Laissez-Faire in American History

11 Key excerpts on "Laissez-Faire in American History"

• 

  eBook - ePub

  Authority and the Liberal Tradition

  From Hobbes to Rorty

  • Robert Heineman(Author)
  • 2020(Publication Date)
  • Routledge

    (Publisher)

  Laissez Faire Becomes Public Policy

  The proponents of limited government and economic individualism had widespread public support during much of the latter nineteenth and early twentieth centuries in the United States; and their views soon became part of the supreme law of the land as enunciated by the nation’s highest court. The laissez faire position gained additional credence from the tremendous economic and technological advances that occurred during this period. As a result, many Americans became convinced that governmental power was not necessary for domestic prosperity; and, thus, they saw no need to formulate an articulate theoretical basis for government as a democratically responsive force for social direction.

  William Graham Sumner and Minimal Government

  The foremost academic spokesman for laissez faire ideas in latter nineteenth-century America was, without a doubt, William Graham Sumner. An instructor at Yale University from 1868 until the early twentieth century, Sumner spent the better part of the period from 1870 through the early 1890s popularizing the doctrine of limited government and individual freedom. He was more than a devotee of the ideas of Spencer, however. His thought represents a fairly comprehensive amalgam of the currents comprising the intellectual revolution of the time. Adherence to the ideas of individualism and laissez faire originated from his early acquaintance with the thought of the classical economists.1 Much of his methodology seems to have been derived from his educational years spent abroad in Germany. His acceptance of Spencer’s ideas and their Darwinian parallels originally stemmed not from the Social Statics but from the later The Study of Sociology.2 Richard Hofstadter’s statement that Sumner “brought together three great traditions of western capitalist culture: the Protestant ethic, the doctrines of classical economics, and Darwinian natural selection…”3

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  The New Roberts Court, Donald Trump, and Our Failing Constitution

  • Stephen M. Feldman(Author)
  • 2017(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  Indeed, government persistently bolstered business. For instance, to nurture the development of the railroads, the national government gave them immense tracts of public land—including 128 million acres during the years 1862–1871. Yet, advocates of laissez faire conveniently ignored such government intrusions into commercial affairs, so long as they directly benefitted business. Throughout the late- nineteenth and early-twentieth centuries, the utopian dream of an unreg- ulated economic marketplace continued to motivate many Americans. These laissez-faire ideologues insisted that any government regulation shifting money or property from A to B or otherwise interfering with the operation of the marketplace necessarily transgressed the common good. 34 The sources of American laissez-faire thought were diverse and com- plex. Unquestionably, economic self-interest motivated many American supporters: They believed they could make more money if governments stopped regulating the marketplace. But more forces than economic interest were in play. For several decades already, British thinkers such as James Mill and David Ricardo had been advocating for unregulated eco- nomic markets. 35 And in a perverse twist, slavery also contributed promi- nently to the elaboration of American laissez faire. Before the Civil War, the emerging Republican party of Abraham Lincoln had advanced a free labor, free soil ideology. 36 The crux of this ideology was to contrast free labor with slave labor. As Republican journalist and politician Horace Greeley wrote in the 1850s: “Enslave a man and you destroy his ambition, his enterprise, his capacity.” But free labor, Greeley explained, was consonant with “the constitu- tion of human nature, the desire of bettering one’s condition [as] the mainspring of effort.” 37 The free labor, free soil ideology closely inte- grated the private and public spheres in the context of a still-agrarian and rural nation.

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  Efficiency and Management

  • Guy Callender(Author)
  • 2008(Publication Date)
  • Routledge

    (Publisher)

  At the time that democracy became more egalitarian and diverse in its objectives, laissez-faire became the populist economic doctrine that dominated UK economic policy. Arguably, one consequence was the comparative decline in national certainty of purpose and macro-efficiency. In place of national goals and international dominance, the individual rights of owners to pursue their own paths to their ‘profits on investment’ 97 became a dominating economic force. This chapter has evaluated a diversity of qualitative economic issues that have emerged in Anglo-American economies over the past two centuries. The aim of this historical review has been to underline the comparative speed with which some Anglo-American economies have shifted, at times rapidly, from laissez-faire to centralized models of economic policy on a pragmatic basis. The chapter also raises the question: is the basis of economic theory, and therefore the foundations of its dominant position in the social sciences, objectively scientific or socio-political? The answer to this question may never be entirely clear. Yet the varying influences that have been identified in the historical analysis of the changing economic epochs of the past 120 years, and the overtly loose linkage made by Friedman between the size of government and the size of the tithe (which is a culturally-embedded belief rather than a universal measure), pose fundamental questions about the supposed scientific basis of economics

  Sign up to read

  Learn more about book
• 

  Available until 4 Dec |Learn more

  The Making of Modern Economics

  The Lives and Ideas of Great Thinkers

  • Mark Skousen(Author)
  • 2015(Publication Date)
  • Taylor & Francis

    (Publisher)

  Pour gouverner mieux, il faudrait gouverner moins (in order to govern better, we ought to govern less).

  “Laissez faire” has come to represent the hands-off policies advocated by Adam Smith, although he never used the phrase. In the twentieth century, John Maynard Keynes gave laissez faire a bad name; it represented the “do-nothing” policies prevalent during the Depression years. “For good or evil, in present day conditions laissez-faire can no longer be relied upon to furnish economic projects with the capital they need,” he wrote (Skidelsky 1992: 185). According to Keynes, government was needed to rescue laissez-faire capitalism.

  In fact, laissez faire was never meant to be a heartless “do-nothing” government policy. Adam Smith and the classical laissez-faire economists actually aimed at dismantling the old system of regulations and special privilege, and thus improving the general welfare.

  The French economists were very much involved in Smith’s magnum opus, starting when he spent time in France preparing his book and discussing ideas with Quesnay, Turgot, and Voltaire. Once The Wealth of Nations was published, the French were highly successful in publicizing Smith’s model of free enterprise and liberalized trade throughout the Western world. They translated Smith’s book into French, published the first encyclopedia of economics and the first history of economic thought, and wrote the first major textbook in economics, Say’s Treatise on Political Economy , which was the principal textbook in the United States and Europe during the first half of the nineteenth century. Many of the Smithian principles were adopted by Alexis de Tocqueville in his profound study of Democracy in America (see box, pages 59 –61

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  The Contours of American History

  • William Appleman Williams(Author)
  • 2011(Publication Date)
  • Verso

    (Publisher)

  Organizing under the leadership of Van Buren, and taking the accurate and appealing name of Free Soilers, easterners of this persuasion entered the political arena in 1848. Attracting some upperclass conservatives who were also integrating their economic, political, and religious morality into an antislavery, probusiness outlook, the new party campaigned vigorously under the banner of “Free Trade, Free Labor, Free Soil, Free Speech, and Free Men.” The party offered internal improvements, free homesteads, and tariff protection along with denunciation of southern slave leaders. It thus defined laissez faire in terms that excluded the south. That was the most portentous development in American history since the 1760s when Samuel Adams had done the same thing in excluding England from colonial mercantilism. For should that definition of laissez faire be accepted by a plurality or majority that won control of the national government, then either it might attack the south or the south might revolt of its own accord.

  Electing 13 congressmen (enough to exercise considerable influence in the Congress) and utterly disrupting the campaign between the Democrats and the Whigs, the Free Soilers advanced a statement of laissez faire that was at once almost pure abstract doctrine and yet practical enough to satisfy the dirt farmer. Despite being often considered insignificant if not unimportant before the time of Samuel Gompers, or before outbreaks of violence such as those in 1877, labor thus played a crucial role in American history when it took up the expansionist outlook. Nothing dramatizes this more effectively than the realization that it took three weeks and 63 ballots to organize the House of Representatives in 1849. Already antagonized by the Wilmot Proviso, the program and the effectiveness of the Free Soil campaign intensified the south’s concern and bitterness. “The madmen of the North and Northwest,” concluded the editor of the Richmond Enquirer , “have, we fear, cast the die, and numbered the days of this glorious Union.”

  Already embarked upon a program of self-conscious reform, the south began to think of itself as a besieged society that not only could create a balanced political economy including industry, but as one that might have to embrace that program in order to survive. Beginning in the 1840s, the region started to improve its agricultural methods, liberalize its state constitutions and extend the suffrage to more white men, build factories and railroads, develop an educational system, and carry through various social reforms. Fully aware of these efforts, many southerners felt northern attacks were doubly unfair. Not only was the antislavery campaign “a direct and dangerous attack” just as Calhoun had said it was in 1847, but it threatened to make “a fixed, dreary, hopeless minority” out of a people who were trying to improve their society. “We do not intend to stand still,” cried Jeremiah Clemens of Alabama, “and have our throats cut.” “No, Sir,” Calhoun added, “the Union can

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Termites of the State

  Why Complexity Leads to Inequality

  • Vito Tanzi(Author)
  • 2017(Publication Date)
  • Cambridge University Press

    (Publisher)

  If the government was not able to solve problems, it was better if it did not even try to. Termites of the State 66 66 The view that a free and unregulated market economy can perform eco- nomic miracles is a relatively recent one, in spite of the frequent references to Adam Smith’s invisible hand over the years. On this important but rarely acknowledged point, it may be worthwhile to cite from an important his- torical book that discussed in great detail various reforms introduced in the nineteenth century in the United Kingdom. As the author of that book put it: A great deal of the talk about laissez faire [in the nineteenth century] must be discounted, or at least put into its proper context. In many cases the argument concealed an admission that a problem was insoluble, or that it must be endured, because no one could think of any method of solving it. From this point of view, the policy of laissez faire was not the result of a new and optimistic belief in the progress of society through private enter- prise. It was rather an acknowledgement that the fund of skill and expe- rience at the service of society was limited, and that, in the management of their common affairs, men would not be able to find the elasticity and adaptiveness [sic] which individuals showed in devising schemes for their own self-interest. The treatment of social and economic questions was more haphazard and empirical than Englishmen were ready to acknowledge. If a practical solution suggested itself, if a tentative experiment could be made, the doctrine of laissez faire would be thrust aside, only to be used again after another failure to discover the way out of a difficulty (Woodward, [1938] 1962, p. 16). This implies that laissez-faire was a kind of frequent, second best approach to be used when what might have been the first best was not expected to be feasible.

  Sign up to read

  Learn more about book
• 

  eBook - ePub

  Modern Understandings of Liberty and Property

  Liberty, Property, and the Law

  • Richard A. Epstein(Author)
  • 2013(Publication Date)
  • Routledge

    (Publisher)

  I will carefully avoid using the term laissez faire to mean what only unscrupulous or ignorant opponents of it and never its exponents make it mean, namely, philosophical anarchism, or opposition to any governmental power or activity whatsoever. I will in general use the term to mean what the pioneer systematic exponents of it, the Physiocrats and Adam Smith, argued for, namely, the limitation of governmental activity to the enforcement of peace and of "justice" in the restricted sense of "commutative justice," to defense against foreign enemies, and to public works regarded as essential and as impossible or highly improbable of establishment by private enterprise or, for special reasons, unsuitable to be left to private operation. Both the Physiocrats and Adam Smith gave some sanction to the limited expansion of governmental activity beyond these limits. Following their example, I will not deny the laissez faire label to any writer who in general accepts the limitations I have enumerated to governmental activity, even if he occasionally, incidentally, and inconsistently relaxes these limitations slightly to permit either of a restricted list of minor exceptions or of temporary suspension of the laissez faire code in case of emergency or abnormal conditions, such as war, famine, or earthquake.

  No social doctrine has a meaningful historical life except with reference, explicit or implicit, to an existent or conceivable alternative or array of alternatives. It is a useful simplification as a first approximation to regard the alternatives to laissez faire as lying along a straight line measuring degrees of governmental intervention in the field of economic activity. Looking in one direction, this straight line represents Herbert Spencer's road to "The Coming Slavery," or Friedrich Hayek's "Road to Serfdom." It is only since the eighteenth century "Enlightenment" that slavery and serfdom have been regarded as pejorative terms. Those well-disposed towards laissez faire should therefore perhaps use in preference such terms as "Road to Tyranny" or "Road to Totalitarianism," labels which as far as I know no one would ever have chosen for highways on which he wished mankind to travel. Looking in the other direction, however, this highway also represents the Road to Anarchy. In any case, along this road are many conceivable stopping-places, and no one may be interested in either of its terminal points. Route 1, a great national highway which connects Boston, New York, Philadelphia, Baltimore, and Washington, begins at Fort Kent in Maine and ends at a sand-dune at the southern tip of Florida. Except on the arbitrary assumption that travel on this road, in either direction, is totally without benefit of brakes, the terminal points of our metaphorical road are often assigned an extravagant degree of practical significance in discourse in this field. Until quite recent years, actual and vital discussion in the public forum has turned mainly on the comparative merits as resting-places along our highway of points not greatly distant from each other, or perhaps more accurately, as between no movement at all and a limited amount of movement, sometimes in both directions simultaneously, from the existing resting-place. Before World War I the issue in debate was never, as far as I can see, between laissez faire and totalitarianism, or between the welfare state and philosophical anarchism. As I will be dealing mostly with pre-1914 facts or ideas, I will spend no time on St. George-and-the-dragon types of argument.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  The Legitimation Crisis of Neoliberalism

  The State, Will-Formation, and Resistance

  • Alessandro Bonanno(Author)
  • 2017(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  For the entire ninetieth century and the first three decades of the twentieth century, the laissez-faire doctrine and commensurate policies dominated the economy and society. And while the theory of free func- tioning of the market was criticized throughout the period, it was only after the crisis of 1929 and the onset of the Great Depression in the 1930s that those alternative postures that later constituted the essence of the Fordist regime were implemented. To be sure, laissez-faire is a multifaceted theory that had rarely found applications that truly reflected its orthodoxy. Yet, in the ninetieth century and early twentieth century, the ideas of the free functioning of the market accompanied by state actions that would safe- guard its working were widely accepted at the scientific and political levels. In his classical critique of the laissez-faire doctrine and period, Karl Polanyi (2001 [1944]) illustrated its benefits and, above all, crippling contradictions. The central point of his theory of the double movement refers to the historical tendency to counter the working of the free market with protectionist moves. Accordingly, protectionism was a constant component of the ninetieth-century economy and represented one of its 1 THE STATE IN CLASSICAL LAISSEZ-FAIRE, ITS CRISIS … 15 major dimensions after the 1870s. Polanyi contended that laissez-faire requires pacifist and internationalist outlooks that justify and promote the free circulation of commodities, labor, and capital. Popular in the first portion of the ninetieth century, these sentiments were later replaced by those favoring protectionism and imperialism. As global competition increased and the generation of profit and control of market were increasingly dif ficult, the policies of protecting markets (protectionism) and areas of commercial influence (imperialism) became highly practiced.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Wealth, Power, and the Crisis of Laissez Faire Capitalism

  • D. Gibson(Author)
  • 2011(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  This is the lowest it has been in almost half a century. 49 Bluestone concluded that while the results of “this neglect of public invest- ment” may not be seen for years, it was clear that Clinton’s policies might be undermining the foundation of economic progress, that is, technologi- cal advance. The priorities of the president who followed Clinton into the White House were not in slowing down speculation and corporate takeovers or in rebuilding and improving infrastructure or in stimulating scientific and technological progress. His priorities were in extending and deepening the laissez faire revolution. Laissez Faire at Home 213 By the time that Bush took office and stated that the spreading of free market economics was a primary national security goal, the country had already been headed in that direction for more than forty years in foreign policy and twenty-five years in domestic policy. The decision to impose laissez faire on the rest of the world was made, as we have seen, in the 1950s and the view of the world that produced that decision had roots in the 1890s in the United States and long before that in England. George Walker Bush, a kind of anti-FDR, may be both the most extreme proponent of the Locke-Smith agenda ever to occupy the White House and one of the clear- est examples of how destructive that agenda is for almost everyone involved. This and the overall policy of the last few decades are historical aberrations. Only England tried anything like this. This aberration involves actions and policies designed to provide maximum freedom for property interests, led by the captains of banking, oil, and media and today’s investor class, and maxi- mum support for those same interests. An Aberration What the United States Establishment has been trying to do is an aberration. The usual and apparently normal state of affairs is for societies to use gov- ernment to stimulate, guide, support, regulate, shape, and even control eco- nomic processes.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  America's Free Market Myths

  Debunking Market Fundamentalism

  • Joseph Shaanan(Author)
  • 2017(Publication Date)
  • Palgrave Macmillan

    (Publisher)

  1 However, by the 1930s perceptions would change again, and drastically so. The length and severity of the Great Depression contradicted classical economists’ notion of the market as a self-regulating mechanism and with it the appeal of a small nonintervention- ist government declined. Laissez faire ideology came back in vogue in the 1970s. It was given considerable support although not many were aware at the time (or today) of the organized push behind it including from wealthy backers with strong ties to media and academia and research foundations established specifically for 50 J. SHAANAN that purpose. It was not too difficult to persuade the public to accept the message. In good economic times laissez faire was hailed as the cause of prosperity 2 and in bad times, govern- ment, fairly or not, received a large share of the blame. Government was an easy target and was criticized for dama- ging the free market economy with its high taxes and needless interventions. Arguments were made in the 1980s that the US was falling behind Japan and needed to improve its competitiveness. The quick and obvious solution was to reduce corporate and high earners’ taxes. Specifically, reducing marginal tax rates would result in people working harder and reducing corporate taxes would lead to more investment thereby returning the US to economic pre-eminence. Regulation, it was claimed, both economic and social (involving health and safety), had become excessive and was burdensome to the point of stifling innovation. Social programs were criticized for having created a culture of dependency and needed to be dismantled. The self-regulating market would take care of all concerns and if the market is not sufficient the legal system could plug the holes through private lawsuits. Privatization and deregulation became synonymous with economic efficiency. The message driven home was that people had to learn to live with risk and get used to change.

  Sign up to read

  Learn more about book
• 

  eBook - PDF

  Boisguilbert Economist of the Reign of Louis XIV

  • Hazel Van Dyke Roberts(Author)
  • 2019(Publication Date)
  • Columbia University Press

    (Publisher)

  Weulersse, Revue d'histoire de doctrines économtques, 1910, p. 128. 7 See below, p. 324. 8 Adam Smith, as is well known, does not use the French expression. Instead he usually refers to occurrences under conditions of perfect liberty. The only case in which he may be said to use the phrase itself is the English equivalent of laissez faire la nature. See below, pp. 325-327. 9 Gesamtausgabe, Erste Abteilung, Band 3, p. 575. For the best example of laissez faire economics run riot, as it were, and to contrast its spirit with 2 5 2 L A I S S E Z F A I R E With Boisguilbert the expression meant not so much laissez-nous faire, but literally laissez faire la nature. It was nature's plan for the functioning of economic society which must not be interfered with by any ministère étrangère . 10 Just what did he regard as nature's plan for mankind ? It was that all men should be able to gain a livelihood from their labor or that of their ancestors. Immediately, it was anything which served to bring this about and did not tend ultimately to destroy this ability upon the part of others, and thus, in turn, of oneself. It is in this way that the term may be said to have included just tax-ation as well as freedom to trade. The oppression of unjust taxation interfered with the ability to gain a livelihood or to improve one's condition as certainly as restrictions on the abil-ity to trade. Laissez faire meant the mutual aid of man and nature : that products be moved from the place where they were superfluous to the place where products were lacking. It meant freedom to sell under conditions of equality with the buyers. There are two reasons why Boisguilbert stressed freedom to sell. The first is because at the time he was writing France was limit-ing the competition for the purchase of her grains to the home market, and the aides prevented the movement or sale of wine.

  Sign up to read

  Learn more about book