The Progressive Era Th e Mises Institute dedicates this volume to all of its generous Supporters and wishes to thank these, in particular: Benefactors Susan B. McNiel, Mr. and Mrs. Donald M. Rembert, Sr., Steven R. Berger Mr. and Mrs. Gary J. Turpanjian, Juliana and Hunter Hastings Ryan Schmitt in Memory of William Norman Grigg Yousif Almoayyed and Budoor Kazim Patrons Anonymous, Behfar and Peiying Bastani in honor of those known and unknown who fi ght for liberty, Wayne Chapeskie, Carl S. Creager Th omas and Lisa Dierl, Reza Ektefaie, Willard and Donna Fischer Kevin R. Griffi n, Jeff and Jamie Haenggi, Jule R. Herbert, Jr. Albert L. Hillman, Jr., Hunter Lewis and Elizabeth Sidamon-Eristoff Arnold Lisio, MD in Memory of Margit von Mises, Arthur L. Loeb David McClain, Joseph Edward Paul Melville, Michael L. Merritt Gregory and Joy Morin, James Nardulli, Chris and Melodie Rufer, Leif Smith Dr. Th omas L. Wenck, Brian J. Wilton, Walter and Sharon Woodul III Donors Anonymous, Wesley and Terri Alexander Th omas T. Amlie making amends for grandfather Th omas Ryum Amlie William H. Anderson, John Bartel, Dr. Th omas Beazlie, Ryan Best Bob and Rita Bost, Rémi Boudreau, John Boyer, Michael L. Burks John L. Buttolph III, Prof. Paul Cantor, Terence Corcoran, Jim and Cherie Cox Paul Dietrich, Randall Dollahon and Kathleen Lacey, Jeff ery M. Doty Prof. Frank van Dun, Bill Eaton, David J. Emery, Eric Englund, John Rock Foster Dietmar Georg, Christopher Georgacas, Kevin Paul Hamilton Charles F. Hanes, Sheldon Hayer, Wilfrid Helms, Dr. Frederic Herman Adam W. Hogan, Greg E. Hood, Andrew C. Irvin, Eric N. Johnson Samuel J. Kain, Brett Keiser, Stephan and Cindy Kinsella, Mitchell Lawhorn Joseph Matarese, Brian E. Millsap, Ali Reza M., R. Nelson and Mary Nash Andrew Packer, Paul F. Peppard, Alan Reynolds, Peter A. Roof Patrick Rosenwald, Dr. Murray Sabrin, Th ad and Cyndy Salmon Dr. John H. Scacchia, John L. Schroeder, Butler and Jane Shaff er, John P. Sharkey Henri Etel Skinner, Mr. and Mrs. Dennis A. Sperduto, Steve Th eodorou Richard Timberger, Pavel Tolkachev, Mitchell A. Vanya, Mark Walker J. Stanley Warford, Alice and Wayne Whitmore Rich and Janny Wilcke in loving memory of their sons Billy and Benny Edgar H. Williams, William B. Zieburtz, Jr. The Progressive Era MURRAY N. ROTHBARD EDITED BY PATRICK NEWMAN FOREWORD BY JUDGE ANDREW P. N APOLITANO M ISESI NSTITUTE AUBURN, ALABAMA Published 2017 by the Mises Institute. Th is work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 International License. http://creativecommons.org/licenses/by-nc-nd/4.0/ Mises Institute 518 West Magnolia Ave. Auburn, Ala. 36832 mises.org paperback edition: 978-1-61016-674-4 large print edition: 978-1-61016-675-1 epub: 978-1-61016-677-5 Contents Foreword by Judge Andrew P. Napolitano . 9 Introduction by Patrick Newman. 15 Preface. 37 Chapter 1: Railroads: The First Big Business and the Failure of the Cartels . 41 1. Subsidizing the Railroads . 41 2. Th e Rationale of Railroad Pricing . 49 3. Th e Attempts to Form Cartels . 56 Chapter 2: Regulating the Railroads . 67 1. Th e Drive for Regulation. 67 2. Strengthening the Interstate Commerce Commission . 80 Chapter 3: Attempts at Monopoly in American Industry . 91 1. America’s Industrial Revolution. 91 2. Th e Petroleum Industry . 93 3. Iron and Steel . 98 4. Agricultural Machinery. 100 5. Th e Sugar Trust . 101 6. Overall Assessment . 104 Chapter 4: The Third Party System: Pietists vs. Liturgicals. 109 1. Th e Th ird Party System . 109 2. Pietists vs. Liturgicals: Th e Political Party Constituencies . 115 3. Pietists vs. Liturgicals in the Midwest . 121 4. Reform and the Drive for Prohibition. 131 5 6 The Progressive Era Chapter 5: The Democratic Triumph of 1892 . 135 1. Th e Road to Democratic Triumph. 135 2. Th e Republicans Regroup . 149 A. Th e Retreat from Prohibition. 149 B. Restricting Immigration . 151 C. Pietism and Women’s Suff rage. 156 Chapter 6: 1896: The Collapse of the Third Party System and of Laissez-faire Politics . 163 1. Th e First Collapse: 1894 . 163 2. Th e Final Collapse: 1896 . 168 3. Th e Transformation of the Parties. 178 Chapter 7: Theodore Roosevelt: The First Progressive, Part I. 199 1. Financial Infl uence on Political Parties. 199 2. T.R.: Th e Making of a Progressive . 203 3. T.R. as President: Th e “Good” Trusts . 213 4. T.R. as President: Th e “Bad” Trusts . 224 5. Th e International Oil War. 230 Chapter 8: Theodore Roosevelt: The First Progressive, Part II. 235 1. Th e Meat Packing Myth . 235 2. Harvey W. Wiley and the Pure Food and Drug Act . 241 3. Th eodore Roosevelt and the Conservation Crusade. 252 Chapter 9: The National Civic Federation: Big Business Organized for Progressivism . 273 1. Th e Origins: Th e Chicago Civic Federation . 274 2. Organizing the NCF . 276 3. Th e Clash over Unions . 277 4. Th e Drive for Workmen’s Compensation Laws . 279 5. Monopolizing Public Utilities . 284 6. Regulating Industry. 288 Contents 7 7. Allied Group: Th e American Association for Labor Legislation. 291 Chapter 10: The Progressive Era and the Family . 295 1. Ethnoreligious Confl ict and the Public Schools . 295 2. Progressives, Public Education, and the Family: Th e Case of San Francisco . 302 3. Ethnoreligious Confl ict and the Rise of Feminism . 309 A. Women’s Suff rage . 309 B. Eugenics and Birth Control. 314 4. Gathered Together: Progressivism as a Political Party . 316 5. Signifi cance. 318 Chapter 11: Origins of the Welfare State in America . 321 1. Why the Welfare State? . 322 2. Yankee Postmillennial Pietism. 327 3. Yankee Women: Th e Driving Force. 332 4. Progressives and the Gradual Secularization of Postmillennial Pietism: Ely, Dewey, and Commons . 333 5. Yankee Women Progressives . 340 6. Th e New Deal . 350 7. Th e Rockefellers and Social Security. 356 Chapter 12: War Collectivism in World War I . 361 1. Big Business and War Collectivism . 363 2. Intellectuals and the Legacy of War Collectivism . 383 3. Th e Drive to Prolong War Collectivism . 389 Chapter 13: World War I as Fulfillment: Power and the Intellectuals . 397 1. Introduction . 397 2. Pietism and Prohibition . 400 3. Women at War and at the Polls . 408 4. Saving Our Boys from Alcohol and Vice . 414 8 The Progressive Era 5. Th e New Republic Collectivists . 420 6. Economics in Service of the State: Th e Empiricism of Richard T. Ely . 428 7. Economics in Service of the State: Government and Statistics. 436 Appendix: Toward the Centralization of Science: Th e National Research Council . 453 Chapter 14: The Federal Reserve as a Cartelization Device: The Early Years, 1913–1930 . 463 1. Th e Origins of the Federal Reserve: Th e Dissatisfaction of New York Bankers. 465 2. Th e Road to the Federal Reserve . 469 3. Th e Structure of the Federal Reserve . 478 4. Th e Personnel of the Federal Reserve . 481 5. Th e Federal Reserve and World War I . 485 6. Internationalizing the Cartel . 487 7. Britain and the Gold Exchange Standard . 491 8. Open-Market Purchases in the 1920s . 494 9. Creating the Acceptance Market . 500 10. From Boom to Depression . 505 11. Summary. 511 Chapter 15: Herbert Hoover and the Myth of Laissez-faire. 513 1. Herbert Hoover as Secretary of Commerce . 513 2. Herbert Hoover Fights the Great Depression . 525 Bibliography. ..