Politics & Policy

The Progressives’ Legacy of Bankruptcy

The roots of our current crisis.

There is a growing sense in the minds of Americans that we, as a nation, are reenacting the dramatic climax of Thelma and Louise: The pedal’s to the metal, the car’s gaining speed, and we are about to plunge into the abyss. The abyss is not the Grand Canyon, of course, but its fiscal equivalent — national bankruptcy. Americans are finally waking up to the fact that our government has been — and still is — on an unsustainable spending spree. According to the International Monetary Fund, our gross debt — which passed the $13 trillion mark in June — is now at 92.6 percent of GDP, and is projected to surpass our GDP (meaning the debt-to-GDP ratio will exceed 100 percent) by 2012.

#ad#As bad as that seems, however, even the gross-debt figure does not capture just how serious the situation is, for it does not include the growing costs of our three largest entitlement programs — Medicare, Medicaid, and Social Security. It is the costs of these three programs, and not the bailouts, wars, stimulus, etc., that are the primary cause of our exploding deficits and debt. “Under current law,” the Congressional Budget Office (CBO) explains, “the federal budget is on an unsustainable path. . . . Almost all of the projected growth in federal spending other than interest payments on the debt comes from growth in spending on the three largest entitlement programs — Medicare, Medicaid, and Social Security.” Our debt crisis is thus essentially an entitlement crisis. When the unfunded liabilities of these programs are added to the gross debt, the figure rises from $13 trillion to a mind-blowing $60 trillion. So grossly underfunded are these programs that the CBO estimates Congress would have to raise the lowest marginal-income-tax rate from 10 percent to 26 percent, the 25 percent rate to 66 percent, and the 35 percent rate to 92 percent, to close the gap.

Who has driven America to this precipice? Certainly part of the blame belongs to the politicians, primarily Democrats, who created and enlarged these entitlements without imposing taxes anywhere near sufficient to sustain them, and otherwise seriously mismanaged the programs’ finances. On a deeper level, however, the blame belongs to the late-19th- and early-20th-century Progressive movement. Despite recent claims that the Progressives had little impact upon the development of liberalism in the New Deal and beyond, including in the realm of social insurance, the Progressives were in fact the founding fathers of social insurance in America. Far from making a break with Progressivism, accordingly, the enactment of these programs during the New Deal and Great Society represents the clear policy fruit of the philosophical revolution as to the end of government, and the fundamental conception of morality underlying it, that the Progressives fought so vigorously to effect.

Of course, persuading many Americans that Progressivism initiated a struggle over the soul of America is a hard sell. For decades, liberal scholars and politicians have attributed the 20th-century growth of government to changes in the mere material circumstances of American life. The Progressive era’s progressive reforms, we have been told, were the necessary and inevitable response to problems created by the closing of the frontier, the rise of huge corporations and a transition to large-scale factory production, population shifts out of the countryside and into the city, large waves of immigration, etc. The New Deal, in turn, was simply a response to the economic hardships caused by the Great Depression. By attributing these periods’ reforms to America’s changing material circumstances, the orthodox view implies that there was no change of philosophical or moral import likewise under way. More to the point, it implies that the Progressives’ reforms were guided by the principles of the American Founding.

And yet this is demonstrably false.

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In its own self-understanding, the late-19th- and early-20th-century Progressive movement was a reform movement in the fullest sense of the term. Growing especially, but not exclusively, out of the efforts of hundreds, perhaps thousands, of budding American social scientists who matriculated in German universities between 1820 and 1920, the largest wave of which occurred in the 1890s, the movement consciously sought to supplant the authority of the principles of the American founding with a new conception of Freedom, History, and the State inspired by early-19th-century German idealism. The Progressive refounding of America thus had both a destructive and a constructive aspect.

#ad#In a 1903 survey of the “recent tendencies” in American political thinking, Charles Merriam — founding father of the American Political Science Association and future head of FDR’s National Resources Planning Board — well captured the destructive aspect: “The individualistic ideas of the ‘natural right’ school of political theory, indorsed in the Revolution,” he wrote, “are discredited and repudiated. . . . In the refusal to accept the contract theory as the basis for government, practically all the political scientists agree. The old explanation no longer seems sufficient, and is with practical unanimity discarded. The doctrines of natural law and natural rights have met a similar fate.” Merriam’s conclusions, which are striking in their directness, were by no means unique. “Across the range of Progressive writings, and throughout this entire period,” as political theorist Eldon Eisenach observes, “one finds a persistent attack on rights and individualism as worthy foundations for American national democracy. . . . The rejection of natural rights as a foundation for moral or political reasoning was not even considered to require a defense.”

The Progressives’ first step in reconstructing America was thus to raze the most fundamental principle of the Founders’ social-compact theory of government — the idea, as the Declaration of Independence expresses it, that “all men are created equal.” For the Founders, the equality principle, which was part of their larger understanding of “the laws of nature and Nature’s God,” is the primary source of the individual’s rights and duties. On one hand, if “all men are created equal,” all ordinary adult human beings have a right by nature to rule themselves without depending upon the permission of anyone else. Man’s natural freedom, in other words, is the necessary implication of equality, and divides up into a host of natural or inalienable rights — and “among these are life, liberty, and the pursuit of happiness.” On the other hand, the very recognition of man’s natural equality also imposes a duty upon individuals to refrain from acting in any way that arbitrarily interferes with another’s right to rule himself — e.g., murder, rape, theft, assault, kidnapping, etc. Liberty, in other words, is not license, and individuals are morally obligated to respect the freedom of all. So long as individuals honor these limits — and otherwise honor the more extensive obligations they have to their spouses and especially their children — they have every right to pursue their own concerns. The pursuit of self-interest in itself is not immoral, only that pursuit which transgresses the natural rights of others or, by extension, the preservation of political society itself.

The Founders’ understanding of the origin of government, in turn, proceeds from a recognition of the difficulty many individuals have in honoring the obligations that flow from the equality principle. Government is formed, in other words, for the express purpose of better enforcing this duty among men, thereby better securing the freedom of all. “If men were angels,” as Madison famously wrote in Federalist 51, “no government would be necessary.” Precisely because men are not angels, because many are strongly inclined to violate the rights of others when it is in their interest to do so, individuals consent to enter into the social compact, and establish government on the understanding it will use its powers to restrain those domestically and internationally who would violate their freedom. In principle, then, the power of government is not absolute but is limited to whatever actions are necessary to secure the natural rights of its members.

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By rejecting the existence of natural rights, accordingly, the Progressives consciously repealed this limit: “It is not admitted that there are no limits to the action of the state,” Merriam observed, “but on the other hand it is fully conceded that there are no ‘natural rights’ which bar the way. The question is now one of expediency rather than of principle. . . . Each specific question must be decided on its own merits, and each action of the state justified, if at all, by the relative advantages of the proposed line of conduct.” In devising the content of the law, legislators need not worry about respecting the individual’s natural right to rule himself, because “there are no ‘natural rights’ which bar the way.”

In principle, accordingly, all of the rights previously believed to inhere in the individual — e.g., the rights to life, to physical liberty, to decide whom to marry, to enjoy the fruits of his labor, to speak freely, etc. — were now subject to public disposal. Whether and to what extent government allows individuals to control any aspect of their personal concerns was now purely a matter of how it viewed the consequences of doing so. To illustrate just how far the Progressives were willing to take this, Merriam, in drawing the foreign-policy implications of this change, declared: “Barbaric races, if incapable, may be swept away; and such action ‘violates no rights of these populations which are not petty and trifling in comparison with its [the Teutonic race’s] transcendent right and duty to establish legal order everywhere.’” As Progressive economist and New Republic editor Walter Weyl summed up this shift in 1912, America was now “emphasizing the overlordship of the public over property and rights formerly held to be private.”

#ad#If the Progressives’ rejection of the Founders’ understanding of natural rights exposes individuals to virtually limitless public interference (or “overlordship”), the Progressive redefinition of individual freedom as spiritual fulfillment basically guarantees it. The constructive aspect of the Progressive refounding of America, in other words, stems from the fact that the Progressive conception of the State finds both its origin, and its ultimate purpose, in a new conception of individual freedom synonymous with the “perfection” or fulfillment of human nature — with, in other words, the realization of the comprehensive human good. Following Hegel, the Progressives widely believed that Freedom consists in the individual’s ability to actualize the spiritual potential inherent in his being, becoming thereby a “perfect” or complete human being. Freedom is thus “something to be achieved,” as Dewey put it, but not through “growth” or change in any indiscriminate or open-ended sense.

“The definition of freedom,” as Progressive sociologist Charles H. Cooley wrote, “is perhaps this: that it is opportunity for right development, for development in accordance with the progressive ideal of life that we have in conscience.” For the Progressives, as with Hegel, then, Freedom is inextricably tied to an evolutionary, or, more precisely, progressive, conception of History in which each successive stage of civilization, like an acorn maturing into an oak tree, represents a fuller or more complete development of man’s moral or spiritual nature than the previous one. History, then, is ordered toward a specific end — the actualization of man’s spiritual nature — and has an identifiable path or content. As Richard Gamble concludes, “History possessed a distinct and discernable tendency, a teleology. It moved from the physical to the spiritual, from perdition to redemption.”

For the Progressives, human beings progress — or become free — through the increasing actualization of the various capacities constituting their spiritual natures. While these potentialities include abilities peculiar to individuals, they also, and more essentially, consist in capacities common to all human beings: “‘The cultivation of the spiritual nature,’” as Merriam, following Progressive legal scholar Theodore Woolsey, clarified, involves “‘educating the religious nature, the moral sense, the taste, the intellect.’” Of these, the intellectual and “moral” (or social) “potentialities” are primary. “The history of morals,” as Dewey and James H. Tufts explained, is characterized by two main, interdependent trends: a “rationalizing or idealizing” process and a “socializing” process. The former trend involves the development of reason in all of its different dimensions, initially as a merely unconscious tool or “means” in the service of man’s spontaneous physical appetites or instincts, but ultimately as an “end” in itself.

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The latter trend is the “socializing process.” This building up of a “social self,” as Dewey and Tufts call it, is the process through which individuals become decreasingly concerned with their own narrow or special interests, and increasingly concerned with the “interests of others,” which “interests” expand both in relation to the number of others one cares about, as well as the kind of concern one has for these others. In effect, the Progressives believed that men were developing an increasingly wide conception of duty to an ever-enlarging circle of men — e.g., city, state, nation, and ultimately all of humanity — which process would culminate in a felt obligation to promote the fullest spiritual development of all mankind. “Do we,” as the German-trained Progressive economist Richard T. Ely asked rhetorically, “regard all human beings as brothers, and have we a sincere longing for the welfare of all? Do we think that only some of us, and not all of us, have talents which we ought to improve; that is, to develop in the most complete manner possible all faculties, physical, mental, moral, spiritual?” For Ely and the Progressives generally, then, “‘true morality consists in the complete surrender of one’s own self, and in self-sacrifice for others.’” If men generally were not yet “angels,” they soon would be, as self-interest — in any sense other than one’s own spiritual perfection — would be a basically evanescent feature of human psychology.

#ad#Self-sacrifice to promote the fullest welfare of all humanity thus lies at the core of the Progressive conception of Freedom. While the Founders did not believe that individuals owe unrelated human beings anything like the comprehensive obligation parents owe children, the Progressives did. In their view, accordingly, to allow individuals to pursue their own personal concerns so long as they did not overtly interfere with the right of others to rule themselves was merely to allow them to disregard the spiritual welfare of others. The Progressives thus endlessly denounced the “individualism” of the Founding. The new model American citizen was to be the soldier in wartime, willing, as President Lincoln once put it, to surrender “the last full measure of devotion.” “In the days of ’61 to ‘65,” as Charles Van Hise, a leading Progressive conservationist, economist, and president of the University of Wisconsin, wrote, “a million men laid aside their personal desires, and surrendered their individualism for the good of the nation. Now it is demanded that every citizen shall surrender his individualism not for four years, but for life, — that he shall think not only of himself and his family, but of his neighbors, and especially of the unnumbered generations that are to follow.” The extraordinary degree of self-sacrifice for others — for the public — once characteristic of Americans only in exceptional, short-lived periods of wartime, should and would become the norm in every area of life.

Like the equality principle, then, the Progressive conception of freedom as spiritual fulfillment gives rise to corresponding rights and duties: Just as the Progressives believed that individuals had an obligation, as moral men, to promote the most complete development of other men, so they believed other human beings had a fundamental or “natural” right to develop spiritually — provided, of course, the more “advanced” races believed the others in question were in fact able to develop. (Hence Merriam’s declaration about “barbaric races,” quoted earlier.) The end of the State, in turn, lies in man’s ultimate moral obligation to promote the Freedom, understood as the fullest spiritual development, of all. Convinced they were in the vanguard of History, and hence possessing superior insight into the nature of Freedom, the Progressives were eager to prod their less progressive fellow citizens (and the “inferior” races of the world generally) up to the same high spiritual plane.

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Domestically speaking, if development were to occur on a wide scale, the “positive” State would have to replace limited or “negative” government. The problem with limited government, as Charles H. Cooley explained, is that it “does not enlist and discipline the soul of the individual.” By limiting its reach over the individual’s thought and behavior, it merely ensures the dominance of man’s more primitive or “self-regarding” impulses, which, in turn, produces social conditions that retard spiritual development. Promoting spiritual fulfillment more generally would entail recognizing, as Ely put it, that “the state [is] an educational and ethical agency whose positive aid is an indispensable condition of human progress.” Like a stern schoolmaster, government would have to take its pupils in hand and direct them to their proper destiny.

#ad#The Progressives’ zeal to promote their fellow Americans’ spiritual development, and thus to engineer social conditions more conducive to this goal, gave rise to an emphasis upon a host of objectives intermediate to this aim. The Progressives were keen to remove any social condition believed to frustrate the process of spiritual fulfillment, including, first and foremost, the problem of poverty. One of the leading problems with the free-market system, Ely explained, is that “on the one hand, we see those who are injured by a superfluity of economic goods; and, on the other, those who have not the material basis on which to build the best possible superstructure.” From the standpoint of spiritual fulfillment, in other words, the free market results in a mal-distribution of wealth; that is, a few individuals obtain more wealth than is good for them, and most obtain too little. The problem with the latter condition, with poverty, is not that it results in a materially less comfortable existence, but that it causes a host of conditions that restrict or stunt the spiritual progress of those in it. “Freedom of thought in a developed constructive form,” as Dewey and Tufts argued, “is next to impossible for the masses of men so long as their economic conditions are precarious, and their main problem is to keep the wolf from their doors. Lack of time, hardening of susceptibility, blind preoccupation with the machinery of narrowly specialized industries, the combined apathy and worry consequent upon a life maintained just above the level of subsistence, are unfavorable to intellectual and emotional culture.”

Viewing the bite of necessity merely as a “restriction” on man’s intellectual and moral development — as opposed to a spur to better, more responsible behavior — the Progressives advocated a host of reforms designed to redress poverty and its consequences including, among others, factory legislation to promote worker health and safety, minimum-wage laws requiring higher pay, maximum-hours laws limiting employees’ hours (and thereby enhancing their leisure), public housing, and a comprehensive package of social insurance, including workmen’s compensation as well as “insurance” for old age, sickness, and unemployment (to provide a financial cushion when these hardships occurred). Because the promotion of economic security was not an end in itself, but a means of releasing the poor from the poverty-related restrictions upon their higher development, the reformers anticipated that great moral improvement would follow upon the enactment of such reforms. “When sanitation, good housing and shorter hours of work have generated enough energy to release starving faculties,” German-trained Progressive economist Simon N. Patten wrote, “poverty men will adjust themselves as capably as normal men and will also appreciate culture and morality.” (By this logic, of course, those recently rioting Greek unions should be overdosing on public-spiritedness by now.)

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To press for the enactment of these reforms, the Progressive academics also established a constellation of advocacy groups, including the American Association for Labor Legislation, which, as Axel Schafer concludes, “created and sustained the organized social insurance movement.” Founded in 1905, the AALL was a direct offshoot of the American Economic Association, an organization founded by German-trained Progressive economists and expressly modeled on the leading German economists’ association (the Verein fur Sozialpolitik). As Daniel Rodgers points out, Richard T. Ely played a leading role in the founding of both organizations, and served as the AALL’s first president. His former student and University of Wisconsin colleague, economist John R. Commons, served as the AALL’s first executive secretary, and its board “was stocked with German-trained progressive economists.” In 1914, when the AALL expanded its initial focus on industrial safety and workmen’s injury insurance to include unemployment, old age, and sickness insurance, Rodgers concludes, it had become “the most active and important social insurance lobby in the United States.”

#ad#The Progressive academics also, importantly, trained students — including Frances Perkins, Edwin Witte, and Wilbur Cohen – who became the leading architects of social insurance during the New Deal and Great Society. Perkins, who had studied economics with Progressive economist Simon N. Patten, was FDR’s secretary of labor and chairwoman of the Committee on Economic Security (CES), the expert committee FDR tasked with formulating what became the Social Security Act of 1935. Witte, who is sometimes referred to as “the father of the Social Security Act,” was the executive director of the CES, and actually wrote the committee’s report. Before joining the CES, he had been a member of the economics faculty at the University of Wisconsin, where, as Rodgers notes, he had earned his Ph.D. and been a “Commons protégé.” Wilbur Cohen, “The Man Who Built Medicare,” was, in turn, another Commons student from the University of Wisconsin who began his long Social Security Board/Administration career as Witte’s research assistant at the CES. The CES’s initial proposal, in any case, included provisions for the creation of a health-insurance program, as well as unemployment compensation and a compulsory old-age-pension system (Social Security). FDR, despite being an enthusiastic supporter of comprehensive social insurance, decided to drop the health-insurance program for fear its inclusion would defeat the entire measure. The most significant steps in the creation of federal health insurance, Medicare and Medicaid, accordingly, were not taken until LBJ’s Great Society.

Our debt crisis, in sum, has everything to do with the transformation of morality and government effected by the late-19th- and early-20th-century Progressive movement. Far from being largely ineffectual reformers, the Progressive academics who articulated the new conception of Freedom and the “positive” State, outlined above, were also the initiators of the entitlement programs that lie at the core of our crisis today. How Americans ultimately decide to resolve this crisis — by reining in spending or meekly submitting to far higher taxes — will serve either to revitalize the Founders’ conception of freedom, and the idea of limited government that flows from it, or seriously accelerate America’s century-long slide into the “overlordship” of Progressivism.

– Tiffany Jones Miller is associate professor of politics at the University of Dallas.

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