In Favor of Government - The Corporatism of the Progressive Era

Dec 2017
357
Florida
So I am furthering my research into the theme of the Progressive Era and a certain book has caught my attention. Gabriel Kolko's Triumph of Conservatism: A Reinterpretation of American History, 1900-1916 so far is a fascinating interpretation on the corporatist experience in early twentieth-century America. Rather then continue the myth that the second industrial revolution in the United States lead to cartelization and monopolization of certain sectors of the economy (a myth that is still continued to this day) Kolko seems to be stating that the competition of the marketplace disallowed voluntary cartelization of the sectors of the US economy, therefore, causing business leaders to look to the government to create "stability" and protect them from competition.

With this information, why is the myth of government needing to regulate markets in order to prevent monopolies still propagated??

What are your thoughts on this development?
 

Ichon

Ad Honorem
Mar 2013
3,763
In the U.S. half a dozen large government supported monopolies exist, if the government didn't attempt to forestall monopolies in other sectors that number would be a few dozen so while the government has been persuaded to support certain monopolies it still acts to restrict others at times though it greatly depends on the administration and the particular people in Justice and various regulating committees as well how successful lobbyists are in Congress.
 

Asherman

Forum Staff
May 2013
3,414
Albuquerque, NM
Rather then continue the myth that the second industrial revolution in the United States lead to cartelization and monopolization of certain sectors of the economy (a myth that is still continued to this day) Kolko seems to be stating that the competition of the marketplace disallowed voluntary cartelization of the sectors of the US economy, therefore, causing business leaders to look to the government to create "stability" and protect them from competition.

With this information, why is the myth of government needing to regulate markets in order to prevent monopolies still propagated??

What are your thoughts on this development?
Could you be more specific about a "myth" that the business leaders of the "saw their chance, and took it", leading to the formation of monopolies. Without government regulation, creating a monopoly on some critical element in the Industrial Revolution was a ticket to super-wealth. The competition was fierce, and again remember no-government interference, any business tactic was legitimate. The guy who really understood how to get his own way controlled the banks. He didn't like all that competition that tended to keep profits down. By force of his personality and control of the money, he generally did get his way. J.P. set the rules so as to reduce competition. Everyone got wealthier, except the working people who owned little more than the ragged cloths on their backs. Those who owned the railroads, oil, or steel mills got richer and richer with not even any taxation. It got to the point where Morgan had to bail out the U.S. government. Congress was virtually owned by men like Morgan, Carnegie, Rockerfeller, and the rest of those whose tactics were all legal, well mostly, but the result of their "business acumen" was also creating a society of under-dogs. Men who had a decade earlier been proud and useful citizens, became beggers.

That was unrestrained capitalism and was an almost natural result of 19th century American ideal of hard work and a clear goal will win the day. Population densities were lower, and distances very far between communities. There were only poor local roads, and people rarely went very far. People had to be independent as a practical matter, and the impact of the Civil War on the way Americans saw themselves became stereotypes.

Societies, most at any rate, are dynamic. They are constantly being challenged, and making choices, always hoping for a better life. More and better food, a brewsky, and to be equal before a Law that they believe in. On that foundation, we humans have built whole civilizations. We've probably tried every conceivable means to survive and prosper as a group. To split the group into contending parties over irreconcilable differences is both natural and ultimately self-defeating. There is strength in numbers, and it is better as a society, to embrace diversity. The longer and more important trends in my estimation, is that it will all work out, or it won't. Who is to say with certainty one way of dealing with the problems that people face every day, every where, is going to result in a better life for all.

You gotta step back from it. Give it some perspective, look at it from different angles and light. Start with the idea that we really don't know very much at all, then we can be open to the lessons that fill all of our days.
 

Baltis

Ad Honorem
Dec 2011
4,006
Texas
With this information, why is the myth of government needing to regulate markets in order to prevent monopolies still propagated??

What are your thoughts on this development?
I think it is not a myth. By its very nature capitalism produces winners and losers. We love the winners but our society has determined that losers should not really be allowed to just wallow and die in poverty. That our environment should be maintained in as clean and healthy way as practical, not the cheapest way, the best way we can. I realize these examples are not precisely on point to your assumption but IMO, they still help us realize the limitations of allowing capitalism to its ultimate conclusion. When large corporations gain too much power they are no longer subject to the pressures of labor supply, etc. We have seen those results and didn't care for them.

Just to add a little tidbit, I consider the breaking of AT&T to have resulted in some of the greatest technological advances in the telecommunications industry that we have seen. Without that intervention, they very likely would have progressed much slower because their focus would remain on feeding the shareholders larger profits instead of developing new products.

The greater myth that seems incapable of going away is that government intrusion into the economy has bad results. Or that government is less efficient than private enterprise. Anytime we have needed large project focus in the US (railroads, wars, canals, bridges, interstate highways, NASA, environmental cleanup), the answer comes from national focus through government action. Even the internet was brought to you by, government. :)
 

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Jax Historian

Ad Honorem
Jul 2012
4,379
Here
I think everyone is misinterpreting to various degrees what Divinespark is saying. Koko's main thesis has to do with the Progressive Era (c. 1900 - 1920). He is contradicting previous theories (most directly Richard Hofstader's 1960 book The Age of Reform) which held that it was the Progressive politicians who drove the reforms "against" big business. Kolko maintains it was not progressive politicians, but big business itself that drove the reforms in this era for their own well-being. Kolko's book was first published in 1963 and he was seen as one of the 1960s "New Left" historians.

As for Divinespark's claim of some "still existing myth," that, to me, smacks of current politics which is supposedly not allowed on the forum. But if moderators allow it to continue, I'll say more about this later. There is no doubt in my mind that this will end in one of the forum's typical incendiary meltdown threads.
 
Dec 2017
357
Florida
In the U.S. half a dozen large government supported monopolies exist, if the government didn't attempt to forestall monopolies in other sectors that number would be a few dozen so while the government has been persuaded to support certain monopolies it still acts to restrict others at times though it greatly depends on the administration and the particular people in Justice and various regulating committees as well how successful lobbyists are in Congress.
Which "other sectors" are you discussing?
 
Dec 2017
357
Florida
Could you be more specific about a "myth" that the business leaders of the "saw their chance, and took it", leading to the formation of monopolies. Without government regulation, creating a monopoly on some critical element in the Industrial Revolution was a ticket to super-wealth. The competition was fierce, and again remember no-government interference, any business tactic was legitimate. The guy who really understood how to get his own way controlled the banks. He didn't like all that competition that tended to keep profits down. By force of his personality and control of the money, he generally did get his way. J.P. set the rules so as to reduce competition. Everyone got wealthier, except the working people who owned little more than the ragged cloths on their backs. Those who owned the railroads, oil, or steel mills got richer and richer with not even any taxation. It got to the point where Morgan had to bail out the U.S. government. Congress was virtually owned by men like Morgan, Carnegie, Rockerfeller, and the rest of those whose tactics were all legal, well mostly, but the result of their "business acumen" was also creating a society of under-dogs. Men who had a decade earlier been proud and useful citizens, became beggers.
What you are describing is corporatism. The corruption of government by businessmen who eventually used their political power to create government-sanctioned monopolies in order to reduce the competition and provide stability. All through out the 19th century there is a general fall in prices and an increase in production. At the start of the 20th century, industry creation (new businesses) were increasing. So I don't know how you can say people were becoming beggars, can you be more specific?

That was unrestrained capitalism and was an almost natural result of 19th century American ideal of hard work and a clear goal will win the day. Population densities were lower, and distances very far between communities. There were only poor local roads, and people rarely went very far. People had to be independent as a practical matter, and the impact of the Civil War on the way Americans saw themselves became stereotypes.
I think that is false with the advent of railroad growth.
 
Dec 2017
357
Florida
I think it is not a myth. By its very nature capitalism produces winners and losers. We love the winners but our society has determined that losers should not really be allowed to just wallow and die in poverty. That our environment should be maintained in as clean and healthy way as practical, not the cheapest way, the best way we can. I realize these examples are not precisely on point to your assumption but IMO, they still help us realize the limitations of allowing capitalism to its ultimate conclusion. When large corporations gain too much power they are no longer subject to the pressures of labor supply, etc. We have seen those results and didn't care for them.
Sure corporations are subject to pressures, it's called diseconomies of scale.

The greater myth that seems incapable of going away is that government intrusion into the economy has bad results. Or that government is less efficient than private enterprise. Anytime we have needed large project focus in the US (railroads, wars, canals, bridges, interstate highways, NASA, environmental cleanup), the answer comes from national focus through government action. Even the internet was brought to you by, government. :)
It is not a myth to state that government is not efficient because the government has no competition so it can't actual product efficient prices. It is a monopoly. It has no market incentive to listen to its customers or be efficient. And do not assume that because public works have transpired that such things cannot be done by private businesses.
 
Dec 2017
357
Florida
I think everyone is misinterpreting to various degrees what Divinespark is saying. Koko's main thesis has to do with the Progressive Era (c. 1900 - 1920). He is contradicting previous theories (most directly Richard Hofstader's 1960 book The Age of Reform) which held that it was the Progressive politicians who drove the reforms "against" big business. Kolko maintains it was not progressive politicians, but big business itself that drove the reforms in this era for their own well-being. Kolko's book was first published in 1963 and he was seen as one of the 1960s "New Left" historians.

As for Divinespark's claim of some "still existing myth," that, to me, smacks of current politics which is supposedly not allowed on the forum. But if moderators allow it to continue, I'll say more about this later. There is no doubt in my mind that this will end in one of the forum's typical incendiary meltdown threads.
Yes, that is the grasp of Kolko's book so far as I have read but nothing of this smacks of current politics but of relevant historical discourse on a historical theory. The theory is, I think erroneously, that government is a regulator of big business for the benefit of American populace.
 

Jax Historian

Ad Honorem
Jul 2012
4,379
Here
Yes, that is the grasp of Kolko's book so far as I have read but nothing of this smacks of current politics but of relevant historical discourse on a historical theory. The theory is, I think erroneously, that government is a regulator of big business for the benefit of American populace.
Well, I don't know how you are going to establish that it is a "current myth" based on anything that happened in the Progressive Era. Even if Kolko is right about the Progress that doesn't mean it holds to this day. You are going to have to deal with almost a century of government legislation.

And I don't see how a "current myth" is going to be discussed without bringing up recent events like whether the deregulating of the banking industry caused the 2008 recession and whether the auto industry bailout benefited the American public or not. And that, I believe, violates the forum rule on "current politics" which prohibits discussion of topics recent than 1990.

If the moderators don't object to this discussion by tomorrow morning, I'll put in my two cents worth then.
 
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