for Discussion: Was the Progressive
movement successful in reforming state and
federal government in the early 1900s?
Reading: Hoffman, pp. 134-139;
Roosevelt "The New
Nationalism" (web); Wilson "The
New Freedom" (web)
The Distinguished Gentlemen
The Progressive Reform Movement
Theodore Roosevelt vs. Woodrow
Wilson on Monopoly and Democracy
Corporate Power and the
Corporate Welfare and the
Subversion of Free Enterprise
1. Social, Economic, and Political
facing America in the early 1900s.
2. The Rise of the Progressive
3. Roosevelt vs. Wilson
4. Corporations, Money, and Modern
5. Campaign Finance
6. Can We Limit Corporate Domination
1. What does Roosevelt mean when he
argues that "there can be no effective
control of corporations while their
political activity remains"
2. Why does Roosevelt believe
industrial corporations are a natural
result of the growth of our modern
3. Do you agree with Roosevelt
government must increase its own power
to match and control these powerful
4. What does Roosevelt mean
5. Do you agree that a strong
government led by a strong President
is the only force that can control these
powerful industrial corporations?
6. Does Wilson believe that
and trusts are inevitable?
7. Why does Wilson believe
are a threat to both our democratic
society and to our free-enterprise
8. Why does Wilson believe
Roosevelt's "New Nationalism" is
simply "regulated monopoly"?
9. What does Wilson propose
to do to
limit the growing political and
economic power of monopolies
10. Do you think Roosevelt
really differ in their attitude toward
government regulation and control
over monopolies and trusts.
can be no effective control of corporations while their political
activity remains. To put an end to it will be neither a short nor
an easy task, but it can be done.....
....."It is necessary that laws should be passed to prohibit
the use of corporate funds directly or indirectly for political
purposes; it is still more necessary that such laws should be thoroughly
enforced. Corporate expenditures for political purposes...have supplied
one of the principal sources of corruption in our political affairs"
....."I believe that every national
officer, elected or appointed, should be forbidden to perform any
service or receive any compensation, directly or indirectly, from
interstate corporations; and a similar provision could not fail
to be useful
within the States."
demand a strong National regulation of inter-State corporations.
The corporation is an essential part of modern business. The concentration
of modern business, in some degree, is both inevitable and necessary
for National and international business efficiency. but the existing
concentration of vast wealth under a corporate system, unguarded
and uncontrolled by the Nation, has placed in the hands of a few
men enormous, secret, irresponsible power over the daily life
of the citizen--a power insufferable in a free government and
certain of abuse.
This power has been abused, in monopoly of National resources,
in stock watering, in unfair competition and unfair privileges,
and finally in sinister influences on the public agencies of State
and Nation. We do not fear commercial power, but we insist that
it shall be exercised openly, under publicity, supervision and
regulation of the most efficient sort, which will preserver its
good while eradicating and preventing its evils."
Progressive Party Platform, 1912
....."What most of us are fighting
for is to break up this very partnership between big business and
the government. We call upon all intelligent men to bear witness
that if this plan were consummated , the great employers and capitalists
of the country would be under a more overpowering temptation than
ever to take control of the government and keep it subservient to
...................Woodrow Wilson, 1913
In order to understand
the debate between Roosevelt and Wilson, we need to go back and
look at the collapse of the Populist movement in 1896. The failure
of the Populists created a political dilemma for American politicians
and the two major political parties, the Republican and the Democratic
parties. In order to avoid another challenge like the Populists
both parties would be forced to address the larger causes for the
Populist's rise and initial successes.
The Populist party in the early 1890s
represented small farmers, rural small businesses, and American
workers. Supporters of the Populists were worried about the growing
failure of family farmers, the threat to rural businesses and the
small-town way of life, and about workers' shrinking wages and the
threat from competing immigrant workers. From 1870 to the 1900,
there were three major Depressions--1873, 1884, and 1893. These
Depressions, in which farmers, small businesses, and workers suffered
from bankruptcy, the loss of jobs, and wage cuts, caused many Americans
to begin to question whether the American economy worked. By the
1890s, Populist politicians were arguing that the growing power
of large, national corporations and oligopolies were threatening
to undermine free enterprise and our democracy. They charged that
there was a conspiracy between these dominant corporations and the
government to enrich the wealthy and large corporations at the expense
of farmers, small businesses, and the American worker.
But in 1896, the Republican candidate
for President, William McKinley, was elected President. And the
Populist party collapsed, because its supporters were drawn into
the Democratic or Republican parties. The collapse of the Populists
was caused by both parties recognition and efforts to address some
of the economic difficulties experienced by farmers, small businesses,
and workers. McKinley was elected President on his promise to promote
economic growth, create jobs, and provide opportunities for all
Americans. McKinley was elected by those Americans who were prospering
in America's growing industrial cities, where jobs, wealth, and
opportunities offered them the promise of achieving the American
Dream. The Populist lost because farmers and small, rural businesses
were now in the minority. Since 1896, the majority of Americans
would support the growth of an urban, industrial America based on
large national corporations and a consumer economy.
In order to prevent the re-emergence
of a Populist political challenge that would once again try to unite
American farmers, small businesses, and workers to challenge the
continued domination of the Republican and Democratic parties, politicians
from both parties would have to ensure that the economy was growing
fast enough, providing enough good jobs, and offering opportunities
for all who were willing to work hard. But how could they do this?
Afterall, the economy had stopped working three times between 1870
and 1900, and had suffered three terrible Depressions.
It is here that Williams' argument
about the growth of support for American imperialism becomes important.
Williams argues that the 1893 Depression, the Populist challenge,
and the growing sense that the American economy didn't work very
well created a "cultural crisis" for Americans in the
1890s and early 1900s. For Williams, Americans were faced with a
dilemma: The expansion of the American economy fueled by the settling
of the West had provided jobs and opportunities for all. Now with
the West and America settled, what would fuel the economic expansion
and opportunities to provide Americans with jobs, wealth, and opportunities?
Williams argues that this economic dilemma fueled the cultural crisis
of the 1890s. Because Americans believed that their individual freedom
depended on economic success and opportunities for advancement.
Without the freedom to expand their individual wealth, Americans
worried that their individual freedom and their democratic society
was threatened. Instead of redefining freedom, and turning away
from the endless pursuit of wealth, and recognizing the limits of
the American economy to provide new wealth and opportunities for
all Americans, Americans discovered a new frontier, a new land to
settle and development, that would provide Americans a tremendous
source of new wealth and economic opportunities. This new frontier
was the world. American political and economic leaders argued that
American should become an empire and spread its economic influence,
culture, and democratic institutions throughout the world.
Williams concludes that American resolved
this cultural crisis in the 1890s and early 1900s by supporting
the growth of an American empire. By becoming a "benevolent,
progressive policemen," by imposing law and order on backward
countries, and by promoting the growth and expansion of American
corporations and economic interests throughout the world, American
leaders believed they had discovered a way to provide Americans
the economic freedom, the jobs, opportunities, and pursuit of wealth
that Americans believed their society was based on. But how did
the growth of this American empire help resolve the economic problems
that created periodic Depressions?
The Depression between 1870 and 1900
were caused by overproduction. With the growth of large, national
corporations and huge, industrial factories that could produce more
goods than Americans could buy, the American economy faced a serious
problem. Because of the growing success and productivity of these
new industrial factories, America was producing more goods than
Americans could buy, and if these goods weren't bought, then the
economy would begin to falter. Here is how it works. If these large
national corporations can't sell all the goods they are producing,
they will be forced to lay off workers, close plants, and even default
on the loans they took out to build these new industrial factories.
Without continuous growth and increasing production, these large
American corporations could not maintain their profits, payoff their
debts, and compete with other modern, industrial corporations. Depressions
occur when overproduction and undercomsumption leads large numbers
of factories to lay off workers and close up, because they are producing
more goods than they can sell. The more workers that lose their
jobs, the less Americans can afford to buy the products that the
industrial economy is creating, and this causes even more overproduction
and even more layoffs and plant closings. Depressions end when enough
factories are closed, and enough surplus production is finally sold
off, that corporations must hire more workers and open more factories
to meet the demand for goods. And, of course, with more and more
factories opening up again, and workers working, Americans can now
afford to buy the products created by this expanding industrial
If overproduction and underconsumption
created Depressions, one of the easiest ways to solve this problem
was to expand the markets for American goods to countries throughout
the world. But in order to expand foreign markets for our manufacturers
and expand opportunities for American corporations and investors
to invest their profits in other countries, the United States musts
pressure other countries to buy our products and allow American
investors to invest in their countries. This would seem simple enough,
but it is not. American companies and investors were blocked by
European imperialism. From 1870 to 1920, facing the same economic
crisis that the American economy faced, European nations decided
to expand their economies by controlling and dominating other countries,
by expanding their empires. Britain, France, Germany, and Belgium
compete with each other to divide up and colonize Africa and Asia.
These European empires forced their colonies to sell their resources
to them and to buy manufactured goods only from them. Thus, facing
competition with European imperialism, American economic and political
leaders concluded that American could compete only it it too expanded
From 1898 to 1920, American expanded
its economic and political domination and control of Latin America,
the Philippines, Hawaii, and China. But American leader argued that,
unlike the Europeans, American imperialism was benevolent, that
our larger goals were to bring our economic wealth, political institutions,
and modern civilization to backward people. Leaders from Roosevelt
to Wilson argued that expanding American influence throughout the
world was our God-given manifest destiny as a superior civilization
and culture. The American Empire, therefore, was not an empire at
all, but an extension and expansion of American freedom. But, as
Williams notes, the contradictions created by forcing other peoples
to accept your influence, control, and domination often leads to
resistance and resentment.
As a result of the growth and expansion
of the American empire in the early 1900s, the American economy
begins to boom and Americans are prospering. But in order to create
this empire, the federal government has greatly expanding its power
and influence. Moreover, in order to promote and support economic
growth and expansion both within America and within its larger empire,
the federal government has massively expanded its size and influence.
In addition to the growth of a powerful, federal government in the
early 1900s, we see the continued growth of large, national corporations,
who were expanding their control over the economy. Between the 1890s
and 1920s, American reformers known as Progressives attempted to
reform the American economic and political system in order to protect
free enterprise and free competition and protect our democratic
institutions from the growing power of these large, national corporations.
Two of the leading reformers were Theodore Roosevelt and Woodrow
Roosevelt served as President between
1900 and 1908, and Wilson served as President between 1912 and 1920.
In 1912, Roosevelt ran against Wilson for President. Roosevelt came
out of retirement because he thought Wilson and President Taft,
who also ran for re-election in 1912, were threatening to undo the
reforms he created as President. The basic problem facing all three
candidates for President was how should the federal government promote
economic growth, regulate large corporations, and protect our democratic
institutions from the growing power of these corporations.
Roosevelt argued that dominant, large,
national corporations that dominated their industries were inevitable.
He believed that oligopolies were the natural result of economic
competition in the free market. Large companies could produce higher
quality goods in greater number at a lower price than smaller companies.
As a result of their ability to out-compete smaller companies, a
few giant companies would inevitably dominate whole industries.
Instead of trying to break up these giant corporations, as Wilson
was proposing, Roosevelt believed that the government should regulate
and control them to ensure that they didn't use their power to control
the economy and threaten our democratic institutions. Thus Roosevelt
supported a strong, powerful central government whose power good
be used to check and balance the power of these giant corporations.
In addition to regulated these corporations, Roosevelt wanted to
prevent them from using their money to influence politicians and
elections. In order to protect our democratic institutions, the
federal government must limit and strictly control the influence
of large, national corporations in politics.
Given Roosevelt's desire to control
giant corporations, what do you think their attitude was toward
Roosevelt? You might think that they would be opposed to his programs,
but their weren't. Many of these giant corporations supported Roosevelt's
campaign for President. The reason they were not opposed to him
is that they had worked with him while he was President. Under Roosevelt,
many of the leaders of these giant corporations were appointed to
run the very government agencies that Roosevelt wanted to use to
regulate national corporations. Because corporate interests dominated
these government agencies, these corporations weren't opposed to
Roosevelt's reforms. By controlling the very agencies created to
regulate them, these giant corporations could acquire even more
control over the economy and their industries.
Running against Roosevelt, Wilson argued
that these large, national corporations had become a threat to the
American economy and society. By creating oligopolies and trusts
that allowed them to dominate whole industries, these corporations
were undermining free enterprise and free competition. Wilson believed
that without the constant competition for consumers created by free
competition between competing corporations, that the American consumer
would suffer; they would no longer be able to buy the highest quality
goods at the lowest price, because these oligopolies would not have
to compete on the basis of price and quality. Thus Wilson wanted
the federal government to break up these trusts and oligopolies
and restore free enterprise and free competition. Unlike Roosevelt,
Wilson believed that the federal government should challenge and
limit the power of these large national corporations in order to
product free enterprise and protect our democratic institutions.
It appears that Wilson and Roosevelt
have some real fundamental differences on how the government should
regulate large national corporations and control the economy. But
do they? Wilson is elected President in 1912, because Roosevelt
and Taft split the remaining votes between them in this three-way
race. As President, Wilson's policies were little different from
Roosevelt's when he was President. Wilson did not work to break
up these giant corporations and restore free enterprise. Like Roosevelt,
Wilson appointed business leaders to the government agencies created
to regulate business. Why did Wilson do this? Doesn't this go against
his campaign promises?
First of all, as President, Wilson
realized that he must create economic growth, jobs, and opportunities
if he was going to get re-elected. In order to do this, he found
that he was forced to cooperate with these large national corporations
and even promote their growth and profits. As a result of the "reforms"
created by Roosevelt and Wilson, we get the continued growth of
the federal government, increasing cooperation between the government
and large corporations, and less American democratic control over
their government and political system.
Faced with the cultural crisis in the
1890s and early 1900s, Americans made a conscious choice. In return
for the growth and expansion of an American Empire, the jobs and
opportunities created by large, dominate national corporations,
and the massive growth and power of the federal government, Americans
gave up some of their democratic control over their government and
political institution and accepted the domination of the American
economy by large, dominant corporations. The irony Williams doesn't
fully explore is this: In return for economic freedom, the freedom
to acquire wealth and success, Americans gave up some of their democratic
rights to control their society and economy. And giant global corporations
are now competing with each other to buy control and influence over
the federal government and our now global empire and interests.
But can American democratic society really work if freedom means
economic freedom and not the political and democratic right to shape
our society, economy, and government? This is one of the larger
contradictions created by what Williams calls "empire as a
way of life."