Monday, May 26, 2008

Theodore Roosevelt and Social Democracy

Theodore Roosevelt is arguably the founder of the modern social democratic movement(1) in America. The movement has many philosophical roots, to include the pragmatists like William James, the Mugwumps and the Progressives, especially Herbert Croly and John Dewey, but more than anything else social democracy is a political movement. At least in part we need to understand the politicians who formulated it to understand the pattern behind it.

Roosevelt began as a post-bellum Mugwump who favored laissez faire ideology then, through his work on the Civil Service Commission in 1889, as New York City Police Commissioner in 1895, as Governor of New York in 1898, as vice president in 1900 and as president in 1901 (following President McKinley's assassination), became increasingly committed to government solutions and ultimately, during his last campaign as the Progressive or Bull Moose Party presidential candidate, advocated a quasi-socialist ideology. The Hepburn Act, passed in 1906 during his presidential administration, gave the power to set railroad rates to the Interstate Commerce Commission. President Roosevelt would have extended this power to federal determination of prices charged by all large corporations had he been able to do this politically.

During his career, Roosevelt advocated a large share of the policies later adopted during the New Deal, to include laws concerning minimum wages (which Democrat Woodrow Wilson opposed), child labor, social security and most of all the regulation of the trusts, by which he meant big business. Roosevelt also advocated extension of the private pension system and federal arbitration of labor disputes. He was the most pro-union president until Franklin D. Roosevelt. He was sometimes critical of unions in practice but was the first president to support them in principle.

The two themes throughout Roosevelt's career are first the belief that rationality is preferable to corruption and that government can be made to function rationally through bureaucratic reform. He extends this emphasis from reform of government through Civil Service to reform of the economy through government regulation of bad trusts. Roosevelt was certainly well intentioned but he does not base his belief system on empirical evidence about economic behavior. Rather, the development of his ideology seems to involve extrapolation from the narrow problem of government operations to the behavioral problems of the economy.

The second theme, beyond rationality, is moralism. Roosevelt's ideas likely link the American Christian tradition which was important to the abolitionists, to the Mugwumps, and was present in much of the late nineteenth century political protest that Wiebe discusses. Roosevelt does not seem to have been a particularly religious man and he was a staunch advocate of religious tolerance and respect. Nor was he likely heavily influenced by the Social Gospel Christianity of Washington Gladden. Nevertheless, the moralism that runs through his thought is very much in the abolitionist tradition.

In an address to the Liberal Club of Buffalo, New York on January 26, 1893(2) Roosevelt argues for a moral, practical and socially active citizenry:

"The first duty of an American citizen, then, is that he shall work in politics; his second duty is that he shall do that work in a practical manner; and his third is that it shall be done in accord with the highest principles of honor and justice...But in advising you to be practical and to work hard, I must not for one moment be understood as advising you to abandon one iota of your self-respect and devotion to principle. It is a bad sign for the country to see one class of our citizens sneer at practical politicians and another at Sunday-school politics. No man can do both effective and decent work in public life unless he is a practical politician on the one hand, and a sturdy believer in Sunday-school politics on the other.

In an 1890 article in The Century(3) Roosevelt compares the corruption of the spoils system that had existed from the 1830s through the early twentieth century with the Civil Service or "merit" system (p. 249):

"The upholders of the merit system, on the other hand, maintain that offices should be held for the benefit of the whole public, and not for the benefit of that particular section of the public which enters into politics as a lucrative though rather dirty game; they believe that the multitude of small government positions, of which the duties are wholly unconnected with political questions, should be filled by candidates selected, not for political reasons but solely with reference for their special fitness for the duty they seek to perform...

"...It is therefore perfectly plain that the remedy lies in changing the system...The offices must be taken out of reach of all politicians, good or bad, by some permanent system of law..."

Likewise, he argued that expert commissions should make recommendations to Congress (4, 264):

"...what is needed in each case is ample provision for a commission of the highest possible grade, composed of men who thoroughly know the subject, and who possess every attribute required for the performance of the great and difficult task of framing in outline the legislation that the country, as distinguished from special interests, really needs. These men, from the very nature of the case, will be wholly free from the local pressure of special interests, so keenly felt by every man who is dependent upon the vote of a particular district every two yours for his continuance in public life. Such a...commission could get at the expert inquiry, and not by the acceptance of interested testimony.

"...As soon as business becomes at all can only be performed by delegating to experts the duty of dealing with all that can properly be delegated. It is only by such delegation that it is possible to secure the proper consideration of the exceedingly important business which cannot properly be delegated..."

It was with respect to the anti-trust issue, which was salient during the Progressive era, that Roosevelt's statism came to full flower. In his autobiography(5, 86):

"...these doctrines of the old laissez faire economists, of the believers in unlimited competition, unlimited individualism, were in the actual state of affairs false and mischievous...government must now interfere to protect labor, to subordinate the big corporation to public welfare and to shackle cunning and fraud..."

In a speech to the Progressive Party convention of 1912 quoted in the New York Times Roosevelt said (6, p. 108):

"To treat the anti-trust law as an adequate, or as by itself a wise, measure of relief and betterment is a sign not of progress, but of Toryism and reaction...The only effective way in which to regulate the trusts is through the exercise of the collective power of our people as a whole through the governmental agencies established by the Constitution for this very purpose..."

He extended this idea of rationalization through governmental regulation and experts from Civil Service, to the trusts, to the broader economy and to social weflare legislation. Thus in a March 15, 1907 letter to the Interstate Commerce concerning the Hepburn Act, which regulated railroads, Roosevelt wrote(7,258):

"Exactly as the developments in the insurance investigations a year ago showed the necessity of a far more rigid governmental control of insurance companies, so your investigations have proved the necessity of a far more rigid governmental control of railroad companies..."

As well, he argued for more "thoroughgoing regulation" in his speech to Congress in 1906 (8):

"The present Congress has taken long strides in the direction of securing proper supervision and control by the National government over corporations engaged in interstate business--and the enormous majority of corporations of any size are engaged in interstate business. The passage of the railway-rate bill, and only to a less degree the passage of the pure-food bill and the provision for increasing and rendering more effective national control over the beef-packing industry, mark an important advance in the proper direction...

"...It must not be supposed, however, that with the passage of these laws it will be possible to stop progress along the line of increasing the power of the National Government over the use of capital in interstate commerce...The best way to avert the very undesirable move for the government ownership of railways is to secure by the government on behalf of the people as a while such adequate control and regulation of the greater interstate common carriers as will do away with the evils which give rise to the agitation against them. So the proper antidote to the dangerous and wicked agitation against the men of wealth as such is to secure by proper legislation and executive action the abolition of the grave abuses which actually do obtain in connection with the business use of wealth under our present system--or rather no system--of failure to exercise any adequate control at all...the deadening and degrading effect of pure socialism, and especially of its extreme form, communism, and the destruction of individual character which they would bring about are in part achieved by the wholly unregulated competition which results in a single individual or corporation rising at the expense of all others until his or its rise effectually checks all competition and reduces former competitors to a position of utter inferiority and subordination."

Roosevelt's emphasis on rationalizing the economy to make it moral led naturally to his advocacy of the graduated income tax, the inheritance tax and a wide range of social welfare measures such as social security, a child labor law and the minimum wage. In his annual message to Congress in 1906(9) he stated:

"(T)here is every reason why, when next our system of taxation is revised, the National Government should impose a graduated inheritance tax, and if possible, a graduated income tax...I feel that in the near future, our national legislators should enact a law providing for a graduated inheritance tax...As the law stands it is undoubtedly difficult to devise a national income tax which shall be constitutional. But whether it is absolutely impossible is another question; and if possible it is certainly desirable."

This line of reasoning also led to his support for labor unions, although it was not uncritical support (10, p. 166):

"The workman saw, and all citizens who gave earnest thought to the matter saw, that the labor problem was not only an economic, but also a moral, a human problem....those artificial individuals called corporations become so vewry big that the ordinary individual is utterly dwarfed beside them and cannot deal with them on terms of equality. It therefore becomes necessary for these ordinary individuals to combine in their turn, first in order to act in their collective capacity through that biggest of all combinations called the government, and second, top act, also in their own self-defense, through private combinations, such as farmers' associations and trade-unions."

Thus, Roosevelt alternatively advocated federal arbitration of labor disputes and collective bargaining (11, 172)

"There must, therefore, be collective action. This need of collective action is in part supplied by the unions, which although they have on certain points been guilty of grave shortcomings, have nevertheless on the whole rendered inestimable service to the working man. In addition, there must be collective action through the government, the agent of all of us."

He also favored laws limiting the number of hours of employment of railroad employees (176), favored the 8 hour day for all workers (176), the abolition of child labor (p. 177), the minimum wage (179), workers compensation (183), and a public works administration (p.188) to provide work to anyone who is unemployed.

It is debatable whether some of these governmental steps would have occurred voluntarily without the need for state action by Roosevelt and Wilson. For instance, the eight hour day exists even for employees who are exempt from the Fair Labor Standards Act that Franklin Roosevelt passed. This is not because of legislation but rather because society became wealthier between 1908 and 1950 and so could afford shorter hours. Likewise, it is less necessary for children to work today because people are wealthier than they were in Roosevelt's day. In countries where poverty is the rule, a law against child labor would likely be ineffective.

Roosevelt's thinking is uninformed by advances in economics that were made later in the twentieth century by the Austrian and Chicago Schools of economics. His assumption that state action is necessary to rectify the ills he saw as police commissioner and governor of New York may have been mistaken.

(1)By social democratic I mean the political movement whose proponents now call liberalism and progressivism. The terms liberalism and progressivism are misleading for several reasons. Social democracy is a more accurate term. Social democracy holds that government offers more rational solutions than voluntary human choice and emphasizes political processes and the use of state violence in solving social problems rather than markets and voluntary exchange.

(2)"The Duties of American Citizenship". In William H. Harbaugh, The Writings of Theodore Roosevelt. Indianapolis, Ind.: The Bobbs Merrill Company, 1967, p.3

(3)"The Merit System versus the Patronage System", The Century XXXIX (February 1890), 628-33, reprinted in Ibid., p. 248

(4)"A Remedy for Some Forms of Selfish Legislation", The Outlook, August 6, 1910, reprinted in Op.Cit., p. 264

(6)"The Inadequacy of the Sherman Anti-Trust Law" from Roosevelt's address to the Progressive Party National Convention in Chicago, August 6, 1912. New York Times August 7, 1912, pp 8-9. Reprinted in Op.Cit., p. 108.

(5)"Resurrection of the Sherman Anti-Trust Law" from Roosevelt's Autobiography, pp. 423-32, Op.Cit., p. 83.

(7) "Letter to the Interstate Commerce Commission, March 15, 1907" reprinted in Op.Cit., p. 257.

(8)"For More Thorough-Going Regulation". From the Annual Message to Congress, 1906, reprinted in Op.Cit., p. 92.

(9)"A More Equitable Tax Structure", Op.Cit.

(10) From Roosevelt's Autobiography, p. 461-72, Op. Cit., p. 162.

(11)"Nationalism and the Working Man", The Outlook, XCVII (February 4, 1911), 253-56. Op. Cit., p 172.

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