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NOTE Crisis and Liberty: Lecture 2

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Good afternoon, ladies and gentlemen. I am not sure that my voice will hold out for another hour and a half, so we may have to have an hour and a quarter for question and answer this session, but I'll do my best.

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The topic for this session is ideology.

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I mentioned in this morning's talk that many scholars of the growth of government have

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to some extent dealt with the role of ideology in the growth of government.

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It's clear that every government has a kind of intellectual bodyguard, as I believe the

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German professors of the late 19th century were said to be for the royal family of the

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The German Empire at the time, and regardless of the status of government, whether it's

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monarchy or empire or democracy, all governments realize that they need some intellectual cover

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for what they do.

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And there are always some people who are willing to serve as intellectual bodyguards.

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Some, I suppose, actually believe in what they're doing. They're not coerced or they're

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not even getting paid to propound arguments that justify the actions of government and

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the growth of government. So I don't take a completely cynical view of the people who

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argue along those lines as some of them believe in what they say. Others obviously are prostitutes

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and hope to gain either income or social standing or in some cases simply to enjoy proximity

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to the Seats of Power. I like to think of people such as Arthur Schlesinger Jr. as the

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archetype of the court historian, the intellectual who not only is willing to serve in an administration,

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but who's willing to spend a good deal of his time and energy thereafter writing laudatory

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accounts of what was done by presidents or other officers of the government.

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So every government needs legitimacy.

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I mentioned this morning observers as far back as 1550, when we have the arguments that Etienne de la Boutouille have recognized, as Machiavelli himself did, that one needs to tell a good tale.

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Nowadays there's more than cottage industry, there's a major industry devoted to propagating ideas that will assist the government in establishing its legitimacy and providing rationales for expansions of its powers.

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Now, it's no shocking statement to say that ideas have some importance in social action.

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Mises himself once wrote that people do not act to promote their interests, as many social scientists claim.

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People act to promote what they believe their interests are, and there's a considerable difference.

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Not only because they may be mistaken about how certain events or actions or programs will affect them and their well-being,

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But because in fact everything that human beings do is based on belief, on ideas, it's ideas that move us to engage in human action, it's the thought we have that we can imagine an alternative state of affairs that we would prefer to the existing state of affairs

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and from that idea we're moved to take some action to realize that imagined superior state of affairs.

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So very often we find in social science a kind of assumption about the immediacy of interest,

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particularly in public choice and political science.

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The analysts often suppose that, say, in the United States, a black person must favor government redistributive schemes because, well, black people would stand to gain from taxing high-income persons and redistributing the income to relatively low-income persons, blacks being predominantly in the relatively low-income

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group, so ipso facto promotes their interest. Sometimes those kinds of

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assumptions are arguably fairly sound, but often they're not sound. We just

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assume that because we know something about where people stand in society or

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something about their age or sex or location that from that we know what is

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is in their interests, but people always have to conceive of how something is in their interest,

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and it's from those conceptions that they're moved to ever do anything.

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Now, to say that ideas matter is an elementary kind of proposition,

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but when we talk about ideology, we're talking about something somewhat more complicated

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and just ideas because an ideology is not simply any old body of beliefs, it's a particular

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kind of belief system and scholars have devoted a lot of attention to the study of ideology.

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Such of this literature, I'm sorry to say, is not worth your time, and it probably wasn't

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worth mine when I read it myself, or a good deal of it myself.

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But some of it is worthwhile, and it's good to know that people have been thinking about

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Ideology and its place in society for at least the past two centuries. Conceptions of ideology

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vary quite a lot among scholars and that complicates one's reading and absorbing of any real understanding

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from what has been written and there are different conceptions of what is meant by ideology and

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where it comes from and what consequences it has, but at least there's a fairly general

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understanding that it's not trivial, that it is a significant aspect of the operation

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of society, and if we want to understand how society operates, we need to understand the

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role of ideology.

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Now, economists lavished a lot of attention in the past 40 years to the question of collective

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action.

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And I want to talk about that for a few minutes because collective action clearly has been

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an important mechanism for bringing about the growth of government and the issue that

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It was raised early on, particularly by Mansur Olson, who has had a huge following among

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social scientists in this country, had to do with the rationality of collective action.

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Olson raised the question whether it made sense for people to even engage in this kind

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of Action, and suggested that, at least in many cases, it didn't make sense. So he created

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a kind of puzzle, a conundrum. Why are people doing these things, particularly when they're

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the kinds of things that have serious consequences? And one of them is promoting the growth of

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and Bigger Government.

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So, let's start by saying what do social scientists mean by collective good?

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I touched on this matter this morning under the heading of public good.

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They're the same idea, just two different names used by social scientists.

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A collective good or a public good is one that has the attribute of non-rivalry and consumption.

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If it's created at all for at least for a domain of beneficiaries then it's

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created for everybody in that domain. If for example we show a film in a theater

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then once it's being shown anyone in that theater can benefit from it whether

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There is no additional cost to showing the film, so we have a zero marginal cost of use, at least up to the point where in this example we filled up the theater.

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Now that's why I said collective goods are always relative to a domain of users.

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We might conceive of a collective good that has a huge domain.

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This morning I suggested that deterrence of atomic attack against the United States might

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conceivably be a good that benefited all the people in this huge nation state, which is

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is a very different order of magnitude than filling up a theater.

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So when we talk about this kind of good, we always have to have in mind what the domain

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is or is claimed to be, at least.

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But within the domain, the collective good has no marginal cost of additional use.

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And furthermore, it's often stipulated that no one can be excluded from enjoying the use

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of the good once it's created at all, so that if, for example, deterrence from atomic attack

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is provided for the United States, then there's no way to say, well, Brad, you don't want

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We want this, so we'll let you opt out here. You cannot opt out. We can't exclude him, even if, for example, he says, I won't help to pay. I don't want it. I'm not interested. He's still going to get this benefit, nonetheless.

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So, non-rivalry and consumption and non-exclusivity are the defining characteristics of a collective

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good.

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Now, very often when we talk about policies, we're talking about actions that bring into

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being some state of affairs that has at least approximately the character of a collective

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good.

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If, for example, we talk about an agricultural program that the government might undertake to restrict the supply of wheat,

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the objective being to cause the market price of wheat to be higher than it otherwise would have been.

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Well, the increase in the price of the product is something that will benefit every seller of wheat.

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So every farmer, every middleman or whoever has wheat to sell is going to be in a better position if this policy is adopted.

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So the collective good aspect of policy applies to many different proposals that are made for what government ought to be doing

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doing to help some subset of people or in some cases to ostensibly help everybody.

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Now what Mancer Olson said is that if we have a large group of potential beneficiaries of

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a collective good then it won't make any sense for anybody to help to pay to bring that policy

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Policy into effect, because the costs that would be borne are positive, some sacrifice

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must be incurred, and yet, if it's a large group situation, my contribution, whether

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I make it or not, is not going to be decisive for whether the policy is actually created

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and put into effect.

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So I can treat the policy's realization the way I deal with the weather.

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I don't know if it's going to rain, not rain.

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It's just something that happens or doesn't.

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It's pointless for me to take some action to try to affect whether it's going to rain

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this afternoon.

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It'll be what it'll be.

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So Olson said in a large group situation, potential beneficiaries view policy implementation

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as a state of nature. If it happens, good. If it's something that happens and creates

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a benefit for them, wonderful. But if it doesn't happen, well, too bad. At least I didn't throw

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away my money trying to bring it about. So he said it's irrational for people to bear

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any cost whatsoever in a large group situation to bring about the realization of a policy

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that creates collective good type benefits but if nobody's willing to

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incur any cost nobody does anything and you never do the politics and the lobbying

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and the paying off legislatures and whatever else is required to bring this

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This program ended up being for anybody. So the conclusion is that nothing happens. People

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never engage in collective action in these large group settings. Now Olson said if it's

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a small group situation, if for example the automobile sellers in the United States would

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If you would like to have a program that puts a quota on the importation of automobiles from other countries,

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well, there are only three or four big car companies, and it'll pay them, any one of them, actually, to bear a lot of costs

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in order to get this quota put into effect, so the problem is different in the small group setting,

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Furthermore, you can't cheat easily. If we had a whole bunch of farmers, in fact, this

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was tried many times in the 19th century. The southerners down here used to have a convention

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of cotton growers almost every year, and they would get a bunch of plantation owners and

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farmers together and they'd say, this situation is terrible. Cotton is selling for six cents

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We're all going broke. We all understand that if we just cut back, let's say we only put half as much cotton on the market next year, we're going to cut the American supply down, and it's going to drive that price up, because even at that time they kind of understood that the demand was inelastic, and so they knew if they managed to restrict the quantity supplied on the American market substantially, they'd get a more

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more than a proportionate increase in the market price, because all we got to do is agree.

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So they would agree, they'd all pat one another on the back and have another couple of bourbons,

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and they would agree that they were going to plant only half as much cotton next year,

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so that they could improve their dire situation. And every year without fail, they'd all go

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Go back and plant even more than they had the previous year because you're not expecting

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that somebody might cut back and raise the price. They'd make more money by having more

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cotton to sell. So, of course, these schemes to cartelize this massive industry with tens

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of thousands or hundreds of thousands of suppliers was hopeless because people cheated on these

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These agreements, there was no way to monitor them adequately or to compel them to pay some

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penalty in the event that they didn't comply with their promise.

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And that's a general problem whenever you have large groups of people agreeing to take

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some action that can't be enforced or monitored.

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But in a small group situation, it's pretty easy to see if the car manufacturers are taking

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a particular action or not.

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Any one just watches two others, and that's a fairly easy endeavor.

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So small groups can manage things that big groups can't, and Olson said that also sometimes

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you can get things done by using what he calls selective incentives.

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The best one of course was coercion, and that often required that you get government involved

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straight away to make sure that whatever it was that the interest group was lobbying for,

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they could get government assistance behind the enforcement of their efforts.

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This was something, for example, that eventually the farmers did manage to do pretty successfully

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after 1933 to get the force of law behind some of their supply restriction schemes and that made them work the way they were supposed to work to the great detriment of the public, but for the benefit of the farmers involved in them.

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So, we do have these ways to get around these free rider problems, they came to be called.

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Nobody wants to bear the cost when he can get the benefit without bearing cost.

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And the problem is that in the large group case, these techniques of using coercion

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or taking advantage of small group monitoring are not available.

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So what do we do about those cases in which we have a collective action involving lots of potential beneficiaries

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in which people with complete disregard for neoclassical economics insist on going ahead and engaging in collective action?

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If, for example, you've got a lot of people, as you do, particularly in Europe, who oppose nuclear power, not just nuclear weapons, nuclear power generation, they oppose anything nuclear, the anti-nukes are against.

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And these people are a pretty big interest group in Germany and some of the other European countries.

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So what do they do? They hold massive demonstrations. They organize meetings. They support candidates for public office. They do all kinds of things.

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And if you look at any given person involved in this activity, it looks like a perfect refutation of Mansur Olson's argument.

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So I'm Gunnar here in Bremen and I can go to this street demonstration against nuclear power or not.

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If I go, I have to use my time at least, and if they want me to make a contribution to the protest group

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Group, or to help pay for leaflets or television programs or something else, I have to sacrifice

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whatever I could have purchased with that contribution money. So there are costs of

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involving myself, but do I really believe that whether I participate or not is going

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to determine the success of the anti-nuke movement? It's absurd to imagine anybody

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What are you thinking that? Curiously, actually, Carl Dieter Opp, who is a very interesting

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sociologist in Germany, did a number of studies of the anti-nukes, and he found, among other

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things, that some of them actually claim that they will make a difference. If you ask them,

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Do you think it will make a difference in the success of your movement, whether you personally

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participate or not? And they say yes. Now that's hard to swallow, but people believe

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odd things and perhaps some of them actually believe that. But Hoppe actually has some

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much better explanations of their participation along the lines I'll come to in a minute.

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Well, suppose there were a way that people could get benefits from participating and seeking large group collective action and furthermore that if they don't participate, they'll lose those benefits.

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You see, the way analysts have normally construed the benefit of participating in seeking collective

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good is that unless you realize the objective of your mission, unless, say, we get the government

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to forbid nuclear power generation in Germany, then we don't get anything. We never bring

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Well, if you think of it that way, then yeah, the Olsen argument seems pretty strong, particularly

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if you're looking at people engaged in what would appear to be hopeless kinds of missions.

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If you want to say vegetarians are campaigning of the government, outlaw the consumption

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Well, you know, I don't think that's in the cards. Yet some people put their time and effort and energy and money into what seem to be very hopeless causes.

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What drives them? What drives them? Well, I think we can understand why they take such actions, actions which turn out to be

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And we can understand why they act in that way without imputing any irrationality to their action and without even getting tied up in this question of do they really think they're going to determine the success of the campaign by their personal involvement or lack thereof?

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And that's where we have to go back to ideology to get a grip on this kind of action.

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So let's step back now from the collective action problem for a moment and talk about what ideology is.

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As I said before, it's not just any old idea.

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It's a belief system, a more or less coherent, more or less comprehensive belief system about social relations.

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So we've already ruled out a lot of ideas. We're not talking about the hard sciences or the life sciences.

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We're not talking about whether people believe that the law of gravity applies

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or whether your DNA determines something about the kind of being you'll grow up to be, we're

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talking about social relationships which embraces economics and politics and the usual suspects.

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Ideology is not the same as religion, although sometimes they have similarities and it's

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It's easy to see certain people driven by religious beliefs in much the same way that

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an adherent of an ideology might be driven, but ideologies don't have to take any position

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on supreme beings or our ultimate place in the universe or what's going to happen to

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us after we die or questions such as that.

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They're not just worldviews, sometimes people talk about Weltenscheung, worldview, and they're

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talking about some kind of outlook people have toward what's happening around them.

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Ideologies are more complex than that, more detailed, more spelled out, not exactly the

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These are the same as social philosophy or even political philosophy because these philosophies don't have all the same elements and consequences that ideology has.

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It's not just social theory, although it involves social theory.

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These belief systems that we properly call ideological have always at least four dimensions,

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at least as I conceive of them.

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The first dimension is cognitive, which is to say we use the ideologies to help us understand or make sense of what's going on in the world around us.

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You might say, well, it's obvious what people are doing, but if anything, it's far from obvious.

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We are all people who have absorbed many, many years of teaching and interpretation of the world.

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And we see a particular event.

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If we see someone here at the Mises Institute preparing lunch food for us out here, what could we make of that?

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You know, this is like a bee, a bee that is driven to go get nectar and then deposit the honey in the hive.

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Are these people who are driven to get food and bring it to the Mises Institute?

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That'd be one way to make sense of what's going on here, a bad way.

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But there are any number of ways we could make sense of the simple observation that people are bringing food to the Mises Institute.

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We might, if we were hardcore old-fashioned socialists, we would look at this person perhaps and say it's a wage slave of Lew Rockwell's.

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This is a person who will die if she doesn't agree to these onerous terms of employment,

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under which she's subjected to Lew's speed-up, and she has to hurry to bring food when Lew orders her to bring food.

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Otherwise, she won't get her pittance of pay, which is not even sufficient to maintain life.

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And Lew doesn't care because if she dies, the reserve army of the unemployed will provide the next wage slave that will come on board and do exactly the same thing until that worker expires.

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So that's another way to make sense of what we see going on.

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not the best way, in my judgment, or if we had the ideology not of old-fashioned socialism, but the ideology of, say, classical liberalism, we would say,

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A person that has agreed to employment at the Mises Institute has agreed that in exchange for certain definite pay and other benefits a person will perform reasonable services according to the instructions of supervisors appointed by the employer.

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Well, that says it. We're looking here at a labor market phenomenon. There's no exploitation.

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Everybody's acting in a way that is voluntary. And to me, that's a good way to make sense when I see

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somebody bringing food to serve for lunch at the Mises Institute. But as you can see, depending on

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On the ideological lens you use to view reality, it's possible to impose very different understandings on observations.

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And all observations of social life have that quality.

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They're subject to alternative interpretation.

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So function number one of ideology is cognitive.

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Function number two, affective, means that ideologies don't just tell us what's happening, but they also categorize events as good, bad, or neutral.

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Function number two, affective, means that ideologies don't just tell us what's happening,

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but they also categorize events as good, bad, or neutral, as virtuous, vicious, or neutral.

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I already suggested this with my example. When the Marxian looks at someone bringing lunch, they say not only is this exploitation of labor, but this is a bad thing.

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This shouldn't be happening. We long for the day when the wheel of history turns and we grind the exploiters underneath it and no longer will anyone have to endure wage slavery. The appropriator will be appropriated.

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On the other hand, I look at this event and I say, well, that's good.

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Lew wants to hire somebody to provide food service.

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These people want to sell their services for doing that kind of work.

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So both parties have been able to come into an agreement

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that puts them in a better position than they would have been without the agreement.

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Agreement, and that's good. We like to see people achieving their ends through

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voluntary cooperation. That's nice. So for a classical liberal, the affect is

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positive of this kind of event. A third element is programmatic, and this is

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It's where politics comes into ideologies, because they all give people a position on

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what would be politically desirable and undesirable.

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If, for example, the old-fashioned socialist looks at the food service worker, he imagines

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is, ah, revolution. Someday, we'll overthrow this kind of vile wage slavery. The workers

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will rise up, whereas if I look at it through the eyes of a classical liberal, I say I just

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hope to God that they don't raise the minimum wage so that Lew might decide, hell, he'll

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So once again, where you stand about political proposals derives from your ideological views.

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So ideologies give rise to political programs.

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And finally, and this is critical, all ideologies have a solitary dimension.

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Ideologies as it were are the membership cards in a community of belief.

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So those of us who share a particular ideology are, as it were, comrades, where we're together

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on something that we view as important.

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Because among other things, it concerns politics, it concerns what the government ought to do

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and the employment of its coercive power or its withholding the exercise of its coercive power.

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So there's a lot of potential creation and destruction at stake here, and those of us

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who have a position on how those powers ought to be used and their abuses prevented and

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and so forth, know that we're not just, I say, members of a garden club, although maybe

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some members of garden clubs take that very seriously too. They don't, at least at this

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one, have to worry too much about the government sending, you know, deviants in the garden

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club to Guantanamo. So, whereas those of us who are classical liberals in the United States

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I have to worry about this because people are being sent to Guantanamo, people who are being sent there not withstanding the Constitution's guarantee of due process of law to everybody in this country and not just citizens, by the way, everybody.

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So, solidarity is something that the Marxists made much of and if you're old enough to remember all those great demonstrations from the 60s and early 70s against the war and forced civil rights, you'll remember that the call that would go out from people in the crowd, they'd say, join us!

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And that didn't just mean fall in with the crowd, that meant become one of us, share our beliefs, and furthermore, by acting on your beliefs that we share, you demonstrate that you're the real thing, that's critical.

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If you just stand there with your arms folded, as the demonstrators go by, marching toward the police who have drawn themselves up down the street, getting ready to crack some heads,

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well, they might think that was okay that you sympathized with them, but it's a very different thing than if you got in there with them and put your head at risk too.

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They'll never accord you the same esteem and respect standing on the side saying, good luck, as they will if you join them and go to the barricades.

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And by going to the barricades, by doing whatever it is, whether it's street demonstrations, actually giving your money to the cause,

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Putting your time into sending out letters, whatever is part of a movement's collective

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action enterprise, when you demonstrate to others in the movement that you're making

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sacrifices to promote that cause, you establish your bona fides as a member of that community.

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When you get the benefit of their regard for you, unless we're psychopaths, we all want

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the good regard of others we care about.

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So this is not nothing.

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And in fact, despite what some neoclassical economists might seem to think, kind of dismissing

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This is probably a lot more important than the movie tickets and trips to the beach that they think are so god-awful fundamental.

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Where people think they stand with others who share important beliefs with them is a far more critical thing in their self-esteem

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The Solidary Element is a very important aspect of ideology because it links utility maximizing

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behavior of individuals to their actions in joining in attempts to create collective goods

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even in large groups.

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So when we see people doing things like not only participating in movements, but voting,

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there was another one of those unexplained things, why do people bother to vote? You

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think your vote is going to sway the election? What a fool. Well, your voting is an act of

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expression. It's a way that you say to the world, look, here's the kind of person I am.

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I'm the kind of guy who votes for George Bush, you know, the defender of the faith, the emperor

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of the world.

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I can stand up and be counted, and you know, when you go down to Rotary, that's worth something.

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So that is one reason you'd vote.

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I've often proposed the idea that if you want to find out why people vote, imagine this kind

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of Mental Experiment. People can vote if they want to or not, but they can never talk to

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anybody later about whether they voted or how they voted. Imagine that. Do you think

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anybody would still vote? I think damn near nobody would. Because all the benefit of voting

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comes from the pronouncements you make to other people.

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I'm going to vote for Joe Blow.

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I'm that kind of guy.

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Or, I voted, you know, I didn't vote for Al Gore.

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You know, kind of a creep would vote for Al Gore.

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And you can be somebody with the people whose opinion matters to you.

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So, it's important that you situate people's actions socially, in communities of some kind, communities that they care about.

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And once you start to think about collective action, these terms, as expressive and as solidarity, then it starts to make perfectly good sense to you.

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People do all kinds of apparently self-sacrificing things, but there's something in it for them.

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There's something in it for them. Maybe even people who behave suicidally in a particular cause for those last few minutes feel such a gigantic sense of self-esteem about what they're doing that it makes it worthwhile.

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Not irrational. Not irrational. It doesn't have to be irrational just because Mansour Olson thought it was irrational.

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So I think this way of thinking about collective action and ideology is very helpful, at least I have found it helpful.

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I find it broadly applicable to many different apparently anomalous forms of political participation in the world.

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If you try it, I think it will work for you too.

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Now, I want to just give a real quick and dirty kind of a look back, because the purpose here is mainly historical, at least for my lectures this week.

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And so, I want to take this notion of ideology that I've just been belaboring,

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and look back at some of the specific forms that ideological commitments have taken in American history

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and we'll be returning to some of these themes quite a bit in the next four days.

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For now I want to just use a broad brush to paint some of the major contours.

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The people who settled the British North American colonies brought an ideology with them.

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And after they got here and began to reproduce themselves over the generations, they developed

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their ideologies somewhat.

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Ideologies by their very nature tend to change fairly slowly, that is, they never just turn

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on a Dime like that, partly because people can't shift mental gears quite that easily,

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and partly because they rarely encounter any experience that leads them to want to shift

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mental gears. They're able to accommodate things that happen within the limits of their

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and their old ideology. But ideologies do change, even if slowly, and I think on occasion they make discrete jumps, at least in short periods of maybe a few years, so that they're noticeable.

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The Englishmen that came to North America and most of the people who settled were from the British Isles.

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Of course, there were Dutch and French and Spanish and a smattering of people from various parts of Europe,

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but most of them were Englishmen and that's the culture and the ideology they brought and it was the germ that they developed thereafter.

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They had conceptions, which had a history of centuries and centuries in the past, of something they call the rights of Englishmen.

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That sounds like just kind of something I made up, the rights of Englishmen, but that's a term of art.

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It's actually what they called it, and it meant something pretty definite to them.

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It meant the sorts of due process that we associate to some extent with our Bill of Rights in the Constitution of the United States.

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It meant that a person who was accused of a crime should have a jury trial with a jury of his peers,

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that he should have the right to respond to his accusers and question them,

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that the legal authorities should not have the power to simply arrest people and imprison them without bringing in charges before an impartial judge and so on.

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So the rights of Englishmen had developed from far in the past and they were well understood and much valued by the people who came to North America.

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Fortunately for them, I think, even though they were part of the British Empire, they were far away and the British government left them alone to a great extent.

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So, some historians refer to benign neglect. Britain was an empire. It was an empire that

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imposed all kinds of mercantilistic rules and laws and procedures that granted monopolies

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to trading companies in various parts of the world, and it gave monopoly franchises to

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for People Who Sold Particular Kinds of Goods in Britain, and so on and so on.

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It was, as some authors would say nowadays, it was a rent-seeking society in a big way.

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And yet, a lot of these mercantilistic rules that were supposed to apply to the British North American colonies

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didn't get applied very much.

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The colonists ignored them, didn't pay the taxes they were supposed to pay, smuggled

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goods in instead of declaring and paying taxes and so forth.

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So for well over a century, life developed in British North America, not in isolation

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Exactly from British rule, but with a very loose rein. And they liked it that way. There

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was a lot of money in smuggling, and a lot of Americans did that kind of work. Some of

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the great founding fathers were smugglers, and that's good. This country was built on

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and Smuggling. And by God, it's still running on smuggling today. And as a result of the

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loose rein the British held the colonists with, they developed de facto self-rule. Now

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again, I don't want to make this a black and white statement. They were still subject

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to British Rule, and in some cases, the king sent royal governors over to be in charge.

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That was just something else you tried to work around. And yet, despite all the efforts

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of the imperial government, these people rule themselves for the most part. They all develop

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For representative institutions, legislatures in their colonies, they had the English common

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law to use in adjudicating their day-to-day disputes, and they certainly were jealous

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of the rights of Englishmen.

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And that's how things went for well over a hundred years.

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The ideas of John Locke were quite popular in the 18th century in North America.

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Cato's letters, which had been written back in the 1720s, I guess, circulated widely in

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the colonies.

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These, if you've never read Cato's letters by the two English writers, they're wonderful.

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Some of them are just beautifully libertarian and rousing and I recommend them highly.

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The Americans took to this sort of thing.

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They were feisty and they liked their independence and self-rule.

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Later on you had even wild-eyed people like Thomas Paine come onto the scene who was very

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He was a very libertarian, more so than the founding fathers, although he joined forces with them to stir up the revolution.

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So you have this kind of atmosphere determining the ideology that was dominant in the colonies by the last quarter of the 18th century.

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and ultimately, of course, it was one of the things that gave rise to the break from England

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because what the colonists were afraid of is after the seven years of war ended and

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the British government decided they were going to make the colonists bear some of the financial

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costs of defending themselves from the French and the Spanish, which the colonists still

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didn't want to do.

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They started trying to actually collect and then they got involved in disputes with the

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Collison so they tried to take their guns away from them and one thing led to another

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and the hell broke loose finally and the revolution occurred.

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Now after the revolution, people were really stirred up ideologically because the people

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People who really believed in Tom Paine type doctrine had sort of been loosed and encouraged

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to come out and fight in the militias against the British and a lot of them had done so.

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So you had some very kind of wild eyed democrats running around in the woods by 1783 and they

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They were given to dancing around the maypole and you can't have that in a respectable society.

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So the founding fathers who were mostly of the better sort, big landowners, big merchants,

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became quite apprehensive in the 1780s about the security of their property and their hold

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on Society. Out in the frontier areas, all the way from Western Massachusetts all the

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way down, a lot of the people who moved out there decided they really were ruling themselves.

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And furthermore, they couldn't see a damn thing the United States government was doing

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for them, so they didn't want to pay any taxes, that was for sure. And they didn't want to

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I can't obey any laws or anything else that the new government of the United States imposed on them because they were still being attacked by Indians, and they said, you know, why should we pay and submit to this government? It's not doing anything. It's not protecting us. It's not doing anything. It's just these rich guys in Philadelphia trying to screw us. So they got drunk and danced around the maypole. That's true Americanism.

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Now, guys like Washington and Adams and even the Virginians, the Jefferson and Madison

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and the rest of those guys, didn't like the radicalism of this situation at all.

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And it was their apprehension that led them finally to get together and create the Constitution

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in the United States, which provided a much stronger central government and gave a definite

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tax power to that government, which meant that it could get money to pay troops. This

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is the short lesson in public finance. Governments need money to pay soldiers to kill people

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who resists their rule. That's a short course in political science.

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And so that's what the government of the United States was designed to do. And it did some

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other things along the way. Of course, there were many people at the time who didn't want

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this new government, were apprehensive about giving it these powers, and resisted it, and

390
00:57:47.920 --> 00:57:53.720
wrote against it and argued against it and politicked against it and what have you and

391
00:57:53.720 --> 00:58:02.720
to some extent they were able to gain concessions at the Constitutional Convention in 1787 but

392
00:58:02.720 --> 00:58:07.840
nonetheless when all the dust had settled we had a much stronger government but we were

393
00:58:07.840 --> 00:58:17.560
We're already, at that point, beginning to see the formation of ideological opponents

394
00:58:17.560 --> 00:58:25.800
that we can trace down through the next 200 years as direct descendants of the Federalists

395
00:58:25.800 --> 00:58:27.800
and the Anti-Federalists.

396
00:58:27.800 --> 00:58:34.700
Now, again, I don't want to overstate this because the last 200 years of U.S. history

397
00:58:34.700 --> 00:58:40.980
are very complicated, and they've involved all sorts of ideas and interest groups and

398
00:58:40.980 --> 00:58:50.740
factions. But nonetheless, we can see continuity between these factions, which on the one hand,

399
00:58:50.740 --> 00:58:58.260
the faction that supported the U.S. Constitution and then became the Federalist Political Party

400
00:58:58.260 --> 00:59:23.260
in the 1790s, those people favored more centralization, more powerful executive, less self-rule by states and local governments they create, more activism on the part of the central government in going out and undertaking projects,

401
00:59:23.260 --> 00:59:36.260
Whether it be sponsoring banks or manipulating the money supply, or building transportation improvements, or building up a Navy, whatever it might be,

402
00:59:36.260 --> 00:59:49.260
that faction tended to be a more potent, more powerful, more centralized form of government, as opposed to their opponents who tended to favor decentralization,

403
00:59:49.260 --> 00:59:57.620
More Home Rule by the states and the local governments, laissez-faire, they oppose the

404
00:59:57.620 --> 01:00:04.020
central governments getting involved in these so-called public works, internal improvements,

405
01:00:04.020 --> 01:00:09.700
they viewed government's involvement in those and in banking and just about everything else

406
01:00:09.700 --> 01:00:15.460
as a boondoggle, more mercantilism, the kind of thing they tried to throw off when they

407
01:00:15.460 --> 01:00:22.180
escape from the British Empire, and so you see then the formation of the Jeffersonians

408
01:00:22.180 --> 01:00:33.180
party, the Republicans, so called at that time, as being in favor of that set of related

409
01:00:33.180 --> 01:00:34.180
policies.

410
01:00:34.180 --> 01:00:40.220
And a lot of things can be seen to fit under that general description as we go down through

411
01:00:40.220 --> 01:00:43.100
the past 200 years.

412
01:00:43.100 --> 01:00:52.860
Now, these people, as it were, kind of had it out in the 1790s, and the Federalists,

413
01:00:52.860 --> 01:01:01.220
with their backs against the wall, decided in 1798 that the short way to suppress their

414
01:01:01.220 --> 01:01:09.220
opponents was shut them up, and if they wouldn't shut up, put them in jail, and if they were

415
01:01:09.220 --> 01:01:15.220
for Foreigners, send them back where they came from, and so the Alien Sedition Acts

416
01:01:15.220 --> 01:01:25.520
were passed, and that was a great motivation to the Jeffersonians to strengthen their opposition.

417
01:01:25.520 --> 01:01:32.580
This to them was outrage, that they thought John Adams was trying to make himself a king

418
01:01:32.580 --> 01:01:45.580
or Executive in Perpetuity and that was too horrible to contemplate and so the states

419
01:01:45.580 --> 01:01:51.940
of Kentucky and Virginia passed resolutions basically nullifying the Alien and Sedition

420
01:01:51.940 --> 01:01:59.940
Acts and Jefferson and Madison wrote memorable manifestos in support of those resolutions

421
01:01:59.940 --> 01:02:09.980
and ultimately Jefferson was elected president in 1800 and the Federalists pretty much dissolved

422
01:02:09.980 --> 01:02:15.580
as an organized political party for the next couple of decades or so.

423
01:02:15.580 --> 01:02:18.780
But those interest groups didn't disappear.

424
01:02:18.780 --> 01:02:24.940
The same people who had supported the Federalists were still out there and to some extent they

425
01:02:24.940 --> 01:02:54.940
They had even embedded themselves in the form of John Marshall getting to become the Chief Justice of the U.S. Supreme Court before the Jeffersonians took power, and so they still had voice, they had voice in Congress and in the legislatures of the states and in the judiciary, particularly, some political scientists look back and they see the American judiciary is our counterpart

426
01:02:54.940 --> 01:02:58.580
of the aristocracies in Europe.

427
01:02:58.580 --> 01:03:02.660
And there's a grain of truth in that perspective

428
01:03:03.760 --> 01:03:08.760
because they're more isolated or insulated from politics

429
01:03:10.200 --> 01:03:13.400
as they can't be so easily removed from office, for example,

430
01:03:13.400 --> 01:03:16.040
if you don't like their decisions.

431
01:03:17.260 --> 01:03:22.260
But as time went by, it turned out

432
01:03:22.260 --> 01:03:52.260
that the new ideological contention arose or perhaps I should say the embers that had never died completely from old disputes particularly over slavery began to burst into flame again associated with that was the use of this federal taxing power in the form of the tariff

433
01:03:52.260 --> 01:04:04.260
Both the tariff and the slavery issues, of course, came to divide northern and southern states, even though all the states had had slavery at one time.

434
01:04:04.260 --> 01:04:16.260
It had never been a terribly important institution in the northern states, and it became a vitally important one in the states, particularly the Deep South.

435
01:04:16.260 --> 01:04:24.260
So that became a contentious issue because it was tied up with control of the federal government in general.

436
01:04:24.260 --> 01:04:36.260
If new states were created as the great national domain was divided into states according to the Constitution's rules and the Northwest Ordinances,

437
01:04:36.260 --> 01:04:40.260
would those be states that permitted slavery or not?

438
01:04:40.260 --> 01:04:46.260
and whether they did would then determine what kind of senators showed up in the Senate of the United States

439
01:04:46.260 --> 01:04:53.260
and that would determine what kinds of laws could make it through Congress and which ones could not.

440
01:04:53.260 --> 01:05:02.260
So a great deal was writing on the slavery expansion dispute including the operation of the tariff system.

441
01:05:02.260 --> 01:05:21.260
So this came to dominate American politics and ideological conflict in the 1830s, 40s and 50s and ultimately, of course, was not resolved and the war took place.

442
01:05:21.260 --> 01:05:51.260
and with the war we had a rebirth of statism because the Lincoln administration in order to successfully prosecute the war resorted to all sorts of measures that had not been seen in this country ever in some cases and to some extent if they had ever been used before went all the way back to the Federalist era at the beginning of the U.S. Government

443
01:05:51.260 --> 01:05:58.280
Many of the new taxes levied during the war, for example, were excise taxes. They even

444
01:05:58.280 --> 01:06:06.680
laid an income tax, an inheritance tax. They laid the diabolical stamp tax that the colonists

445
01:06:06.680 --> 01:06:16.940
had resented so vastly when the British tried to collect it before the revolution. So statism

446
01:06:16.940 --> 01:06:26.300
and of course, whenever you have a big event like that with so many different dimensions,

447
01:06:26.300 --> 01:06:33.900
it leaves many legacies. It changes many people's ways of thinking about why things happen as

448
01:06:33.900 --> 01:06:41.020
they do, what is desirable politically, what is expedient politically, what we can get

449
01:06:41.020 --> 01:06:49.980
away with what we can't. People learned a great deal from the war and on top of it all,

450
01:06:49.980 --> 01:06:55.580
the Republican Party, which had come into existence in the 1850s, became the ruling

451
01:06:55.580 --> 01:07:03.500
party of this country for more than a half century afterwards. The only time a Republican

452
01:07:03.500 --> 01:07:11.020
and wasn't President of the United States, from President Lincoln onward to Wilson, was

453
01:07:11.020 --> 01:07:14.540
the two separate terms of Grover Cleveland.

454
01:07:14.540 --> 01:07:21.700
Otherwise, they had a lock on the presidency, they had their boondoggles, their land grants,

455
01:07:21.700 --> 01:07:30.420
their subsidies to business, their high tariffs, their national banking system, and they had

456
01:07:30.420 --> 01:07:37.800
the vast patronage schemes where they were in a position to say who was going to be postmaster

457
01:07:37.800 --> 01:07:46.620
of Auburn, Alabama. What an insult, among other things. And they kept this going for

458
01:07:46.620 --> 01:07:54.500
a long time, a long time, so that was a very important consequence of the statism they

459
01:07:54.500 --> 01:07:59.900
they had put in place on an even vaster scale during the war.

460
01:07:59.900 --> 01:08:03.500
Now these things again were not undisputed.

461
01:08:03.500 --> 01:08:09.520
We still got the heirs of the Jeffersonians out there.

462
01:08:09.520 --> 01:08:12.340
There were those two glorious terms of Grover Cleveland.

463
01:08:12.340 --> 01:08:18.260
I'm not one to normally rave about politicos, but in the context you got to rave about Grover

464
01:08:18.260 --> 01:08:19.260
Cleveland.

465
01:08:19.260 --> 01:08:23.580
He was a country mile ahead of the others.

466
01:08:23.580 --> 01:08:32.140
So we had a curious kind of ideological evolution after the Civil War, and in some ways these

467
01:08:32.140 --> 01:08:38.020
Civil War programs were abandoned or given up, and say the income tax was terminated

468
01:08:38.020 --> 01:08:44.000
in 1872, and the inheritance tax was given up, and a lot of the excises, and they quit

469
01:08:44.000 --> 01:08:49.900
making land grants to railroads after the early 1870s, and so forth. So there was a

470
01:08:49.900 --> 01:09:19.900
There's a lot of retrenchment and in some ways the 1880s looked like a period that approximates laissez-faire about as closely as we ever came in this country, maybe comparable to the 1840s or so, but nonetheless that was one movement and it was already being countered by a movement of people who were promoting new forms of statism.

471
01:09:19.900 --> 01:09:27.900
The Federal's impulse continued to operate, and it took a number of forms.

472
01:09:27.900 --> 01:09:36.900
One was that Americans began to import from Europe Socialism, or ideas colored by Socialism,

473
01:09:36.900 --> 01:09:42.900
which was a more advanced stage in Europe at that time than in the United States.

474
01:09:42.900 --> 01:09:59.900
So Americans, particularly after the 1870s when a lot of young scholars went to Germany to study because the Germans had venerable old universities that gave the Ph.D. degree.

475
01:09:59.900 --> 01:10:23.900
And that was unknown in the United States before 1876, when my alma mater, Johns Hopkins, decided to pretend to be a venerable old German university, even though it was a new kid on the block, and they started giving PhD degrees, and then other universities began to follow.

476
01:10:23.900 --> 01:10:31.860
For a long time, if you wanted to be a bona fide academic with a Ph.D., you went to Germany

477
01:10:31.860 --> 01:10:34.900
and studied and got a Ph.D. there.

478
01:10:34.900 --> 01:10:41.420
And when these guys went there, as many people who became very influential in academia in

479
01:10:41.420 --> 01:10:48.060
the United States did, they encountered the ideas of German socialism, which were not

480
01:10:48.060 --> 01:10:52.940
only floating around in the universities there, but they were actually being, to some extent,

481
01:10:52.940 --> 01:11:01.940
So into practice, starting in the 1880s, under Bismarck, the Germans started to build what we would now call the welfare state.

482
01:11:01.940 --> 01:11:15.940
Pensions, insurance for sick and people injured on the job, things of that sort, to buy off the working class so they wouldn't oppose the government.

483
01:11:15.940 --> 01:11:28.940
And it works every time. Even in Germany, where we had masses of socialists, it was operating as Bismarck intended it to operate.

484
01:11:28.940 --> 01:11:35.940
And the real proof of that pudding came in 1914, when you had these legions of German socialists

485
01:11:35.940 --> 01:11:40.940
who were supposed to owe allegiance to no nation, but only to the working people of the world.

486
01:11:40.940 --> 01:11:47.180
World, and what did they do? They fell into ranks and marched off to the trenches to be

487
01:11:47.180 --> 01:11:54.840
cannon fodder by the millions, some socialists. Never trust a socialist when the chips are

488
01:11:54.840 --> 01:12:02.500
down. Okay, so we were bringing these ideas, these institutions back over here in the United

489
01:12:02.500 --> 01:12:13.500
in the United States and representing them as advanced thinking, these smart guys at Johns Hopkins and Harvard and Columbia,

490
01:12:13.500 --> 01:12:25.500
well they said, we're backward, we didn't even have old age pensions, except for all these veterans and their distant relatives,

491
01:12:25.500 --> 01:12:29.500
We didn't have insurance when people got sick.

492
01:12:29.500 --> 01:12:32.500
The working class had to make do.

493
01:12:32.500 --> 01:12:34.500
That's horrible.

494
01:12:34.500 --> 01:12:40.500
So they began to write and to speak, to train students,

495
01:12:40.500 --> 01:12:45.500
and to produce a cadre of ideological activists

496
01:12:45.500 --> 01:12:50.500
for what we would now look back on and call social democracy,

497
01:12:50.500 --> 01:12:53.500
soft socialism.

498
01:12:53.500 --> 01:12:57.860
They didn't all believe in nationalizing all the means of production, although some of

499
01:12:57.860 --> 01:13:00.540
them also believed in that.

500
01:13:00.540 --> 01:13:06.500
And we eventually had even regular socialist groups, mainline type, old-fashioned socialists

501
01:13:06.500 --> 01:13:11.940
who became fairly influential in some places in this country in the late 19th and early

502
01:13:11.940 --> 01:13:12.940
20th century.

503
01:13:12.940 --> 01:13:21.580
In cities like Milwaukee, for example, they always had a socialist municipal administration.

504
01:13:21.580 --> 01:13:28.040
In the state where I was born, Oklahoma, of all places, in the first decade of the 20th

505
01:13:28.040 --> 01:13:39.040
century, had the biggest socialist party of any state in America. Go figure. They were

506
01:13:39.040 --> 01:13:45.280
what we were more inclined here to call populists. Somehow the socialist party there would not

507
01:13:45.280 --> 01:13:50.600
organize these farmers, because they always thought they were being cheated by bankers

508
01:13:50.600 --> 01:13:58.200
and Railroads, and so, let's nationalize the banks and the railroads, take care of that.

509
01:13:58.200 --> 01:14:06.120
So socialism itself got to be fairly influential, but more importantly was the way that socialist

510
01:14:06.120 --> 01:14:10.420
ideas began to penetrate society.

511
01:14:10.420 --> 01:14:16.000
When we talk about the importance of ideology, as I've said before, it's often an importance

512
01:14:16.000 --> 01:14:29.000
It is felt slowly. It takes decades sometimes for people to absorb the outlooks and the beliefs and the commitments of an ideology.

513
01:14:29.000 --> 01:14:44.000
These guys who came back from Germany were the pioneers, I think, of producing what has come to be the dominant ideology of the United States in the 20th century.

514
01:14:44.000 --> 01:14:51.800
Now in the early 20th century we had progressivism, which was to some extent an expression of

515
01:14:51.800 --> 01:14:58.300
these trends I've been discussing. It had some homegrown elements too. As always we

516
01:14:58.300 --> 01:15:07.500
see some conflicting currents, some counter movements going on. Progressivism in the eyes

517
01:15:07.500 --> 01:15:19.500
The eyes of some analysts, people like Gabriel Kolko, for example, looks like a conspiracy of big business interests to capture the power of the state, to solidify their cartels.

518
01:15:19.500 --> 01:15:31.500
And we can certainly find some evidence that that sort of thing was going on during the progressive era, quite a lot of such evidence, in fact.

519
01:15:31.500 --> 01:16:01.500
but at the same time many progressives hated big business and the trusts wanted to break them up, subject them to government control or at one point they even espoused a license, a federal license that every corporation doing business in interstate commerce would have to get from the federal government to do business and then of course the issuer of that license would be able to establish the terms on

520
01:16:01.500 --> 01:16:08.540
in which those companies could operate. So that would have been a lever of control over

521
01:16:08.540 --> 01:16:15.780
anybody doing an interstate business, all the big businesses. Well, so there were any

522
01:16:15.780 --> 01:16:24.700
business and pro-business elements of progressivism. There were also any politics groups, strange

523
01:16:24.700 --> 01:16:29.600
to say. What are you doing in politics if you're against politics? Well, they were against

524
01:16:29.600 --> 01:16:36.600
corrupt existing type politics, the kind that we saw in all the big cities in America, where

525
01:16:36.600 --> 01:16:43.120
we had bosses. All these immigrants were coming here by the millions in the late 19th century

526
01:16:43.120 --> 01:16:47.680
and because they didn't have any established position in society, nobody gave a damn about

527
01:16:47.680 --> 01:16:55.400
them and they were kicked around right and left by the ruling class. So pretty soon somebody,

528
01:16:55.400 --> 01:16:59.400
Political Entrepreneurs say that there's hay to be made.

529
01:16:59.400 --> 01:17:03.400
Let's organize these guys, they can vote.

530
01:17:03.400 --> 01:17:09.400
We'll organize all these immigrant voters and we'll pay them off with a turkey on Thanksgiving.

531
01:17:09.400 --> 01:17:13.400
Or, you know, we'll go down to the police court when they get arrested.

532
01:17:13.400 --> 01:17:21.400
And since they speak only Polish, we'll send somebody down there to help them explain to the judge that they didn't mean it.

533
01:17:21.400 --> 01:17:26.520
and we'll do something for these guys and they'll be beholding to us and they'll vote for our guys

534
01:17:26.520 --> 01:17:33.080
at the election and they did. This system really worked pretty well. So this is another way in

535
01:17:33.080 --> 01:17:40.200
which the welfare system came to America through politics. People have always received assistance

536
01:17:40.200 --> 01:17:47.960
when they were destitute. They got it from friends, family, churches, lodges, all sorts of voluntary

537
01:17:47.960 --> 01:17:54.440
Associations. But now we're using politics. We're using political power because Cleveland

538
01:17:54.440 --> 01:17:59.160
is getting the money by taxing people and then these aldermen are turning around and

539
01:17:59.160 --> 01:18:06.880
using the money to hire Joe Paluca to stand around on a public construction job and collect

540
01:18:06.880 --> 01:18:16.920
his pay. So this system was something that the progressives detested. They really began

541
01:18:16.920 --> 01:18:23.560
in the form of the goo-goos. Goo-goo was a term of ridicule that was used for people

542
01:18:23.560 --> 01:18:32.560
that wanted good government. Goo-goo. And realists looked at these guys in the 1870s,

543
01:18:32.560 --> 01:18:38.960
1880s, who wanted good government and the suppression of corruption. They said, what

544
01:18:38.960 --> 01:18:45.600
a bunch of naive fools. You know, don't they understand politics? They want to get rid

545
01:18:45.600 --> 01:18:54.080
of Corruption, and it's part and parcel of politics. But eventually these Gugus who were

546
01:18:54.080 --> 01:19:01.000
kind of point men for the respectable class began to get political power of their own

547
01:19:01.000 --> 01:19:09.000
or to expand on positions of power they'd enjoyed already. And so when the progressives

548
01:19:09.000 --> 01:19:15.200
got truly in flower after about 1900 or so, a lot of the Gugu people now became progressives

549
01:19:15.200 --> 01:19:26.200
and they wanted to get rid of old-fashioned style politics, particularly in the states and the cities, and substitute what?

550
01:19:26.200 --> 01:19:31.200
Not politics, that's inherently corrupt. They weren't so dumb as to substitute politics.

551
01:19:31.200 --> 01:19:38.200
They wanted to substitute decision-making by disinterested experts.

552
01:19:38.200 --> 01:19:43.760
Why, who could argue with that? Don't you want the experts to decide things? You want

553
01:19:43.760 --> 01:19:52.560
a bunch of amateurs? And you certainly can expect, say, a guy who's been to Columbia

554
01:19:52.560 --> 01:20:01.280
to be disinterested. So you basically appoint all your respectable pals to administrative

555
01:20:01.280 --> 01:20:07.920
of Positions, whether it's city manager of a town or whether it's a member of a regulatory

556
01:20:07.920 --> 01:20:14.700
commission to set utility rates or tell the railroads how much they can charge for hauling

557
01:20:14.700 --> 01:20:20.440
different classes of freight, and the experts run things. And they run more and more things

558
01:20:20.440 --> 01:20:27.080
because if expert administration is good, then more expert administration is better.

559
01:20:27.080 --> 01:20:31.880
So the progressives began to look around and see that there's hardly anything going on

560
01:20:31.880 --> 01:20:41.280
in economic life that can't be improved with regulation by disinterested experts, because

561
01:20:41.280 --> 01:20:43.280
they're not political.

562
01:20:43.280 --> 01:20:49.400
Well, it's hard to say whether they really believed this malarkey.

563
01:20:49.400 --> 01:20:53.320
I think some of them did, actually.

564
01:20:53.320 --> 01:21:00.420
It was extremely naive, and hard-nosed people never believed it for a minute, and some of

565
01:21:00.420 --> 01:21:06.000
them just used it, particularly the business interests who looked around and said, okay,

566
01:21:06.000 --> 01:21:10.120
we've got these idiot progressives running amok.

567
01:21:10.120 --> 01:21:15.420
And as Samuel Insel said quite explicitly on one occasion, better for businessmen to

568
01:21:15.420 --> 01:21:21.740
get involved than to wait and have that involvement thrust upon them.

569
01:21:21.740 --> 01:21:27.140
So when they got involved, they made a difference because what they had was a lot of money.

570
01:21:27.140 --> 01:21:29.580
And money is a fine thing in politics.

571
01:21:29.580 --> 01:21:36.020
I don't care what country you're talking about or what the system is, money does wonders.

572
01:21:36.020 --> 01:21:43.020
So a lot of business interests organized and became involved in progressive politics.

573
01:21:43.020 --> 01:21:49.200
And that's where we get all these developments that Gabriel Kolko and Weeby and other historians

574
01:21:49.200 --> 01:21:57.240
have documented at great length, which involved solidification of business cartels in a number

575
01:21:57.240 --> 01:21:58.240
of industries.

576
01:21:58.240 --> 01:22:04.160
Well, I'm going to stop there just with the summary statement that by the time we get

577
01:22:04.160 --> 01:22:07.280
to progressivism, we've crossed over.

578
01:22:07.280 --> 01:22:18.640
We've crossed over from an old regime to the one that has, although flowered and developed

579
01:22:18.640 --> 01:22:23.880
in a multitude of ways in the past hundred years. It's basically progressivism. That's

580
01:22:23.880 --> 01:22:30.880
what we've endured in this country ever since. The whole idea that government should be involved

581
01:22:30.880 --> 01:22:36.520
in this and that and that and that, that we should have regulatory commissions here, there

582
01:22:36.520 --> 01:22:43.760
and everywhere, that government can improve on the state of affairs in the unhampered

583
01:22:43.760 --> 01:22:50.440
Market, that government officials know what to do to promote the public interest and we

584
01:22:50.440 --> 01:22:59.840
can expect that they will do it, the two great fallacies of the mixed economy, all wrapped

585
01:22:59.840 --> 01:23:11.240
up in progressivism and that has been the germ, ideological germ of any number of pernicious

586
01:23:11.240 --> 01:23:24.240
Did you talk a little bit about the sort of takeover of the Democratic Party in 1996 and how it played into this?

587
01:23:41.240 --> 01:23:49.240
and Home Rule by the state and local governments and all those very Jeffersonian type things.

588
01:23:49.240 --> 01:23:56.240
Cleveland was the last national democratic leader who espoused that kind of program.

589
01:23:56.240 --> 01:24:05.240
And after you had the William Jennings Bryan debacle, the new type Democrats who merged

590
01:24:05.240 --> 01:24:12.440
with the populists and progressives became quite different.

591
01:24:12.440 --> 01:24:17.960
Now, Woodrow Wilson in some ways looks like an old-fashioned Democrat,

592
01:24:17.960 --> 01:24:23.480
at least for a while, that doesn't last long.

593
01:24:23.480 --> 01:24:30.440
And then with World War I, that's the end of it.

594
01:24:30.440 --> 01:24:35.000
There's no doubt after that that the Democrats are the party of state,

595
01:24:35.000 --> 01:24:40.940
Stateism, whereas before the Republicans were the party of stateism, and now both the major

596
01:24:40.940 --> 01:24:45.680
parties are the parties of stateism, and that's where we've been ever since, that they just

597
01:24:45.680 --> 01:24:52.160
serve slightly different masters, and even then not all that different, because the people

598
01:24:52.160 --> 01:24:59.300
with substantial political resources get served no matter which party is in power.

599
01:24:59.300 --> 01:25:04.220
It's a fraud that there's a competitive political system.

600
01:25:04.220 --> 01:25:10.900
Even Engels wrote that what the United States has is the rotation of two bands of pirates

601
01:25:10.900 --> 01:25:21.140
who pretend to compete, but they're both engaged in plundering the public.

602
01:25:21.140 --> 01:25:22.140
Questions, comments?

603
01:25:22.140 --> 01:25:23.140
Guido?

604
01:25:23.140 --> 01:25:36.140
It's symptomatic that until fairly recently, there was a word to describe the phenomenon, because we were always talking about collectivism, socialism, fascism, and so on.

605
01:25:36.140 --> 01:25:42.140
All expressions that focused away attention from the main phenomenon, the core, which was statism.

606
01:25:42.140 --> 01:25:56.140
Statism by Mises when he wrote Bureaucracy or something, for lack of a better term we could say it's a lot of statolatry or right statism, so there was obviously a word to describe this.

607
01:26:12.140 --> 01:26:17.180
Progressivism was a kind of afterthought, it probably shows, originally I hadn't planned

608
01:26:17.180 --> 01:26:22.580
to write a chapter on progressivism, but it became increasingly obvious to me as I worked

609
01:26:22.580 --> 01:26:29.140
on the book that I needed to give some account of how the dominant ideology of the United

610
01:26:29.140 --> 01:26:37.400
States changed because it was that change that made the consequences of crisis different

611
01:26:37.400 --> 01:26:42.920
in the 20th century than they had been in the 19th century.

612
01:26:42.920 --> 01:26:49.000
So I tried to learn as much as I could about progressivism, and one of the first things

613
01:26:49.000 --> 01:26:53.080
I discovered is that, well, it doesn't look as if it's coherent at all.

614
01:26:53.080 --> 01:27:02.320
It has all these different types of elements, you know, it's anti-political, it's pro-political,

615
01:27:02.320 --> 01:27:07.320
it's pro-business, it's anti-business, it's this, that and the other.

616
01:27:07.320 --> 01:27:12.220
It looked as if it was for and against everything simultaneously, and that didn't make any sense.

617
01:27:12.220 --> 01:27:15.720
How could it be some kind of a consequential movement?

618
01:27:15.720 --> 01:27:21.440
But I ultimately began to see that every one of these progressive positions had one thing

619
01:27:21.440 --> 01:27:28.200
in common, and that is they proposed to use the power of government to accomplish something

620
01:27:28.200 --> 01:27:30.480
that they could not accomplish otherwise.

621
01:27:30.480 --> 01:27:49.480
So, essentially, progressivism was statism. Statism for many different purposes, promoted by many different interest groups and individuals, but statism through and through.

622
01:27:49.480 --> 01:28:10.480
It seems like today, if there is anything maybe a little bit brighter than it was then is that now people tend to be sort of cynical when they hear about government's ability to accomplish something. In fact, it seems like what you read from that time, with the exception of a few really bright satirists, people just have this great faith that government's the great...

623
01:28:10.480 --> 01:28:20.480
Sometimes I share that impression you have, that I look back and I say, these people were so naive, and I don't even have to go back that far.

624
01:28:20.480 --> 01:28:27.480
I go back to the 1940s and I look at what the government used to tell people, and I think, people believe this?

625
01:28:27.480 --> 01:28:36.480
I mean, it's so blatant, malarkey, and I know some of them did.

626
01:28:36.480 --> 01:28:51.480
But then I look around me today and I decide that people are just as naive, just as easily fooled by the government now as they were a hundred years ago.

627
01:28:51.480 --> 01:29:05.480
They believe what they're told, they do what they're told, and indeed I think I am prepared to conclude that they're even more docile now than they were a hundred years ago.

628
01:29:05.480 --> 01:29:34.480
Just a short question. Robert Liebman seems to have been the last president we could have any respect for. Where did he come from?

629
01:29:34.480 --> 01:29:37.680
Okay, and a short follow-up question. Where was William McKinley shot?

630
01:29:41.280 --> 01:29:44.680
Coincidence or conspiracy?

631
01:29:47.280 --> 01:29:47.780
Joe?

632
01:29:48.580 --> 01:29:58.180
Right. In your journal, which you had an independent review, there was a review a couple of years ago, and it just gave me the name of the author.

633
01:29:58.180 --> 01:30:11.180
But it was a book arguing that at the state level, the organized farm interests really pioneered a lot of the progressive bureaucracy by setting up state agriculture departments.

634
01:30:11.180 --> 01:30:17.180
I mean, Alabama, I guess, was the biggest fiefdom until education overtook it. Now, that's the biggest fiefdom.

635
01:30:17.180 --> 01:30:20.180
Do you have any comment on the organized farmers?

636
01:30:20.180 --> 01:30:27.380
Well, the farmers' attempts at organization go way back, and of course they got a commissioner

637
01:30:27.380 --> 01:30:32.840
of agriculture at the federal level during the war between the states.

638
01:30:32.840 --> 01:30:38.900
So that was the beginning of the federal involvement, and also the Land Grant, the Merrill Act to

639
01:30:38.900 --> 01:30:44.780
establish these so-called land grant colleges.

640
01:30:44.780 --> 01:30:49.420
If you seek its monument, look across the street.

641
01:30:49.420 --> 01:30:55.100
There's one right there. Auburn is the land grant institution in the state of Alabama

642
01:30:55.100 --> 01:31:09.340
and every state has one. 1862, early in the war. Obviously this was an idea whose time

643
01:31:09.340 --> 01:31:18.540
had come rather suddenly and this was a very early example of this way that the Federal

644
01:31:18.540 --> 01:31:30.540
The federal government gets the states roped into doing what somebody wants the federal government to do and makes it look a little more constitutionally legitimate, at least in the beginning.

645
01:31:30.540 --> 01:31:44.540
After a while they don't worry about that at all anymore, but the farmers also had these state departments of agriculture in every state.

646
01:31:44.540 --> 01:32:08.540
And for the most part, in the 19th century, these government interventions in agriculture were engaged in research and dissemination of information and passing out seeds, and they were really pretty trivial.

647
01:32:08.540 --> 01:32:37.540
Not too many of them ever did anything of importance, but occasionally one of them would, and dissertations have actually been written by economic historians to prove that the investment in government agricultural research had a gigantic rate of return just because of two or three innovations that came out of these experiment stations.

648
01:32:37.540 --> 01:32:48.540
They devised, I think, in Wisconsin, if my memory serves me, a machine for measuring the milk fat content of milk.

649
01:32:48.540 --> 01:32:53.540
And, well, that turned out to be a pretty important instrument in agriculture.

650
01:32:53.540 --> 01:33:05.540
And so just the payoff on that one innovation pretty much covered the whole federal expense of agricultural experiment stations for 50 years.

651
01:33:05.540 --> 01:33:32.540
It wasn't until World War I that this began to take a nasty turn toward regulation, and of course the government regulated heavily under the Lever Act in World War I, prices of wheat and the prices of a number of agricultural and raw commodities, and other conditions.

652
01:33:32.540 --> 01:33:37.240
use this licensing power I mentioned that they had threatened on all corporations, it

653
01:33:37.240 --> 01:33:42.300
was exercised under the Lever Act and if you didn't do the government's bidding they withdrew

654
01:33:42.300 --> 01:33:51.060
your license and you're out of business. So in order to get all the local farmers regimented

655
01:33:51.060 --> 01:33:57.220
for World War I, they sent agents around and they basically invented what's now known as

656
01:33:57.220 --> 01:34:03.780
was the Farm Bureau and afterwards it was carried forward and it came to look like a

657
01:34:03.780 --> 01:34:11.340
private organization but it was entirely the creation of government agents during the war

658
01:34:11.340 --> 01:34:19.100
and from that time on of course having all these well organized state groups the farmers

659
01:34:19.100 --> 01:34:26.980
became a more potent lobbying interest group and they managed to get several acts of congress

660
01:34:26.980 --> 01:34:37.820
to give them financing during the 1920s and then the Agricultural Marketing Board was

661
01:34:37.820 --> 01:34:46.460
created in 1929 to prop up farm prices and then the dam burst totally in 1933 with the

662
01:34:46.460 --> 01:34:55.340
Agricultural Adjustment Act and we've had that ever since in its many forms.

663
01:34:55.340 --> 01:35:03.620
The most beautiful of all these agricultural interventions to my way of thinking was the

664
01:35:03.620 --> 01:35:14.480
great hoax of 1996, that being 1996, when Congress decided to give vast tanker loads

665
01:35:14.480 --> 01:35:19.260
of cash to farmers in order to phase out subsidies.

666
01:35:19.260 --> 01:35:23.940
And this was called the Freedom to Farm Act, because now they didn't have to obey any rules

667
01:35:53.940 --> 01:36:00.820
in all this loot in the service of phasing out federal intervention in the details of

668
01:36:00.820 --> 01:36:08.020
farm decision making and when that law expired of course all those interventions were reinstituted

669
01:36:08.020 --> 01:36:15.500
along with huge tanker loads of cash to accommodate them to the shock of going back to the old

670
01:36:15.500 --> 01:36:16.500
system.

671
01:36:16.500 --> 01:36:19.500
We're out of time, Bob. Thank you.