8 THE PROGRESSIVE ERA

The Birth of the Living Constitution and the Death of Liberty

The incredible explosion of wealth in the United States, complete with a supposedly new economic ruling class, aroused profound unease. Millions of Americans had left their rural, agrarian hometowns and poured into cities. Cut off from traditional communities and let loose in the world of capitalism, they felt exploited and alienated, cast adrift in a world of strangers. And even though common people were indeed getting richer and forming new, vibrant communities, one can only sympathize with the sense of vertigo they must have felt. Capitalism seemed all too chaotic, disorganized, unfulfilling, and, at times, cruel for those lacking in financial or social capital. Nostalgia, homesickness for an imagined time of security and spiritual comfort, was in the air. The philosophy of “individualism” was too small to give meaning, or the sense of belonging, so many yearned for. And while they struggled for security as much as wealth, the ruling classes seemed to be unjustly rich in both.

A new group of American philosophes emerged, arguing, much as Rousseau had, that there has to be a better way. America needed a new imagined community, bound together by a new civic religion, which, like Rousseau’s, claimed to be Christian in form but was really nationalistic and Spartan in substance.

The task for these self-anointed philosophes, these new priests of modernity, was to refound America on new principles that, if put into action, would create a new society that would fill the holes in the American soul.

These American philosophes were a diverse lot, but they are best lumped under the banner of progressivism. And while not all progressives were hostile to every feature of the American order, as a group their goal was to discredit and replace that order with a new one. Princeton historian Thomas C. Leonard identifies two core assumptions of progressive intellectuals: “First, modern government should be guided by science and not politics; and second, an industrialized economy should be supervised, investigated, and regulated by the visible hand of a modern administrative state.”1

If the original Founders were products of the Scottish Enlightenment, the new founders were products of the new German renaissance, the awakening of German social science. Many of the American sociologists, philosophers, and economists who created their fields and schools of thought in America had attended German universities or studied under those who had. (When the American Economic Association was formed in 1885, five of the first six officers had studied in Germany. At least twenty of its first twenty-six presidents had as well. In 1906 a professor at Yale polled the top 116 economists and social scientists in America; more than half had studied in Germany for at least a year.)2

In the nineteenth century, German air was thick with Marx, Hegel, and Herder. All of these thinkers fed into the broader worldview known as the “historical school.” Devotees believed that all economic facts are relative and evolutionary, contingent upon their time and place. Descendants of German romanticism, they saw the state as an expression of the spirit of the people (Volksgemeinschaft) and, in turn, they believed the state had not only a right but an obligation to forge a new general will.

Richard T. Ely, the first president of the American Economic Association and the founder of the “Wisconsin School” of progressivism (which served as a kind of think tank for the Progressive Era in the first third of twentieth century), earned his PhD at the University of Heidelberg under the historical economist Karl Knies. “The most fundamental things in our minds,” he recalled of his generation of intellectuals, “were on the one hand the idea of evolution, and on the other hand, the idea of relativity.” And men like Ely would use these ideas to wage unremitting war on capitalism.3

Indeed, the most vital ingredient in this German intellectual cocktail was Darwinism. Darwin’s theory of evolution injected a new scientific credibility into the old anti-Enlightenment philosophies of nationalism and identity. Darwinism not only made biological racism possible. It also dealt a devastating blow to notions of natural rights while breathing new life into the idea that the state was not just an expression of the people but should also guide the continued “evolution” of society. The idea was that the nation and the state and all of the institutions within it were part of a single organic whole, evolving together, with the state serving as the brain, controlling and regulating all of the other organs. Individuals were little more than cells in the body politic. Herbert Croly, the founder of the New Republic, said society was just “an enlarged individual.” Edward Alsworth Ross, possibly the most influential sociologist of his day, believed society is “a living thing, actuated, like all the higher creatures, by the instinct for self-preservation.”4 The chaos of capitalism was antithetical to this vision: Organs cannot compete against each other; they must work in harmony.

I do not want to make it sound like American statism began as a mental virus that escaped some German laboratory. American intellectuals made their own original contributions as well. The two most important were the “social gospel,” a novel reinterpretation of an ancient interpretation of Christianity, and eugenics, the belief that weeds of the unfit had to be pruned and plucked by the state.

In an echo of Rousseau, the social gospel held that spiritual redemption was—or must now be—a collective enterprise. Saving souls retail was a fool’s errand. The state, according to Ely, was “a moral person.”5 But the state was also God’s divine instrument. “God works through the State in carrying out His purposes more universally than through any other institution,” Ely wrote. It “takes the first place among His instrumentalities.”6 Social gospel preacher Samuel Zane Batten thought that one of the most pressing questions of his time was: Would the state “become the medium through which the people shall co-operate in their search for the kingdom of God and its righteousness?” (He hoped it would.)7 And the essential task in the pursuit of social righteousness was the war on capitalism and doctrines of individualism. “Our disorganized competitive life must pass into an organic cooperative life,” Walter Rauschenbusch, the leading social gospel preacher and intellectual of his time, insisted.8 “Unless the ideal social order can supply men with food, warmth and comfort more efficiently than our present economic order, back we shall go to Capitalism…” Such an eventuality was unthinkable. So he proclaimed, “The God that answereth by low food prices, let him be God.”9

Without this theological backdrop, eugenics could never have caught on. Telling the full story of eugenics in America would take us too far afield. Suffice it to say that eugenics was seen at the time as cutting-edge science, and there was a large, if not total, consensus that weeding the garden of humanity of the unfit was essential to social progress. In The Promise of American Life, the bible of American progressivism, Herbert Croly insisted that the state had an obligation to “interfere on behalf of the really fittest.” Richard Ely insisted that progressives must acknowledge the “superiority of man’s selection to nature’s selection.”10 Letting free people reproduce freely—presumably an integral part of the pursuit of happiness—was folly. Such freedom is just too likely to give us unfit men. But a society guided by the expert hands of science “gives us the ideal man,” he explained. “The great word is no longer natural selection but social selection.”11

While I’ve focused on the roles of America and Germany, it should be noted that the ideas of the Progressive Era were truly part of a transnational intellectual awakening. For instance, positivism, a widely held philosophy largely invented by the Frenchman Auguste Comte, held that humanity had entered the third stage of history, the Age of Science. Essentially picking up where Condorcet had left off, Comte believed that human society could be directed, guided, and ultimately perfected by enlightened experts. That project, by its nature, would have to be collectivist in outlook. (He called individualism the “disease of the Western World.”)12 Comte coined the term “sociology” and helped create the discipline to achieve this end. Later he created a wholly secular “Religion of Humanity,” in which men of science would be the new saints. When Herbert Croly was born in 1869, his parents literally baptized him into Comte’s “Religion of Humanity.”13

Still, on a practical level, the influence of Germany, specifically Prussia, was especially significant because it was seen as a real-world example of how politics should work. It helped fuel a deep contempt for traditional notions of democracy. Prussia—where so many progressives had studied—at the end of the nineteenth century (1871-90) had been ruled by Otto von Bismarck, the authoritarian “Iron Chancellor,” who introduced what was then called “top-down socialism” run by professional civil servants. Bismarck’s Prussia was seen as state-of-the-art in governance by a new generation of American academics. One such academic, who studied under Ely and who was granted one of the first PhDs from the new Johns Hopkins University, the first major German-style research university in America, was Woodrow Wilson. He would later write that Bismarck’s Prussia was an “admirable system” and “the most studied and most nearly perfected” in the world.14

In the 1880s, Wilson had argued the “most despotic of governments under the control of wise statesmen is preferable to the freest ruled by demagogues.” Alas, America was a democracy, and, to counter that, Wilson wanted to limit “the error of trying to do too much by vote” by walling off as much policy making from the court of public opinion as possible. “Let administrative study find the best means for giving public criticism this control and for shutting it out from all other interference.”15 After all, he explained, “self-government does not consist in having a hand in everything, any more than housekeeping consists necessarily in cooking dinner with one’s own hands. The cook must be trusted with a large discretion as to the management of the fires and the ovens.”16 “Give us administrative elasticity and discretion,” Woodrow Wilson wrote in 1891; “free us from the idea that checks and balances are to be carried down through all stages of organization.”17

It is difficult to exaggerate Wilson’s arrogant and sovereign contempt for the system set up by the Founders. “The reformer is bewildered,” he whined, by the need to persuade “a voting majority of several million heads.”18 Elsewhere he scoffed, “No doubt, a lot of nonsense has been talked about the inalienable rights of the individual, and a great deal that was mere vague sentiment and pleasing speculation has been put forward as fundamental principle.”19

Wilson’s views on democracy and the Constitution were relatively tame compared to those of many of his peers. But they capture the essential spirit of the progressive outlook.

Woodrow Wilson depended heavily on Darwin to argue for throwing the Constitution in the dustbin:

The Constitution was founded on the law of gravitation. The government was to exist and move by virtue of the efficacy of “checks and balances.” The trouble with the theory is that government is not a machine, but a living thing. It falls, not under the theory of the universe, but under the theory of organic life. It is accountable to Darwin, not to Newton. It is modified by its environment, necessitated by its tasks, shaped to its functions by the sheer pressure of life. No living thing can have its organs offset against each other, as checks, and live.20

Thus, for all practical purposes, was the insidious American cult of the “living Constitution” born. “Living political constitutions,” Wilson wrote, “must be Darwinian in structure and in practice. Society is a living organism and must obey the laws of life, not of mechanics; it must develop.”21

Contempt for the Founding became the hallmark of sophistication. The philosopher John Dewey, the most important philosopher of the Progressive Era, argued that the folly of the Founders lay in their belief that their principles would or should outlive their time. The Founders “lacked,” he explained in Liberalism and Social Action (1935), “historic sense and interest.”22 The Lockean ideal of government merely protecting the rights of the citizens and otherwise leaving the people alone was antiquated codswallop. Even the idea of individual rights was a bygone relic. “Natural rights and natural liberties exist only in the kingdom of mythological social zoology.”23 Rights can only be properly secured through “social control of economic forces in the interest of the great mass of individuals.”24 Humans were “nothing in themselves”25 for Dewey; the General Will was everything.

“Social expediency, rather than natural right,” argued Frank J. Goodnow, the first president of the American Political Science Association and a hugely influential professor of administrative law at Columbia University, must “determine the sphere of individual freedom of action.”26 “Changed conditions,” he added, “…must bring in their train different conceptions of private rights if society is to be advantageously carried on.”27

These views were no doubt sincerely held. But the supposedly “disinterested” experts and intellectuals who pushed them had an interest in doing so. They weren’t merely arguing in the abstract that experts should guide society forward; they were claiming that they themselves were the experts who should do so. “The period of constitution-making is passed now,” Woodrow Wilson huffed. “We have reached a new territory in which we need new guides, the vast territory of administration.”28

As we’ve seen, the progressives were not the first to advocate the creation of extra-legal administrators licensed by the general will to wield arbitrary power for the greater good. Rather, the progressive desire for a new aristocracy of expertise was yet another example of how the old reactionary drives of human nature continually reappear in new forms. As Jefferson warned, “The natural progress of things is for liberty to yield, and government to gain ground.”29 My only quibble with Jefferson here is that he chose the wrong word. The dynamic he was describing was not progress but decay, or corruption.

So what happens when you commit to the notion that there is a special class of administrators allegedly insulated from politics with a providential writ to do good without reference to the law or the voters?

You get the administrative state.

What is the administrative state?

Most directly, it is the fruit of the second American Revolution. As we’ve seen, the progressives sought to inter the old “Newtonian” constitutional order and replace it with a new “Darwinian” paradigm. This new regime would be run by “disinterested” social scientists, or simply administrators, who drew their legitimacy not from “We the People” but from their superior insight and, in Woodrow Wilson’s words, “special knowledge.”^*

Wilson thought it bewildering that the reformers should have to consult with the wishes of the people. If you have the “scientific” facts on your side, why would you put the question before the voters? Wilson explained that

the functions of government are in a very real sense independent of legislation, and even constitutions, because [they are] as old as government and inherent in its very nature. The bulk and complex minuteness of our positive law, which covers almost every case that can arise in Administration, obscures for us the fact that Administration cannot wait upon legislation, but must be given leave, or take it, to proceed without specific warrant in giving effect to the characteristic life of the State.30

This was not Wilson’s pet theory. This was a time when science and technology were conquering nature at a breakneck speed. Industry was achieving once unimaginable efficiencies in production. Engineering was a glamorous new vocation as experts in every field revolutionized business, medicine, infrastructure, and food production. Thanks to Darwin, the experts now believed they also understood how the human machine worked. So why not let the new “social engineers” revolutionize government the way technological engineers revolutionized industry and public works? What did the common people know about the science of society, i.e., “social science”?

The public intellectual and journalist Walter Lippmann was among the foremost critics—for a time—of old-fashioned and outdated democracy. “In ordinary circumstances voters cannot be expected to transcend their particular, localized and self-regarding opinions,” he wrote. “In their circumstances, which as private persons they cannot readily surmount, the voters are most likely to suppose that whatever seems obviously good to them must be good for the country, and good in the sight of God.”31 Putting faith in the wisdom of the people was simply a colossal error. “The crucial problem of modern democracy,” Lippmann wrote, “arises from the fact that this assumption is false.”32

This widespread conviction was put into action by Woodrow Wilson (for whom Lippmann had worked as an advisor). While Madison believed that self-interest is “sown in the nature of man,”33 Wilson believed that the science of administration could elevate man above his nature and the people he serves. The old dream of the perfectibility of man would be achieved in, of all types, the bureaucrat! Ronald J. Pestritto adds that “Wilson assumed, just as Hegel had in the Philosophy of Right, that a secure position in the bureaucracy, with tenure and good pay, would relieve the civil servant of his natural self-interestedness, thereby freeing him of his particularity and allowing him to focus solely on the objective good of society.”34

It is vital to underscore once again that intellectuals draw their ideas from the times they live in. There is a feedback loop at work in every age. Just as the American founding was an expression of the “American mind,” as Jefferson put it, and just as rebelling against the British and romantic nationalism was fueled by a popular backlash against Napoleon and the Enlightenment among the German people, the progressives drew sustenance from a popular backlash against capitalism itself. When confronted with the seeming chaos of capitalism and democracy, the human mind retreats to its tribal programming.

This doesn’t mean Americans during the first three decades of the twentieth century dabbed war paint on their faces and fought with spears. We all speak in the language and symbols of the time we live in. Percival Lowell, the turn-of-the-century astronomer who built the telescope that discovered Pluto, lived at a time when large-scale canal building was a sign of technological and industrial advancement. So when he saw straight lines on the surface of Mars, he assumed they were put there by an advanced civilization.35 During the Progressive Era, industry, engineering, medicine, and science were making incredible breakthroughs. For entirely understandable reasons, progressive intellectuals, and Americans generally, assumed that if science and technology could solve age-old problems in real life, if industrial managers could create amazingly efficient new forms of organization, then surely experts could do the same thing for politics. This was a time when social science was new, the phrase “social engineering” had no negative connotation, and it was assumed that political science was, or could be, every bit as scientific as physics or chemistry.

But enough with the theory and philosophy. What was the administrative state in practical terms? Put most simply, it was the vast enlargement of the government. But this simplification doesn’t capture the revolutionary nature of the administrative state, because the new army of regulators and revenuers worked outside the constitutional framework, which is why the administrative state is sometimes called the “fourth branch” of government. (For reasons I’ll discuss in the next chapter, I think this label misses the mark.) Congress is responsible for making policy, also known as legislation. The president, the head of the executive branch, is responsible for executing that policy. But with the rise of the administrative state, bureaucrats began driving the policy-making process.

By the end of Wilson’s first term, the administrative state had been created. Personal income was now taxed directly by the federal government, as were corporations and estates. Big industries were broken up. The newly minted Federal Reserve regulated money, credit, and banking. The Federal Trade Commission supervised domestic industry, and its new Tariff Commission regulated international trade. State and federal labor legislation mandated workmen’s compensation; banned child labor; compelled schooling of children; established minimum wages and maximum hours; and established pensions for single mothers with young children. Armies of regulators inspected factories, intervened in businesses, and demanded all manner of licenses to work in various fields.36

One can certainly argue that some of these reforms were valuable and necessary. But that is a different argument. What was revolutionary was the argument that the state should take its own counsel on what society needed. “Social expediency,” as Frank J. Goodnow put it, now trumped constitutional fidelity and democratic sovereignty.

And all of this happened before Wilson plunged America into World War I. During the war, the American government became vastly more intrusive not only economically but also politically.

President Wilson’s war to “make the world safe for democracy” obviously had ample support for its expressed foreign policy aims, particularly among the hawkish Teddy Roosevelt wing of the progressive movement, who tended to think Wilson wasn’t belligerent enough. But for the social-engineering wing, international affairs were largely incidental. What fascinated them was what John Dewey called “the social possibilities of war.” Dewey meant by the phrase that he wanted the war to force Americans “to give up much of our economic freedom.” He continued: “We shall have to lay by our good-natured individualism and march in step.” He hoped that the war would constrain “the individualistic tradition” and convince Americans of “the supremacy of public need over private possessions.” Another progressive put it more succinctly: “Laissez-faire is dead. Long live social control.”37

(Randolph Bourne, the dissident progressive intellectual who famously declared, “War is the health of the state,” was almost alone in noticing the “peculiar congeniality between the war and these men.” He added that “it is as if the war and they had been waiting for each other.”)38

During the war, all of the tribal impulses were given free rein. Woodrow Wilson demonized the “others” in our midst: the so-called hyphenated Americans, i.e., German-Americans, Italian-Americans, and any other ethnicity or group that didn’t commit to what many called “100 percent Americanism.” “Any man who carries a hyphen about with him carries a dagger that he is ready to plunge into the vitals of this Republic whenever he gets the chance,” Wilson proclaimed.39 Under Wilson’s administration, America created the first modern propaganda ministry in the world: the Committee for Public Information.40 It threw thousands in jail for criminal thoughts and speech.41 It enlisted the help of an army of quasi-official fascisti, the American Protection League, who beat up protestors, interrogated “hyphenated-Americans,” and enforced loyalty to the state.42

Economically, the government pursued a policy that was widely dubbed “war socialism.” Big corporations were essentially enlisted in the war effort and cartelized. The state didn’t nationalize every industry outright; instead, it pursued a policy of neo-guildism. The point was that the economy had to be oriented toward the aims of the state in all matters. Over 5,000 “mobilization agencies” were created to make sure all of the oars pulled in the same direction. The state, Robert Higgs adds,

virtually nationalized the ocean shipping industry. It did nationalize the railroad, telephone, domestic telegraph, and international telegraphic cable industries. It became deeply engaged in manipulating labor-management relations, securities sales, agricultural production and marketing, the distribution of coal and oil, international commerce, and markets for raw materials and manufactured products. Its Liberty Bond drives dominated the financial capital markets. It turned the newly created Federal Reserve System into a powerful engine of monetary inflation to help satisfy the government’s voracious appetite for money and credit.43

In the 1918 midterm elections, the Republicans took back Congress. Two years later the Republicans reclaimed the White House as well on a platform of a “return to normalcy.” The slogan resonated with Americans fed up not just with war but also with domestic authoritarianism. The progressives who saw the war as an exemplary use of state planning were dejected that the American people had turned their backs on them. As a consequence, as I detail at length in Liberal Fascism: The Secret History of the American Left, from Mussolini to the Politics of Change, the progressives cast their eyes to “advanced” countries that continued the struggle for social engineering and “scientific” management of society: Fascist Italy and Soviet Russia. The American progressive rallying cry during the Roaring Twenties was a plaintive “We planned in war, why not in peace?”

A dozen years after Wilson left office, Franklin Roosevelt entered office. The lingering Depression of 1929 provided ample ammunition—and popular support—for finding a replacement for laissez-faire capitalism, even though government interference had contributed to the economic problems the country faced. Roosevelt picked up right where Wilson left off, transforming Wilson’s war-time agencies into permanent fixtures of the state. The Securities and Exchange Commission was an extension of the Capital Issues Committee of the Federal Reserve Board. The Reconstruction Finance Corporation was an updated version of the War Finance Corporation. FDR’s public housing initiative was run by the architect of World War I-era housing policies.

Of course, Roosevelt went much further than Wilson. With Congress’s help, and the American people’s approval, American government was permanently transformed into a state.

In the next chapter we look at what has become of the administrative state.