Are Progressives for the Little Guy?

Liberals aren’t liberals anymore. These days they call themselves “progressives.”

Writing in The New York Times, Columbia University economist Jeffrey Sachs said there were two progressive eras: one in the early part of the last century and the other during the administration of Franklin Roosevelt. He called on liberals to create a third progressive era, in part “to re-establish the supremacy of people votes over dollar votes in Washington.”

To hear Sachs tell it, progressivism means being in favor of the little guy and against the special interests. Aligning himself with the motley crew that calls itself Occupy Wall Street, he writes:

The young people in Zuccotti Park and more than 1,000 cities have started America on a path to renewal. The movement, still in its first days, will have to expand in several strategic ways. Activists are needed among shareholders, consumers and students to hold corporations and politicians to account. Shareholders, for example, should pressure companies to get out of politics. Consumers should take their money and purchasing power away from companies that confuse business and political power.

Sachs doesn’t know much about history. Nor do most other people. Given Teddy Roosevelt’s attacks on “the trusts” and the muckraking novels of Upton Sinclair and Ida Tarbell, you might suppose that 100 years ago progressives were antibusiness. Yet nothing could be further from the truth. The fundamental economic vision of progressivism was to not to combat special interests, but to embrace and empower them.  In a very real sense, “progressivism” means rule by special interests.

The world looks just the same
And history ain’t changed

As the leftist historian Gabriel Kolko has documented, the Interstate Commerce Commission (ICC) — our first progressive-era federal regulatory agency — was dominated by, and served the interest of, the railroads. The main accomplishments of regulation were to outlaw price cutting, establish minimum prices and make the railroads more profitable than they had ever been. The experience was far from unique.

The regulatory apparatus created by the Meat Inspection Act of 1906 served the interests of large meat packers. Safety standards were invariably already being met — or were easily accommodated — by large companies. But the regulations forced many small enterprises out of business and made it difficult for new ones to enter the industry.

This same pattern — of regulatory agencies serving the interests of the regulated — was repeated with the establishment of almost all subsequent regulatory agencies. For this reason, Kolko called the entire Progressive Era the “triumph of conservatism.”

The practices Kolko described were elevated to a refined science by Woodrow Wilson’s War Industries Board (WIB) during World War I. Trade associations were allowed to organize along industry lines — controlling output, setting prices and effectively functioning as an industry-by-industry system of cartels. By the time Franklin Roosevelt established the National Recovery Administration (NRA) during the Depression years, planners could draw not only upon the experience of the Wilson-era WIB, but also on the far more extensive experience of Mussolini’s Italian economy — which was organized in the same way. In fact, Roosevelt’s economic vision for America was almost identical to the vision of Italian fascism.

As Jonah Goldberg has pointed out, there are more than a few transatlantic parallels. The symbol of the NRA was the Blue Eagle, which businesses were expected to hang on their doors to show compliance with NRA rules. Newspapers in both America and Germany compared the Blue Eagle to the swastika and the German Reich eagle. A quasi-official army of informants and goon squads helped monitor compliance. Nuremberg-style Blue Eagle rallies were held, including a gathering of 10,000 strong at Madison Square Garden. A New York City Blue Eagle parade was larger than the ticker-tape parade celebrating Charles Lindbergh’s crossing of the Atlantic.

Through the NRA, the federal government — backed by the full force of criminal law — intruded into virtually every economic transaction. An immigrant dry cleaner spent three months in jail for charging 35 cents to press a suit when the code required a minimum charge of 40 cents. Another case — one that went all the way to the Supreme Court — involved immigrant brothers who ran a small poultry business. Among the laws they were accused of violating was a requirement that buyers of chickens not select the chicken they were buying. Instead the buyer needed to reach into the coop and take the first chicken that came to hand. (Amity Shlaes explains the reason: buyers would be tempted to take the best chicken, leaving less desirable options for other buyers.)

In Schechter Poultry Corp. v. United States (the so-called “sick chicken” case), a unanimous Supreme Court declared the NRA unconstitutional. Roosevelt responded by trying to intimidate the justices and by asking Congress to expand the number of justices so that he could pack the court with judges more to his liking. Although he lost the battle, Roosevelt eventually won the war.

The Supreme Court today places very few restrictions on government authority to regulate the marketplace, no matter how indefensible the interventions.

The use of the word “progressive” by modern liberals is appropriate — to the degree that it reminds us of the historical and intellectual roots of much of liberal thinking. But there is another sense in which the word is very misleading. In general, there is nothing truly progressive about modern progressives. That is, nothing in their thinking is forward looking. Invariably, the social model they have in mind is in the distant past. Many explicitly admit they would like to resurrect Roosevelt’s New Deal.

In this sense, most people on the left who use the word “progressive” are actually reactionaries. Many are explicit about their desire to preserve the current allocation of jobs and the incomes that derive from those jobs. Although they tend to focus on opposing globalization and international trade, consistency requires them to oppose virtually all of the “creative destruction” that the economist Joseph Shumpeter said was inevitable in any dynamic, capitalistic economy.

Comments (18)

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  1. Vicki says:

    Fascinating post. Good song pairing.

  2. Kent Lyon says:

    Yes, what Progressives want, is not just the bound sticks that were the symbol of Mussolini’s Fascism (supposedly representing strenth in unified action, more illustrating the grip of the state on the people), but a straight-jacket on the American economy and the American people. Progressivism is the anti-thesis of American liberty, Natural Right, the Lockean social contract, and the US Constitution. Progressives disdain the Natural Rights enshrined in the Declaration and the Constitution, and regard the Constitution as a dead letter (a Progressive professor of political science at Texas A and M University, of all places, and a giddy Obama supporter, affirmed as much to me directly, dissing the Federalist Papers as forgotten and unfortunate “history” that no longer applies to the modern world and needs to be eliminated). They accept the viciously perverse “Pragmatist” philosophy of Rorty and the “social justice” of Rawls that are nothing less than the self-anointed “elites” playing god (as obama is wont to do). Progressivism is not the old evil empire of the Soviet Union. It is far worse, and far more perverse. Communism at least gave some value to the human individual, albeit in the context of the collective. Progressivism relegates humans to the category of beasts, indeed, lower than beasts because they are far more dangerous to the planet, to the ecosphere. For Progressivism, humans are the enemy, the problem, the plague that is overwhelming the planet, the population that must be curtailed to protect and preserve all other life forms on the planet; and, unlike the Judeo-Christian ethic of the Western World, Progressives see humans as beyond redemption, incapable of being saved, irrevocably benighted and malign, that must be made to be wards of the State. The perversity of the Progressive view of mankind is beyond description.

  3. Michael Sanera says:

    John, Excellent history lesson. Unfortunately, our schools don’t teach this. Instead, they teach that progressives are for the little guy. Just pick up any high school or college textbook. It is important to remember that the “winners” get to write the history.

  4. Bill Hallman says:

    Great article. It’s been years since I read, or even saw reference to, Gabriel Kolko.

  5. Greg Scandlen says:

    You write — “He called on liberals to create a third progressive era, in part “to re-establish the supremacy of people votes over dollar votes in Washington.”

    That is exactly the problem with this viewpoint. Voters get to make their wishes known only once every two years but consumers get to “vote” every time they spend a dollar. Real democracy REQUIRES free markets.

  6. Blake Woodard says:

    I don’t use the word “liberals,” either. I call them control freaks.

  7. Ken says:

    I like Greg’s comment.

  8. Alieta Eck, MD says:

    Once progressives discovered that they could personally benefit from the business of “regulation,” there has been no end to their creative meddling.

    Electronic medical records, designed to coordinate the care of every patient, has been widely tauted by Newt Gingrich. It has actually spawned a whole new industry that some have promoted as creating jobs! There are conferences on how to code correctly. All this does is raise the cost of health care. Has anyone calculated this?

    Progressives see any government job as a good job and would like every physician to be a controlled employed physician. As government grows, freedom diminishes. But as long as progressives run the show, they are happy.

  9. steve says:

    1) All of this was done in an era when government was tiny. The argument about large government is clearly not part of the problem when discussing regulations. Businesses are able to write their own regulations when government is small or it is big.

    2) Businesses pay for and dictate the regulations they want, but they are never considered part of the problem by you. Why?


  10. John Goodman says:

    Steve, it doesn’t matter what business does or doesn’t do, as long as the coercive power of the state is held in check. All of the examples of price fixing that I gave required government. In an era when there were no anti-trust laws to speak of, businesses were unable to collude on their own. They needed government. Take away the power of the government to fix prices and the problem goes away.

  11. frank timmins says:

    Excellent thought provoking piece John Goodman. This should be required reading for some of our er….”Independent” friends who aren’t sure which philosophical side they come down upon.

    I am a bit thrown for a loop in one respect though. How do Teddy Roosevelt’s “Trust Buster” initiatives correspond with the “Progressive” mentality that you have outlined? Maybe I should not be accepting the terminology of “Trust Busting” as an effort to prevent collusion and price fixing. But this blurs the lines for me due to the fact that IMO one of the problems we have in healthcare is lack of competition among healthcare financiers.

    Are you saying that TR’s advertised Trust Busting was not so much that as it was the same tactics used by Wilson and FDR to set up government controls?

    Greg’s comment is most significant.

  12. Matt Basil says:

    Liberal-progressives are fond of grand, sweeping state-planning projects, conceived in abstraction by academic theorists. Their preference is for betting the house on one roll of the dice, for example, with Obamacare. No incremental, careful tests for them.

    Still, so-called urban renewal projects, though on a smaller scale, command liberal-progressive planners’ attention. Why miss an opportunity to destroy a neighborhood and wipe out a few thousand local businesses?

    Such depredations can be imposed in the name of “caring,” for an abstraction known as “the people.” Because “the people” is an abstraction, misery inflicted in real life is not on the radar screen of liberal-progressive academics. In Nancy Pelosi’s assessment, people will learn to love the works of Big Brother after they’ve been exposed to them long enough and after Democrat/Socialist political orators have explained why they really love Big Brother.
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  13. Paul Nelson says:

    Before medicare, the national cost of the healthcare industry represented 6-7% of the GDP. It is now nearly 17-18%. Over the next ten years, the national cost of the healthcare industry will eventually contribute to a national debt level currently affecting Greece, Italy, and Portugal. Clearly, the role of the federal government is key. The funding structure of medicare is the real culprit. Changing the national cost of Medicare will require incentives necessary for the community development of Primary Health Care, neighborhood by neighborhood. This will take a precise use of ideas and concepts as a basis for change, ideas and concepts not currently prominent to healthcare reform.

    As a starting point, our national heritage began with a belief in limited government that was based on a participatory hypothesis (Herbert Simon). Our nation continues to set the world-wide standard for liberty: a free-press. It is time to bring trust, collaboration, and transparency to the affairs of our nation’s healthcare. Any national strategy for reform of the healthcare industry needs an infusion of well defined ideas and concepts for the Basic and Complex Health Needs of each citizen, neighborhood by neighborhood and community by community. The ideas and concepts should begin with Professor Elinor Ostrom and the Smith Lever Act of 1917. In addition, I would also cite the contributions of Eric Hofer, Thomas Kuhn, Carl Rogers, Lawrence Weed, Steven Covey and Peter Drucker. Ultimately, promoting a high-quality and efficient healthcare industry will require a paradigm shift away from a VISION of “Finding the cure” to “Stable health for each citizen.”

    To start, the Federal government will require a commitment to trust, collaboration and transparency. Given the history of progressive politics, is there any hope?

    Paul Nelson, Omaha

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