Monday, August 4, 2008

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.

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