Individual Liberty in the Crucible of History, Part V
Americans came upon the road to collectivism by diverse ways and from many paths. The signs that pointed toward this broad road filled seeker’s hearts with hope by such disarming labels as “General Welfare,” “Social Justice,” “Economic Security,” and “Freedom from Want.” Some came in large groups which had been organized to advance special interests, while others came as individual stragglers. There were those drawn from the path of liberty by the siren song of utopian reformers. Tender-hearted men turned toward collectivism in the belief that it offered the best hope of alleviating the suffering which they saw or read about. The obstacles in the path of liberty— the difficulties in the way of achieving economic independence, the hardships of the individual route to personal fulfillment— convinced many of the “necessity” for joint effort. Budding intellectuals discovered a new faith in the organic conception of society, and the unsuccessful could excuse their failures as the fault of society. The destitute succumbed easily to the explanation that they were victims of oppression. Some men may be honestly convinced that they know what is best for all of us; at any rate, collectivism offered a mode for reformers and planners— men caught in the grip of a compelling yision— to use government to embody their ideas in law and practice. By these and other paths did Americans gather upon the road to collectivism.
Historically, however, the shift to collectivism was made in the following manner. Men organized themselves in interest groups for the pursuit of common goals. They included such groupings as farmer alliances, labor unions, business associations, and professional organizations. These organizations frequently sought privileged status at law, and to bring the force of government to bear upon Americans to make them accede to their demands. When they succeeded, they contested with one another for superior position, and preyed upon both unorganized individuals and other groups as well. This neofeudal system (strangely enough, many “liberals” called it progress where labor unions were concerned) created a situation rife for the United States government to step in and “adjust” these demands in the public interest. This last is the face that collectivism presents in our day.
So stated, the development appears logical and “inevitable.” Is there anything strange or irregular about men grouping together to advance common interests? What could be more appropriate than the harmonization of conflicting interests by action of the national government? Is not a part of American freedom the freedom of men to associate for common ends? Was not the republican government of these United States erected to resolve the conflicts among contending parties and to “promote the general welfare”? In short, have we not come to collectivism by a logical extension of the very ideas which informed the Constitution and have for all its days been a part of the American tradition? Or, did we reach collectivism by evading the Constitution and a profound departure from the American tradition?
These questions are of such moment for everyone— not just for historians— that they must be answered very carefully. Let us search out in our history those transitional movements from individualism to collectivism. By uncovering them, we should be able to decide how we came to this pass within a proclaimed framework of constitutionalism and a never-announced departure from liberty. What was done to effect the change is important, if the information is to be useful in finding our way back to liberty.
The Trouble with Groups
The mere existence of groups and organizations in a society is no indication that collectivism prevails. Alexis de Tocqueville noted in the first half of the nineteenth century that Americans were prone to the formation of all sorts of groups. Freedom to associate for common purposes is a basic freedom which to prohibit would be to circumscribe severely the liberty of the individual. The social and charitable functions of such groups can and have ameliorated the severities of individual responsibility and helped the individual to undertake what he could not do alone.
Associations become a matter of public concern primarily when they use force or coercion in pursuit of their ends. So long as the individual can join and quit a group voluntarily, so long as the group is inhibited (by law and fear of punishment) from forcing its way upon others, no great harm need result from its existence. In practice, when groups have no special exemptions or privileges in law and cannot use the power of government to force others to yield to them, individual liberty can prevail regardless of the number and variety of groups in our midst.
By turning these last two points around, it is possible to see what collectivism is. It is the institution of group force to attain the goals of groups within a society. That this is usually done in the name of society should not mislead us, for where men are free there will be conflicts as to goals, and no man’s interests are fully merged with that of society. It can be shown, of course, that every man should be interested in protection from the use of force upon him, but beyond that men will have interests and interpretations quite divergent from one another. For these reasons, collectivism must always be nothing more than forcing the interests of some upon all. The thrust of collectivism is to merge all men into a common mass. For it is only by ignoring or lopping off all that is unique in the individual and dealing with that which is common to all men that collectivism can be justified.
The difference between a collectivistic society and an individualistic one can be succinctly stated. Where individual liberty is the goal, the government will exist, in considerable part, to disarm collectives. In a collectivist society, government will act to empower groups. The shift for America, then, came at those points when governments ceased to disarm groups effectively and began to empower them.
To Disarm Collectives
That the Constitution of these United States was designed to disarm collectives and prevent them from using the power of government to work their ends is attested to by no less an authority than the Father of the Constitution, James Madison. This is the burden of his argument in the justly famous “Federalist” Number 10. The problem, as he defined it, had been to erect a government that would have a “tendency to break and control the violence of faction.” He explained further, “By a faction I understand a number of citizens, whether amounting to a majority or minority of the whole, who are united and actuated by some common impulse of passion, or of interest, adverse to the rights of other citizens, or to the permanent and aggregate interests of the community.” It is well to note, too, that the question of whether a majority or minority wanted the action interested him only as it affected the likelihood of its enactment. Madison believed that the danger to liberty and the general welfare lay in the factional use of government for partisan ends.
He went on to explore the possibilities of preventing the partisan use of government. It could be stopped by taking away the liberty which gives rise to factions or “by giving to every citizen the same opinions, the same passions, and interests.” Both of these alternatives are rejected: the first because it is undesirable and the second because it is impractical. The problem then becomes one of preventing the effects rather than removing the causes of faction. Madison held that republican government— by which he meant representative government— would be the one most likely to bring to nought the effects of faction. Specifically, he maintained that the Constitution as drawn would provide such a government. By spreading representation over large constituencies, by having the houses of Congress chosen in a different manner, he thought it would be difficult for any collection of men to attain its end. The separation of powers would add to the difficulties of groups seeking special privileges and partisan goals. It should be pointed out, though, that developments in communication and transportation since Madison‘s day have swept away much of the importance of the vastness of the country in deterring concerted action by groups.
The point, however, is that the purpose of the Constitution was to disarm rather than empower collectives. Madison saw clearly that the great danger of popular government was its susceptibility to use for partisan ends. He desired a government which could maintain the needed unity for external defense and internal accord but which would be inhibited by its organization from taking precipitate and arbitrary actions that would intrude upon the liberties of individuals. This wish he shared with many of those who did and many who did not approve the Constitution as drawn in 1787.
Let us follow Madison‘s reasoning that it is not the existence of factions (or collectives) which really endangers liberty but their gaining sway. It is not, for example, the presence of lobbyists that corrupts legislatures but the bowing of legislators to their will. Churches limit individual liberty when they can use the powers of the state to enact their morals or enforce their goals on society. Business associations and corporations delimit liberty when they bring government to bear in securing special privileges. Labor unions endanger both public interest and individual liberty when they use coercion with the connivance and support of government.
That Americans have largely left off thinking in terms of individual liberty and gone over to collectivism is mirrored in current language. One hears and reads regularly of minority rights, majority rights, the rights of organized labor, the rights of business, the rights of children, the rights of women, the rights of the farmer, the rights of the people (considered collectively), and even of the rights of governments.
Rights or Privileges
When President Kennedy brought the influence and indirect coercive power of government to bear upon steel companies to induce them to forfeit an announced raise in prices, many of those who objected did so on the grounds that it was an attack on “business.” But this is a tacit acknowledgment that “business” has special rights and privileges. From an individualist point of view, the President was either attacking the rights of all Americans, or he was threatening the rights of no Americans. The real principle involved in the steel affair (so far as individual liberty was concerned) was whether or not individuals and voluntary associations of men may act, without force, to raise or lower prices. In short, are men free to offer goods and services at whatever price they see fit, or are prices to be determined by executive fiat? The matter of monopolies and price fixing in an industry is important to liberty, but it was clearly not the issue here. The President wanted to fix the price in the name of the public interest. If he succeeds in this aim, he will have achieved a greater restriction upon liberty than any monopoly could without the force of government, for he acts with the force of government.
What we have, in our situation, is that government, having recognized and empowered various group interests, then tries to harmonize them. It can only do so at the expense of the liberty of all individuals, though some may believe themselves more than adequately compensated for their loss by the greater power they have at their disposal. The historical task is to point up those events and developments which marked turning points from individualism to collectivism.
There has hardly been a time in the history of these United States when contending factions were not prominent. Manufacturers early sought a protective tariff. Veterans of the Revolutionary War pressed for special privileges. Land speculators and farmers contended for different systems of dividing and pricing public lands for sale. Representatives from the East sought to hamper the westward movement, while Southerners and Westerners sought to use the federal government to acquire more and more lands to the west. Even the most careful efforts of writers of the Constitution had not managed to design a government that could not on occasion be used for partisan purposes. Indeed, the constitution-makers yielded to faction in permitting the counting of a proportion of slaves for determining congressional representation. The Whiskey Tax was almost certainly legislation aimed to penalize a particular group—the small entrepreneurs of the back country. The Bank of the United States, as set up, may have forwarded special interests. Certainly, the protective tariffs enacted periodically from 1816 on provided special privileges for manufacturers and were disadvantageous to some shippers.
Much as one may deplore these successes of groups and factions, however, they do not indicate that America was from the beginning collectivistic. To think that they do is to confuse aberrations with central tendencies. For however much Congress, the President, or the courts might have yielded to special interests on occasion, they had not yet formally acknowledged their existence. Jefferson may have been moved by agrarian sentiments to acquire Louisiana, but it was not officially done for “agriculture.” Perhaps Daniel Webster had questionable relations with “business,” but he spoke for the unity of America.
The Turning Point
The turning point from individualism toward collectivism should be located at the time when formal recognition was given to groups, when the federal government began to act in the name of factions, and when the constitutional inhibitions against such actions began to break down. Until that point we are dealing with suspicions of motives rather than definite effects.
Several events occurred in the 1880′s which suggest that the turn should be located thereabouts. In 1886 the Supreme Court decided, in the Santa Clara Co. case, that a corporation was a “person” in the meaning of the Fourteenth Amendment. By so doing it gave special status to one kind of association— the corporation. Congress made an equally substantial break with the past by the passing of the Interstate Commerce Act in 1887. Legislation aimed at any particular group is dangerous to liberty,1 but this act had even more direct import. It provided for an Interstate Commerce Commission. As one history describes it, “The Interstate Commerce Commission was the first permanent federal administrative board to which Congress delegated broad powers of a quasi-legislative, quasi-executive, and quasi-judicial nature. Its establishment was a landmark in American constitutional history…. The Commission… represented a fundamental departure from the principle of the separation of powers.”`’ Through the years other such bodies were added— Federal Trade Commission, Federal Communications Commission, Securities and Exchange Commission, National Labor Relations Board— which had the cumulative effect of bringing to nought the means set up in the Constitution for disarming groups.
Another signal departure came in 1889 with the raising of the Department of Agriculture to cabinet rank. This was the first such recognition of group or class interests by the central government, but not the last. Predictably, of course, other factions vied for similar recognition. A Department of Commerce and Labor was created in 1903, and separate departments for each were set up in 1913. Within a three-year period— 1886 to 1889— the break with the tradition had been made in the legislative, judicial, and executive branches of our government.
But the way was prepared beforehand for the break. The rise of the Republican Party just before the Civil War was a landmark of sectionalism, for it was the first party with so exclusively a sectional following to gain the Presidency. Its successful organization spurred the formation of even more factional parties in the South. The short-lived Freedmen’s Bureau, set up toward the end of the Civil War, was a special agency of the federal government to look after the freed Negro. The Fifteenth Amendment to the Constitution— forbidding the exclusion from voting privileges on the grounds of race, color, or previous condition of servitude— adopted in 1870, may have given credence to the budding notion that there are minority rights. It was obviously intended to enfranchise a minority.
Giving Them Power
National groupings according to economic interests made their appearance in the latter part of the nineteenth century. It should be kept in mind, however, that it was not the existence of these organizations that effected collectivism but their empowerment by government. Accompanying the spread of large businesses operating throughout the United States was the organization of nationwide labor unions. The National Labor Union was organized in 1866, but expired a few years later. Much more important and influential was the Knights of Labor which was organized in the 1870′s. The first strike on anything like a national scale was the Railway Strike of 1877. The American Federation of Labor was organized in 1886 under the leadership of Samuel Gompers. Farmers, too, turned to organization as a means of effecting their ends. The Patrons of Husbandry (or National Grange) was founded in 1867, and shortly began sponsoring regulatory laws. Businessmen formed the National Association of Manufacturers in 1895. The American Anti-Boycott Association (1902) and the Citizens Industrial Association (1903) came into being to counter certain kinds of union activity.3
The increase and growth of corporations needs mention also. By 1900 two-thirds of all manufacturing in the United States was carried on by corporations. Incorporation confers a special privilege— that of limited liability. In return for this privileged status, corporations have long been reckoned to have a public character and to be subject to public limitations on their activities. However, in the latter part of the nineteenth century, due mainly to the fortuities of our federal system of government, many corporations managed to hold their privileged status and avoid onerous limitations. Corporate charters could be obtained in a single state, but the resulting corporation could operate in all states. Some states— notably New Jersey and Delaware— provided unusually generous terms of incorporation. When this condition was coupled with court treatment of corporations as persons, corporations were extremely difficult to reach by regular lawful means. The resulting confusion of individual liberty with corporate “liberty” has not yet been disentangled. It created a situation ripe for governmental limitation of individual liberty in order to control corporate activity. It gave impetus, too, to the setting up of arbitrary commissions to deal with business activity.4
New Parties for Political Favor
New political parties in the latter part of the nineteenth century definitely appealed to economic interest groups. There was the Greenback Labor Party (organized 1878), the People’s Party of the U. S. A. (Populist Party, organized 1891), and the Socialist Labor Party (organized 1877 but only achieved national importance in the 1890′s). Those historians who attribute this rise of third parties to a feeling among farmers and laborers that their interests were not being looked after by the major parties may be right. Certainly protective tariffs, land grants and subsidies to railroads, and monetary policies frequently provided advantages for financiers and industrial entrepreneurs. But the important point is that factions organized themselves to secure political action in their favor. They had only a limited success in the nineteenth century, however.
The progressive movement of the early twentieth century occupies an anomalous position in the march of Americans toward collectivism. This is so mainly because people of many different persuasions— socialists, nationalists, welfare staters, and free traders— adopted the rubric or have been called progressives by historians. In their stated aims, Woodrow Wilson and Eugene Debs (the candidate of the Socialist Party) in 1912 were almost as far apart as it would he possible to get. Yet they are both treated under progressivism because they were reformers. The confusion is compounded because all shades of reformers did generally accept the organic conception of society. They all wanted to use the United States government to achieve positive social ends. Moreover, the idea of progress and the belief in successive stages of the development of society permeated reform thought. For these reasons, it maybe that those historians who have lumped reformers together are nearer the truth than those who have made rigorous distinctions among them.
Progressive legislation does indicate that collectivism was making headway. The scope and authority of the Interstate Commerce Commission was broadened by several acts. The Pure Food and Drug Act and the Meat Inspection Act, both of 1906, show the federal government entering the arena of protecting the consumer. The Mann Act of 1910—prohibiting the interstate transportation of women for immoral purposes— extends the principle to the protection of people from themselves. Here was a clear limitation upon liberty which deals neither with the use of coercion nor even the performance of an immoral act. It deals with motives and restricts transportation. It is class legislation in that presumably men can be transported across state lines for immoral purposes without fear of penalty.
It is true that Woodrow Wilson, in 1912, proclaimed the New Freedom and declared it to be his aim to restore liberty by breaking up the trusts and removing special privileges. Yet once in office he approved the Clayton Antitrust Act which exempted labor from its provisions and provided the opening wedge for the creation of a privileged status for organized labor. The Underwood Tariff Act did free trade to some extent, but the Federal Trade Commission and Federal Reserve Board— whatever their purposes— were agencies beyond the separation-of-powers principle. The Adamson Act provided for an eight-hour day and time-and-a half for overtime on interstate railroads, an undeniable use of government power for a faction.
The Shifting Role of Government
Once the United States entered World War I, Wilson swiftly abandoned such relics of the New Freedom as he had held on to and turned to what might more aptly be styled the New Tyranny. The government turned from attempting to enforce competition to the co-ordination of the economy. Boards and commissions were created to deal with the various economic interests— War Industry Board, War Labor Board, Food Commission, and so forth. The Presidency supported the direct use of propaganda by way of the Committee on Public Information. The Sedition Act of 1918 restricted liberties in a manner that had not been done since the days of John Adams. The railroads were taken over and run by the government.5
The constitutional amendments adopted under the impetus of progressivism provided some of the legal foundations for collective action. The Sixteenth Amendment (income tax) paved the way for a redistribution of wealth and for tax policies that could be (and have been) used for the advancement of class interests. The Seventeenth Amendment (direct election of Senators) altered the republican character of the government somewhat and may have weakened the inhibitory powers which Senators would exercise on legislation. The Eighteenth Amendment (prohibition )empowered the Congress to legislate in matters of morals and to send out federal agents over the land to inquire into the activities of Americans. The Nineteenth Amendment (woman’s suffrage) gave color, though not substance, to the notion that groups have rights.
The reaction to restrictive action by government was hardy and vigorous, though frequently misdirected, in the 1920′s. Railroads were returned to private ownership, but the act that returned them empowered the Interstate Commerce Commission to foster mergers. The Tariff Act of 1922 not only raised rates— protecting American industries as well as making it virtually impossible for European countries to pay debts, but also it carried a provision against the importation of obscene books, a provision which was sometimes interpreted to exclude works now recognized as classics. Founders of patriotic organizations were probably right in believing there were threats to Americanism, but their indiscriminate activities were hardly calculated to preserve it. Communists were driven under ground by the Palmer raids, but constitutional liberties were ignored in the effort. So confused had the American tradition become that many writers and artists attributed violations of civil liberties to an American tradition of mob rule and lynch law.
Roosevelt‘s Hundred Days
The culmination of the trend toward the empowering of groups came with dramatic swiftness. In the “Hundred Days” following his inauguration in 1933, Franklin D. Roosevelt pushed through Congress bills which presented the country with collectivism as a fait accompli. All the steps toward it thus far had been but background and prelude. The central pieces of legislation were the Agricultural Adjustment Act and the National Industrial Recovery Act. By the Agricultural Adjustment Act Congress acknowledged itself as caretaker of the needs of farmers, and proceeded to provide for them by regulation, subsidies, and parity payments. Industries were invited to control themselves by fair trade codes under the NIRA. Labor was provided for by the section of the Act which guaranteed labor’s right “to organize and bargain collectively through representatives of their own choosing.” A National Labor Board was created to enforce this provision. While these actions marked a climax of the empowering of factions, their aim has been fully pointed out by Rexford G. Tugwell, one of the architects of these acts. “NRA could have been administered so that a great collectivism might gradually have come out of it, so that all the enormous American energies might have been disciplined and channeled into one national effort to establish a secure basis for well-being.”6
Although the surge into collectivism came with almost lightning quickness, the way had been prepared for it. The Depression offered the occasion, but it was not the efficient cause. For over fifty years the numbers of dependent farmers and workers had been increasing. The impotence of the individual was accentuated by the increase in size and complexity of institutions and organizations in America. A new ethos— the collectivist curvature of the mind—provided the mental bent for collective action. Actions taken during World War I provided the pattern for governmental action. The voluntary trade associations of the twenties made NRA appear to be a natural next step. Never-ending protective tariffs had accustomed Americans to collective action for particular interests. Organized labor’s special status had already been recognized by the Norris-La Guardia Anti-injunction Act of 1932.
The NIRA and AAA were nullified by the Supreme Court, but these decisions did not stem the tide of collectivism. Even before the courts nullified these laws, Roosevelt had launched upon a different course. Business lost much of its privileged status when NRA succumbed, and the administration cast it into that limbo in which it has usually existed since—subjected to harassment, regulation, and periodic threats of investigation and dismemberment. Meanwhile, Roosevelt and his congressional followers turned to providing protection and benefits for the “underprivileged” and “unfortunate.” (The argot of the New Dealers implied that all wealth and station resulted from special privileges and good luck.) The Social Security Act was class legislation to provide benefits for wage workers. Massive relief was provided from 1935 to 1939. The National Labor Relations Act of 1935 gave organized labor increased status and included prohibitions of employer activity against unions. The Revenue Act of 1935 increased the surtax rate on individual incomes, raised rates on large corporations, and estate and gift taxes were increased. In 1937 the Farm Security Administration was set up to aid tenant farmers, and in 1938 a new Agricultural Adjustment Act was passed, reenacting the protected position of farmers.
Over the years since, organized labor has consolidated its privileged position. Farmers have become accustomed to subsidies and crop controls. Government aid has been extended to more and more of the population by way of extension of Social Security and through such devices as FHA loans. Many businesses became accustomed to cost-plus contracts during and after World War II, and have managed by manipulation to acquire privileged positions. Minimum wages and hours coupled with wage bargaining by industry has tended to make prices inflexible and to stifle competition. Amidst the pulling and hauling of privileged groups for a greater share of the “national income,” the cry increases for government to act to harmonize these interests. Some want laws prohibiting labor unions from striking; others want wage, price, and rent controls. Governmental action during World War II set further precedents for control which have not yet been extended to peacetime use. One more good emergency should provide the setting for wiping out the remaining vestiges of liberty in America, since we have both the practice and the beliefs for it.
The road we have taken toward collectivism has now been pointed out. It was made possible for us to come upon this road by ignoring and evading the Constitution. Groups were empowered rather than disarmed as they gained recognition and privileges from governments. Once this has happened, it can be made to appear that the completion of the circle is inevitable. If farmers can use government to raise food prices, if organized labor can use force aided and abetted by government to drive up wages, if corporations can operate with only arbitrary limitations, who is to protect the public interest? The obvious answer is that the United States government must act to resolve conflicts and protect the general welfare. But it is not the only answer. If liberty be accepted once more as the goal, if government will once again disarm groups, we can return to liberty. By marking out the trails by which we have come to collectivism, I have also uncovered the signs which we may follow to recover the path of liberty.
You CAN WIN an election and still lose your liberty…. You do not waste your vote when you lose an election; but, you certainly do waste your vote when you lose your principles.
Joseph A. Galambos
1 Government by law rather than by men requires that laws be of general applicability. As F. A. Hayek says, “Law in its ideal form might be described as a `once-and-for-all’ command that is directed to unknown people and that is abstracted from all particular circumstances of time and place and refers only to such conditions as may occur anywhere and at any time.” The Constitution of Liberty (Chicago: University of Chicago Press, 1960), pp. 149-50.
2 Alfred H. Kelly and Winfred A. Harbison, The American Constitution: Its Origin and Development (New York: Norton, 1955), p. 549.
3 George E. Mowry, The Era of Theodore Roosevelt (New York: Harper, 1958), p. 12.
4 This is no attack on the corporation. I am trying to make clear that there is a valid and valuable distinction between individual and corporate activity. When this distinction is restored, it will make possible both the extension of individual liberty and regular lawful means of limiting the scope of corporate activity.
5 There are two very good reasons why I do not take up the question of whether or not these actions were “necessary” for the war effort. In the first place, I don’t know—nor do all those historians who say that it was. In the second place, necessity does not alter the effects of actions, which is my concern.
6 Quoted in Arthur M. Schlesinger, Jr., The Politics of Upheaval (Boston: Houghton Mifflin, 1960), p. 214.
Editor’s Note: This essay first appeared in the September 1962 issue of THE FREEMAN.
Clarence B. Carson was a frequent contributor to THE FREEMAN, and was Professor of History at Grove City College in Pennsylvania.
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