The national debt runs out of control. The Federal Reserve System has purchased hundreds of billions of dollars of private assets by creating new money out of thin air. The number of prisoners in the nation’s jails continues to grow to new records every year. Government at all levels systematically erodes our liberties.
All these things and more are symptomatic of the modern age, but the problems we face today are the legacy of a movement that occurred more than a century ago: the Progressive Era, which ran from the late 1800s to the end of World War I. Because most people are not aware of Progressivism and its legacies, I would like to educate the readers a bit.
First, and most important, Progressivism is portrayed by historians as a time of “reform,” in which people fought against the alleged ills created by industrial growth and capitalism. According to the pundits, American businesses were monopolizing the economy, “gobbling up the wealth,” and leaving most Americans worse off in their wake. Railroads supposedly were victimizing Americans with their rebates and long and short-haul rates.
Second, Progressives believed that they could apply “scientific principles” to political-economic decisions in order to make U.S. society a better place to live. Among the things that Progressives advocated were a stronger executive branch (exemplified by the Progressives’ Progressive Teddy Roosevelt), centralization of the political structure, and the creation of “independent” agencies supposedly insulated from politics. The crown jewel of the agencies was the Federal Reserve System.
The notion was that market systems and the relatively decentralized and congressionally dominated political system of the United States were “outdated” and could not be quickly marshaled for Progressive causes. Furthermore, the relatively decentralized systems of education, both government and private, were unacceptable to Progressives, such as John Dewey, who believed that children must be trained to serve the state, which was to be the embodiment of all of society.
In 1913, thanks to a number of congressional initiatives and addition of amendments to the Constitution, the United States saw the establishment of the Fed, the national income tax, and direct election of U.S. senators, who until then were appointed in most states by the state legislatures. It was, according to Prof. Thomas DiLorenzo, the “Revolution of 1913.”
Perhaps it is not surprising that a great Progressive cause, World War I, followed soon afterward, with the United States entering in 1917. As Murray Rothbard noted in his essay “World War I as Fulfillment,” the war permitted the intellectuals to impose nearly all their ideas, from industrial cartelization to prohibition of alcoholic beverages, on American citizens.
Although many of the features of the war economy disappeared during the 1920s, the Fed and the income tax remained, and the former would play a major role in dragging the United States into the Great Depression. If World War I was the Progressives’ war, the Great Depression was the era in which many Progressive ideals could be put into place permanently.
Fast forward to 2009. We have seen the Fed create two consecutive financial bubbles that have broken, the collapse of the Progressive-style entities Fannie Mae and Freddie Mac, and yet another attempt by the government to create that ultimate Progressive goal, nationalized medical care. We have seen the executive branch operate almost unencumbered by Congress and the courts bail out one firm after another and create a number of “czars” to oversee everything from Wall Street to the automobile industry.
Indeed, the Progressive “solutions” to our current set of economic problems are no solutions at all; they are the cause of the economic downturn. From the Fed to the staggering weight of government spending and debt, we can see that Progressivism truly has run its course. Unfortunately, while it runs its course, Progressivism also is running this country into the ground. The solution is not more government power. The solution is liberty. It is high time we rediscovered our roots of freedom.
