innovation involved agriculture. In 1935, the farm population composed one-quarter of the total population of the nation. The New Dealers undertook to set prices and production levels through the Agricultural Adjustment Act. The AAA did stabilize prices and reduce production, thereby giving benefits to producers at a cost to consumers. Moreover, the AAA had political effects: farmers became much better organized and more skillful at influencing government.
This expanding government met resistance in the courts. Before the New Deal, the U.S. Supreme Court opposed redistribution, protected liberty of contract, and generally upheld a strong right to private property. In doing so, "they were fulfilling the property-centered vision of society held by the founding generation." This interpretation of the Constitution was incompatible with the New Deal, which claimed broad powers over property and economic activity. The Supreme Court responded in 1935 and 1936 by invalidating several acts of the New Deal, including the NRA. A majority of the Court judged that the NRA lay beyond Congress's power to regulate commerce and constituted an unconstitutional delegation of power from the legislature to the executive. As for the Agricultural Adjustment Act, a Court majority concluded, "It is a statutory plan to regulate and control agricultural production, a matter beyond the powers delegated to the federal government."
FDR responded by proposing to change the Supreme Court's decisions by changing the members of the Court. The defenders of constitutional constraint would quickly come to be outnumbered by the friends of state expansion. The "Court-packing plan" failed on the battlefield of public opinion but won the larger war in the judiciary. By 1941, the Supreme Court openly declared it would not enforce previously recognized constitutional limits on government regulation of business. The New Deal consigned "property to a secondary status with only minimal constitutional protection, a development that allowed a wide sway for economic regulation." The larger question remained-what would the federal government do with its new powers?
The New Dealers had initially focused on reconstruction rather than recovery. They distrusted capitalism and free markets and preferred industrial planning and cooperation of business and labor through cartels managed by the government. The New Dealers believed deflation came from too much competition and production. Consequently, the AAA tried to increase farm prices by cutting output, allowing cooperative marketing, and imposing target prices for commodities. The National Industrial Recovery Act enacted industrial codes that restricted competition and production while imposing labor market reforms. The economist Gene Smiley notes that "the NRA was attuned to discourage recovery, and that is exactly what it did." An economic recovery that began in late 1933 stalled for two years; a more vigorous recovery began in late 1935 and lasted through the election. In 1937, a new depression in some ways more severe than the first commenced. At the end of Roosevelt's second term, the national economy had not recovered fully from the initial contraction of the early 1930s.
Excerpted from THE STRUGGLE TO LIMIT GOVERNMENT by JOHN SAMPLES Copyright © 2010 by Cato Institute. Excerpted by permission.
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