Moralists or Pragmatists: The Mugwumps 1884-1900

Mugwump Seth Low, last Mayor of Brooklyn, Mayor of New York City and President of Columbia University


Gerald W. McFarland, editor. Moralists or Pragmatists? The Mugwumps, 1884-1900: A Penetrating Study of This Political Reform Movement. Articles by Robert L. Beisner, Goeffrey T. Blodgett, Ari Hoogenboom, Michael G. Kammen, Gerald W. McFarland, Gordon S. Wood. New York: Simon and Schuster, 1975. 152 pages.

This a good book. When read in combination with Gerald W. McFarland's Mugwumps, Morals and Politics one gets a good appreciation for McFarland's sound scholarship as well as the mugwumps. All of the essays are good and several are excellent.

McFarland notes (p. 2-3) that:

"Modern stereotypes of liberalism scarcely fit the Mugwumps...In economics they adopted the classical nineteenth-century liberal position that the greatest good would be served when the supposedly 'natural' laws of competition and of supply and demand were allowed to work without interruption. On these grounds they denounced most proposals for federal social and economic legislation. Inflationary financial schemes--advocated by Greenbackers and Populists--would simply create 'dishonest' dollars, the Mugwumps charged. Similarly, they condemned the protective tariff as government paternalism on behalf of special interests...

"Implicit in the Mugwumps' careers are three subjects--corruption, motivation and political strategy--which have particular relevance to us..."

McFarland raises the question of what the Mugwumps' motivations were: simple interest in reform, economic self-interests, or psycho-social feelings arising from loss of social status (Hofstadter's thesis in Age of Reform).

McFarland also points out that the Mugwumps' history is suggestive as to the kind of strategy that political minorities should follow. "Are political minorities better off staying in the party and hoping to have some influence within it? Or should dissenters leave the party in an effort to purify it?" There is no satisfactory answer in McFarland's view.

He also notes that "the pressure group ethic" of emerging industrial America was distasteful to the Mugwumps. However, somewhat contradictorily, the Mugwumps were leaders in the movement to rationalize the professions. During the first two decades of the American Bar Association's existence (1878-1898) three Mugwumps served as its president, and Mugwumps were involved with early learned societies like the Modern Language Association.

The Mugwumps' interest in civil service reform was as much an interest in "purifying" government (p.10) as in providing better management. The editor of the Nation, EL Godkin, one of the most famous Mugwumps, called the election of New York City Mayor William L. Strong (sponsored by the Committee of Seventy, which included many Mugwumps) the "Triumph of Reform". You get a feel for the Mugwumps' cultural orientation in that Strong appointed Theodore Roosevelt police commissioner, and Roosevelt rigorously enforced Sunday blue laws prohibiting liquor sales, which enraged German immigrants and caused Strong to lose the next election. The Committee of 70's successor, the Citizens' Union, won the 1901 election when Seth Low, former mayor of Brooklyn and president of Columbia University, was elected New York City mayor.

The Mugwumps realized that the Citizens' Union could not defeat the Tammany Hall machine without the lower East Side ethnic vote. One can really see the origins of progressivism in this paragraph (p.12):

"With 'The City for the People!' as its slogan, the Union endorsed a wide range of measures on behalf of lower-class constituents: public baths and lavatories, improved tenement housing, more small parks in tenement districts and increased social services for the sick, destitute and aged. 'Mismanagement, favoritism and dishonesty must go," the Union's election handouts insisted. 'But this is not enough. We must have positive benefits for the people.' Sincere though it was, this bid for support from 'other' New Yorkers gave the gentlemen-led Union a mild case of campaign schizophrenia--Citizens' Union speakers promising downtown slum residents more services and uptown middle-class voters more economy. Yet the fusion of these two voting blocs was one of the Union's foremost goals and a crucial factor in Seth Low's 1901 victory."

The Mugwumps were the first limousine liberals! Some of the Mugwumps went on to become progressives, although I believe that McFarland overstates the percentage because he includes government reforms in the issues that he indexes to determine whether Mugwumps later became progressives. I think that he underestimates the power and importance of the Mugwumps' laissez faire philosophy. McFarland adds (p.14):

"The political and social reforms of the Cleveland Democrats in New England and the municipal reform programs of the Strong administration and the Citizens' Union campaigns in New York City were the chief signs that the Mugwumps were making practical concessions to urban-industrial conditions. The tools the genteel progressives applied were modernized ones, such as expert administration, centralized control and scientific investigation of social problems. Instead of morality, the new reform generation made progress its creed. Experts were its chief priesthood. There were orthodox underpinnings to these innovations, however, as reform still had a strong vein of old-fashioned elitism. Earlier the community's elite had reserved to itself the role of determining what was moral. Similarly, the new elite of experts claimed to have special credentials for interpreting what constituted progress. Granted, the progressive liberals actively sought to ameliorate the harsh impact of industrialism on lower-class Americans, but the reformers retained for themselves primary responsibility for deciding what the people needed.

"From a critical perspective today many aspects of both preindustrial Mugwump ideas and modern American liberalism are troubling. In pre-industrial United States the ranks of the 'best men' were restricted by class status and family connections. After modernization, limited access to high status was sustained by new, 'objectified', devices--intelligence tests, civil service examinations and educational credentials. Neither the old nor the new pattern was an absolutely closed system, but both, as is obvious now, seriously discriminated against Americans who started behind in the race for wealth and status."

Geoffrey T. Blodgett's contribution to the book, "The Mind of the Boston Mugwump" (p. 18) is a rich description of the Mugwumps' cultural and social world. Blodgett argues that in 1884 the Mugwumps' "dominating motive for their behavior was a desire to escape the status fitted for them by indulgent families, an eagerness to break loose from their role as passive heirs. This did not make them rebels against the New England past."

"Boston Mugwumps maintained a notably more genial temper than did their contemporaries in New York...The Bostonians looked to New York for inspiration...Godkin's Nation was their Bible...But years of dismal experience with Grant, Conkiling and Tammany Hall had played out the resilience in the New Yorkers..." (P.25)

"Immigration, urbanized politics and the rushing growth of protected industry had by the 1880s made town-meeting democracy almost a rural relic...Democracy had broken out of the stable framework in which New England had contained it. Now, to the Mugwump eye, it ran through her cities, crude, impetuous, without a memory. Unbridled democracy seemed to threaten not only private property but personal liberty and all the subtle authority which the town meeting had once assured the educated man of substance"(p.27).

Blodgett is a bit hard on the Mugwumps, though. No broad movement, even of educated people, is mostly composed of economics scholars or original thinkers. Somewhat condescendingly, Blodgett writes (p. 32):

"The Mugwumps looked on the economic and social problems of their era with well-meaning but uncreative conservatism. Their prime assumptions were absorbed at second-hand from the texts of Harvard's Francis Bowen, the pages of Godkin's Nation, the essays of William Graham Summer...Imprecise notions from Adam Smith, John Stuart Mill and Herbert Spencer mingled in shadowy fashion in their minds."

but (p.33)

"The Mugwumps staked little claim to economic authority. Their main concern was with party politics...Mugwumpery was above all an escape from party. By breaking fixed rules of political behavior, the Mugwumps hoped to change them..."

and (p.36)

"the driving impetus toward civil service reform was the Mugwump desire to slash through the tangle of personal influence and responsibility that tied public office to the party system. The more exuberant theorists envisioned an ideal future government run by administrative technicians whose only loyalty was patriotism"

and (p. 36)

"their muddling confirmed them as political amateurs."

Ari Hoogenboom, a former Brooklyn College professor, contributes an excellent article entitled "Civil Service Reform and Public Morality" in which he attacks the common belief that the Gilded Age was all that corrupt (I would argue that the present day is more corrupt in terms of real dollars but less overtly so) and makes a useful point as to the reason for the emphasis of corruption in the Gilded Age (p. 42):

"The historian is usually liberal, more often than not a Democrat. He is hostile to big business, an advocate of government regulation, strong executive leadership and an expert civil service. The post-Civil War era stands for all the historian opposes. It was an era of Republicanism, big business power, ineffectual attempts at government regulation, weak executives and an essentially nonprofessional civil service."

As a result, while reformers of the Gilded Age exaggerated corruption, historians tend to repeat the accusations too uncritically (p.43).

In Hoogenboom's view, the Mugwumps wanted careers in government, but were foreclosed by the spoils system. Thus, they became enemies of the spoils system. He gives the example of Charles Eliot Norton, who was related to Charles W. Eliot, Harvard's president, and co-founded the Nation with E.L. Godkin. Norton believed that democracy contributed to "the unfortunate national 'decline of manners.'" When President Grant was elected, Norton hoped to be appointed as ambassador to Holland or Belgium, and when he was ignored, he concluded that Grant was under the control of the spoils system. Likewise, George William Curtis, editor of Harper's Weekly, "was not opposed to the spoils system until it ceased to function satisfactorily for him and his friends." Lincoln had offered him an ambassadorship to Egypt, but postwar politicians (p. 46) "snubbed Curtis and his peers."

I don't find this argument entirely convincing, because the examples that Hoogenboom gives of Curtis's failure to win New York's senatorial nomination and failure on the Civil Service Commission are consistent with alternative interpretations, namely, that Curtis was not manipulative and found real-world politics to be distasteful. Hoogenboom also uses Henry Adams as an example, but again this example is not convincing of his point that the Mugwumps' interest in reform came from their lack of personal gain from Gilded Age politicians.

Hoogenboom argues that "The careers of Norton, Curtis and Henry Adams demonstrated that the civil service reform movement fitted a pattern of those out of power versus those in power...The civil service reformer's political impotence accurately reflected his loss of social and economic power. He was out of step with the rest of society..."

The last of the contributions about which I blog is McFarland's. I had previously blogged his book, but he has a slightly different take on his data here. McFarland argues that "I do not believe that displacement was the primary stimulus for the Mugwumps' reform efforts. As I will attempt to show in my conclusions, the Mugwumps' moral intensity and elitist feelings were in large part the outgrowth of their family tradition, educational background and professional status. Their familial, educational and professional experiences led them to feel a personal responsibility for the preservation of civic morality.

McFarland's data is interesting He complies a list of 396 Mugwumps and then traces their occupations viewable here.

Post-progressivism

Progressive-liberalism originated in the 1890s and saw its heyday in the nineteen teens. Ninety years have passed, yet the premises of the progressive-liberal movement, which was Republican as much as Democratic (Theodore Roosevelt, a Republican, and Woodrow Wilson, a Democrat, were Progressives) remain the same. When Progressivism was founded, it was regarded as "new". But after ninety years, progressivism and its followers have to be said to be following an old idea. In the coming months, I intend to show that progressive-liberalism, and today's liberalism, which has remained largely the same, was an ideology appropriate to the modernist era. Modernism differentiates from post-modernism with respect to organizational structure, scale, flexibility, unity of public opinion, technology, aesthetic, diversity and a host of other characteristics. Progressive-liberalism is an ideology that was appropriate to large-scale government characteristic of the modern era. It reached its limits in part because progressivism never solved the corruption that faced the post-Civil War political machines and in part because its organizational form is inappropriate to today's problems, for instance the need for economic competitiveness and education able to meet more competitive demands.

The post-progressive era is characterized by the need for greater flexibility,the need for heightened innovation in many fields such as health care and transportation, better education, and smaller organizations. The problems it faces such as cultural atomization, interest group pressure, the need to cope with interest group pressure at the national level, the need to develop a competitive economy, and the need for accelerated innovation, suggest the need for new emphasis on governmental forms. The new governmental forms include the importance of localism, the ability to experiment, the need for additional flexibility in responding to change and greater scope for the private sector. Flexibility, for example, involves the importance of being able to respond to military opponents who derive their power from "fourth generation" military strategy and terrorism. In turn, government must become decentralized, must learn to experiment and must learn to learn.

President Diocletian

Chad the Elder of Fraters Libertas notes that the Democrats
"are trying to out-demagogue each other on the horrible state of the economy and how the only answer to our woes is government, government, and yes MORE government."

and

"Most of the Republican candidates aren't much better. From the populism of Huckabee to the corporatism of Romney, there's not a lot for a free marketeer to get excited about."

Chad goes on to note that fiscal stimulus plans borrow from Smith to pay Jones, and from Jones's grand-children to pay Jones. The greatest generation has saddled the baby boomers with dismal Social Security benefits, and the baby boomers have saddled generation Y with enormous federal debt, dollar depreciation, unfunded retiree health insurance and even worse Social Security benefits.

Chad notes that

"An indiscriminate spurt in "aggregate demand" is essentially irrelevant to longer-term economic problems"

and...

"Given the weakness of the dollar and some other frightening signs that we're already slumping towards a Seventies style era of stagflation, a rate cut by the Fed is not what I would prefer from a policy perspective. But as someone who's been trying to sell a house in a soft market and hopefully purchase another one soon, lower interest rates sound pretty damn appealing right now."

Chad's blog is good, but only intimates the worst long term risk to the economy in the last paragraph. According to the prisoner's dilemma, people have trouble colluding to maximize their well being. Rather, they minimize their maximum loss.

In the prisoner's dilemma, the cops have caught two crooks. They are interrogated separately, just like on Law and Order or The Wire. If neither talks, they both get three years. If either talks, one gets 4 years and the other gets 0 years. If both talk, they both get two years. Game theorists argue that they will both talk because the talking strategy dominates the non-talking one. I have played a simulation game called The Oil Pricing Exercise with my conflict and negotiation classes at NYU and Brooklyn College for the past eight years. I have done it close to thirty times, and the vast majority, ninety percent, indeed arrive at a suboptimal solution (I doubt more than 10% arrive at jointly profit-maximizing approach) even though sub-optimal (which game theorists argue is most rational for each individual but not most rational for society as a whole) means a lower grade.

The economy is a prisoner's dilemma. If we all collude and respect free markets, in the long run we will all be better off. There will be more innovation and a more productive economy, so we will be wealthier on average. If special interests or well meaning progressive-liberals interfere with the economy, wealth is shifted from its most productive uses, and the long run effect is that we are all poorer, although a few may be richer than they would have been in a free market (hence the much-observed income inequality). Given the incentives for special interests to extract favors from the government, and politicians' interest in short-term solutions that benefit today's "prisoners" at the expense of their children, free markets are at a political disadvantage in a free economy, even though in the long run they would make everyone better off. One of the bitterest flaws of Herbert Croly's and the Progressives' ideas (not to mention socialists, fascists, etc.) is that they did not realize that by freeing the public will from the restraint of limited government, in the long run society will become poorer and income inequality will increase. We are seeing the inevitable process before our eyes. The solutions that the Republicans and Democrats offer will make us poorer over time. We are leaving our great grandchildren a more modest living standard than could have been.

Chad's post illustrates this. His need to sell his house means that he has a vested interest in inflation, i.e., in reduced interest rates. In the long term, the inflation will harm those who do not own homes and who do not get salary raises. Chad knows this, but the money is too sweet to resist.

If you generalize this across the economy, and into areas of the economy like hedge funds or Wall Street where $100 or $200 thousand represents a restaurant bill, the motives for lobbying for lower interest rates are profound. There is no recession. Instead, Wall Street has paid its executives high salaries for years while it has destroyed economic value. Non-productive industries lobby for lower interest rates at the expense of the productive sectors of the economy.

Stronger moral education and better education about free markets would considerably help. It would probably take several decades to wring out the inefficiencies in the American economy and replace our lazy, speculative mentality with one based on initiative, productivity and thrift.

I fear that we are on a downward spiral and much will have to happen before America turns itself around. If ever. Rome didn't turn around after Diocletian's "government, government and more government" solutions*. It lasted another 100years.

*Diocletian believed that going forward under the current system of Roman Imperial government was unsustainable. He initiated a number of reforms to prevent a return to the disorder of previous generations and maintain the viability of the Empire. These included splitting the Empire into two in order to be more manageable, creating a new system of Imperial succession, ruling as an autocrat and stripping away any remaining façade of republicanism, and economic reforms aimed at the problem of hyperinflation..."

"...Further, in 301, Diocletian attempted to curb the rampant inflation with his Edict on Maximum Prices. This edict fixed prices for over a thousand goods, fixed wages, and threatened the death penalty to merchants who overcharged. Instead of curbing inflation, the edict's price controls drove goods onto the black market and created shortages. In some areas, the edict was simply ignored, and it was soon withdrawn in failure."

Bernanke, Ridin' That Train, Lowers Rate 75 Basis Points

"Ridin' that train. High on cocaine. Casey Jones you better, watch your speed. Trouble ahead; trouble behind. And you know that notion, just crossed my mind."--The Grateful Dead

Money News on Newsmax reports that the Fed has lowered interest rates 75 basis points (from 4.25 to 3.5 percent), "the biggest one day move in recent memory".

Gold stocks continue to perform well, but at 11:40 the Dow is down 138 points to 11961, the S&P 500 is down 23 points to 1302 and the Nasdaq is down 55 points to 2285.

The Fed is concerned is concerned about recession fears and the recent sharp stock market declines. The interest rate cuts should boost stock values but will also continue to depreciate the dollar. The Fed reduces interest rates by printing money. Lower interest rates enable unproductive firms to remain in business because their costs of borrowing are reduced. Firms that do not create a market-determined value that would enable them to exist are subsidized by increasing the money supply, which reduces wage earners' inflation-adjust salaries. Thus, the Fed is taxing the productive sectors of the economy to subsidize the unproductive ones. The unproductive sectors are centered on big business, the financial sector and Wall Street, who have (1) extracted excessive CEO and investment banker salaries; (2) repeatedly made terminally stupid business decisions; and (3) and now go to the Federal Reserve welfare trough for a bail out.

Meanwhile, the dollar will depreciate and inflation will escalate.

Although the markets are cool now, they likely will heat up in response to the reduced rates, but the response will be temporary.