Corporatism lines up better with Progressivism than with a free market ideology

by Robert Maynard

Last week I wrote an article entitled “Hiding behind an imaginary boogeyman“, in which I pointed out the hypocrisy of those on the left who started Vermont’s first “super Pac” supposedly to ward off all the out of state “right wing” corporate money that is poised to flow into Vermont.  In the article I pointed out that most of the out of state money flowing into Vermont has been in support of the left’s agenda.  I took up the same theme in an interview on the Ethan Allen Institute’s “Common Sense Radio”.  It was then that a caller insisted that, at least on the national level, corporations dwarf all other political giving.  I pointed out to him that in the 2010 election cycle that single biggest donor was the American Federation of State, County and Municipal Employees as $87.5 Million. The main source of corporate giving was the Chamber of Commerce, who came in second at $75 Million.  In addition to the AFSCME’s political contributions, there was the Service Employees International Union at $44 Million and the National Education Association at $40 Million.  In short, among the major donors in the 2010 election cycle, union related giving accounted for $171.5 Million.  He argued that such figures do not account for giving by individual corporations.  While that is true, neither do such figures account for the total combined union giving, to say nothing of the dollar value of the “boots on the ground” activism that unions provide for the left during political campaigns.  The list in question was not exhaustive and only included the biggest donors.  It wasn’t until  after the show that it dawned on me that both of us were missing a very important point.  It is often assumed that corporations somehow represent a “right wing”, or “free market”, ideological agenda and their influence needs to be countered by the forces of progressivism.  The fact of the matter is that corporatism lines up better with progressivism than with a free market ideology.  In a September 2011 issue of the Freeman, there was an article entitled “Taylorism, Progressivism, and Rule by Experts“, which makes that case from a historical perspective.  They start out by addressing that the myth that progressivism was on the other side of the ideological divide from corporatism:

The Progressive movement at the turn of the twentieth century—the doctrine from which the main current of modern liberalism developed—is sometimes erroneously viewed as an “anti-business” philosophy. It was anti-market to be sure, but by no means necessarily anti-business. Progressivism was, more than anything, managerialist.

The American economy after the Civil War became increasingly dominated by large organizations. I’ve written in The Freeman before about the role of the government in the growth of the centralized corporate economy: the railroad land grants and subsidies, which tipped the balance toward large manufacturing firms serving a national market (“The Distorting Effects of Transportation Subsidies,” November 2010), and the patent system, which was a primary tool of consolidation and cartelization in a number of industries (“How ‘Intellectual Property’ Impedes Competition,” October 2009, tinyurl.com/lqzehv)

In fact, some of the ideological push for the centralization of government power came from major U.S. business schools:

These giant corporations were followed by large government agencies whose mission was to support and stabilize the corporate economy, and then by large bureaucratic universities, centralized school systems, and assorted “helping professionals” to process the “human resources” the corporations and State fed on. These interlocking bureaucracies required a large managerial class to administer them.

According to Rakesh Khurana of the Harvard Business School (in From Higher Aims to Hired Hands), the first corporation managers came from an industrial engineering background and saw their job as doing for the entire organization what they’d previously done for production on the shop floor. The managerial revolution in the large corporation, Khurana writes, was in essence an attempt to apply the engineer’s approach (standardizing and rationalizing tools, processes, and systems) to the organization as a system.

These ideas became foundational for progressivism as an ideological movement:

And according to Yehouda Shenhav (Manufacturing Rationality: The Engineering Foundations of the Managerial Revolution), Progressivism was the ideology of the managers and engineers who administered the large organizations; political action was a matter of applying the same principles they used to rationalize their organizations to society as a whole. Shenhav writes (quoting Robert Wiebe):

Since the difference between the physical, social, and human realms was blurred by acts of translation, society itself was conceptualized and treated as a technical system. As such, society and organizations could, and should, be engineered as machines that are constantly being perfected. Hence, the management of organizations (and society at large) was seen to fall within the province of engineers. Social, cultural, and political issues . . . could be framed and analyzed as “systems” and “subsystems” to be solved by technical means. . .

During this period, “only the professional administrator, the doctor, the social worker, the architect, the economist, could show the way.” In turn, professional control became more elaborate. It involved measurement and prediction and the development of professional techniques for guiding events to predictable outcomes. The experts “devised rudimentary government budgets; introduced central, audited purchasing; and rationalized the structure of offices.” This type of control was not only characteristic of professionals in large corporate systems. It characterized social movements,the management of schools, roads, towns, and political systems.

The progressive “ethos” imagined a classless society brought about by the social engineering efforts of the best and the brightest:

In Shenhav’s account this apolitical ethos grew out of engineers’ self-perception: “American management theory was presented as a scientific technique administered for the good of society as a whole without relation to politics.” Frederick Taylor, whose managerial approach was a microcosm of Progressivism, saw bureaucracy as “a solution to ideological cleavages, as an engineering remedy to the war between the classes.” Both Progressives and industrial engineers “were horrified at the possibility of ‘class warfare’” and saw “efficiency” as a means to “social harmony, making each workman’s interest the same as that of his employers.”

The implications, as James Scott put it in Seeing Like a State (about which much more below), were quite authoritarian. Only a select class of technocrats with “the scientific knowledge to discern and create this superior social order” were qualified to make decisions. In all aspects of life, policy was to be a matter of expertise, with the goal of removing as many questions as possible from the realm of public political debate to that of administration by properly qualified authorities. Politics, Scott writes, “can only frustrate the social solutions devised with scientific tools adequate to their analysis.” As a New Republic editorial put it, “the business of politics has become too complex to be left to the pretentious misunderstandings of the benevolent amateur.”

There was a socialistic, anti-business wing of the progressive movement, but they ended up as the junior partners in a broad attempt to expand the role of government at the expense of America’s free market traditions:

It’s true that Progressivism shaded into the anti-capitalist left and included some genuinely anti-business rhetoric on its left-wing fringe. But the mainstream of Progressivism saw the triumph of the great trusts over competitive enterprise as a victory for economic rationalization and efficiency—and the guarantee of stable, reasonable profits to the trusts through the use of political power as a good thing.

In the end the more utopian or socialistic Progressives found they’d become “useful idiots.” Their desire to regiment and manage was given free rein mainly when it coincided with the needs of the corporatist economy created by Rockefeller and Morgan. These needs were for what Gabriel Kolko (The Triumph of Conservatism) called “political capitalism,” the guiding theme of Progressive-era legislation. Political capitalism aimed to give corporate leadership “the ability, on the basis of politically stabilized and secured means, to plan future economic action on the basis of fairly calculable expectations” and to obtain “the organization of the economy and the larger political and social spheres in a manner that will allow corporations to function in a predictable and secure environment permitting reasonable profits over the long run.”

This history of the progressive movement should be kept in mind the next time some leftist demagogue starts arguing for an expanded role of government as a means of curbing corporate power.  When one reaches the top of the hill in the economy, one does not necessarily support a free market and open competition.  The excessive regulation and high taxation that inevitably come with an expanded role for government, are more of a threat to those who are working their way up the economic ladder than those already at the top.  The truth of the matter is that the ones who are really looking out for the interest of the “little guy” are those that advocate for a free market.  The left really has no use for the “little guy”, except as a potential victim who gives them an excuse to expand the role of government even further.  Look that the reaction of those on the left to George Soros vs. the Koch brothers.  The left sees Soros as some kind of hero, while the Koch brothers are portrayed as the Devil incarnate.  Both sides are billionaires, but one supports the leftist agenda of an ever expanding government and the other supports a competitive free market with limited government.  Which side is really standing up for the interests of most Americans?  People like the Koch brothers are not demonized because they are rich, for so is Soros, but because of their ideological support for a free market and their willingness to use their considerable resources to back up that support.  The dividing line is along ideological lines rather than by class.

One thought on “Corporatism lines up better with Progressivism than with a free market ideology

  1. Nicely done. Finally a sound off on the evils of large corporations. They are the ones behind the rise of our current version of Socialism – the one given the name Fascism.
    Back to your starting point about corporate political contributions. I do not doubt that an overwhelming majority of S&P 100 contributions go to the left wing. Expand to the S&P 500 and it will come in at a level comfortably above 50%. When you get down to the 25 employee company, the Mom&Pop’s, the lone business owner, you’ll find their heads screwed on straight and the numbers inverted. The media, who would certainly have researched this area, is probably well aware of this. The results are, of course, unreportable.

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