A NEW HISTORY OF LEVIATHAN A NEW HISTORY OF LEVIATHAN Essays on the Rise of the American Corporate State EDITED BY RONALD RADOSH AND MURRAY N. ROTHBARD A Button Ngjijfly Paperback E. P. DUTTON & CO., INC. | NEW YORK | 1972 Copyright © 1972 by Murray N. Rothbard and Ronald Radosh All rights reserved. Printed in the U.S.A. First Edition Individual Copyrights William Appleman Williams: "A Profile of the Corporate Elite." Printed by permission of the author. Copyright © 1972 by William Appleman Williams. Martin J. Sklar: "Woodrow Wilson and the Political Economy of Modern United States Liberalism." Reprinted from Studies on the Left, Vol. 1, No. 3 (Fall, i960), by permission of the author. Copyright © i960 by Studies on the Left. David Eakins: "Policy-Planning for the Establishment." Printed by permission of the author. Copyright © 1972 by David Eakins. James Gilbert: "James Burnham: Exemplary Radical of the 1930s." Printed by permission of the author. Copyright © 1972 by James Gilbert. Leonard P. Liggio: "American Foreign Policy and National- Security Management." Printed by permission of the author. Copyright © 1972 by Leonard P. Liggio. No part of this publication may be reproduced or transmitted in any form or by any means, electronic or mechanical, includ- ing photocopy, recording, or any information storage and retrieval system now known or to be invented, without per- mission in writing from the publishers, except by a reviewer who wishes to quote brief passages in connection with a review written for inclusion in a magazine or newspaper or broadcast. Published simultaneously in Canada by Clarke, Irwin & Company Limited, Toronto and Vancouver. SBN 0-525-47312-2 Preface RONALD RADOSH and MURRAY N. ROTHBARD It is now widely understood that the United States in mid- twentieth century is a Leviathan Corporate State—a politi- cal economy dominated by giant multinational corpora- tions whose extensive domain, operating with the levers of government, extends from the local retail outlet to firms negotiating for rights to explore oil deposits offshore of Saigon. But the corporate state, whose pervasive influence has recently been subjected to sharp critiques by Herbert Marcuse, Charles Reich, and Phillip Slater (in The Pursuit of Loneliness [Boston: Beacon Press, 1970]), is by no means a new phenomenon. The corporate leviathan began to emerge at the turn of the twentieth century, after an era of substantial laissez-faire had proceeded to industrialize and urbanize the nation. The essays in this book reveal how and in what manner the corporate state developed in twentieth-century America. They show how a sophisticated group of large corporate reformers managed to replace a freely competi- tive economy and make a new governing class, through the use of reform mechanisms to mold the government into a mighty instrument of monopolization and cartelization. From Theodore Roosevelt to Woodrow Wilson to Franklin Vi PREFACE D. Roosevelt to their corporate backers, down to the intel- lectuals who forged theoretical apologia for the new corporatism, these essays show how these sophisticated corporatist reformers sought to stifle the fierce winds of competition and to achieve what James Weinstein has called the "stabilization, rationalization and continued expansion" of the new political economy. The ideology of these corporatist reformers was liberal- ism, but this was scarcely the liberalism of popular myth and image. Arthur M. Schlesinger, Jr., a noted spokesman for the popular image of liberalism, once wrote that liberal- ism in America has been ordinarily the movement on the part of the other sections of society to restrain the power of the business community. This sort of statement assumes the existence of a broad popular movement, staunchly opposed by business, that arises to challenge and curb the one-sided power of corporate enterprise. But new historical research, much of it presented in this volume, has shown the fallacy of the popular conception. The new twentieth- century liberalism was not antibusiness. On the contrary, new research has shown that liberalism has been the ideology of the dominant business groups and that these groups have consistently favored state intervention in the economy in order to regulate and cartelize business activ- ity. As Gabriel Kolko has remarked in The Triumph of Conservatism, we have had regulation not by, of, and for the mass of the people against large business; rather we have had regulatory mechanisms designed, operated, and staffed by the men who run the corporations themselves—a form of corporate-inspired self-regulation carried on under government aegis. Furthermore, liberal historiography has generally de- picted twentieth-century America as a conflict between good-guy Democrats, leading a farmer-labor Populist coali- tion against big business, in conflict with laissez-faire, business-minded Republicans. This book demonstrates that Preface vii both parties have been dedicated to a large, business- dominated corporate state, with the Democrats perhaps a bit more sophisticated and intense about establishing and advancing the corporatist system. Thus, A New History of Leviathan transcends the ideol- ogy and historiography of liberalism. One unusual aspect of the book is that the selections were made by, and three of the essays written by, two editors, each of whom launch their joint critique from widely differing perspectives. Mur- ray N. Rothbard is one of the intellectual leaders of the new "right-wing libertarian movement"—a movement that has emerged out of what has come to be called the Old Right, the American libertarian tradition beginning with Jefferson and Paine and continuing in the twentieth cen- tury in the thought and politics of such people as H. L. Mencken, Garet Garrett, Oswald Garrison Villard, John T. Flynn, and Senator Robert A. Taft. A firm believer in laissez-faire capitalism, Rothbard is a free-market econo- mist, a former contributor to National Review, and a member of the executive committee of the National Tax- payers Union. Ronald Radosh, on the other hand, emerges from the ranks of the New Left. As an undergraduate and graduate student at the University of Wisconsin, he was an active member of the Wisconsin Socialist Club, and functioned as an associate editor of the radical journal, Studies on the Left. Working with this group, he was among those who developed the critique of the system and ideology of corpo- rate liberalism, a term that came into widespread use and popularity with the political leadership of Carl Oglesby1 in the mid-1960s and the emergence of Students for a Demo- cratic Society. Unlike Murray Rothbard, Ronald Radosh is a libertarian socialist who believes in the creation of a 1 Carl Oglesby and Richard Schaull, Containment and Change (New York: Macmillan, 1967). Vlll PREFACE radical consciousness as a prerequisite for the forging of a socialist politico-economic structure. How is it that an archexponent of laissez-faire capitalism can coedit a collection on the Leviathan Corporate State with a firm believer in the necessity of socialist revolution? The answer is that each, because of his critique of liberal ideology and concepts, has been able in his own work to transcend the ideological myths that enable the large cor- porations to mask their hegemony over American society. One might look only at the editors' essays on Herbert Hoover (Rothbard) and the New Deal era (Radosh) to see how the transcendence of liberalism has enabled each author to bypass the mythology that has blocked full comprehension of these respective periods. To liberals, Hoover was the bad guy and F.D.R. the good guy. Demo- crats blamed the Depression on Hoover for his allegedly laissez-faire policies (much as Republicans were later to blame Harry S Truman for "losing" China), and praised Roosevelt for taking strong affirmative action on behalf of the poor and unemployed. But as the authors show, Herbert Hoover was actually the precursor of the entire New Deal system, and Roose- velt only carried out to its logical end the politics de- veloped by Hoover and other elements of the corporate economy. Adherence to the liberal framework prevents others from grasping the fundamental truths about these periods, as the essays point out in detail. Awareness that the nature of liberalism has been distorted to mask large corporate control over American politics is essential for interpreting our past development, and for understanding how the Leviathan Corporate State operates today. There are, of course, major political and philosophical differences between the editors, and therefore between the authors of the essays in this volume. Most obviously, one favors removing the privileges of the large corporations and returning to laissez-faire, whereas the other favors a Preface ix decentralized socialist economy. But political differences may be submerged when it comes to using basic analytical techniques, when it comes, in short, to challenging the preeminent liberal ideology of mainstream corporate America and its academic and intellectual servants. On this issue the authors and editors stand together, and it is our hope that this book will carry forth the challenge to the intellectual underpinnings of the Leviathan Corporate State. Contents Preface by Ronald Radosh and Murray N. Rothbard v Introduction, A Profile of the Corporate Elite by William Appleman Williams I Woodrow Wilson and the Political Economy of Mod- ern United States Liberalism by Martin J. Sklar 7 War Collectivism in World War I by Murray N. Rothbard 66 Herbert Hoover and the Myth of Laissez-Faire by Murray N. Rothbard in The Myth of the New Deal by Ronald Radosh 146 Policy-Planning for the Establishment by David Eakins 188 James Burnham: Exemplary Radical of the 1930s by James Gilbert 206 American Foreign Policy and National-Security Management by Leonard P. Liggio 224 Suggested Readings 260 Notes on Contributors 262 A NEW HISTORY OF LEVIATHAN INTRODUCTION A Profile of the Corporate Elite WILLIAM APPLEMAN WILLIAMS Perhaps the greatest importance of the Pentagon Papers resides in the clear evidence provided in those documents that the men who wield power know what they are about.