The two Roosevelts were founders of post-modern progessivism. Theodore Roosevelt was a Republican who believed in a statist corporate system. He became the most radically left-wing of all American presidents, including his cousin Franklin. Roosevelt believed that corporations should be licensed to engage in interstate commerce and that the federal government should tell firms what prices to charge and how to function. Although his ideas were too extreme, and ultimately were rejected by his appointed successor, William H. Taft, the model of a state-regulated economy was the product of the Progressive Republicans and of Roosevelt's presidency. Today, Democrats are calling themselve Progressive, but the fact is that Progressivism was a Republican more than a Democratic movement. Wilson was a Progressive because he had to be. His Mugwump background was consistent with a belief in freedom and private enterprise, and although many Mugwumps, including Theodore Roosevelt, had turned to statism in the Progressive era, Wilson did so in response to political pressure.
The Republican Party, then, was not a small government party in the twentieth century until Barry Goldwater ran on those views in the 1964 presidential election. The Republican Party included a minority of small business advocates (who were NOT libertarian in philosophy-- this was the group that had fought for the Sherman Ant-trust Act and the Interstate Commerce Commission in the 1880s). It included a minority of laissez faire advocates in the late 19th century, the Mugwumps, but but their laissez faire orientation had diminished by 1900, and they were too few in number to be of any importance until Goldwater, who lost by a landslide in the federal election.
The laissez-faire Republican Mugwumps of the late 19th century were not loyal to the Republican Party because the Republicans were indifferent to laissez faire and in their minds good government (civil service) principles. The laissez-faire Democrats in the late 19th century were known as the Bourbon Democrats, and included President Grover Cleveland. But these groups were small even in the 19th century (certainly less than 5 percent of the electorate). Laissez faire was not the philosophy of late nineteenth century Americans, many of whom were immigrants who benefitted from political machines in the cities and had no understanding of the economics of Smith or the opinions of EL Godkin. Thus, it is impossible that laissez-faire conservatives reflected even a small fraction of the Republican Party by the 1930s, when Roosevelt was elected.
Those conservatives who saw themselves adversely affected by the Franklin Roosevelt policies (at least in the public relations sphere) reaped what they had sown. They had not funded opposition to Progressivism in the early twentieth century, and there was no intellectual foundation to fight the New Deal in the 1930s.
Thus, while the founder of the modern Republicans was the Progressive Theodore Roosevelt and his protege (and more conservative but still rather statist) William H. Taft, the founder of the modern Democrats was the social Democrat Franklin D. Roosevelt, who adopted many of the ideas of Herbert Croly with respect to legislation.
Thus, the debate of the twentieth century has been largely among progressive Republicans, who follow the Taft position, and the progressive Democrats, who follow the Roosevelt position. Both are descendents of Theodore Roosevelt, who may be viewed as the founder of twentieth century ideological debate.
John Lukacs has argued that the dominant ideology of the twentieth century was national socialism. Stalin advocated "socialism in one country" as did Mao, while Hitler coined the term Nazi-Sozi. Progressivism is the American strain of the national socialist movement, and most Americans believe in it. The twenty or thirty percent of Americans who do not must clarify a few points among themselves.
1. The difference between national socialist Americans and those who believe in "none of the above" is that "none-of-the-above" Americans believe in a limited state. That should be the glue that binds them. Other issues distract from the need to restrain state power, which is the chief threat to freedom, progress and economic gain. These are difficult to withstand, because nationalism is a highly emotional cause.
2. Many of the supposed arguments between conservatives and the left are spurious. They are instituted by statists on both left and right. Both the statist left, in its radical as well as liberal forms, and the right, in its converstive talk-show form, are progressive, national socialist movements, even though the right claims to be for small government (but of course belies those claims when elected). Those who would change in the direction of less government have to change habits of thought. That means asking what others who believe in reductions in state power are least likely to believe and avoiding emphasis on those issues for political purposes.
3. Advocates of "none of the above" ought to think of ways to include each other, not to exclude each other because of shibboleths, code words, racial divides, or side issues that serve only to distract.
4. It is a mistake for libertarians to believe that big business Republicans and neo-conservatives are on their side. There is no alliance between those who do not believe in left or right wing national socialism and libertarians, small scale liberals and those who oppose the extension of state power and favor economic development. The conservative right is and always has been as statist as the radical left. The libertarian right has been bamboozled much as the libertarian left has been bamboozled by Stalin and Mao.
Saturday, March 15, 2008
Progressivism and Globalization
In passing the Federal Trade Commission and Clayton Acts, which supplemented the Sherman Anti-Trust Act and the Interstate Commerce Commission, Congress established a system of federal regulation of business. The rationale for federal regulation as opposed to laissez faire competition was self contradictory. The chief argument was one that primarily served capitalists' interests: over-production and the need for liquidity in credit markets (which was accomplished via the Federal Reserve Bank and ultimately the abolition of the gold standard in 1933). However, the chief concern in the public mind was unreasonable restraints of trade, "bad trusts", who harmed the public via monopoly restrictions on prices. Note the contradiction: big business constitutes monopoly power which restrains production to raise prices; but the chief problem according to Progressive advocates of regulation of business was overproduction and too-low prices.
The Progressives also argued that a central government power was necessary to eliminate harmful competition or irrational decision making among some big businesses. But the Progressive argument begged the question. If managers of big businesses might be irrational, why might not officials of the Federal Trade Commission or Interstate Commerce Commision also be irrational, greedy, power hungry or unreasonable? Was Theodore Roosevelt necessarily more rational or moral than John D. Rockefeller? What would have made him so, a halo? Would he have made a better manager of oil companies than John D. Rockefeller was? What evidence was there that government bureaucrats or experts were more rational or effect at managing large concerns, or could contribute meaningfully to the management of the firms?
In today's world, a century after the Progressive era, firms are no longer national in extent, purpose and often allegiance. They are global. Competition is global. There is no agency to supervise the global firms. Toyota, Mercedes and GM all compete without the benefit of government guidance. Yet there is no monopoly power and there is no overproduction. These were imaginary problems claimed by primitive ideologues with little knowledge of how economies work.
The model of management that the Progressives advocated that experts in government agencies can provide management help to large firms is woefully out of date. The chief knowledge of importance to business is, as Hayek pointed out, on the spot. It is specific knowledge concerning production and quality improvement processes. It is not abstract or theoretical and it is not found in business schools or economics departments.
Taiichi Ohno's model of lean manufacturing and continuous production, like Hayek's concept of on-the-spot-information, suggests that the modernist view of expertise as generalizable knowledge is inappropriate to the post-modern world. Knowledge evolves from production processes, which dictate process improvements through specific constraints and requirements that differ from firm-to-firm. The idea that an expert with a Ph.D. can tell firms what processes to use or how to improve quality is as antiquated as the idea that government inspectors are necessary to ensure good quality meat.
The phenomena of big business was striking to the popular mind of the late nineteenth century. The spectacular rise of large firms such as Standard Oil, which were protected by high tariffs and likely would not have grown to the extent that they did without the tariffs impressed people who grew up toward the end of the era of the horse and buggy . The rise of large firms, and the tariffs and other government support for their rise, led to public concerns about monopoly, excessive power and unreasonable competition. But the public fear of large corporations did not reflect an understanding of their vulnerability to creative destruction. The owners themselves were afraid at the time and repeatedly complained about lack of profit, overcompetition and destructive competition. But this was very much in the public interest. Nothing should make the public happier than a capitalist who makes no money because prices are drive down by competition. But the public was unable to disect the pro-capitalist gist of the Progressive argument.
The left of the late nineteenth century, like the left today, is a pro-centralization movement, and therefore it is closely aligned with, despite its hatred of, big business Republicanism. The Progressives favored large scale firms managed by government bureaucracy because they believed that the highest development of industry had occurred in the early twentieth century. The spectacular growth of the large firms seemed to them the pinnacle of human economic achievement. They could not, as we cannot, envision future management and technological developments. To them, the oil mining technology of Standard Oil and the Ford assembly line were humanity's ultimate triumphs. These advances were important, but are primitive by today's standards.
In order to achieve these breakthroughs, capitalist free market competition was essential to innovation. Without "overproduction" cost saving technology would not have been the subject of creative thought. Without economic stress capitalists would not have supported the invention of new products that created competitive advantage (in 1980s lingo). But the Progressives could not see that the advance of capitalism was a dynamic process and the technology of the 20th century by the standards of the 24th century (assuming that progressivism does not prevail) will seem even more backward and primitive than the technology of the 16th century seems to us today.
Ray Kurzweil has argued that technology advances at ever quicker rates. Kurzweil's argument depends in part on Moore's law, which does not seem to be materializing now and assumes a rate of advance that is quicker than past and recent rates by orders of magnitude. One need not buy into Kurzweil's singularity argument to believe that future advance will be quicker than past advance. Technological advance depends on interaction and creativity. Informationi technology has increased the rate of interaction, so the rate of advance has been increasing. But much of the advance has been in information technology. Therefore, we can expect escalating rates of advance. This has occurred despite attacks on the flow of information. Much of the twentieth century world was darkened by dictatorship: communism covered China and Russia and a corrupt socialism dominated India. National socialism dominated the world's political systems, and progressive regulatory systems, income taxation and inflationary Federal Reserve policies that allocate credit away from innovative firms toward financial firms hammered at progress in the United States. Despite the Progressive assault on human progress, except for the period of high tariffs, depression and war from the late 1920s through the 1950s, the twentieth century still saw progress, although not at the rate that could have been, and perhaps slower than the late 19th century rate, which saw less circulation of information for less intervention.
The economy has become more global and competition is no longer "managed" (like a child who believes he is a policeman, so Theodore Roosevelt believed he could manage the economy) yet overproduction is not a problem, nor is unfair competition.
The Progressives also argued that a central government power was necessary to eliminate harmful competition or irrational decision making among some big businesses. But the Progressive argument begged the question. If managers of big businesses might be irrational, why might not officials of the Federal Trade Commission or Interstate Commerce Commision also be irrational, greedy, power hungry or unreasonable? Was Theodore Roosevelt necessarily more rational or moral than John D. Rockefeller? What would have made him so, a halo? Would he have made a better manager of oil companies than John D. Rockefeller was? What evidence was there that government bureaucrats or experts were more rational or effect at managing large concerns, or could contribute meaningfully to the management of the firms?
In today's world, a century after the Progressive era, firms are no longer national in extent, purpose and often allegiance. They are global. Competition is global. There is no agency to supervise the global firms. Toyota, Mercedes and GM all compete without the benefit of government guidance. Yet there is no monopoly power and there is no overproduction. These were imaginary problems claimed by primitive ideologues with little knowledge of how economies work.
The model of management that the Progressives advocated that experts in government agencies can provide management help to large firms is woefully out of date. The chief knowledge of importance to business is, as Hayek pointed out, on the spot. It is specific knowledge concerning production and quality improvement processes. It is not abstract or theoretical and it is not found in business schools or economics departments.
Taiichi Ohno's model of lean manufacturing and continuous production, like Hayek's concept of on-the-spot-information, suggests that the modernist view of expertise as generalizable knowledge is inappropriate to the post-modern world. Knowledge evolves from production processes, which dictate process improvements through specific constraints and requirements that differ from firm-to-firm. The idea that an expert with a Ph.D. can tell firms what processes to use or how to improve quality is as antiquated as the idea that government inspectors are necessary to ensure good quality meat.
The phenomena of big business was striking to the popular mind of the late nineteenth century. The spectacular rise of large firms such as Standard Oil, which were protected by high tariffs and likely would not have grown to the extent that they did without the tariffs impressed people who grew up toward the end of the era of the horse and buggy . The rise of large firms, and the tariffs and other government support for their rise, led to public concerns about monopoly, excessive power and unreasonable competition. But the public fear of large corporations did not reflect an understanding of their vulnerability to creative destruction. The owners themselves were afraid at the time and repeatedly complained about lack of profit, overcompetition and destructive competition. But this was very much in the public interest. Nothing should make the public happier than a capitalist who makes no money because prices are drive down by competition. But the public was unable to disect the pro-capitalist gist of the Progressive argument.
The left of the late nineteenth century, like the left today, is a pro-centralization movement, and therefore it is closely aligned with, despite its hatred of, big business Republicanism. The Progressives favored large scale firms managed by government bureaucracy because they believed that the highest development of industry had occurred in the early twentieth century. The spectacular growth of the large firms seemed to them the pinnacle of human economic achievement. They could not, as we cannot, envision future management and technological developments. To them, the oil mining technology of Standard Oil and the Ford assembly line were humanity's ultimate triumphs. These advances were important, but are primitive by today's standards.
In order to achieve these breakthroughs, capitalist free market competition was essential to innovation. Without "overproduction" cost saving technology would not have been the subject of creative thought. Without economic stress capitalists would not have supported the invention of new products that created competitive advantage (in 1980s lingo). But the Progressives could not see that the advance of capitalism was a dynamic process and the technology of the 20th century by the standards of the 24th century (assuming that progressivism does not prevail) will seem even more backward and primitive than the technology of the 16th century seems to us today.
Ray Kurzweil has argued that technology advances at ever quicker rates. Kurzweil's argument depends in part on Moore's law, which does not seem to be materializing now and assumes a rate of advance that is quicker than past and recent rates by orders of magnitude. One need not buy into Kurzweil's singularity argument to believe that future advance will be quicker than past advance. Technological advance depends on interaction and creativity. Informationi technology has increased the rate of interaction, so the rate of advance has been increasing. But much of the advance has been in information technology. Therefore, we can expect escalating rates of advance. This has occurred despite attacks on the flow of information. Much of the twentieth century world was darkened by dictatorship: communism covered China and Russia and a corrupt socialism dominated India. National socialism dominated the world's political systems, and progressive regulatory systems, income taxation and inflationary Federal Reserve policies that allocate credit away from innovative firms toward financial firms hammered at progress in the United States. Despite the Progressive assault on human progress, except for the period of high tariffs, depression and war from the late 1920s through the 1950s, the twentieth century still saw progress, although not at the rate that could have been, and perhaps slower than the late 19th century rate, which saw less circulation of information for less intervention.
The economy has become more global and competition is no longer "managed" (like a child who believes he is a policeman, so Theodore Roosevelt believed he could manage the economy) yet overproduction is not a problem, nor is unfair competition.
Thursday, March 13, 2008
Eliot Spitzer in The New York Times
Progressives argue that deliberative processes are essential to a just society. However, accurate information sources are necessary to deliberation. If news media fail to provide accurate information, then deliberative processes need to be curtailed. If one draws an analogy to business, news sources ought to be fiduciaries to the public, i.e., to serve the public trust, if the progressive goal of deliberation is achievable. If news sources see themselves as sellers of news, then they can ethically puff up and distort stories. But in that case good deliberation and decision making is impeded and the progressive model will fail.
The New York Times is widely regarded as the nation's chief news source and is the most likely candidate of all news sources to play the role of fiduciary to the public. The advent of the Times as a putative objective source of information was part of the development of Progressivism and twentieth century liberalism. But its handling of Eliot Spitzer's candidacy and gubernatorial administration took a marketing as opposed to a fiduciary tone. Rather than attempt to uncover facts and report accurately about Eliot Spitzer, from the beginning the Times saw its role as Spitzer's marketer and defender. While partisan news is fine, it does not lend itself to deliberative processes, because deliberation depends on sound information and trust rather than deception and distrust. The Times followed the 19th century journalistic advocacy model with respect to Spitzer. Assuming the Times's failure is generalizable, and there is no reason to think it is not, deliberative progressivism is an impossible chimera because information sources necessary to competent public deliberation are missing. Intelligent deliberation cannot be based on the liberal media's outright deception.
The Times had about ten years to observe Eliot Spitzer, who first campaigned for Attorney General in 1998 and then for Governor in 2006. Yet, the Times failed to highlight fundamental character flaws that are now evident to all and would have been evident to any objective observer. The matter is not of sexual vice but of Spitzer's bad judgment, willingness to lie, self-indulgence and lack of common sense. Spitzer publicly stated that he would avoid accepting campaign contributions over $10,000, and when he did accept such contributions the Times did all it could to minimize the story. Observers, including myself, had long suspected character problems. By late last year it was evident that Spitzer's inability to overcome political resistance to reform in Albany meant that he had been elected on false premises. But the Times did not reconsider its rigid support for Spitzer. Rather, it preferred to continue to lie. Public deliberation is impossible with such information sources.
In this blog I will review some of the Times's pre-election coverage of Spitzer and its unwillingness to raise ethical questions about contributions to Spitzer's campaign. In subsequent blogs I will review its biased handling of Spitzer's time in office.
The Times's Election Coverage
On October 22, 2006 the Times formally endorsed Eliot Spitzer. According to Nicholas Confessore the Times's editorial board had said that:
"Mr. Spitzer 'has been fearless and dogged in his pursuit of justice. We are eager to see what happens when he applies those attributes to Albany's immobile Legislature, which has a long, sad history in wearing would-be reformers down, waiting them out.'"
In the ensuing 16 months, during which Governor Spitzer did little or nothing to reform Albany and instead was involved in repeated fights with other politicians, the Times failed to flash any caution lights. It had to have been aware that time was of the essence for Spitzer to overcome resistance to reform, but it did not monitor or question Spitzer's timeliness.
During the campaign, the Times ran several articles discussing Republicans' support for then-candidate Spitzer. In an article entitled "A Secret Divide on Republican Turf", Manny Fernandez wrote about support for Spitzer in Broome County, New York:
"Mr. Spitzer appeals to Republicans for a number of reasons. As the state's top law enforcement officer, he made a name for himself as a tough prosecutor in a series of high-profile cases. But two factors drawing Republicans to Mr. Spitzer have less to do with the candidate himself than with the way the race for governor has played out."
In the ensuing months, when Governor Spitzer failed to engage not only with Republicans but also with his fellow Democrats, the Times never again mentioned the Republicans of Broome County and whether they had been misled.
At the same time that the Times boasted about Mr.Spitzer's ability to clean up Albany and win over Republican support, the New York Daily News already carried stories that questioned Spitzer's ethics. On September 5, 2006, Bill Hammond of the New York Daily News published a story entitled "High Flying Spitzer Hits Ethical Turbulence." In the story Hammond notes:
"(A)ccepting deeply discounted air travel from a gambling mogul doing lots of business with state government - as Spitzer and an aide did in May - is too cozy for comfort. The would-be Sheriff of Albany should be keeping a safe distance from favor seekers, not putting himself in a position where he owes them anything."
On September 2, 2006, the Times carried the story this way in an article entitled "Hammering at Spitzer, but With Nary a Dent to Show":
The Republican candidate, John Faso, hammered at Attorney General Spitzer for accepting flights on a private jet owned by Richard Fields, a developer who ferried Mr. Spitzer to fund-raisers across the country, and who has himself donated $200,000 through various entities he controls... Not that any of this came close to making a dent in Mr. Spitzer’s aura of invincibility. The attorney general leads Mr. Suozzi by more than 50 points in various polls.
This evidence of the shallow fraudulence of Spitzer's claim to be an ethics leader did not, for some odd reason, give the Times's editors pause. On January, 19 2007 the Times carried another story in its Metro Briefing section entitled "New York: Albany: Spitzer Returns Campaign Cash". The story does not mention the Faso accusations several months earlier and merely notes:
"Mr. Fields was reimbursed because his companies exceeded the $50,100 limit on individual donations allowed under state law, said a Spitzer spokeswoman." The Times did not raise ethical issues. Indeed, in a November 12 article about Governor Spitzer's election the Times's Leslie Eaton wrote:
"Mr. Spitzer was not sure if he would seek private donations to pay for a celebration, as Gov. George E. Pataki did for his first swearing-in, in 1995. That practice has raised ethical questions in the past, Mr. Spitzer said, 'and we’re going to handle it in a very, very different way.'" Ms. Eaton did not raise the question of Richard Fields during Mr. Spitzer's beach holiday and why, if funding the inaugural celebration was an ethical problem, why accepting large donations from a casino developer was not. The Times chose to focus on Spitzer's supposedly ethical refusal to have private sources pay for a celebration, and ignored hundreds of thousands of dollars worth of donations from casino developers.
On September 17, 2006 in the Daily News , Michael Goodwin wrote with respect to Spitzer's ability to implement campaign finance reform:
"Eliot Spitzer says it over and over again: 'On Day One, everything changes.'... But Spitzer's vow is suspect in one key area because he comes to the job with dirty hands...Having trounced his primary opponent with more than 80% of the vote, and having a huge lead in fund-raising and the polls over Republican John Faso, Spitzer could take the high road before November. He could lead by example and give the tainted money back. That way, he'd be a true reformer on Day One...Among the $37 million he has collected is at least $350,000 from a handful of backers who had already reached the $50,100 limit, according to Common Cause."
On September 19, 2006 the Times's Mike McIntire notes in passing that AIG had contributed excessively to Spitzer's campaign. But on January 14, 2006 the Times's Patrick D. Healy had minimized ethical questions that had been raised about Spitzer:
"Mr. Suozzi continued that he believed Mr. Spitzer has 'been overly reliant' on donations from trial lawyers and lobbyists. He then asked to move that comment off the record as well...
"According to studies by Common Cause New York, Mr. Spitzer has raised many tens of thousands of dollars from lawyers and lobbyists, although a precise total was not available yesterday. Since 1999, Mr. Spitzer has received $94,300 from a political action committee for trial lawyers -- half of the amount that Gov. George E. Pataki received during that period, though Mr. Spitzer received a greater number of contributions from the committee...In an interview yesterday, Mr. Spitzer did not appear troubled by Mr. Suozzi's remarks, declining to comment on the expletive and reacting skeptically to the description of his fund-raising."
The Times was committed to Spitzer to a degree that would have been suicidal for a business investor. Isn't a political candidate something of a public investment? And isn't the media's role something of a public trust? If it is not, if the Times is partisan, the system of big government and public deliberation will not work.
The New York Times is widely regarded as the nation's chief news source and is the most likely candidate of all news sources to play the role of fiduciary to the public. The advent of the Times as a putative objective source of information was part of the development of Progressivism and twentieth century liberalism. But its handling of Eliot Spitzer's candidacy and gubernatorial administration took a marketing as opposed to a fiduciary tone. Rather than attempt to uncover facts and report accurately about Eliot Spitzer, from the beginning the Times saw its role as Spitzer's marketer and defender. While partisan news is fine, it does not lend itself to deliberative processes, because deliberation depends on sound information and trust rather than deception and distrust. The Times followed the 19th century journalistic advocacy model with respect to Spitzer. Assuming the Times's failure is generalizable, and there is no reason to think it is not, deliberative progressivism is an impossible chimera because information sources necessary to competent public deliberation are missing. Intelligent deliberation cannot be based on the liberal media's outright deception.
The Times had about ten years to observe Eliot Spitzer, who first campaigned for Attorney General in 1998 and then for Governor in 2006. Yet, the Times failed to highlight fundamental character flaws that are now evident to all and would have been evident to any objective observer. The matter is not of sexual vice but of Spitzer's bad judgment, willingness to lie, self-indulgence and lack of common sense. Spitzer publicly stated that he would avoid accepting campaign contributions over $10,000, and when he did accept such contributions the Times did all it could to minimize the story. Observers, including myself, had long suspected character problems. By late last year it was evident that Spitzer's inability to overcome political resistance to reform in Albany meant that he had been elected on false premises. But the Times did not reconsider its rigid support for Spitzer. Rather, it preferred to continue to lie. Public deliberation is impossible with such information sources.
In this blog I will review some of the Times's pre-election coverage of Spitzer and its unwillingness to raise ethical questions about contributions to Spitzer's campaign. In subsequent blogs I will review its biased handling of Spitzer's time in office.
The Times's Election Coverage
On October 22, 2006 the Times formally endorsed Eliot Spitzer. According to Nicholas Confessore the Times's editorial board had said that:
"Mr. Spitzer 'has been fearless and dogged in his pursuit of justice. We are eager to see what happens when he applies those attributes to Albany's immobile Legislature, which has a long, sad history in wearing would-be reformers down, waiting them out.'"
In the ensuing 16 months, during which Governor Spitzer did little or nothing to reform Albany and instead was involved in repeated fights with other politicians, the Times failed to flash any caution lights. It had to have been aware that time was of the essence for Spitzer to overcome resistance to reform, but it did not monitor or question Spitzer's timeliness.
During the campaign, the Times ran several articles discussing Republicans' support for then-candidate Spitzer. In an article entitled "A Secret Divide on Republican Turf", Manny Fernandez wrote about support for Spitzer in Broome County, New York:
"Mr. Spitzer appeals to Republicans for a number of reasons. As the state's top law enforcement officer, he made a name for himself as a tough prosecutor in a series of high-profile cases. But two factors drawing Republicans to Mr. Spitzer have less to do with the candidate himself than with the way the race for governor has played out."
In the ensuing months, when Governor Spitzer failed to engage not only with Republicans but also with his fellow Democrats, the Times never again mentioned the Republicans of Broome County and whether they had been misled.
At the same time that the Times boasted about Mr.Spitzer's ability to clean up Albany and win over Republican support, the New York Daily News already carried stories that questioned Spitzer's ethics. On September 5, 2006, Bill Hammond of the New York Daily News published a story entitled "High Flying Spitzer Hits Ethical Turbulence." In the story Hammond notes:
"(A)ccepting deeply discounted air travel from a gambling mogul doing lots of business with state government - as Spitzer and an aide did in May - is too cozy for comfort. The would-be Sheriff of Albany should be keeping a safe distance from favor seekers, not putting himself in a position where he owes them anything."
On September 2, 2006, the Times carried the story this way in an article entitled "Hammering at Spitzer, but With Nary a Dent to Show":
The Republican candidate, John Faso, hammered at Attorney General Spitzer for accepting flights on a private jet owned by Richard Fields, a developer who ferried Mr. Spitzer to fund-raisers across the country, and who has himself donated $200,000 through various entities he controls... Not that any of this came close to making a dent in Mr. Spitzer’s aura of invincibility. The attorney general leads Mr. Suozzi by more than 50 points in various polls.
This evidence of the shallow fraudulence of Spitzer's claim to be an ethics leader did not, for some odd reason, give the Times's editors pause. On January, 19 2007 the Times carried another story in its Metro Briefing section entitled "New York: Albany: Spitzer Returns Campaign Cash". The story does not mention the Faso accusations several months earlier and merely notes:
"Mr. Fields was reimbursed because his companies exceeded the $50,100 limit on individual donations allowed under state law, said a Spitzer spokeswoman." The Times did not raise ethical issues. Indeed, in a November 12 article about Governor Spitzer's election the Times's Leslie Eaton wrote:
"Mr. Spitzer was not sure if he would seek private donations to pay for a celebration, as Gov. George E. Pataki did for his first swearing-in, in 1995. That practice has raised ethical questions in the past, Mr. Spitzer said, 'and we’re going to handle it in a very, very different way.'" Ms. Eaton did not raise the question of Richard Fields during Mr. Spitzer's beach holiday and why, if funding the inaugural celebration was an ethical problem, why accepting large donations from a casino developer was not. The Times chose to focus on Spitzer's supposedly ethical refusal to have private sources pay for a celebration, and ignored hundreds of thousands of dollars worth of donations from casino developers.
On September 17, 2006 in the Daily News , Michael Goodwin wrote with respect to Spitzer's ability to implement campaign finance reform:
"Eliot Spitzer says it over and over again: 'On Day One, everything changes.'... But Spitzer's vow is suspect in one key area because he comes to the job with dirty hands...Having trounced his primary opponent with more than 80% of the vote, and having a huge lead in fund-raising and the polls over Republican John Faso, Spitzer could take the high road before November. He could lead by example and give the tainted money back. That way, he'd be a true reformer on Day One...Among the $37 million he has collected is at least $350,000 from a handful of backers who had already reached the $50,100 limit, according to Common Cause."
On September 19, 2006 the Times's Mike McIntire notes in passing that AIG had contributed excessively to Spitzer's campaign. But on January 14, 2006 the Times's Patrick D. Healy had minimized ethical questions that had been raised about Spitzer:
"Mr. Suozzi continued that he believed Mr. Spitzer has 'been overly reliant' on donations from trial lawyers and lobbyists. He then asked to move that comment off the record as well...
"According to studies by Common Cause New York, Mr. Spitzer has raised many tens of thousands of dollars from lawyers and lobbyists, although a precise total was not available yesterday. Since 1999, Mr. Spitzer has received $94,300 from a political action committee for trial lawyers -- half of the amount that Gov. George E. Pataki received during that period, though Mr. Spitzer received a greater number of contributions from the committee...In an interview yesterday, Mr. Spitzer did not appear troubled by Mr. Suozzi's remarks, declining to comment on the expletive and reacting skeptically to the description of his fund-raising."
The Times was committed to Spitzer to a degree that would have been suicidal for a business investor. Isn't a political candidate something of a public investment? And isn't the media's role something of a public trust? If it is not, if the Times is partisan, the system of big government and public deliberation will not work.
Failure of Progressivism
Writing in the tradition of John Dewey's progressivism, Peter Levine and others have argued that deliberation and democracy are key values and that society ought to be reformed to reinvigorate public participation and deliberation. Liberals now call themselves progressives and continue to argue for enhancement of the public sphere at the expense of the private sphere; increased government involvement in the economy; and a reinvention of policies that, over the past century, have failed. But Progressivism has failed and will continue to fail because its commitment to big government ignores the conditions for good decision making in a large economy and in the kind of large organizations that progressivism subsidizes.
In order to function, economies and institutions need to make best use of information. Such information is available through price fluctuations and on-the-spot shifts in demand. To make best use of informational change, economic decision makers must be local and/or flexible. Some patterns may be global, but even there continuous improvement is necessary to an efficient organization, and the ability to continously and at times radically improve is necessary to an efficient economy.
To be local, organizations must be decentralized. To be decentralized, they must be small actors who are profit oriented; or be decntralized large organizations. Institutions at the macro-economic level are too large and centralized to be able to make use of local information, as Friedrich Hayek has argued. Thus, to make best use of information in the economy, economic actors must be small, privately owned organizations with local knowledge or be able to emulate such organizations. For large governmental institutions to work they must emulate small organizations anyway, and there is no reason to characterize them as governmental institutions. To the extent that they are government institutions they will not function effectively.
There is a second reason for the failure of progressivism. In order to manage systems, feedback is necessary and reform of policy must be continuous. This is important in both the individual organization and the larger economy as well for two reasons. First, organizations need to maintain stability. If, for instance, prices rise, then the organization must be able to promptly adjust purchasing policies, pricing strategy and a host of similar variables in order to stabilize themselves with respect to the rising price. Second, in order to improve their products organization must be able to continuously change. This requires motive and ability to continuously improve organizational information systems. Such continuous improvement is impossible in a democratic setting. Democratic processes are global and require mass deliberation. Nor are such improvement processes possible via expert commissions. Experts are not privy to what the quality expert EI Deming called the "profound knowledge" of workers intimately involved in a production system. Moreover, the knowledge base that is required changes constantly because of shifting conditions.
Neither of these requirements hold with respect to deliberative democracy and so is precluded by progressivism. Deliberative processes are untimely; cannot integrate local information; are rigid; are unable to be revised because of the costliness of the deliberative process; are subject to opportunistic manipulation by self-interested parties and insiders; do not reflect a unitary profit motive; and often are subject to a range of contradictory motives.
Because of these limitations progressivism is necessarily at odds with progress. Progress requires innovation, which in turn is conditional upon incentives, a clear goal, a focus on improvement (continuous as well as radical), flexibility with respect to decision making and experimentation conditioned upon flexibility and unforeseen results and outcomes.
Thus, progressive-liberalism is inherently anti-progress. Its very name is self-contradictory.
In order to function, economies and institutions need to make best use of information. Such information is available through price fluctuations and on-the-spot shifts in demand. To make best use of informational change, economic decision makers must be local and/or flexible. Some patterns may be global, but even there continuous improvement is necessary to an efficient organization, and the ability to continously and at times radically improve is necessary to an efficient economy.
To be local, organizations must be decentralized. To be decentralized, they must be small actors who are profit oriented; or be decntralized large organizations. Institutions at the macro-economic level are too large and centralized to be able to make use of local information, as Friedrich Hayek has argued. Thus, to make best use of information in the economy, economic actors must be small, privately owned organizations with local knowledge or be able to emulate such organizations. For large governmental institutions to work they must emulate small organizations anyway, and there is no reason to characterize them as governmental institutions. To the extent that they are government institutions they will not function effectively.
There is a second reason for the failure of progressivism. In order to manage systems, feedback is necessary and reform of policy must be continuous. This is important in both the individual organization and the larger economy as well for two reasons. First, organizations need to maintain stability. If, for instance, prices rise, then the organization must be able to promptly adjust purchasing policies, pricing strategy and a host of similar variables in order to stabilize themselves with respect to the rising price. Second, in order to improve their products organization must be able to continuously change. This requires motive and ability to continuously improve organizational information systems. Such continuous improvement is impossible in a democratic setting. Democratic processes are global and require mass deliberation. Nor are such improvement processes possible via expert commissions. Experts are not privy to what the quality expert EI Deming called the "profound knowledge" of workers intimately involved in a production system. Moreover, the knowledge base that is required changes constantly because of shifting conditions.
Neither of these requirements hold with respect to deliberative democracy and so is precluded by progressivism. Deliberative processes are untimely; cannot integrate local information; are rigid; are unable to be revised because of the costliness of the deliberative process; are subject to opportunistic manipulation by self-interested parties and insiders; do not reflect a unitary profit motive; and often are subject to a range of contradictory motives.
Because of these limitations progressivism is necessarily at odds with progress. Progress requires innovation, which in turn is conditional upon incentives, a clear goal, a focus on improvement (continuous as well as radical), flexibility with respect to decision making and experimentation conditioned upon flexibility and unforeseen results and outcomes.
Thus, progressive-liberalism is inherently anti-progress. Its very name is self-contradictory.
Conformity and Fear in Modernism
One of the hallmarks of modernism is fear. Fear arises from modernism's emphasis on scale, its support for large organizations and institutions, i.e., bureaucracy, which its apologists defend on the grounds of economic efficiency. However, modernism depended on state support for those same institutions. In the 19th century state support involved tariffs, land grants, favors and subsidies to large organizations. The chief beneficiaries of big government, big businessmen, were able to convince Progressives, such as Theodore Roosevelt, that state management and stabilization were necessary. This led to the establishment of the Federal Reserve Bank in 1913, the chief source of subsidies to large coroprations, banks and the investment community.
In the 1920s, tariffs that had been abolished in the late 19th century were reestablished and in the 1930s the gold standard was abolished, freeing the central government to provide unlimited subsidies to large organizations. At the same time, government was centralized in the name of public welfare, making the ordinary citizen ever more dependent on large organizations. The alternatives presented as necessary to modern life were framed as a choice between large, inefficient, state-subsidized industries and even larger government-owned industries.
There was never any evidence that these were the only choices. In fact, the evidence suggested that only the capitalist class suffered from decentralized, competitive industry and that without centralization the average American saw increasing real wages and high demand for labor. The advocates of Progressivism argued that the competitive economy resulted in "overproduction". Yet overproduction suggests over-employment and excess demand for labor. Yet at the same time, the Progressives argued that over-production resulted in unemployment.
Fear arises because large scale institutional structure inhibits job formation. It does so through taxation, reallocation of capital from individuals to centrally controlled institutions via the Federal Reserve Bank, government regulation, the minimum wage and in the early twentieth century institutionalized racial discrimination. Government policies restrict the availability of jobs, making individuals increasingly independent on corporate and state employment. Income taxation and social security eliminate private saving so the individual lacks resources on which to depend if he loses his job and experimentation with new production and institutional forms is curtailed.
Corporate liberalism extends its attack on private resources to the few individuals who manage to accumulate enough to live without dependence on large corporations. It establishes an inheritance tax so that independence cannot be transmitted intergenerationally, increasing the likelihood of near-universal dependence on large institutions. The inheritance taxes are structured so that trusts and legal exceptions are made for the very wealthy, insuring the establishment of an intergenerationally progressive-liberal artistocracy based on ownership of large-scale institutions. Beneficiaries of such privilege, such as the Ochs Sulzbergers of the New York Times and the Rockefellers, then argue for increased inheritance taxes on others who can afford less creative legal advice.
Fear arises because loss of employment can mean personal disaster. Risk increases with ability level. Corporate jobs are difficult to procure because of artificially induced shortages. Specialized knowledge is often firm specific, hence, the individual becomes politically, intellectually and morally dependent on the corporate system. The most talented individuals become the most inhibited. The inhibitions are reinforced through cultural institutions such as universities who incultate political correctness, uniformity of thought and cowardly political behavior.
Individuality erodes for additional reasons. First, in the workplace corporations discourage individuality in the name of coordination. This is done by requiring "interpersonal skills" or "managerial skills" of corporate employeesj; requiring that individuals be "team players" and in universities through "political correctness" and ideological litmus tests. Employees who do not conform to the corporate or academic value systems are regarded as troublemakers and are precluded from further engagement with the firm or from promotion even if their productivity is significantly higher than their wage. Hence, large institutions are generally inefficienct and do not maximize profit. This is possible in part because they are subsidized by regulation and Federal Reserve Bank credit and because they enjoy substantial monopoly power in their industries.
Fear and conformity result in a propensity toward mass thinking among modern citizens. Those who deviate, are "politically incorrect" do not behave appropriately are viewed as unemployable. A few are able to start businesses or find alternative ways to make a living. However, these are too few in number to alter the character of modern society.
Second, mass consumption and the mass media result in a high degree of uniformity of opinion. Mass consumption requires a uniform assortment of merchandise of modest quality that is attractive to large numbers of consumers. Coca-cola, McDonald's and network television become standards, and refusal to engage with these products becomes a stigma. Likewise, those who produce mass media are subject to the same corporate groupthink as the members of other corporate and professional communities, and the public mind is heavily influenced through repetition and frequent exposure to television and films.
Fear and conformity lead to fascination with mass entertainment, frivolous interpretations of what art, knowledge and literature are, declining standards in academia and higher education and failure of science. The achievement value of achievement is replaced by the value of conformity, other-directedness, groupthink and acceptance of authority and political correctness. Thus, left and right are alternative cults that aim to provide a "received" political value to conformist, modern citizens. Participation in a cult is necessary because modern citizens lose faith in their own ideas and opinions, and come to believe that newscasters, newspapers and others are necessary to make intelligent and informed choices. Of course, such sources are no better informed than the citizens themselves, and so the modern political world becomes a contest of wills among several groupings of opinion, each one ill-informed and each one emotionally comitted to its group, and each one unable to free itself from the fear and conformity that drive their spirits.
In the 1920s, tariffs that had been abolished in the late 19th century were reestablished and in the 1930s the gold standard was abolished, freeing the central government to provide unlimited subsidies to large organizations. At the same time, government was centralized in the name of public welfare, making the ordinary citizen ever more dependent on large organizations. The alternatives presented as necessary to modern life were framed as a choice between large, inefficient, state-subsidized industries and even larger government-owned industries.
There was never any evidence that these were the only choices. In fact, the evidence suggested that only the capitalist class suffered from decentralized, competitive industry and that without centralization the average American saw increasing real wages and high demand for labor. The advocates of Progressivism argued that the competitive economy resulted in "overproduction". Yet overproduction suggests over-employment and excess demand for labor. Yet at the same time, the Progressives argued that over-production resulted in unemployment.
Fear arises because large scale institutional structure inhibits job formation. It does so through taxation, reallocation of capital from individuals to centrally controlled institutions via the Federal Reserve Bank, government regulation, the minimum wage and in the early twentieth century institutionalized racial discrimination. Government policies restrict the availability of jobs, making individuals increasingly independent on corporate and state employment. Income taxation and social security eliminate private saving so the individual lacks resources on which to depend if he loses his job and experimentation with new production and institutional forms is curtailed.
Corporate liberalism extends its attack on private resources to the few individuals who manage to accumulate enough to live without dependence on large corporations. It establishes an inheritance tax so that independence cannot be transmitted intergenerationally, increasing the likelihood of near-universal dependence on large institutions. The inheritance taxes are structured so that trusts and legal exceptions are made for the very wealthy, insuring the establishment of an intergenerationally progressive-liberal artistocracy based on ownership of large-scale institutions. Beneficiaries of such privilege, such as the Ochs Sulzbergers of the New York Times and the Rockefellers, then argue for increased inheritance taxes on others who can afford less creative legal advice.
Fear arises because loss of employment can mean personal disaster. Risk increases with ability level. Corporate jobs are difficult to procure because of artificially induced shortages. Specialized knowledge is often firm specific, hence, the individual becomes politically, intellectually and morally dependent on the corporate system. The most talented individuals become the most inhibited. The inhibitions are reinforced through cultural institutions such as universities who incultate political correctness, uniformity of thought and cowardly political behavior.
Individuality erodes for additional reasons. First, in the workplace corporations discourage individuality in the name of coordination. This is done by requiring "interpersonal skills" or "managerial skills" of corporate employeesj; requiring that individuals be "team players" and in universities through "political correctness" and ideological litmus tests. Employees who do not conform to the corporate or academic value systems are regarded as troublemakers and are precluded from further engagement with the firm or from promotion even if their productivity is significantly higher than their wage. Hence, large institutions are generally inefficienct and do not maximize profit. This is possible in part because they are subsidized by regulation and Federal Reserve Bank credit and because they enjoy substantial monopoly power in their industries.
Fear and conformity result in a propensity toward mass thinking among modern citizens. Those who deviate, are "politically incorrect" do not behave appropriately are viewed as unemployable. A few are able to start businesses or find alternative ways to make a living. However, these are too few in number to alter the character of modern society.
Second, mass consumption and the mass media result in a high degree of uniformity of opinion. Mass consumption requires a uniform assortment of merchandise of modest quality that is attractive to large numbers of consumers. Coca-cola, McDonald's and network television become standards, and refusal to engage with these products becomes a stigma. Likewise, those who produce mass media are subject to the same corporate groupthink as the members of other corporate and professional communities, and the public mind is heavily influenced through repetition and frequent exposure to television and films.
Fear and conformity lead to fascination with mass entertainment, frivolous interpretations of what art, knowledge and literature are, declining standards in academia and higher education and failure of science. The achievement value of achievement is replaced by the value of conformity, other-directedness, groupthink and acceptance of authority and political correctness. Thus, left and right are alternative cults that aim to provide a "received" political value to conformist, modern citizens. Participation in a cult is necessary because modern citizens lose faith in their own ideas and opinions, and come to believe that newscasters, newspapers and others are necessary to make intelligent and informed choices. Of course, such sources are no better informed than the citizens themselves, and so the modern political world becomes a contest of wills among several groupings of opinion, each one ill-informed and each one emotionally comitted to its group, and each one unable to free itself from the fear and conformity that drive their spirits.
A Milestone Revisited: Governor Spitzer versus Governor Sulzer
On October 24, 2007 Sam Roberts, in the New York Times, noted that Governor Eliot Spitzer had outlasted another New York Governor, Governor William Sulzer. Governor Sulzer was impeached on October 17, 1913, less than 10 months after he had assumed office. Governor Spitzer lasted less than 15 months, so he failed to break the Sulzer brevity record for progressive-liberal New York governors, but he is probably the first New York governor to resign in less than 18 months.
As Roberts notes, there are a few parallels between Governors Spitzer and Sulzer besides their last names' beginning and ending with the same letters and including the letter z. Like Spitzer, Sulzer fought with the leadership of New York's corrupt state government. Like Spitzer, Sulzer was accused of spying on political opponents.
According to Wikipedia, in Sulzer's case "Silent Charlie" Murphy, sachem of Tammany Hall, orchestrated Sulzer's impeachment. Tammany accused Sulzer of corruption because Sulzer had refused to accept Tammany's instructions on which political cronies to appoint.
In October, Roberts wrote in the Times:
"Nobody has been comparing Governor Spitzer with Governor Sulzer. But even some of the biggest fans of Governor Spitzer, say that like Governor Sulzer, he has gone out of his way to invite retaliation from people he does not like, but still needs, to accomplish the lofty goals that he advanced during his campaign."
These remarks were unfair in October. By then, I and others had been calling for Spitzer's resignation for some time. The Times was busily defending the wisdom of Spitzer's crackpot plan to provide drivers' licenses to illegal aliens. It took Spitzer's side in his battle with Joseph Bruno, who, though without as much power, is a bit like Silent Charlie. It omitted stories about accusations about Spitzer and emphasized stories that embarrassed Bruno. It did not question why a former prosecutor who had made a name for himself as a reformer and had claimed to be able to clean up Albany had done nothing to clean up Albany; had appointed a board member of one of the organizations he had investigated, the New York Stock Exchange, to the board of SUNY; and had been accused of using air transport for political purposes, the very accusation he had levied against Bruno.
Roberts does injustice to Governor Sulzer. Sulzer managed to get himself reelected to the New York State Assembly in November 1913, just a month after he had been removed as governor. He re-ran for governor in 1914. Although he wasn't elected, he took enough votes away from Democrat Martin H. Glynn to cause Republican Charles S. Whitman to win the gubernatorial race.
Unlike Sulzer, Spitzer, right under the nose of the New York Times for the past decade, has been an infantile, hypocritical fraud who attacked numerous businessmen, all of whom were more ethical than Spitzer was. He destroyed lives and reputations in his self-indulgent quest for power. He claimed to be a reformer but lacked knowledge of basic processes and politics necessary for reform. The New York Times championed an incompetent, depraved fool like Eliot Spitzer for more than a decade. This suggests continued dysfunction not only of New York, but of the nation's media.
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