The Myth of America's Laissez-Faire Past
By Sheldon Richman / fee.org

In 1888, at the height of the Gilded Age, a rather prominent American said some startling things. First he observes:

Our cities are the abiding places of wealth and luxury; our manufactories yield fortunes never dreamed of by the fathers of the Republic; our business men are madly striving in the race for riches, and immense aggregations of capital outrun the imagination in the magnitude of their undertakings.

But this did not mean all was well with America. The speaker goes on:

We view with pride and satisfaction this bright picture of our country’s growth and prosperity, while only a closer scrutiny develops a somber shading. Upon more careful inspection we find the wealth and luxury of our cities mingled with poverty and wretchedness and unremunerative toil.

Assigning Blame

Has this man forgotten, as many people do, that in market-based societies the growth of wealth, while inevitably uneven, is over time steady and general? That’s not relevant to what he has in mind: He wishes to assign blame for the poverty he observed:

We discover that the fortunes realized by our manufacturers are no longer solely the reward of sturdy industry and enlightened foresight, but that they result from the discriminating favor of the Government and are largely built upon undue exactions from the masses of our people. The gulf between employers and the employed is constantly widening, and classes are rapidly forming, one comprising the very rich and powerful, while in another are found the toiling poor.

As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel. Corporations, which should be the carefully restrained creatures of the law and the servants of the people, are fast becoming the people’s masters.

Rewards unrelated to effort! Undue exactions from the masses! Widening gulf between employers and employed! Rapidly forming classes! Rich and powerful versus the toiling poor!

We’ve heard this somewhere.

Powerful Minority

But he’s got more to say:

Under the . . . laws . . . the Government permits many millions more to be added to the cost of the living of our people and to be taken from our consumers, which unreasonably swell the profits of a small but powerful minority. . . .

[T]he Government, under pretext of an exercise of its taxing power, enters gratuitously into partnership with these favorites, to their advantage and to the injury of a vast majority of our people.

This is not equality before the law.

Sounding like one of today’s Progressives attacking “trickle-down economics,” he continues:

He mocks the people who proposes that the Government shall protect the rich and that they in turn will care for the laboring poor. Any intermediary between the people and their Government or the least delegation of the care and protection the Government owes to the humblest citizen in the land makes the boast of free institutions a glittering delusion and the pretended boon of American citizenship a shameless imposition.

Call for Reform

And he’s not finished. The speaker calls for reform, which he expects would have the support “of all who believe that the contented competence and comfort of many accord better with the spirit of our institutions than colossal fortunes unfairly gathered in the hands of a few” (emphasis added).

Who is this man? Progressive politician William Jennings Bryan? Socialist Party presidential candidate and union leader Eugene V. Debs?

No. It is neither of them.

Casting a wider net, perhaps it is the “free market socialist” writer and editor Benjamin Tucker?

Again, no.

It is Grover Cleveland, the 22nd and 24th president of the United States. The occasion: his December 1888 State of the Union address, delivered a month after losing his reelection bid in the electoral college (but not in the popular vote) to Benjamin Harrison. (There is high irony here considering that Cleveland had a long and close relationship with the House of Morgan, the center of American corporate statism.)

Source of Privilege: The Tariff

The source of corporate privilege that raised Cleveland’s ire was the tariff, one of Tucker’s despised “four monopolies. (Back in the day, it was said, “The tariff is the mother of trusts.”) As Cleveland puts it, “It can not be denied that the selfish and private interests which are so persistently heard when efforts are made to deal in a just and comprehensive manner with our tariff laws are related to, if they are not responsible for, the sentiment largely prevailing among the people that the General Government is the fountain of individual and private aid.”

Then, astoundingly, he adds:

Communism is a hateful thing and a menace to peace and organized government; but the communism of combined wealth and capital, the outgrowth of overweening cupidity and selfishness, which insidiously undermines the justice and integrity of free institutions, is not less dangerous than the communism of oppressed poverty and toil, which, exasperated by injustice and discontent, attacks with wild disorder the citadel of rule. [Emphasis added.]

Note what Cleveland is saying: The impetus for communism is not the masses’ or intellectuals’ envy of wealth earned through achievement in the market, but rather honest people’s frustration at being exploited through the collusion of capital and State, which Cleveland also labels a form of “communism.” In another place he refers to the “communism of pelf.”

No Laissez Faire

Thus, judging by Cleveland’s address, America in the Gilded Age was no era of laissez faire characterized by rugged entrepreneurship. Rather, it was a neomercantilist corporate state, where government–as only government can–empowered privileged business interests to make fortunes at the expense of regular working and consuming Americans. Cleveland, in this speech at least, echoes the pro-market “anti-capitalist” critique voiced by Lysander Spooner, Benjamin Tucker, and their compatriots for whom justice for worker-consumers was the very basis of their seminal libertarian movement. (Yet see Spooner’s letter to Cleveland and Cleveland’s role in the Pullman strike.) Later classical-liberal historians Arthur A. Ekirch Jr. and George C. Roche III shared their critique. (See also Joseph R. Stromberg’s “The Gilded Age: A Modest Revision.”)

Cleveland’s words will undoubtedly surprise most people—regardless of their political philosophy.

4.0 · 1
What's Next
Related
Load Comments
Trending Today
When You Kill Ten Million Africans You Aren't Called 'Hitler'
Liam O'Ceallaigh · 8,377 views today · Take a look at this picture. Do you know who it is? Most people haven’t heard of him. But you should have. When you see his face or hear his name you should get as sick in...
"Desert Goddess" Remembers Arizona's Glen Canyon
7 min · 4,931 views today · In this excerpt from the award-winning documentary DamNation, filmmakers Ben Knight and Travis Rummel interview the "desert goddess," Katie Lee. When the Glen Canyon Dam was...
This Painting Captures a Disturbing Truth about the History of Our Education System
2 min · 4,516 views today · The truth is chilling. But it is a history we should never forget. This is a clip from the feature documentary "Schooling the World." Thanks to the generosity of the...
Blind Man and His Armless Best Friend Have Planted Over 10,000 Trees in China
Kate Good · 2,139 views today · It doesn’t happen often, but every now and then you hear a story about people overcoming all odds to help others and it completely changes your perspective of the world. The...
Today I Rise: This Beautiful Short Film Is Like a Love Poem For Your Heart and Soul
4 min · 1,590 views today · "The world is missing what I am ready to give: My Wisdom, My Sweetness, My Love and My hunger for Peace." "Where are you? Where are you, little girl with broken wings but full...
This Dude Just Used Jelly Beans To Convince Me To Live My Life To The Fullest
3 min · 1,568 views today · After watching this video, I just wanted to make the most of my free time. I also wanted some candy, so we will call that a 2 for 1. - Rafael Casal
The Trials of Henry Kissinger (2002)
80 min · 1,260 views today · Part contemporary investigation and part historical inquiry, documentary follows the quest of one journalist in search of justice. The film focuses on Christopher Hitchens'...
John Lennon's "Imagine," Made Into A Comic Strip
John Lennon. Art by Pablo Stanley · 1,098 views today · This is easily the best comic strip ever made.  Pabl
Watch a Giant Suction Tube Gobble Up The Earth In This Brilliant Video about Our Economy
7 min · 1,072 views today · Modern production is based on extraction from the planet, and modern finance is based on extraction from the many for the benefit of the very few. What would a new economy look...
I Wish for You... Jeremy Irons is a Grandfather With A Beautiful Message for His Granddaughter
5 min · 1,038 views today · 'War Horse' author Michael Morpurgo and actors Jeremy Irons and Maxine Peake have joined forces to make a powerful new 5 minute film especially for you. Please watch and...
This Video Dispels Every "Nature VS Nurture" Myth You've Ever Heard. The Implications are Profound.
31 min · 930 views today · If everyone watched this it could radically transform the world. This is a segment from Moving Forward (2011). Watch the full documentary online here.
Who Are You? This Breathtaking Video Might Change Your Life
2 min · 872 views today · "Normal is getting dressed in clothes that you buy for work, driving through traffic in a car that you are still paying for, in order to get to a job that you need so you can...
Republicans Welcomed Bernie Sanders to Wisconsin By Calling Him an Extremist. His Response? Perfect.
5 min · 860 views today · This was just awesome. No wonder so many people love Sander's message. The opening minutes of the July 1st rally was a classic #FeelTheBern moment, delivered to a 10,000...
F*ck That: A Guided Meditation for the Realities of Today's World
2 min · 764 views today · Just acknowledge that all that sh*t is f*cking b*llshit — you're here now, in this place, with your inner stillness. Take in a deep breath ... now breathe out. Just feel the...
Schooling the World (2010)
66 min · 625 views today · If you wanted to change an ancient culture in a generation, how would you do it? You would change the way it educates its children. The U.S. Government knew this in the 19th...
HEIST: Who Stole the American Dream? (2012)
76 min · 606 views today · HEIST: Who Stole the American Dream? is stunning audiences across the globe, as it exposes the real truth behind the worldwide economic collapse, tracing its origins to a 1971...
Nigerians Are Building Fireproof, Bulletproof, and Eco-Friendly Homes With Plastic Bottles and Mud
Amanda Froelich · 597 views today · These colorful homes are bulletproof, fireproof, and can withstand earthquakes. They also maintain a comfortable temperature, produce zero carbon emissions, and are powered by...
The White Man in That Photo
Riccardo Gazzaniga · 597 views today · Sometimes photographs deceive. Take this one, for example. It represents John Carlos and Tommie Smith’s rebellious gesture the day they won medals for the 200 meters at the...
The Most Amazing Guide to Leadership Ever
3 min · 489 views today · Useful advice for starting a dance party or a mass movement to change the world.
9 Ways We Can Make Social Justice Movements Less Elitist and More Accessible
Kai Cheng Thom · 459 views today · In my first year of college, I stopped calling myself an activist. It took attending just a few meetings of the campus queer group for me to realize that I didn’t fit in with...
Load More
Like us on Facebook?