Letter to the Olive Press

Dear Editor:

One of my neighbors took some offense at my recent characterization of Democrats as thieves in the pages of the Olive Press. My neighbor is not a thief, and that is probably true of a majority of the 36% of Americans who are registered Democrats. Nevertheless, I stand by my letter. For there are two kinds of Democrats: (a) thieves and (b) those fooled by (a). Category (b) Democrats might blame 2,500 years of propaganda. In Open Society and Its Enemies Karl Popper argues that Plato was the first to propagandize for collectivism by identifying collectivism with altruism. But collectivism has almost always helped the rich at the expense of the poor, not the reverse. Thus, "limousine liberals" advocate a class- and self-interested view.

The (a) category goes back to the days of Boss Tweed and "Plunkitt of Tammany Hall". In 1932 Franklin D. Roosevelt (FDR) extended the federal edifice that the Progressive Republicans led by Theodore Roosevelt (TR) had established. The crux of the New Deal was FDR's abolition of the gold standard, which permitted the Federal Reserve Bank unlimited power to create ("print") money. The chief function of the Federal Reserve Bank has been and still is to expand the money supply by printing new reserves and then depositing them in money center banks who have the power to print a multiple of the money, as much as six times, of which they lend a disproportionate share to Wall Street. If you doubt that a disproportionate share goes to Wall Street, check out Roger Lowenstein's When Genius Failed about Long Term Capital Management (LTCM). The banking system had lent this early hedge fund 100 billion dollars when it collapsed. One hundred billion that time was more than one percent of the entire economy but LTCM employed only about 200 people. This kind of thing has accelerated during the Bush-Obama administration, with Obama donating untold trillions to his supervisors on Wall Street.

On the local level, the corruption of the Democrats never disappeared, even with the diminution of Tammany Hall in the 1930s under the Mayor Fiorello Laguardia (R-NY). Today, government employees, school teachers, and businesses who receive contracts, that is, category (a) Democrats, unabashedly steal from their neighbors. Category (b) Democrats, confusing collectivism with altruism, confuse the schoolteachers', government employees' and contractors' greed with altruism.

At the level of federal government operations, the edifice that TR and FDR created opened the door to special interest politics. No one knows how much of the federal government's operations budget actually performs any valid "service". Newspapers avoid questions like this, preferring to cheer for the bailout and Obama. My guess is less than 20% goes to any public interest purpose. 80% of your federal taxes are squandered.

Today we are facing a health reform bill, that category (b) Democrats have been told will help the poor. It will not. If you compare the performance of health industry stocks over the past two years with the stock market in general, the fall in the health stocks has been two thirds smaller than in the stock market generally, 8% versus 23%, since January 2008. The stock market thinks that the health reform bill will be a boon to the health industry. This will not be the case for the general economy. New regulations will increase costs; health benefits will be reduced; and the uncovered poor will be forced to buy coverage. It makes category (a) liberals happy to know that people making $50,000 per year will have to pay $6,000 for coverage. For these will be forced to sell their homes and live in city projects while category (a) limousine liberals can buy their houses as investments as they congratulate themselves about their liberal consciences.

Sincerely,

Mitchell Langbert

David Horowitz on the Birth Certificate: An Anti-Federalist's Response

David Horowitz recently wrote an important Frontpagemag editorial that argued that conservatives should drop the birth certificate issue:

"64 million Americans voted to elect Barack Obama. Do you want to disenfranchise them? Do you think it's possible to disenfranchise 64 million Americans and keep the country? And please don't write me about the Constitution. The first principle of the Constitution is that the people are sovereign. What the people say, goes. If you think about it, I think you will agree that a two-year billion dollar election through all 50 states is as authoritative a verdict on anything as we are likely to get. Barack Obama is our president. Get used to it."

David and I exchanged several e-mails over this point last week. I disagree not so much with the possibility that the birth certificate may be ok (who knows?) but with David's claim that democracy ought to trump constitutional parameters and restrictions.

Majority rule was not contemplated when the nation was founded. The Progressives such as Herbert Croly argued for Rousseauean general will and unlimited democracy. Whether their agenda was this or whether Croly and his partner Walter Weyl were just re-processed Fabian socialists interested in furthering a Europeanized American elite is a matter for debate. But Croly's and the other Progressives' contempt for the founders together with their advocacy of unlimited, socialist-style state power reflected the essence of European statism and remain the essence of American P(p)rogressivism. Weyl's and Croly's Progressivism cannot be called conservatism in the American sense, yet the leadership of the Republican Party has discarded the last remnant of Jacksonian democracy, the "Reagan revolution", and adopted the Progressive platform. Thus, today we have no conservatives in Washington but rather a Progressive Party and a progressive one.

When the current Constitution was framed there were two schools of thought, the Federalists and the anti-Federalists. We remember the Federalists such as Hamilton and Madison, who wrote the Federalist Papers and the Constitution, but we don't have so clear a memory of the anti-Federalists, to include George Clinton, Robert Yates, Sam Adams and Richard Henry Lee. The anti-Federalists were in a number of senses more modern, or perhaps post-modern, than the Federalists.

The Federalists were proto-typical Progressives in the sense that they advocated centralization and a strong federal government. They were advocates of economies of scale that carried forward via the Progressives into the twentieth century. But the Federalists, like Madison, did not reject the basic notion of limited government. Madison argued that a durable Constitution would serve as a more potent limit on tyranny than would Jeffersonian generational revolutions.

The Federalists feared what de Tocqueville called "tyranny of the majority", and the most important theme that runs through the Federalist Papers, such as number 10, is fear of faction, specifically (emphatically) including majority faction. The Federalists did not advocate rule of the majority. They limited popular vote to vote for the House. The Senate was to be elected by state legislatures and the president by the Electoral College. Article II Section I of the Constitution does not provide for popular election of the president:

"Each State shall appoint, in such Manner as the Legislature thereof may direct, a Number of Electors, equal to the whole Number of Senators and Representatives to which the State may be entitled in the Congress: but no Senator or Representative, or Person holding an Office of Trust or Profit under the United States, shall be appointed an Elector."

Although the Electoral College has received a great deal of criticism among pissant progressives, the recent election seems to me to confute the progressives' claims for unlimited democracy. The absence of a competent media in the United States means that popular opinion is misguided and that democracy necessarily devolves into a contemptible failure here. Conservatives ought to begin to fashion alternatives to the Progressive propaganda into which they have been indoctrinated at Columbia and elsewhere.

As unlikely supporters for ignoring the Constitution as were the Federalists, the anti-Federalists would have been much less likely to support ignoring Article II's natural born citizenship requirements (were they alive today) for they were opposed to a central government period. They would have scorned the idea that popular elections would have any meaning for the very reasons I adduce: the public has no way of evaluating candidates elected on so vast a scale, so large scale democracy must fail. 64 million Americans must be wrong because it is impossible to obtain good information. This is because of constraints on the media's ability to ask relevant questions, its cognitive limits on rationality, not just because it is owned by media conglomerates and biased in the progressive direction.

The anti-Federalists favored small batch production, small units, and local responsiveness. They were post-modern (as well as pre-modern). They favored local democracy in many cases, but not national democracy, an idea that they would have scorned.

There is a true question that no historian has asked as to whether adoption of hyper-decentralization in that early period, as the anti-Federalists favored, would have resulted in a more dynamic, more competitive and more productive American economy than the centralizing approach that Hamilton advocated. Progressivism has claimed that big business makes consumerism possible, but the facts do not seem to support this claim. Production methods of the 21st century are more consistent with the idea of "just in time" decentralization than with large-batch centralization. Perhaps the sub-optimal centralization of the Federalists and the Progressives could have been avoided. A more decentralized America would not have permitted as much lackadaisical big business, waste, railroad-related corruption and big city sleaze of the very kind that resonates today in Chicago.

Jefferson was on the fence. He was often a fellow traveler of the anti-Federalists and objected to centralization, but as president bought Louisiana and acted like a Federalist, establishing the navy and avoiding legislative restrictions on executive privilege and advocating use of state level sedition acts against his opponents.

The anti-Federalists lost the constitutional debate, although they are memorialized in the Bill of Rights, but the election of Jefferson in 1800 was a reassertion of a fossilized anti-Federalism within the Federalist system. Jefferson's election ended the Federalists as a political force, and both of today's political parties descend from Jefferson's Democratic Republicans. But both have rejected the decentralization in which Jefferson believed in principle.

Neither party has been perfect. The Democrats under Andrew Jackson smashed the central bank and emphasized states' rights, albeit for the wrong reasons. The centralizing, aristocratic, elitist element has always been present in American politics via the Whigs and the Republicans. But the decentralizing, anti-elitist element that started with the anti-Federalists and to which Jefferson and Jackson were sympathetic has all but died. This is the tragedy of American politics: our greatest tradition to which conservatism ought to be committed has been replaced by a pale copy of European monarchy, centralization and Fabian socialism via Weyl and Croly. The Republicans have become the Progressive Party and the Democrats the progressive Party. Meanwhile, the American people are scratching their heads.

The great confusion began with Abraham Lincoln, who was a Whig and a centralizer, but who adopted Jacksonian rhetoric that was carried forward by the Mugwumps. The Mugwumps such as Charles Sumner, EL Godkin and David Ames Wells adopted Jacksonian economics and favored the gold standard. But they had two interests that were consistent with their Whig roots and were the basis for the reassertion of centralization that was carried forward via the Progressives. These were a desire to rationalize government via civil service and an interest in establishing professions such as law and medicine.

The Mugwumps' fixation on professionalization and universities led directly to the modern American university's adoption of European standards, which in turn has been the major force for statism in American history. Thus, the modern university is a direct product of American political forces, notably the Republican Mugwumps' fascination with economic and sociological theory led them to send as many as 10,000 Americans to German and European graduate schools in the late nineteenth century. These young graduates came back and established anti-laissez faire centers at Johns Hopkins, Wisconsin and elsewhere via European-trained economists like John R. Commons and Richard T. Ely.

The Republicans thus reasserted themselves as a centralizing force in the late 19th century (the Republican cooptation of Jacksonian Democracy having lasted no more than 35 years, from the 1860s to the 1890s) and then the Progressives became the centralizing elitist force out of the remains of the late nineteenth century Mugwumps and Bourbon Democrats.

The Progressives were smart enough to assert European values in the name of the common man and trust busting, even though the effects of their programs were not so straightforward, and the Democrats then copied the Progressive Republicans in the 1930s, claiming to be for unions and the poor when they were really for Wall Street. The most important step Roosevelt took was abolition of the gold standard and freeing the Fed to create money, the greatest subsidization of business in American history.

Thus, by the 1930s the centralizing force had won, and the decentralizing, anti-elitist force ceased to be a political power except on the fringe. Of course, many and perhaps a majority of Americans still believed in the anti-elitism of Jackson and had decentralizing instincts, but the rhetoric of American politics became riddled with double talk, lies and deception ever since the Progressive era. The wealthy were able to pull off a centralizing coup, securing monetary-creation power for themselves while telling everyone, including idiots like William Greider, that the creation and handing of money to business interests was in the poor's interests. In a sense, through sleight of hand, a fringe elite has been running the nation ever since.

As a result, today we can truly say that America is a one party system, the Republicans who advocate for the Fed on behalf of the wealthy and say they are for free markets and competition, and the Democrats who advocate for the Fed on behalf of the wealthy but say they are for the poor.

So what does all this have to do with the Birth Certificate? The Constitution is in extremis. Ignoring Article II is one more nail in the Constitution's coffin. If you look back to the anti-Federalists, they warned of an over-powerful Supreme Court, fearing it would turn into a force for an aristocratic elite. Likewise, they opposed the central bank for the same reason. They were right. The Federalists believed that the Constitution would prove durable and serve as a restraint on centralized power.

But today even conservatives have forgotten that America is first a nation of liberty, not a democracy. Nor was it intended to be a democratic one, except according to the fringe Progressives who have come to dominate the central government, the very outcome against which the anti-Federalists warned.

The Progressives' Sleight of Hand

In the nineteenth century, "progress" meant technological and economic progress. Whig economists like Henry Carey believed in progress and were optimistic as opposed to the pessimism of Malthus and the Manchester school. However, by "progress" Carey meant technological and economic progress. He did not see politics as important. The idea that progress ought to occur through the political system was introduced in the late nineteenth century in several ways. First, the Mugwumps argued that rationalization of public administration through Civil Service laws meant progress. Populists argued that large scale industry must be broken up by government edict. Americans such as Henry Carter Adams, Richard T. Ely and John R. Commons, educated in Germany began to argue for social democratic intervention. Thus, the Progressives identified progress with governmental reform. Which is more important: breakthrough technologies and better management methods that increase wealth, or government policies that rationalize government operations and redistribute wealth? The Progressives seem to not have realized that there was a trade off. In particular, the policies that implement redistribution and regulation forestall entrepreneurship because their costs rest most heavily on small business entrepreneurs. The result is that the Progressives adopted an anti-progressive attitude toward technological and market progress, which was carried forward through the New Deal. The twentieth century saw a slowing of technological progress because of monetary, regulatory and redistributive reforms of the Progressive and New Deal era.

Elitism in American History

Progressivism and social democracy are democratic liberal doctrines that introduce the possibility of an activist, authoritarian state that they aim to limit. Progressives of the early twentieth century management of large business enterprise, although many such as Herbert Croly and Theodore Roosevelt argued for expansion of state action into the social welfare realm. The social democrats under the New Deal discarded the Progressives' interest in efficiency and instead focused on social welfare. Hence, American public policy debate became that that countered those interested in greater efficiency with those interested in increasing welfare transfers. The advocates of greater efficiency tended to emphasize management solutions in the tradition of the Mugwumps. Hence, their emphasis on low taxes was accompanied by an interest in limiting waste in government. These views seem to overlap with the Jeffersonian philosophy of limiting centralized federal government but the Progressives' most basic belief was that efficiency in overseeing big business could not be achieved without centralization of state power. Hence, their philosophy is fundamentally statist and centralizing and so is very much in the Federalist tradition. The social democrats too are descendants of Federalism. The anti-Federalist Jeffersonians and their Jacksonsian descendents believed that centralized institutions such as the central bank and Hamiltonian schemes to support business expansion were opposed to the interests of taxpayers and small holders. It is true that in Jefferson's day there were relatively few workers, but those supported Jefferson. Jefferson opposed the same common law that was used in the Philadelphia Cordwainers' case against unions, and the Jacksonian democracy saw a renewed support for the union cause in the form of the decision of Commonwealth v. Hunt, which changed American legal attitudes in unions' favor. However, the eighteenth century's anti-Federalists nineteenth century's Jeffersonians had a very different point of view from the twentieth century's social democrats. First, the anti-Federalists and Jeffersonians opposed the central bank. Second, they opposed government support for business. Third, they opposed taxation (the Federalists advocated taxes such as the Whiskey tax, not the anti-Federalists). Thus, the spirit of pro farmer and by extension pro worker laissez faire was fundamental to the earliest political debates in America. The elitism of the Federalists was associated with support for big business and big government. The claim that the state's power would be used to support workers and the poor had not occurred to the Federalists at that point. Part of the reason was that the Federalists were individualists who opposed political parties and factions, hence manipulative or political doctrines such as social democracy would not have occurred to them. There were indeed early rumblings of interest in governmental support for workers, such as during Jefferson's 1807-08 Embargo Acts, which caused unemployment in the cities. Some workers demonstrated for expansion of city employment to counter the unemployment that resulted from the embargoes.

The elitist philosophy of Federalism did not die with the Federalist movement in 1800. Federalism died in part because of internal fighting among Hamilton, Adams, Charles Cotesworth Pinckney and other prominent Federalists. Much of their struggle had to do with the abrasive personalities of Hamilton and Adams and their unwillingness to think in terms of a unified party (Hamilton preferred Jefferson to Adams and Adams preferred Jefferson to Hamilton and Pinckney). However, the Jeffersonian Democratic-Republicans eventually broke into two parties, the Whigs of Henry Clay and the Democrats of Andrew Jackson. Of these, the Whigs trailed the Federalists and were precusors to today's Republicans while the the Jacksonians retained the anti-Federalist impulse, were pro-worker, pro-union and anti-elitist. The Whigs believed in big government and support for business, and in central banking. In contrast, the Democrats believed in states' rights and were relatively, but not perfectly laissez faire in orientation. Hence, the history of elitism can be traced directly from the Federalists to the Whigs to the Republicans. It is tragic that the anti-elitist philosophy of Jacksonian democracy became associated with slavery because of its states rights emphasis. Without the issue of slavery, the American debate would have been more clearly along class lines, with the general public supporting Jacksonian democracy and laissez faire, and the business and plantation elites supporting Federalist, Whiggish and then Republican big government and centralization. But the states rights and slavery issue confounded this alignment to a degree.

The transformation in the party orientation of elitism began to occur in the late nineteenth century. In 1884 the elite Republican Mugwumps bolted the Republican Party in favor of the candidacy of Grover Cleveland. Cleveland was a traditional Jeffersonian-Jacksonian candidate, favoring the gold standard and low taxes. The Mugwumps, supported the laissez faire philosophy, perhaps contributing to its identification with the wealthy. However, the Mugwumps also supported rationalization of government and civil service. Even more important, the Mugwumps represented the college-educated elite of the late nineteenth century. Whereas only about five percent of the American public had attended college in the 1880s, over 50 percent of the Mugwumps had attended college. The Mugwumps were very interested in shoring up professionalism in academia, education, social work, law and medicine. They were the first professional interest movement in American history. Thus, some Mugwumps did favor some forms of government intervention, such as improvement of housing standards, and virtually all favored the Pendleton Act and attempts to improve the management of government at the federal as well as the state level. The Mugwumps were predecessors to the Progressives and were the earliest advocates of enhanced focus on rationalizaton of government and support for the professional (and implicitly) economic interests of the professional classes. Thus, American reform took the form of an alliance between professionals interested in narrow interests of their specific professions coupled with rationalization of government. The impulse toward social democracy came in part from the fixation on professional problems, not from a socialistic or equalitarian impulse. Thus, specialists in housing reform and social work began the emphasis on government intervention to improve municipal housing. It was a narrowly defined professional response. The response had two implications: one broad and one narrow. The broad response was to legitimate needs in the cities that the economy would address only slowly as productivity improved and people became wealthier. The narrow response was that the professions gained in power, prestige and access to resources as the broad response gained currency. Hence, the pattern of government programs that combined rationalization with social welfare began to take root with the Pendleton Act. American elites, both in business and in the professions, found that they had much at stake in state largess, and so the American political debate, which became increasingly a debate among elite economic interests (business and rationalizers versus the professions) began to take the shape that it has today.

Gerald W. McFarland's Mugwumps, Morals and Politics, 1884-1920

Gerald W. McFarland. Mugwumps, Morals and Politics 1884-1920. Amherst, Ma: University of Massachusetts Press, 1975. 291 pages.


Gerald W. McFarland's Mugwumps, Morals and Politics 1884-1920 (Amherst, MA.: University of Massachusetts Press, 1975) is a well-researched, well-written and scholarly book. In contrast to David M. Tucker's Mugwumps: Public Moralists of the Gilded Age and John M. Dobson's Politics in the Gilded Age: A New Perspective on Reform McFarland combines a quantitative analysis with his historical narrative; focuses on the later Mugwumps (the narrative ends in 1920); and reviews a wider range of activities than Tucker, who focuses on the ideology of key Mugwumps, and Dobson, who focuses on politics. The Mugwumps were, in McFarland's book, a broader movement than in Tucker's, although Tucker's perspective is better because it clarifies the original Mugwumps' purposes.

McFarland does not consider that the Mugwumps may have been ideologues, motivated by belief in science and morality. Rather, McFarland suggests at several points that the economics of the Mugwumps was "derivative" and motivated by class interest or erroneous thinking. Not that he discounts their ideology entirely, but he does not stress it. It would seem that if the Mugwumps indeed spent a large portion of their time fighting for the gold standard, free trade and efficient government, then they held an underlying belief system to which they were emotionally committed. The gold standard is not, as McFarland seems to think, a silly, abstract idea. Thus, I prefer Tucker's purpose-driven or teleological perspective to McFarland's. But McFarland's book is excellent nonetheless.

McFarland's logic can be equally applied to the Progressives, who followed the Mugwumps by a generation. The leading Progressives were upper class and some were former Mugwumps. Many were professionals. Many were business executives. For instance, the Roosevelts were from a wealthy background. The Progressives' ideas were certainly derivative, in part based on 17th century Mercantilism and in part based on Bismarck's welfare state, which itself was derivative of feudalism. The former Mugwumps, such as Theodore Roosevelt, Simeon Baldwin (who adopted a modest Progressive program into his gubernatorial administration) and Louis Brandeis, who transformed themselves into regular Republicans and then Progressives benefited from their beliefs professionally much more than did most of the Mugwumps. Progressivism advocated the creation of commissions, professional jobs, regulations and the like that served the narrow interests not only of professionals, but of big business as well.

Some of the Mugwumps began to gradually transform into Progressives by the 1890s. McFarland finds that 40% of the Mugwumps never adopted Progressivism, 27% adopted one or more Progressive ideas (many of which were extensions of Mugwumpery involving improving government) and only 33% became outright Progressives. Some of the Mugwumps, such as Josiah Quincy, mayor of Boston, adopted socialist ideas. Perhaps not coincidentally, Quincy was one of the few Mugwumps associated with corruption and political spoilsmanship.

When progressive ideas confronted the Mugwumps, their professional interests likely conflicted with their classical liberal ideology. In other words, the spoils from Progressivism were probably greater than the spoils from classical liberalism. Outside of the emphasis on professionalization (which includes establishing the professions in which many of them worked as well as rationalizing government) the classical liberal ideology never served their eonomic interests, so if the Mugwumps were purely an economic interest group they might as well have dropped classical liberalism in the first place and become another interest group pleading for favors from the Stalwarts or Halfbreeds (supporters and opponents of President Grant). This is a problem for the view that classical liberalism served the Mugwumps' economic interests.

The economic philosophy that best served upper class investors and real estate holders was Populism, but this point seems to escape McFarland, or at least he deemphasizes it. Similarly, although Wilson adopted the Federal Reserve Bank in 1913 and the Federal Trade Commission, an anti-trust measure, in 1914, neither of these were viewed as radically progressive. Many Mugwumps supported the Fed because they believed that removing control of money from the political process would rationalize it. They could not anticipate widespread acceptance of Populism via Keynesian economics in the 1930s and Roosevelt's ending of the gold standard in the 1930s.

But Wilson became much more progressive when he realized that he needed to win over the progressive wing of the Democratic and Republican Party for the 1916 election. Thus, political opportunism as much as anything can explain Progressivism's successes, for example Wilson's adoption of it. Opportunism applies less to Mugwumpery than to Progressivism, for the Mugwumps had little to gain from bolting or from supporting classical liberalism. Few were factory owners and many were investors. Opposition to labor unions would have been much less important to them than support for the gold standard (the gold standard hurt speculators because it resulted in deflation). Yet, they supported the gold standard, which was not beneficial to them economically.

What destroyed Mugwump individualist-liberalism was the wresting of scientific blief from classical liberalism that occurred in universities. Richard T. Ely's establishment of the American Economics Association in the 1890s seriously damaged the individualist-liberal Mugwump movement. They could no longer say that "science" supported their moral views. Although von Mises offered an alternative perspective beginning in the 1920s as did Hayek in the 1940s and Friedman in the 1960s, mainstream academics have emphasized market failure since the 1890s. This made it much more difficult for Mugwumps and later conservatives and libertarians to defend their views.

McFarland's quantitative descriptions of the Mugwumps are useful, although they would have been improved had they been hypothesis or theory driven. The findings that the Mugwumps were almost entirely college graduates (in an era when only two percent of the public graduated from college); that they were not the super-rich millionaires like Jay Gould associated with the regular Republicans (and that a smaller percentage of Mugwumps were millionaires than were the regular Republicans who attended fundraisers); that the Mugwumps came from well-to-do ancestries; and that they were mostly professionals involved in nascent professions attempting to establish themselves (professors, librarians) are interesting but not powerful (i.e., they do not enable us to reject Tucker's null hypothesis that they were morally and ideologically driven).

It seems that the transformation of a third of the Mugwumps from classical liberals to Progressives is linked to their gradual recognition that to win power they needed to one-up the political machines in the cities, which had traditionally provided jobs and benefits to immigrants and the poor. The way to do this, some Mugwumps began to realize in the 1890s, was to provide benefits to the working class that superseded the machines' paternalistic and spoils-based approach. Progressivism was thus a way to wrest power from the political machines by replacing locally-based paternalism with nationally based paternalism. Thus, the New Deal was the logical extension of progressivism, not because of ideology, but from the standpoint of obtaining power and utilizing programs to win power.

The machines began to realize that the Progressives' strategy worked, and responded by tentatively adopting the Progressives' reform ideas. Charles (Silent Charlie) Murphy, the boss of Tammany Hall from the 1890s to the 1920s began to support reform-oriented candidates as early as 1903. Ultimately, Murphy supported Al Smith for Governor of New York, and it was Smith who conceptualized the framework that became the New Deal. Smith was a Tammany Hall man. Franklin D. Roosevelt succeeded Smith as governor of New York, and when he was president in the 1930s adopted Smith's program on the national level.

Thus, progressivism was the nationalization of political bossism. Roosevelt never addressed urban corruption, which would have been a chief Mugwump concern. Tammany Hall was destroyed by the fusion (Republican) mayoralty of Fiorello Laguardia, but it is not clear that this completely eliminated corruption. Progressive and New Deal administrators like Robert Moses, who admittedly was more effective than prior generations' administrations, "got things done" at a very high cost to poor New Yorkers. The progressives' and New Deal liberals' control of New York from the Laguardia administration through John Lindsay resulted in the city's near bankruptcy (saved by Felix Rohatyn and some financial maneuvering), a result that did not attend the political bossism of the nineteenth century.

A useful point that McFarland makes is on p. 113 in his discussion of Robert Treat Paine, a philanthropist and attorney from Boston:

"Paine was a Social Gospel Episcopalian--not a reform type that would dominate liberal circles after the New Deal, perhaps, but a type that played a major role in the incipient social progressivism of the 1890s."

Likewise, McFarland notes (p. 103-4):

"One of the foremost spokesmen for social progressivism was R. Fulton Cutting, a Mugwump who served as chairman of the Citizens' Union...Cutting was descended from Robert Livingston and Robert Fulton and had inherited a large fortune through his family connections...

"In a speech...Cutting denounced past reform movements for savoring 'more of Oligarchy than Democracy'. Patronizing appeals for civic morality had met with limited success, he believed, because reformers made no effort to make city government important to the average voter...As a advocate of Social Gospel Christianity, Cutting predicted that the twentieth century would produce a broad trend toward expanded government social and economic programs: "There is a swelling tide of human brotherhood that seeks to expose itself through Democratic institutions and the religion of the Twentieth Century is destined to employe Government as one of its principal instrumentalities for the solution of social issues."

Cutting said so in 1901. What is revealing in the cases of Paine and Cutting is that (1) they were upper class; (2) they were devout Protestants of the Social Gospel type; (3) they had seen the Mugwumps' reform ideas frequently defeated by corrupt political machines that provided benefits to immigrants and the poor; (4)they believed that they found a way to implement both their Christian beliefs and their interest in reform.

As with any effective ideology, the Paine/Cutting view combined a strategy for obtaining power with a belief that the strategy is morally right. More than 100 years later, Mike Huckabee continues to reflect this perspective, which reflected the views of a segment the Republican Party in 1901.

Those who believe in individualist-liberal ideas, the economics of Mill and Smith, and see progressive-liberalism as a reactionary, poverty-generating system that harms citizens and reflects anything but love, need to make the case that classical liberalism is humane and helps the poor while government does not. As well, the reform of universities to regain a place for classical liberal ideas is crucial. The mass media lacks the theoretical grounding to provide a foundation for a successful reversal of progressive-liberal domination.

Democratic versus Achievement Motives in American History

David M. Tucker. Mugwumps: Public Moralists of The Gilded Age. Columbia, Mo.: University of Missouri Press, 1998. 139 pp.

David M. Tucker's Mugwumps: Public Moralists of the Gilded Age is an excellent overview of the Mugwumps. It is sympathetic to its subject, unlike others who have written about the Mugwumps. Phrases like "Old Right" abound in the post-war libertarian literature, but the image often is vague. Tucker's book shows that the 19th century classical liberals, known as independent Republicans, were former abolitionists, not bigots in any sense of the word (the few that turned out to be, such as Henry Adams ceased to be considered Mugwumps and became associated with Populism), and were very conscious of their libertarian ideology, their commitment to Adam Smith, the Manchester liberals and John Stuart Mill, with whom several corresponded. The Mugwumps were:

-A small movement, no larger than today's Libertarian Party as a percentage of the voting public, and probably smaller
-sharply differentiated from the two major parties in terms of their commitment to liberal or libertarian ideas, specifically tariff reduction (which the Democrats tended to support and the Republicans tended to oppose); hard money and the gold standard (which neither party really supported); and opposition to imperialism
-support for the newly formed (under the Pendleton Act) federal civil service, which they thought would end corruption in government and reduce the opportunity for spoils, which led the public to support corrupt government (in other words, they wanted to end special interest capture of government)

The book is very well written (although at times there could have been slightly better transitioning and linkage of ideas) and of serious interest to libertarians, conservatives, and those with an interest in the decline of morals in business and government.

Although the Mugwumps were the first post-industrial libertarian movement, they also were at the root of today's progressive-liberalism, as Richard Hofstadter has pointed out. The effectiveness of their tactics, the use of social control and groupthink to effectuate a uniform party platform, served as a model to the next generation's emphasis on big government, imperialism and state intervention in the economy. Most of all, Mugwumps pioneered the use of groupthink as a political tactic. This has been copied not only by the progressive-liberals but also by today's Libertarian Party, which borrows the Mugwumps' appellation for the Republican Party, "the party of principle".

Tucker's perspective on the Mugwumps is sharply from John R. Dobson's Politics in the Gilded Age which I blog here. Tucker has more respect for the Mugwumps.

David Riesmann has argued that in the twentieth century Americans turned from a 19th century inner directedness that involves a goal and future orientation to an other directedness that involves a focus on peers, influence from popular media, fashion and interpersonal relationships at work. But the tension between these two impulses was already evident in the 1870s.

Several of the Mugwumps, such as Theodore Roosevelt and Henry Cabot Lodge, sacrificed their Mugwump ideals for conformity to the Republicans' political demands. They refused to join the other Mugwumps in exiting the Republican Party in 1884. Both Roosevelt and Lodge had much more successful political careers than the other Mugwumps because they put politics over principle, and they did so by adopt the other-directed progressive-liberal ideas of the early twentieth century. Theodore Roosevelt may be thought of as the first other-directed American.

A few of the Mugwumps, such as Henry Adams, who rejected Mugwumpery in favor of anti-Semitism, Populism and free silver (Tucker suggests that the Adamses' exit from Mugwumpery was related to their failure in real estate speculation in Spokane and Kansas City and their hope for a silver inflation). Henry Adams became a Populist who blamed Jewish bankers for his business failings.

The most effective Mugwumps were those who played off the two-party system, favoring one or the other party depending on who was following the most libertarian course. They became famous for this in 1884, when they contributed to the defeat of James G. Blaine in favor of Grover Cleveland, who was a largely libertarian president.

The Mugwumps ran only two independent candidates in their roughly 35-year history: Horace Greeley of the Liberal Republicans in 1872 and John M. Palmer of the National Democrats in 1895. Neither fared well. There is a lesson for the Libertarian Party here. The LP would function more effectively as an election spoiler than as an independent political party.

The Mugwumps (or Independent Republicans) were mostly upper class northeasterners, mainly from New England and New York. They tended to have been educated in religious, Protestant schools and to have had a strong moral sense. Many were former abolitionists. They were not religious themselves, but their grounding and education was. They were concerned with the decay of morals in American politics, and were inclined to foresake personal gain and office on behalf of their ideals, which did not match their economic interests. In other words, many of them benefited from paper money and inflation, but they opposed it on moral grounds, and the same is true of tariffs. Many left wing historians, who lack grounding in economics and ethics, look for class or personal motives in the Mugwumps' position. Ironically, support for inflation, free silver, greenbacks and Keynesian economics is very much the position that favors the upper class, banking interests, Wall Street, hedge fund billionaires, large coroporations and corporate executvies. It was Theodore Roosevelt who benefited from his cynical adoption of progressive-liberalism, the ideology of the American upper class from 1900 to 2007. EL Godkin, Carl Schurz, Horace White and the other Mugwumps paid dearly for their idealistic commitment to morality in politics. The fact that historians have often treated them shabbily suggests shabbines in academia more than anything else.

The Independent Republicans had one advantage over today's libertarians and conservatives: the intellectual support of mainstream universities. Relatively few Americans were capable of thinking through monetary issues even in the 1870s. Today, probably even a smaller percentage of the population is willing to expend the effort to do so. However, when the Mugwumps could say that their ideas had the backing of Harvard economists, the public was much more likely to defer. In this sense, they provided a role model to today's progressive-liberals, who dominate our society through their control of higher education. This intrigues me because it suggests a tighter link between the ideology of higher education, economic interests and what Howard S. Katz calls "the paper aristocracy" than I used to think.

The Mugwumps had limited data on which to base their arguments, and they fell into a number of errors. The most grievous Mugwumps fell were their support for the establishment of the Federal Reserve Bank and their belief that the civil service would end special interest politics and government corruption. Their emphasis on the Fed came from three factors: (1) they believed that the Fed would be constrained by the gold standard, which Roosevelt abolished in the 1930s; (2) they believed that separating money from politics would reduce the temptation to inflate (they overrated the institutional separation of the Fed from Congress; (3) they did not anticipate Keynesian economics, which provided an ideological rationale for the inflationist view which (not to blame them, who could would have known?).

Their notions of morality led to their belief in free trade, the gold standard and honest government, notably via civil service reform. Their advocacy of sound money and free trade, which they explicitly linked to the elimination of special privilege, favoritism for the rich (the debtor class, according to their arguments, being the chief beneficiaries of paper money, then as now) was explicitly rooted in their moral sense. They saw individual achievement, self sufficiency and hard work as moral principles that protectionism and paper money would debase.

Then as now there were powerful forces arrayed against moralist and hard money positions. There was strong western agitation for greenbacks and then silver inflation by landowners (much as the subprime crisis today has been a strong motivation of reallocation of wealth to wealthy investment bankers and landowners), and politicians were inclined to support the demands for inflation. In fact, there were several greenback and free silver bills passed, that Mugwump agitation was able to stop, and some that the Mugwumps could not stop.

The Mugwumps saw the debate as one involving moral principle against personal gain. Those who favored personal gain over morals joined the regular party ranks. Theodore Roosevelt and Henry Cabot Lodge, are cited as two examples of reformers who chose to emphasize their careers as opposed to their morals. When James G. B

Gain in democracatic politics is linked to popular appeal. Hence other directedness results from focus on public opinion. However, the advances in American society came not from the political but from the creative, scientific, engineering and management fields, which do not depend on public opinion. Theodore Roosevelt was among the first other-directed, twentieth century men. In choosing personal gain and political advantage over moral belief, he set the stage for the progressive-liberalism of the twentieth century, its moral vacuity and the economic decline that will result from focus on relationships and opinion rather than achievement.

John "Zippy" Callister, Doug Ross and the MSM's Three Biggest Lies

Doug Ross has an interesting blog about John "Zippy" Callister's letter to the Wall Street Journal (courtesy of Larwyn). Mr. Callister had written to the Wall Street Journal complaining that while his portfolio went up during the eight Clinton years, the S&P 500 has done little during the Bush years (actually it has done alot if, as Howard Katz and I have done, you bought in 2002 and sold last year). Mr. Callister, publicly-spirited as he is, complains that he does not care about terrorism, overseas wars, social security or income tax:

"...But, a 100 point gain in the S&P 500 means about $50,000 in my pocket... It is odd that so many people forget the stock market boom of the late 1990s."

Doug is annoyed at Zippy, and rightly so, although Zippy's argument is more revealing about the Democrats and the mainstream media than Doug suggests.

According to my broker at Smith Barney, the S&P 500 is currently at 1409. If 100 points (7% x 1409) means $50,000 to Zippy, that means his portfolio is roughly $50,000/ .07 = $714,000.

Zippy suggests that his portfolio hasn't increased since 2000, so I assume it was $714,000 in 2000. In contrast, the Census Bureau says that the median household net worth in 2000 was $55,000. The median household net worth for households in the highest income quintile was $185,000. In 2000, only 27.1% of households owned stocks and mutual fund shares at all, and these had an average value of $19,268. 29.9% of households had 401k plans with average assets of $29,900. Thus, Zippy's household wealth of $714,000 put him well above the median for the highest quintile in 2000. That Zippy favors the Democrats is revealing of the the MSM's three biggest lies:

Lie Number One: The Democrats are for wage earners, not the wealthy.
Lie Number Two: Corporate interests reflect the public interest.
Lie Number Three: The stock market goes up because of general prosperity.

MSM Lie Number One: The Democrats Favor Wage Earners, Not The Wealthy

Conservatives and libertarians often wonder why the wealthy, such as George Soros, Warren Buffett, Nancy Pelosi and Zippy, tend to prefer progressive-liberals and Democrats. The "Red" states, it has been noticed, are concentrated where there are many trust fund babies and millionaires, while the "Blue" states tend to be poorer. This is chalked up to left-wing education. But progressive-liberal dogma is consistent with the economic interests of the wealthy. The reason is that the Democrats tend to be even more inflationary than the Republicans, who are also inflationary, just not so much.

Yet, the MSM repeats the claim that inflationary, high-tax, high-regulation policies favor the average American rather than the wealthy, "Red State" trust fund babies whom such policies do favor. Zippy is merely the bull in the china shop who reveals to us that selfish impulses do matter. The Republicans' policies help the average working man while the Democrats, who claim to be for the poor, help Zippy.

MSM Lie Number Two: The Stock Market Reflects The General Prosperity

Advocates of mainstream finance theories argue that markets are rational. This has a clinical sound to it. However, even if true, rational markets do not require rationally run corporations. In fact, most big businesses aren't run rationally. They require subsidies at public expense. Even if large businesses were run efficiently without the need for government welfare, their interests would not coincide with the general public's for several reasons. Laws that protect business from competition serve corporate interests but do not serve the public interest. Since the 1850s, business has lobbied, often effectively, for protectionism, regulation to rationalize markets, easy credit, lucrative government contracts and the like. Public waste is private profit. Stockholders of firms that benefit from wasteful government contracts, protectionism, regulation and subsidies become wealthier as the public becomes poorer. Joint gains are only possible in a market economy. Yet, the MSM repeatedly claims that stock market increases are good for the general public. This is not the case in a mixed economy where government subsidies are common. They are certainly good for Zippy, who is wealthier than average and who benefits from secular stock market increases. They are also good for government contractors. But they are not good for the average person.

MSM Lie Number Three: The Stock Market Goes Up Because of General Prosperity

This is perhaps the most pernicious lie because it encourages the public to harm itself. The chief driver of the stock market is interest rates. Interest rates are chiefly influenced by the Federal Reserve Bank. The Federal Reserve Bank can raise interest rates by contracting the money supply and can reduce interest rates by increasing the money supply, i.e., printing money. The advocates of printing money were known as Populists in the 19th century. In the twentieth century they realized that if they pretended to be scientists their self-serving claims would be more convincing. Thus, they packaged their argument for increasing the money supply in the garb of "science", calling themselves "macro-economists". The "macro-economics" that they advocate is in substance the same as the arguments of the 19th century Populists, who advocated greenbacks and free silver. The macro-economists claim that they can adjust the money supply at different stages of the economic cycle, but the Fed doesn't do this. Although the Fed has never done this, the "scientists" do not revise their opinions, and when they gain power they do the same thing that the Fed has always done, namely, they support the stock and real estate markets at the expense of the general public. The money supply has gone in one consistent direction since the Fed was founded--UP. The US money supply is 16 times greater today than when the Fed was founded in 1913.

Stock and real estate markets inflate along with the money supply because of low interest rates. But increasing the money supply has another effect, namely, because the number of dollars in circulation is increased at a faster rate than the value of output increases (a painfully difficult fact for progressive-liberal advocates of the large-corporations-are-rational philosophy) there are general price increases, i.e., inflation in food, energy, labor and other prices. Prices have indeed gone up by 3.5% on average since 1979. A dollar in 1979 is worth 38 cents today. The mother of three must pay more for milk and her children might be hungry, but Zippy and his fellow Democrats gets to pocket the increase, and he is happy.

In the past six years the price of gold has gone from $250/oz. to nearly $900/oz. Thus, although the Republicans may not have been as good at inflating the stock market as the Democrats, they have been much better at inflating commodity prices. Of course, neither party is different from the other because they are both following the same inflationary policy. They are the ReInflateoCrat Party (the In stands for Bloomberg Independent). Howard S. Katz argues that there is a commodity "pendulum" which causes first declines in commodity prices and increasing stock market prices then increases in commodity prices. Katz argues that we are only at the beginning of the pendulum swing favoring commodity prices and that we still have a decade or even two to go. This will be true whether Democrats or Republicans win.

In other words, the stock market increases of the Clinton years are desirable only to trust fund babies, the wealthy, Democrats and Zippy. They are not beneficial to the average American.

What is perhaps most telling about Zippy's letter is his simple-minded selfishness, a characteristic of today's wealthy that did not characterize the wealthy of the late 19th century. I attribute this to progressive-liberal education and the general triumph of progressive-liberalism, which is a philosophy of pretended altruism coupled with the devastation of the average American through taxation and other violent state policies that progressive-liberals gleefully depict as altruistic when they are mostly self-serving.

Richard Hofstadter's Age of Reform

Richard Hofstadter. Age of Reform. New York: Vintage Books, 1955.

I just had the privilege to read Richard Hofstadter's 1955 Age of Reform, which won the 1956 Pulitzer Prize for history. Hofstadter's book, more than 50 years old, resonates today. This book is a true classic for the general reader, although in a few passages he commits the mid-century vice of assuming that Keynesian macro-economics is science.

One of Hoftstadter's points is that the 19th century American farmer was not the idyllic tiller of the soil that we idealize but rather an incipient businessman whose chief interest was real estate speculation. In contrast to European farmers, for whom land was at a premium and labor was cheap, American farmers faced high labor costs and cheap land that was increasing rapidly in value. They did use capital intensive methods and did have to borrow to purchase the machinery. But, according to Hofstadter, real estate speculation was more important in the 19th century. The eastern farmers would sell their land to new immigrants and move westward, investing in larger farms for which they were anticipating even greater price appreciation.

The process that Hofstadter described in 1955 is very much like today's real estate craze. The agrarian populist movement favored inflation, much as today's sub prime investors likely do (if the education of today's sub prime borrowers has cognitively enabled them to consider the issue), but contrary to what I learned in elementary and high school, the greenback and free silver movements were driven by land speculators, not by people whose interest was working farms and were concerned with machinery investment. The overlap between American farmers and their support for inflation in the late 19th century (via the Populists whom William Jennings Bryan's candidacy preempted in 1896) was driven by land speculation more so than by machinery investment.

To understand the Progressives, you need to understand the Mugwumps, who were a generation earlier, and the Populists, who were a less educated late 19th century movement that also preceded the Progressives. The Populists advocated inflation, anti-Semitism, opposed immigration, hated the British, opposed the gold standard and opposed industrialization and big business of the 19th century. In contrast to the Populists, the Mugwumps were late 19th century professionals and were a small, well-educated group that refused to vote for James Blaine, the Republican presidential candidate in 1884, whom they considered corrupt. They refused to vote for Blaine, and because New York was a closely contested state, some believe that they swung the election to Grover Cleveland, a Democrat. They got the name "Mugwumps" after young Algonquin Indian Chieftains. Although the term originated as one of derision, they adopted it themselves. Some argued that they were called Mugwumps because their mugs were on one side of the fence and their "wumps" were on the other. The Mugwumps favored laissez faire and I believe in many cases hard money (as Cleveland in the Jacksonian or Bourbon Democratic tradition did too) and were similar to today's libertarians. I couldn't help thinking that my interest in NOTA ("none of the above") has similar implications to the Mugwumps in '84. Unfortunately, though, today both candidates have adopted the Populist/Keynesian monetary nostrum.

One of the points that Hofstadter makes is that the Populists, the Mugwumps and their successors, the Progressives, were largely reacting to the growth of big business. (I am just starting to read Herbert Croly's Progressive Democracy and Croly, one of the founders of the New Republic Magazine, makes this point on page one.)

In several brilliantly insightful passages Hofstadter discusses how 19th century Americans believed that the purpose of the economy was to reward good ethics, and that the growth of big business contradicted this belief. Big business did not require or encourage the ethical fabric that local business did, and the progressives were concerned that the American economy no longer provided an education in morality, but instead that the economy had begun to encourage corruption. They also felt that the political boss system of the large cities paralleled and was symbiotic with the growth in industrial power. They felt that to balance the power of big business, they had to establish government counterbalances that would regulate business, hence the Sherman Anti-trust Act, the Interstate Commerce Act and the Federal Reserve Bank.

As well, there had been a spike in inflation in the late 1890s and early 1900s because of gold discoveries globally (America was still on a gold standard). Inflation went up to two percent or so, roughly half of what it has been for the last 28 years under the post-Carter Fed. However, that two percent inflation rate infuriated the public and led to support for the Fed. Ironically, the Fed has caused two or three times greater inflation (especially if you add the rise in the cost of home purchasing that the Bureau of Labor Statistics has slyly excluded from the Consumer Price Index since 1980). The cure (the Fed) was worse than the disease (the two percent inflation due to global gold discoveries).

Unfortunately for America, Schumpeter's concept of creative destruction, Austrian economics and the ideas of Milton Friedman were developed after the Progressive era. The ideas of free market economics are subtle, much more so than the antiquated and awkward ideas of the liberal left, and it seemed impossible to the Progressives of the late 19th and early twentieth century that the large concentrated industries were vulnerable to global competition. Indeed, the Mugwumps had advocated free trade as the solution to excessive business power and corruption, and the Progressives could not believe that global competition might reduce business power because the believed in deliberation and rationality, and the notion that competition, creative destruction and innovation would limit ineffective and inefficient big company practices seemed incredible to them, as it seems incredible to today's naive progressive-liberals.

Ironically, as Gabriel Kolko has written in his book the Triumph of Conservatism instead of limiting the power of big business, the concepts of regulation that the Progressives advocated enhanced the power of big business with a few, much-publicized exceptions that satisfied public opinion, such as the Standard Oil breakup. The Fed alone has vastly extended the power and grasp of investment and commercial banking and big business through easy credit. The Fed truly represents the triumph of the interests of real estate and stock speculation, Wall Street, commercial banking and big business, while the average worker has seen stagnant real wages over the past 30 years, a stagnation that did not occur during the laissez faire late 19th century. Thus, the Progressives' reforms led to effects that were opposite from what they intended, namely, the furtherance of big business interests and the impoverishment of labor. Despite the obvious outcomes of their policies, public deliberation today is incapable of rationally dissecting causes for several reasons. First, because of the inheritance tax (the Mugwumps were mostly independently wealthy) the Republicans are largely dominated by self-interested careerists and special interests. Second, because the Democrats are wedded to the failed Populist ideas that turned out to also reflect the careerists' interests. It is no coincidence that the wealthiest Americans such as Bill Gates and Warren Buffett support the inheritance tax, because without an independent-minded elite that is not subject to corporate power (in the form of having to go to work) it is unlikely that any significant group will oppose the rapacious Populist policies of the Federal Reserve.

Hofstadter's final chapter in which he compares the New Dealers with the Progressives is also instructive. The Progressives had traditional American values and did not question the importance of individualism and freedom. In contrast, the New Dealers were influenced by social democratic ideas, collective action and the (supposed) technical benefits of large scale government organization than were the Progressives.

In the end, the ideas of both the Progressives and the New Deal led to failure. The notion that, left to its own devices, big business would be replaced only if the government were prevented from supporting it did not seem possible to these two failed ideologies. Nor, incidentally, did Hofstadter grasp this because he was imbued with 1940s and 1950s Keynesian Populism.

In the end, the Mugwumps were smarter than their children in the Progressive movement or their grand children in the New Deal movement. Although Americans instinctively understand the virtues of the Mugwump position, American education studiously avoids discussing their ideas, focusing instead on the vapid ideologies of liberal-Progressivism and the New Deal.

Peter Levine's "New Progressive Era"

I had previously blogged about Peter Levine's New Progressive Era when I was starting it. Now that I've finished it, I conclude that my initial reaction was correct. The ideology of the progressives, and of Levine, ignores long run effects; bounded rationality; processes of experimentation that are necessary to innovation; the importance of private property and the private sphere; the importance of individual rights to be free from the progressives' endless taste for attacking the individual; and the importance of free markets to create a wealthy society.

Deliberation and democracy are only beneficial if there are limits set to their scope. As de Tocqueville argued, tyranny of the majority is the chief threat to American democracy.

Having grown up in New York, the state and city where the deliberative state has grown most extensively, I grew up seeing the failure of Levine's ideas first-hand. In New York, progressivism degenerated into Robert Moses's capricious abuse of power. Although Levine argues that the earlier progressives were ambivalent about unions, Levine is very pro-union. In New York, I watched the business base disappear; property values soar to the point of crippling unaffordability; and the growth of the rat population in the subways. (The city had confiscated the subways during the post-progressive era thanks to the moronic deliberation of that era). The City has increasingly become an elite playground that excludes the middle class thanks to the practical effects of Levine's ideas, specifically, special interest pressure to support public sector unions who have fought for high taxes; special interest eminent domain actions that have closed small factories and destroyed inexpensive housing; and the use of urban renewal and the tax system to squelch start-ups that have yet to prove themselves.

Despite its claim to be democratic, progressivism is anti-democratic. It is anti-democratic because it aims to apply democratic deliberation inappropriately to economic issues and so must fail. Levine does not appear to grasp the concept of marginalism or marginalist decision making; nor does he leave sufficient room for the possibility that an artist, intellectual, inventor or entrepreneur might have ideas which the majority would rather suppress because it does not understand them. This has been the consistent failure of progressivism. Deliberation and progressivism are fine in the limited scope of public decision making as defined in the nineteenth century. The slightest expansions make them untenable. In areas like monetary policy, which are not that complicated, special interests leap to make the topics seem complicated, and the public is easily bamboozled. The result is the special interest constituencies, which Howard S. Katz has called the "paper aristocracy" in the case of money supply, who argue vehemently for the "stabilization of credit markets" and similar kinds of meaningless, self-serving nonsense in order to justify public subsidies. The public is deferential toward the quack claims of academics, and so democracy becomes a matter of special interest, privilege and fake authority.

The public is simply not equipped to engage in debates about engineering; economics; architecture; construction; manufacturing, etc., etc. This is understandable because no one has the mental capacity to absorb all of these issues. In arguing for the public to engage in debates about such a wide range of issues, Levine and his fellow progressives are paving the way to totalitarianism. This is not surprising because it happened in Germany, the first country to adopt a progressive policy.

The end result of Levine's progressivism is dictatorship. Far from being a reform movement, the "new progressivism" leads to the kind of totalitarianism to which Bismarck's progressivism led Germany.

There are more than a few evidences of authoritarianism in Levine's book. For instance, Levine implies that those who "admire the market" should not "have disproportionate political power as a result of their wealth". But this kind of distinction leads to suppression of speech. For instance, is it fair that people with higher IQs have disproportionate political power and so can manipulate the government to serve their interests as the financial community has been able to do with the Federal Reserve Bank and as business has been able to do with the department of labor and the federal trade commission? The fact is that Levine singles out business as a manipulator, when the only conceivable outcome of his progressivism is manipulation by special interest groups.

Given the repeated failure of the progressives' ideas, one would hope that their ideas would have been consigned to the trash bin. But their emotional hatred of business, which they cannot dominate and control, inspires their endless speculation as to how to suppress entrepreneurs and those who do not pay attention to their stale ideas.

Liberals Should Be Called "Suppressives" Rather Than "Progressives"

I have recently blogged about Peter Levine's book New Progressive Era and note that although Levine claims that public deliberation ought to replace free markets, public deliberation is impossible because progressives dislike speech that disagrees with their own and because progressives' choices, which are mostly erroneous, become institutionalized. Upon institutionalization, discussion about them is foreclosed. Some examples are the rat-infested New York City subway system; the near-bankrupt social security system; and the income-inequality and poverty-generating Federal Reserve Bank.

As well, a key problem with progressivism is the willingness of progressives to distort facts, to lie, in order to secure programs or institutions that are bound to fail. The public finds it difficult to debate when, for instance, the Fed claims it is managing the "federal funds rate" rather than increasing the money supply (or more to the point, counterfeiting). Likewise, the public finds it difficult to debate about "social security" when its proponents claim that it is a fair insurance program rather than primarily a welfare or transfer program.

Perhaps the worst lies of all concern the names that the "progressives" call themselves. When I was growing up in New York,the high crime rates were attributable to "limousine liberals". Liberals became associated with the ACLU, welfare, corruption and incompetence. Rather than divulge the truth, today's liberals call themselves "progressives". It would be much more conducive to intelligent dialogue for all of us, and much fairer, to call liberals "suppressives".