How The Patriots’ America Became The Progressives’ America

 

(1)  The Patriots’ America

On July 4, 1776, Americans declared not only their separation from an imperious motherland, but the separate and equal status to which all men were naturally entitled.  As John Locke put it:

[All men are in] a state of perfect freedom to order their actions, and dispose of their possessions and persons, as they think fit, within the bounds of the law of nature, without taking leave or depending upon the will of any other man.[1]

And what were the bounds the law of nature proscribed?

“The State of Nature has a Law of Nature to govern it and reason, which is that law, teaches all mankind who will but consult it that being all equal and independent, no one ought to harm another in his life, health, liberty or possessions.”[2]

Now, the promise of freedom and a natural wilderness spectacularly rich in minerals, waterways and other natural resources drew Europeans to these shores in droves.  And that allowed millions of settlers to happily advance the conditions of their lives.  No longer would they be locked into a hierarchical noose of feudal ranks and stations the Old World mercilessly imposed.  No one better captured the optimism of America’s early days than did the French visitor, Hector St. John Crevecoeur.  Writing in the 1790s, he observed:

No sooner does an European arrive, no matter of what condition, than his eyes are opened upon the fair prospects….Has he any particular talent or industry?  He exerts it in order to procure a livelihood, and it succeeds.  Is he a merchant?  The avenues of trade are infinite.  Is he eminent in any respect?  He will be employed and respect­ed.  Does he love a country life?  Pleasant farms present themselves.  Is he a laborer, sober and industrious?  He need not go many miles, nor re­ceive many informations before he will be hired, well fed at the table of his employer….Does he want uncultivated land?  Thousands of acres pres­ent them­selves…. Whatever be his talents or in­clinations, if they are moderate, he may satisfy them.

But Crevecoeur did not merely catalogue the ample varieties of opportunity that awaited the lowliest sojourn­er in the free soil of America.  More fundamentally, he depict­ed the opportunity-fed transformation that took root in the soul of the newly-minted American.

[He] no sooner breathes our air than he forms schemes and embarks in designs he never would have thought of in his own country….He begins to feel the effects of a sort of resurrection.  Hitherto he had not lived, but simply vegetated.  He now feels himself a man, because he is treated as such….Judge what an alteration there must arise in the mind and thoughts of this man.  He begins to forget his former servitude and dependence.  His heart involuntarily swells and glows….If he is a good man, he forms schemes of future prosper­ity.  He proposes to educate his children better than he has been educated himself.  He thinks of future modes of conduct, feels an ardor to labor he never felt before.  Pride steps in and leads him to everything that the laws do not forbid…. He sees happiness and prosperity in all places disseminated.  He meets with hospitali­ty, kind­ness, and plenty everywhere….From invol­un­tary idleness, servile dependence, penury, and useless labor, he has passed to toils of a very different nature, rewarded by ample substance—This is an American.[3]

This wide berth of freedom finds particular expression in a certain economic corollary, the laissez faire arrangement outlined in Adam Smith’s The Wealth of Nations. Along with free speech, a free press, and religious liberty, it gave men the right to gain, keep, use, trade or otherwise dispose of their freely-acquired possessions.  Government would be a PROTECTOR, not a PROVIDER.  Since all are created equal, government would not pick winners and losers.  Live and let live became the American creed.

Why did Smith think a free market would most conduce to lasting prosperity?

Why did Smith think a free market would most conduce to lasting prosperity? It would incentivize men to invent, innovate, produce, and market useful commodities.  An “Invisible Hand” would direct capital investment to sectors where demand far outstripped supply.  Robust competition would drive down prices and free international trade would allow every country to sell the articles that were best suited to its particular climate, geography and native skills.

 

(2) The Emergence of Progressivism

But the happy conditions Smith anticipated, did not pan out.  Instead, America was hit with a long series of boom-and-bust business cycles.  The Panic of 1792 wiped out enterprises and cost thousands their livelihoods.  Crippling financial panics recurred in 1819, 1837, 1857, 1873, 1893 and 1907.  Out of such recurring patterns, the progressive movement was born.  The hardships endured during the Great Depression of the 1930s ushered in a bevy of remedial, social programs.

For the patriots of the American Revolution, public power was the age-old nemesis of liberty.  Their Constitution used power to check the awful influence of power, itself.   The power the progressives most feared inhered in the “free market,” itself.  They abhorred (1) the gigantic trusts that were being run by a small handful of ruthless “robber barons,” (2) the vast inequalities in the distribution of wealth, (3) the condition of the working classes, (4) the wholesale corruption of public power for private, pecuniary gain and (5) the distressing periods of economic blight.  No one better captured the progressive mood, than did Herbert Croly.  In The Promise of American Life (1809) Croly explained:

A more highly socialized democracy is the only practicable substitute on the part of convinced democrats for an excessively individualized democracy.

Writing of the early Progressive Era, Richard Rorty concluded: “These criticisms helped substitute a rhetoric of fraternity and national solidarity for a rhetoric of individual rights.”  And so the Patriots’ America became the Progressives’ America.  Eldon Eisenach added that the cause was taken up by America’s universities which he saw as “something like a national ‘church'”[4]

What can explain the discrepancy between Adam Smith’s theory and America’s history?  At the height of the Great Depression, Samuel Pettengill pointed to the answer:  ‘When it is said that free enterprise has failed, my answer is that we have not permitted it to work.[5]

America never achieved a fully free market.

America never achieved a fully free market.  The demise of the free enterprise system can be traced to the second bill signed into law by the first president.  The Tariff Act of 1789 placed duties on imported, manufactured goods, as the law stipulated, “for the protection and encouragement of manufactures.”  Protective tariffs enabled domestic manufactures to raise their prices and reap greater profits, at the expense of farmers, planters, consumers, shipbuilders, seaport merchants and thousands employed in the maritime and carting trades.  Then and there, Congress began picking winners and losers.

Political interference takes two basic forms.  Burdensome regulations raise business costs and impede commercial activity.  As the cost of doing business rises, so must prices.  Disposable income shrinks and hardship spreads.

Much less understood is the far greater harm caused not when governments regulate and impede, but when they positively promote economic growth.

Much less understood is the far greater harm caused not when governments regulate and impede, but when they positively promote economic growth. Subsidies to favored businesses and industries may grow an economy, for a while.  Financial markets may soar and insiders who know where to “invest” may prosper.  But once the subsidies run out and businesses are left to fend for themselves, economic booms turn to economic busts.

The Transcontinental Railroad project approved by Congress in 1862 captures the process.  The Union and Central Pacific railroads received between $16,000 and $48,000 for every mile of track laid.  In addition, Congress awarded the two corporations 2 square miles of land (later 20 sq. miles) in alternating sections, for every mile of track put down on schedule.  Completed in 1869, by 1873, the Union and Central Pacific companies filed for insolvency.  It was too early for such an enterprise to succeed.  Soon, firms that supplied the steel rails, coal, lumber, flat/box cars, locomotives, food and transport services likewise failed.   Workers lost their livelihoods and the nation fell into a deep, six-year funk.

Political favoritism sparked the successive failures.  Yet the crashes are universally depicted as naturally occurring business cycles.

All the while, progressively higher tariff duties deprived Europe of the profits needed to purchase American cotton and grains, so agriculture also languished for much of the 19th century,

Political favoritism sparked the successive failures.  Yet the crashes are universally depicted as naturally occurring business cycles.  It is fair to conclude that the long succession of financial panics and deep depressions caused not by free market activities, but by CORPORATE welfare policies, alone, created the “need” and demand for SOCIAL welfare reforms from the Progressive Era, to the New Deal and beyond. 

 

—————————————————————————————————————————————————————————————-

References: 

[1] John Locke, Second Treatise of Government (any edition)  § 1

[2] Ibid., § 6

[3] Quoted in Jerome Huyler, Locke In America:  The Moral Philosophy of the Founding Era (Lawrence, KS: University Press of Kansas, 1995) pp. 206-7.

[4] Quoted in Richard Rorty, Achieving Our Country:  Leftist Thought in 20th Century America (Cambridge, MA: Harvard University Press, 1998) p. 50.

[5] Samuel Pettengill, Jefferson the Forgotten Man, (NY:  America’s Future, Inc, 1938) p. 135.