Dr. Carson has written and taught extensively, specializing in American intellectual history. He is the author of several books and a frequent contributor to The Freeman and other scholarly journals.
Some of the major relics of government intervention are still with us today as a result of the Progressive movement of the early twentieth century. The Progressives promoted and brought about intervention in three distinct ways. (1) They made the fateful link between the idea of progress and positive government action. (2) They adapted socialistic reform to the American framework as gradual and mounting government intervention. (3) They succeeded in getting some of their reforms enacted into law either as particular programs or constitutional amendments.
The Progressive movement began to make its political impact in the first years of the twentieth century and had largely spent itself by 1920. Some would date the beginning of that impact from 1901, when Theodore Roosevelt became President after the assassination of McKinley. The end of its thrust as a national movement can be dated from two events which occurred in 1920: the election of Warren Harding as President vowing to oversee a “Return to Normalcy,” and the adoption of the 19th Amendment, which was the last of the Progressive amendments to the Constitution.
The peak of the movement was reached in 1912 when Woodrow Wilson, an avowed progressive, was elected President as a Democrat, when Theodore Roosevelt came in second to him as the nominee of the Progressive Party, and when William Howard Taft, whom Roosevelt had chosen to succeed him in 1908 because of his progressive tendencies, came in third as the Republican candidate. Most of the legislative triumphs which can be attributed to the Progressive movement came during the years 1913-1916.
Neither the public in general nor very many intellectuals in particular associated the idea of progress with government intervention in the economy before the twentieth century. On the contrary, the prevailing ideas in the nineteenth century opposed government intervention as retrogressive and reactionary. Political and economic progress were to be attained by restraining government and freeing the energies of peoples. The Progressives, then, effected a major change in thought by giving currency to the notion that progress could be made by forceful government action.
The idea of Progress
How important this change was for the thrust of intervention becomes clear only when we recall the lode-stone-like attractiveness of the idea of progress over the past several centuries. Since the seventeenth century, European thinkers had become increasingly enamored of the idea. Indeed, the belief that progress was taking place goes back further than that. Men of the Renaissance believed that they were progressing far beyond their Medieval forebears. But their progress they attributed mainly to the recovery of the learning of the Ancients.
Seventeenth-century scientific discoveries, however, began to point in a different direction. Thinkers were now discovering laws and relationships not only unknown to thinkers of ancient Greece and Rome but also some of which ran counter to their assumptions, such as that the sun moves around the earth and that freely falling bodies accelerate at a uniform rate regardless of weight. However much their thinking might be buttressed by the earlier work of Greek and Roman thinkers, the Moderns were now going well beyond them. They were making progress. (That there were still champions of ancient learning as late as the eighteenth century to contend with the proponents of modern progress is at least suggested by Jonathan Swift’s satire, The Battle of the Books, published in 1710.)
The idea of progress gained increasing sway in the course of the eighteenth century, especially among intellectuals. The idea of an orderly universe which was greatly bolstered by the findings of Kepler, Galileo, and Newton, among others, was now being extended into the social, political, and economic realms. Everywhere men studied they found signs of underlying laws, laws sub sisting, as they said, in the nature of things. The belief took hold that by gaining knowledge of this natural order great progress could be made by men by bringing their behavior into conformity with it. There were many indications, too, that something like this was actually taking place.
In the nineteenth century, belief in the idea of progress was well on its way to becoming an article of faith. Cities began holding great fairs and expositions at which displays of the latest marvelous achievements from around the world could be made. Even so, a major change was occurring in the ideological underpinnings of the idea of progress.
Evolutionary Theories Gain in Social Impact
Evolutionary theories, particularly the biological theories of Darwin, were being substituted for or being used to support older ideas of progress. Herbert Spencer made the social interpretation of evolution that had the greatest immediate impact. But progress, on this view, was the result of the working out of natural laws for the development of society. Governments could not intervene so as to alter the course of development. As William Graham Sumner, Spencer’s American disciple, described the situation, the Western world had moved into an industrial stage. It was a stage which, he believed, was bringing great progress. The notion of intervening in it so as to change its course was absurd. “We have to make up our minds to it,” he said, “adjust ourselves to it, and sit down and live with it.”
My main point, however, is that by the early twentieth century Americans generally had come to believe in progress. It had become, or was becoming, a word to conjure with and was ready to join that other word, “freedom,” which all politicians who would succeed must avow as the aim of their programs.
It was especially important for those who would use the power of government to make social improvements to identify their programs with progress. After all, the only feasible justification for making their innovations was that they would lead to improvement or progress. Yet their path was doubly blocked in the late nineteenth century. In the first place, the case against intervention had been made by the Spencerians, who had made the earliest and most plausible application of the Darwinian theories. In the second place, much of socialist thought, which was the main source both of the critique of contemporary society and of the vision of a better one, was equally set against government intervention. Karl Marx, for example, was so convinced of the futility of ameliorative measures achieved by government intervention that he believed socialism could only be reached by violent revolution.
The work of overriding these theoretical obstacles to reform by way of government intervention had been largely accomplished before the Progressive movement was well under way. It almost certainly had to be. While a goodly number of thinkers contributed to the undertaking, Lester Frank Ward, an obscure sociologist, made one of the most direct assaults on the Spencerian position. (American thinkers could, and did, usually ignore the Marxian argument against ameliorative reform.)
Ward granted that in times past social change as well as biological changes had taken place without being consciously directed. But, he proclaimed, a new stage in evolution had now been reached as a result of thousands of years of movement in its direction. The new stage was the “advent with man of the thinking, knowing, foreseeing, calculating, designing, inventing and constructing faculty, which is wanting in lower creatures . . . .” This development repealed “the law of nature and enacted in its stead the psychologic law, or law of mind.”
By the Mind of Man
The vision that Ward held forth was one in which man could use the creative powers of his mind to take over the direction of social development. By so doing, he could bring nature and natural law to heel, or, as Ward put it:
. . . When nature comes to be regarded as passive and man as active . . . . when human action is recognised as the most important of all forms of action, and when the power of the human intellect over vital, psychic and social phenomena is practically conceded, then, and then only, can man justly claim to have risen out of the animal and fully to have entered the human stage of development.
In short, the path to progress now lay through man’s taking over and directing the course of social development.
It should be pointed out, however, that neither Lester Frank Ward nor anyone else has proved that government intervention in general can produce progress, nor even that particular interventions will necessarily do so. Indeed, the intellectuals—Ward, Richard Ely, E. A. Ross, John Dewey, Walter Rauschenbusch, Thorstein Veblen, Herbert Croly, Oliver Wendell Holmes, Jr., Louis Brandeis, and others—were generally strong on assertion and weak on proof. By and large, they were enthusiasts, caught up in the vision of making all things new, eager to innovate, aware, perhaps, that most men do not so much require proof as vigor in assertion, and bent toward joining their word visions of the future to political power. In any case, they prepared the way for linking the idea of progress to government intervention, not because they had proved the connection by evidence and reason, but by laying their claim on the basis of assertions about what could be accomplished. The politicians did the rest.
Even though the linkage was made by little more than intellectual sleight of hand and political bombast, it was nonetheless a political master stroke. Long aider the Progressive movement had been relegated to the pages of history reformers continued to give impetus to their measures by claiming they were progressive and by denouncing those who opposed them as reactionaries desirous of returning to the unsavory past. Today, the linkage is a relic, a relic of intervention.
Actually, the ]inking of the idea of progress to government intervention was one of the ways that socialistic reform was adapted to the American framework. It was, however, such an important element of that effort, and so distinctive, that it has been accorded separate discussion. What needs discussing about the adaptation is how the Progressives smoothed the way and prepared Americans for the reforms and interventions.
Most of the basic reform ideas were promulgated by the Populists in the 1890s. However, they advanced them as immediate demands and made it appear that if they were adopted a virtual revolution would be accomplished. Their arguments were cast in class language; their denuncia tions of wealth, banking, and gold were clearly demagogic; their proposals were rough hewn and heavy handed. Their monetary panaceas were at considerable remove from programs the generality of Americans were likely to find acceptable.
By contrast, Progressivism was much more attuned to the American political motif. Demagoguery there might be, but it was toned down to a level that made it little different from the approach of most politicians. The class struggle was muted; wealth and property were not attacked directly; the utopianism of populism was kept out of sight, and reform and gradual change were the only tickets presented.
However much Populist ideas might be drawn from intellectuals, they had about them the aura of Kansas farms and Chicago factories. Progressivism, on the other hand, brought to the fore the reformer dressed in his Sunday best, so to speak, ready to take up his place in the American mainstream. While Richard Hofstadter held that Populism merged into Progressivism in the early twentieth century, he described the differences between them this way: “Populism had been overwhelmingly rural and provincial. The ferment of the Progressive era was urban, middle-class, and nationwide. Above all, Progressivism differed from Populism in the fact that the middle classes of the cities not only joined the trend toward protest but took over its leadership.”
Both Theodore Roosevelt and Woodrow Wilson, the most prominent political leaders of a progressive bent, illustrate the point well. They were of older American stock, respectable, and had their political careers in the established political parties. Roosevelt was a Republican, until his temporary break in 191.2, and Wilson was a Democrat throughout, as befitted a man who was born in Virginia and who grew up in the South. They were both college men, trained at old prestigious universities, Roosevelt at Harvard and Wilson at Princeton. Both, too, went to law school, Roosevelt at Columbia and Wilson at the University of Virginia, though neither was attracted to the practice of law. They were both historians, of sorts, though Roosevelt had no extensive formal training in the discipline in contrast with Wilson, who obtained a Ph.D. at Johns Hopkins. In short, they were nurtured in the most prominent of American institutions and were successful members of the prevailing American society.
To put it another way, they were ideally suited by background and training to help make reform respectable in America, and they did. Both were attracted to reform initially in opposition to what they took to be the corruption of American ideals and political principles.
Roosevelt had been only a few weeks in his first political position as a member of the New York legislature when he moved to have a well known judge impeached. The judge had made favorable rulings for some financiers and, although the impeachment move failed, Roosevelt did manage to make known his belief that the legislature was being corrupted by what he called the “wealthy criminal class.”
One of the first acts Wilson managed to get through the New Jersey legislature after he was elected governor in 1910 was a Corrupt Practices Act. He also managed to get direct primaries instituted, a measure touted as “returning the government to the people.” Such reform did have the appearance, at least, of being an effort to restore American ideals rather than to make radical changes.
“National Need” Comes First
But both Roosevelt and Wilson, and Progressives in general, were something much more than simply reformers bent on rooting out corruption. They had hold of the vision of using the power of government to change the direction of the development of America. What Roosevelt sought, according to Richard Hofstadter, was “A strong centralized State, extended government interference in economic life, freedom of politics from concern for special interests . . . ”
As Roosevelt himself stated it in his call for a New Nationalism: “The American people are right in demanding that New Nationalism, without which we cannot hope to deal with new problems. The New Nationalism puts the national need before sectional or personal advantage . . . . This New Nationalism regards the executive power as the steward of the public welfare. It demands of the judiciary that it shall be interested primarily in human welfare rather than in property, just as it demands that the representative body shall represent all the people rather than any one class or section of the people.”
Wilson said, “I believe that the time has come when the government of this country, both state and national, have to set the stage . . . for the doing of justice to men in every relationship of life . . . . Without the watchful interference, the resolute interference, of the government, there can be no fair play between individuals and such powerful institutions as the trusts. Freedom to-day is something more than being let alone. The program of a government of freedom must in these days be positive, not negative merely.”
Since both men wanted to use government for large and extensive purposes the attack on corruption had for its specific purpose the building of public confidence in government. Only if the public had confidence in the uprightness of government in general would it be likely to support such a great increase in reliance upon it.
Progressives were reformers, me-liorists—“improvers”—not revolutionaries. They proposed to work within the existing framework, even to change the framework, and sometimes posed as conservatives, seeking to preserve the inherited order by making changes. If they be considered as socialists, and a case could be made for it, they were gradualists, moving gradually toward a distant goal of socialism. The extent to which particular Progressives had such a distant goal in view is largely undetermined. The evidence exists mostly in bits and pieces. For example, Wilson was reported to have made these remarks to a confidant, while ruminating about the changes that would occur after World War I:
The world is going to change radically, and I am satisfied that governments will have to do many things which are now left to individuals and corporations. I am satisfied for instance that the government will have to take over all the great natural resources . . . all the water power, all the coal mines, all the oil fields, etc. They will have to be government owned.
He went on to deny that he was a socialist, but his words speak for themselves.
Be that as it may, the Progressives served the function of acclimating Americans to socialism by the gradual process. Moreover, the gradual method had already been set forth when Wilson and Roosevelt were advancing their programs. The English Fabians had described how it was to be done at great length in the 1890s. Some American intellectuals were not slow, either, to explain how it could be done within the American framework.
Perhaps, the most thorough effort along these lines was made by Herbert Croly in The Promise of American Life, a book published in 1909. Croly’s work is important in this context, too, for Roosevelt read and was influenced by it. The book is largely a reprise of American history written to show that certain seeds of a promise had been here in the beginning in the ideas of Jefferson and Hamilton, but they had never been brought to fruition because Jefferson had been individualistic and Hamilton had focused on the development of business. Croly’s program has been summarized by one historian this way: It would establish “a tremendously powerful national state that would regulate corporations, unions, small businesses, and agriculture in the ‘national interest’.”
Croly admitted that in very important respects his programs might well be characterized as socialistic. Most important, however, was his consistent gradualism. This is well illustrated by his description of how government might gradually get control of the railroads. He explained it this way:
In the existing condition of economic development and of public opinion, the man who believes in the ultimate necessity of government ownership of railroad and road-beds and terminals must be content to wait and to watch. The most that he can do for the present is to use any opening which the course of railroad development affords,.for the assertion of his ideas; and if he is right, he will gradually be able to work out, in relation to the economic situation of the railroads, some practical method of realizing the ultimate purpose.
This gradualist approach has been taken by reformist politicians not only for regulation of the railroads but also for just about everything else. It is a premier relic of intervention from the Progressives.
Trusts and Monopolies
The bête noire of the Progressives was what they most often called “the trusts,” but which they also described as “monopolies.” By so doing, they promoted a confusion as to the meaning of these words which became a part of the American lexicon. The businesses they castigated as “trusts” were not in fact trusts. The trust device had been employed at one time by Standard Oil to control companies not owned. However, the Sherman Anti-Trust Act of 1890 prohibited the business use of the device, and it was abandoned. True, the holding company was eventually developed to perform a similar function, but whatever else might be said about it, it was not a “trust.”
As to “monopoly,” the word had been used in the past most commonly to refer to a legally established exclusive right of sale of some good or service. The new use, which somewhat antedated the Progressives, conveyed some such notion as a company becoming the “only” or “major” seller of some good or service. In fact, the word lost all precision, and its vagueness down to this day has served mainly to make all enforcement of anti-trust legislation arbitrary and punitive.
What the Progressives apparently meant, so far as they meant anything specific, when they castigated “trusts” and “monopolies,” were large nationwide businesses and especially those that had resulted from combinations of these. At any rate, everywhere they looked they saw either potential or actual “trusts” and “monopolies.” If there was not already a “trust” under every bed there soon would be, to hear them tell it. There was an “oil trust,” a “sugar trust,” a “steel trust,” a “tobacco trust,” probably a “telephone and telegraph trust,” and so on.
Above all, by 1913 there was something on the order of a “money trust,” according to the Pujo Committee report. Two great confederations of Wall Street financial organizations, those of J. P. Morgan and of Rockefeller, occupied a dominant position in finance, so this report concluded. By interlocking directorates they controlled huge banks, major insurance companies, large railroads and other industries, and investment firms. Prior to 1907, the houses of Morgan and Rockefeller had competed with one another, but after the panic of that year they worked with one another. Talk of a money monopoly was already rampant before the committee made its report.
Different Directions of Reform
Progressives were agreed that business combinations, concentrations of wealth, and Eastern financial institutions posed a serious and mounting threat to Americans and that the Federal government should do something about it, but they differed on important points as to what should be done. Roosevelt and Wilson divided sharply in the campaign of 1912, and the different directions they set forth have remained in the reform impulse ever since and often resulted in inconsistent lines of political action.
Roosevelt had gained fame during his presidency as a “trustbuster.” By 1910, or earlier, he had changed directions in his thinking about this. He had concluded that combination and growth in business was a natural development, that it was often the most efficient way to produce and distribute goods, and that it was both futile and harmful to set out to break them up. Instead, he favored vigorous government regulation of business, in effect, government control of it. He favored government empowerment of labor unions and their regulation as well. Generally, Roosevelt favored the establishment of commissions, such as the Interstate Commerce Commission, to accomplish the regulation.
By contrast, Woodrow Wilson was much more intent upon breaking what he conceived to be the power of the “trusts.” His analysis convinced him that the “trusts” were not a natural growth so much as a product of government nurture. The traditional arguments of Democrats against the protective tariffs could be rung in to support this view. He pointed out, too, that the corporation derives its powers “wholly . . . from legislation.” He proposed to remove government supports, where appropriate, the use of government power to break them up, in many instances, and to prevent by law the development of industrial giants.
The legislation of the Progressive years bore earmarks of both these strains of thought. Before discussing that, however, it may be well to emphasize that both Roosevelt and Wilson believed in a strong and innovative presidency. In his earliest studies, Wilson had described the potentialities of presidential power, and Roosevelt demonstrated how it could become actuality by his ener-getic involvement in all sorts of things. They initiated and developed the idea of presidential candidates developing full-fledged programs, giving them a name, and campaigning on the basis of them—what I have elsewhere characterized as “Four-Year Plans.” Roosevelt weighed in with the first program under the rubric of a Square Deal. For the campaign in 1912 he came up with the New Nationalism. Wilson followed suit by dubbing his program the New Freedom. Since that time, such program names have been devices used mostly by Democrats.
In the main, the reform legislation of the Roosevelt-Taft years (1901-1913) falls into the regulatory pattern. Much of it had to do with increasing the power and sway of the Interstate Commerce Commission. (The Commission was established in the 1880s, but it was granted little power, and the courts tended to restrain it even further.) In 1903, the Elkins Act provided statutory penalties for railroad officials who gave rebates and defined and prohibited discrimination between railroads. The Hepburn Act of 1906 empowered the ICC to set maximum rail rates ,and prescribe uniform accounting procedures. It expanded the jurisdiction of the ICC and gave to its decisions binding authority subject to court review. The Mann-Elkins Act of 1910 extended the authority of the ICC to telephone and telegraph facilities and further expanded its powers. The whole scheme of railroad regulation was finally rounded out by the Transportation Act of 1920, which gave the ICC the most comprehensive control over the railroads that had ever been devised for privately owned companies.
Progressive legislation moved into other areas during these years, too. In 1903, a Department of Commerce and Labor was established. It had within it a Bureau of Corporations which was empowered to investigate corporate behavior, a first step toward control. An Expedition Act was passed in the same year, giving the Attorney General authority to place anti-trust suits at the head of court dockets. A Pure Food and Drug Act was passed in 1906 which put the Federal government in the business of regulating these. On the same day, a Meat Inspection Act was passed. The Aldrich-Vreeland Act of 1908 turned out to be a forerunner of the Federal Reserve, since it authorized the issuance of currency on the basis of commercial paper and government bonds. The act also established a National Monetary Commission, whose eventual report pointed hesitantly toward the setting up of a central banking system. In the same year, a National Conservation Commission was established for the purpose of cataloging the natural resources within the United States. The Mann Act of 1910 put the Federal government into the business of regulating morals by prohibiting the transportation of females across state lines for immoral purposes. And, a Postal Savings bank was established in the same year, bringing into being a system sought by the Populists first in 1892.
Four amendments to the Constitution can be attributed to the Progressive impulse. Two were passed by Congress and sent to the states for consideration during Taft’s presidency. The 16th Amendment, whose ratification was completed in 1913, made taxes on incomes legal and has been used as the basis for the graduated income tax on individuals and corporations, though there is no specific grant of power to do so contained in it, or elsewhere in the Constitution. At any rate, the stage was now set for a direct assault by government upon the accumulation of wealth.
The 17th Amendment was a more indirect slap at wealth. It provided for the direct election of Senators. The charge had been repeatedly made that the Senate was a rich man’s club, and claims were made that since Senators were elected by state legislatures wealth could easily be used to influence elections. The much more important impact of the amendment, however, was to reduce the extent to which Senators represented states.
The 18th and 19th Amendments were passed and ratified during Wilson’s administration. The 18th—the Prohibition Amendment—was in several respects more revealing of the heart of the Progressive impulse than any other. It was an attempt to use the power of government to alter human behavior, perhaps, even human nature. Drinking had long been reckoned a major evil among reformers. Most Populists had loathed alcohol with as much fervor as the gold standard. The amendment, too, was an attack on business and trade, since the manufacture and sale of alcohol is a business. The Volstead Act, passed to enforce prohibition in 1920, looked more like the New Tyranny than the New Freedom, but it was Wilsonian in spirit nonetheless. It was an attempt to stop the liquor traffic, once and for all, root and branch. The Roosevelt approach won out in the end. Prohibition failed; the amendment was repealed; but the industry remains heavily regulated and highly taxed. That would have been Roosevelt’s way. The 19th Amendment simply extended the franchise to women.
Wilson moved quickly, with the help of a compliant Congress, to enact major parts of his New Freedom program. Probably, the single most important act was the one setting up the Federal Reserve system. It was passed in December, 1913. Although the act was supposed to break up the alleged money monopoly and decentralize monetary sources, it actually set up a central banking system under the auspices of the government. While state chartered banks did not have to become a part of the system, most eventually did, and national banks had to become members. Its establishment turned out to have been a gradualist move to give the national government full control of the money supply.
Curbing “Unfair” Trade
Two acts passed in 1914 appear to have been more along the Rooseveltian lines of regulating business than the course Wilson claimed to be set on. The Federal Trade Commission was established to prevent what were called “unfair trade practices.” It had similar investigative powers to those given to the Bureau of Corporations, which was now eliminated, and it was authorized to issue cease and desist orders. “Among the practices which the commission subsequently singled out were trade boycotts, mislabeling and adulteration of commodities, combinations for maintaining resale prices, and false claims to patents.” The Clayton Anti-Trust Act singled out and prohibited a number of practices, such as interlocking directorates, which were supposed to lead to monopoly. Ostensibly, it exempted from its provisions worker organizations. The tendency of this act was to discourage business cooperation and to encourage the organization of labor. It was certainly class legislation.
These acts, and supportive ones not discussed, demonstrate the deter-ruination of the Progressives to establish government control over the economy. There is a widespread misconception that intervention on any scale got underway with the New Deal. That is by no means the case. Progressives had not only worked out the intellectual justification and set forth the methods but also made headway in altering the Constitution and passing legislation. Most of this was done, too, without even the excuse of any emergency, economic or otherwise. The United States generally enjoyed unparalleled prosperity from the beginning of the century to World War I. The relics of intervention are from further back than is commonly supposed. Even so, the New Deal did make a more concerted effort toward a government managed economy than the Progressives ever managed (except, possibly, during World War I), and it is appropriate now to turn to that story. 
Next: The New Deal Bent to Inflation.