One of the most important moments in my political education was when I learned from Murray Rothbard, the Austrian economist, what the “Progressive Era” was really all about. Like most people in this country I was taught that Wilson and his crew had enacted “reforms” for which the public was agitating. People wanted a Federal Reserve. People wanted an income tax. People thought World War I was a keen idea.
And some people did. But it wasn’t THE PEOPLE who we’re agitating for these things. In most cases of “progressive” reform it was actually industry calling for increased regulation to protect their market positions. The railroads, banks, and meat packers actually wanted the Feds to come in since it was they who controlled the Feds.
The last part of the 19th Century had been a time of intense industry competition with prices generally trending slightly down over time. The consumer reaped more and more rewards with increased competition and innovation. Life generally trended for the better for most. But it meant the industrialists had to hustle in the marketplace.
But many of the industrialists naturally did not like this state of affairs, and after having tried to institute cartels on their own which always failed, they turned to the government to institute cartels for them.
Rothbard constantly overturns accepted ideas as he argues for his interpretation. Most of us have heard of the furor early in the 20th century over conditions in the Chicago meat packing industry, set off by Upton Sinclair’s novel The Jungle. Few people are aware, however, that Sinclair’s sensationalism was fiction, in direct contradiction to what contemporary inspections of the meat packing plants revealed.
Rothbard goes much further. He shows how, beginning in the 1880s, the large meat packing plants lobbied for greater regulation themselves.
Unfortunately for the myth, [about The Jungle’s influence] the drive for federal meat inspection actually began more than two decades earlier, and was launched mainly by the big meat packers themselves. The spur was the urge to penetrate the European market for meat, something which the large meat packers thought could be done if the government would certify the quality of meat, and thereby make American meat more highly rated abroad. Not coincidentally, as in all Colbertist mercantilist legislation over the centuries, a governmentally-coerced upgrading of quality would serve to cartelize: to lower production, restrict competition, and raise prices to the consumers.
Rothbard sees in postmillennial pietism a key to the entire Progressive Era. The postmillennials preached that Jesus would inaugurate His kingdom only after the world had been reformed, and they accordingly saw a religious mandate to institute the social reforms they favored.
Their influence was pervasive. For example, Rothbard draws an unexpected connection between their ideas and eugenics:
One way of correcting the increasingly pro-Catholic demographics … often promoted in the name of “science,” was eugenics, an increasingly popular doctrine of the progressive movement. Broadly, eugenics may be defined as encouraging the breeding of the “fit” and discouraging the breeding of the “unfit,” the criteria of “fitness” often coinciding with the cleavage between native, white Protestants and the foreign born or Catholics — or the white-black cleavage. In extreme cases, the unfit were to be coercively sterilized.
Theodore Roosevelt was the quintessential Progressive, and Rothbard shows in convincing fashion how his analytic framework helps explain that bizarre and flamboyant figure. Roosevelt was allied with the banking interests of the House of Morgan. His “trust busting” activities were very selective. Only the trusts opposed to Morgan control were in Roosevelt’s crosshairs. He supported “good” trusts, i.e., ones allied with the Morgan interests. Besides his Morgan alliance, Roosevelt was dominated by a bellicosity of maniacal proportions. “All his life Theodore Roosevelt had thirsted for war — any war — and military glory.”