I've recently finished reading The Lost Promise of Progressivism, a book that gives an in depth look at the history of ideas behind Progressivism and the people who articulated those ideas. Interestingly to me, several of these people were Great American Economists, notably Richard T. Ely. (The Ely lecture is given by the incoming President of the American Economic Association at the annual winter meeting.) I had always known the name, but otherwise didn't know why he was important. The copyright on Lost Promise for the book that I got from our Library says 1994, which I assume was the first printing, not quite twenty years after the course I took. One additional fascination in reading this book is to see Eisenach as a consummate scholar, grappling with the ideas he was teaching us as his life's work. I don't know many people who have done this with their research. Most of the economists that I know seem to move their research agenda from time to time, either to keep up with what's then current or because the area they had been investigating becomes pretty well mined, so they look for a more fertile and fresher landscape. In contrast, Eisenach found his Shangri-La with this work on Progressivism as an intellectual movement.
The other reason for the reading is that today we (people with a "liberal" inclination) seem so desperately in need of a coherent social philosophy. In search of one my inclination is to look backward in time for when such coherence existed. This is the case for Progressivist thought circa 1900. According to Eisenach, Progressivism dominated in American social consciousness, roughly from the election of William McKinley to the Presidency (1896) through World War I. It died out quickly thereafter. The election of Warren Harding to the Presidency in 1920 signified a shift away from Progressivism. Some of the Progressivist ideas survive in current liberal thinking, but not in a coherent manner. Those ideas are garbled with New Deal Liberalism to produce a hodgepodge that lacks a principled basis.
As Eisenach convincingly argues, Progressivism borrowed heavily from early Puritan thought. America was to be the New Israel. The ocean voyage from Europe to America that the first Puritans made was akin to the wandering in the desert. The Progressivist thinkers of the late nineteenth and early twentieth century were almost all Protestant Evangelical, but of the liberal kind, raised in the New England Puritan tradition. They produced a synthesis that married the historical ideas with then current issues and dilemmas, some of which I'll elaborate on below. If we are to produce a coherent social philosophy today, why not repeat the exercise that the Progressivist thinkers of the late nineteenth century went through, but this time updating it to the 21st century?
With this as background let me also try to distinguish how the word Progressivism is used by Eisenach versus how it used in most contemporary writing, where it seems interchangeable with Liberalism or, if not that, then each can be identified with certain policy positions and it is those policy positions themselves that we attach the label to, not some set of underlying principles. David Sirota tries to parse out the difference in a way that to me fails because it ultimately focuses the labels onto the issue of the proper role of government. I would argue that is not a first principles issue, but is itself derivative. Progressivism a la Eisenach is akin to nationalism, a love of country and its people, along with a way to express that love. This kind of nationalism is unique to America in that the notion is not tied to a particular tribe, race, or creed. Religion remains an important concept to bind the people, yet it is a distinctly American religion, one that can accommodate non-Protestants and non-believers. So in this piece I want to discuss a new Progressivism as first principles. Then I'd like to conclude with a partial list of policy recommendations that I believe follow from the principles.
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There are two parts to the principles argument. The parts are intertwined but I'll put the argument forward initially as if they are distinct. Then I'll sketch how to tie them together. There will be gaps in the thinking, as I'm still trying to make sense of it. I hope there is enough presented so the reader can get a decent picture of the arguments. One piece is economic. The other piece is ethics. Given my background, I feel more terra firma on the economics, so I'll do that one first.
The U.S. Constitution (1783) was written around the time of Adam Smith's Wealth of Nations (1776). Capitalism at that time was mainly of the small market variety. Most economic exchange was local. Producers were close to their customers. Further, the scale of production matched those market conditions. So the production scale was small. The Constitution was written with that as the implicit economic model. The emphasis in the Constitution was on individualism and local control, hence a weak central government. This wasn't merely a reaction to the tyranny of the King of England before the American Revolution and it didn't necessarily reflect an endorsement of pure laissez-faire without any government interference whatsoever. Instead, it reflected a view that government, where it does regulate the marketplace, should be of the same scale.
Of course, there was a tension on this key issue among the Founders. Hamilton advocated for a strong national presence. Jefferson preferred a much more limited Federal government. More generally, the more industrial north leaned Hamilton's way while the rural South was in Jefferson's camp. And, as a humorous recent column by Gail Collins indicates, these divisions in point of view are still with us. (She also indicates that some of this is more a mindset than a reflection of practical reality, with Texas the second most populated State in the Union but clearly with a southern/rural mindset.)
One hundred years after the Constitution the economic situation was substantially different. Much industry had reached a national scale (or larger). Think of the transcontinental railroads, big steel, big oil, meat packing, etc. The titans of industry who led in these sectors were not Caspar Milquetoasts. They engaged in many predatory behaviors - much were aimed at workers, while still more were directed at rivals or potential rivals. We learned a bit about this in high school by taking American History. The muckrakers exposed many of these predatory practices. Though sunlight is the best disinfectant, the muckraking in itself was insufficient to reform industry behavior. Alas, state and local government, the primary mechanism specified by the Constitution, was also insufficient for the task, both for the scaling reason already mentioned and because it was too easy for the leaders of industry to get into cahoots with the local regulators, for their mutual benefit but to the detriment of everyone else. Progressivism argued for a strong national government as the only possible solution.
This issue of insufficient jurisdiction for government to oversee industry remains with us today, and is particularly manifest with e-commerce. Consider, for example, that Apple sidesteps paying state corporate taxes, notably in California where its corporate headquarters are located but also in other states where it does business, by incorporating in Nevada where the corporate tax rate is zero. Apple does likewise in the international arena.
Apple, for instance, was among the first tech companies to designate overseas salespeople in high-tax countries in a manner that allowed them to sell on behalf of low-tax subsidiaries on other continents, sidestepping income taxes, according to former executives. Apple was a pioneer of an accounting technique known as the “Double Irish With a Dutch Sandwich,” which reduces taxes by routing profits through Irish subsidiaries and the Netherlands and then to the Caribbean. Today, that tactic is used by hundreds of other corporations — some of which directly imitated Apple’s methods, say accountants at those companies.
In the public psyche Steve Jobs has been cast as an American hero, not a latter day Robber Baron in the style of Jay Gould. The above suggests we should have a more mixed view of him, jaundiced by the evident stinginess and lack of social responsibility. That we don't perhaps is because on balance he achieved much good and made only little harm. But partly this may be because avoiding taxation is as American as apple pie (no pun intended) so we don't hold it against him. Many people do aim to avoid paying taxes, working people as well as big corporations.
People who made their livelihoods in a high tax northeast state often retire to a southern state where there is no personal income tax. They may have contributed to the public good (a significant component of which is the educational expense of the next generation) and did so when their own kids were in school in that northeast state, but then they dramatically reduce their contribution to the public good after moving to a southern state. (There are property taxes and sales taxes in the southern state, so they continue to pay something, but at a much lower rate than they had been paying. If they retired but stayed put in the northeast, they'd be paying more in state and local taxes.) In this, do they feel guilty of not paying their fair share of the educational expenses? I suspect that most do not - out of sight, out of mind.
Indeed, the crux of the economic argument is that the main 21st century issue is demographics and geography. We have been reckless in ignoring the issue, but we can no longer afford to do so. Migration patterns within the country matter a great deal. Our (lack of) policy on this matter has already made things bad. We need a national strategy to put us on a right footing.
In other contexts, however, we think of the migration issue quite a lot. Consider this gallows humor piece by Timothy Egan, The Schadenfreude Sports Fan. In the piece Egan talks about the no longer NBA team the Supersonics and their fans in Seattle, chagrined by the move of the franchise to Oklahoma City, which was done in large part because Seattle refurbished the old arena but didn't build a new one. That sports franchise owners can hold municipalities hostage by (credibly) threatening to move the team, with the core issue typically that of aging facilities and who will bear the cost of a new arena has become so commonplace that fans not in the affected cities hardly notice. If there were a common governance structure in both locations there would not be such a credible threat and the building of a new arena might be better determined purely by efficiency criteria. Likewise, the total number of sports franchises would be close to optimal. (Existing owners have incentive to keep the number below optimal, just so the can exercise this sort of threat.) Further, the "right cities" would have teams. One measure of that is population. On this chart of metropolitan areas, Seattle (really the Sea-Tac area) ranks 15th nationally, while Oklahoma City ranks 43rd and is less than half the population. On those grounds the move makes little sense. Of course there are exceptions with small(er) towns hosting professional sports teams, Green Bay and Buffalo in football providing good examples. But there was some historical basis for where those teams are sited.
Let's return to migration more broadly considered. The general argument goes something like this. The population has been aging. Senior citizens prefer warmer climates for retirement. So it is natural for a good chunk of them to move south when they retire. Those seniors who have decent income (or estates that they can draw from) will have demand for a variety of goods and services. This means there will be jobs available where it is that seniors migrate to and hence the senior migration creates a complementary migration from among the rest of population or from among the immigrant population.
Should the policy encourage the flow to certain places, retard the flow, or be neutral on this front? Let's keep this question in mind but not answer it yet. Instead let's look at the recent history. I took a table of state populations over the last 50 years (1960 - 2010) with data from the decennial census and massaged it a bit to include rank in population and percentage of the total population as well as an overall growth rate. The country as a whole grew by 72% in population over those 50 years. Most northern states grew but at a rate slower than the population as a whole and their ranking among states fell as a consequence. Nevada had the highest growth rate. Arizona was next. Neither is coastal and both are largely desert. Florida also had a high growth rate and it was a comparatively large state back in 1960. Both California and Texas grew well above average and both were very large states already back in 1960.
Consider the real estate bubble in this light. The bubble was mainly in those states mentioned in the previous paragraph. Rapid population growth or substantial population growth in an already densely populated area seems to contribute to speculative behavior, which provides the genesis for the bubble. It also helps fuel the mindset that real estate prices must continue to rise, because demand growth is apparent. To the extent that the burst in these bubbles has had macroeconomic consequences of national, indeed international proportion, there is an obvious need to deter such bubbles from happening in the future. For this reason, balanced population growth should be preferred to massive growth in a few southern states and modest growth in the north. This suggests that policy should aim to retard the flow if not to totally reverse it.
Now consider the ecological issues, focusing on one particular scarce resource, fresh water. Texas is still in a drought, the worst in its history. Global warming may make water shortages a permanent condition in the American Southwest, but even Florida is susceptible to the problem. Perhaps in the future new retirees will develop a different preference, wanting water in abundance as their primary end, rather than craving warm weather first and foremost. I don't know. The issue is whether we can wait till such a preference emerges. I think not. Thus, the ecological issues also suggest that policy should aim to retard the flow.
Viewed this way, state income tax rates (and the state's general regulatory environment) are a matter of national concern and it should not be left to the individual state to set these things. This had led to chaos regarding population migration. We'd be far better off if tax rates were equalized across states and thus were taken out of the equation when people decide to relocate. Yet we should note that an under populated state gets a near term benefit from cutting its tax rate as a way to steer migration to that state and thereby encourage growth. There can be too much a good thing; having opened the spigot it is difficult if not impossible to close it later, which is what the last fifty years have taught us.
I do not know what overall population growth rate we should aspire to for the next fifty years. Focusing on the ecological issues encourages a Malthusian (limited natural resources) view, one that may be too pessimistic, especially if we can achieve more balanced growth. So I don't have much to say about immigration except these two points. The anti (Hispanic) immigrant perspective seems most pronounced in the Southwest, Arizona in particular. Perhaps that's because some of these Southwest states share a border with Mexico. But let's not discount that some of these states have experienced rapid population growth and their economies have become especially volatile as a consequence. This volatility contributes to the sense of decline and the threat that aliens might create. So, it is my belief that balanced growth would contribute to a more welcoming attitude about immigration.
The other point regards whether our views about immigration are consistent with still holding a belief in America as the New Israel. The New Colossus, Emma Lazarus' famous poem which is posted at the Statue of Liberty, has a view of immigration that truly is consistent with America as the New Israel. It includes these lines:
"Give me your tired, your poor,Your huddled masses yearning to breathe free,The wretched refuse of your teeming shore.Send these, the homeless, tempest-tost to me,I lift my lamp beside the golden door!"
A view of immigration that says it should be blocked because the immigrants will become leeches on the good life that America has to offer seems more consistent with an image of America as the New Rome, an imperial nation whose empire is spent. It is for this reason that I'd like to see us more pro immigration. Having made that point, this is a good place to segue to the ethical issues.
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"I pledge allegiance to the flag of the United States of America, and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all."
The line, one nation under God, indivisible, is a tribute to Abraham Lincoln. Progressivism found its hero in Lincoln. He saved the Union. One nation, indivisible was the guiding principle. The expression under God was added during the Eisenhower administration. The linguistic history of the Pledge is interesting to learn about. Here, however my purpose is more practical. What mechanisms are in place to make America one nation, indivisible?
Pretty early on in The Lost Promise, Eisenach introduces the reader to Albion Small, a sociologist, a professor at the University of Chicago, and author of this still intriguing essay, The Bonds of Nationality, published in 1915. The glue that ties us to one another Small calls social bonds. They exist in all groups, can be strong or weak, and determine effectiveness of group function and how enduring the group will be. Viewed from the perspective of the individual in regard to the group, the principal bond is loyalty. In turn, loyalty begats responsibility for the welfare of other group members.
In the context of a small group operationalizing the abstract ideas of loyalty and responsibility is not hard. Their expression depends on the circumstances and needs of the group members. As applied to an entire nation, however, that is harder to do given the far greater number of members of the group and the larger distance between members. I will give my interpretation in what follows, using the academic setting as first example. But before I do I need to make the following point, because these notions seem to be especially controversial just now. In Eisenach's telling there was one area of American society exempt from Progressivism, even during its heyday. That area is the Law, where the Constitution did hold sway and a rights-based approach prevailed. So legal scholarship developed separately from Progressivist thought. The two are hard, if not impossible, to reconcile.
When I teach the economic notion of a public good, where the emphasis is non-excludability in consumption, I give as example the questions that students pose in class. When many students have the same question on their mind, asking the question promotes a response from the instructor and then perhaps further discussion after. All students in the class benefit from that. Something that was muddied for them has become clearer or some connection with other ideas has been established. This point about the social benefit of questions is transparent to them and its a good example to use, because many of them hadn't thought of the public good aspect.
Asking a question during lecture, if it is already a regular practice in the classroom, is a matter of fact thing, no big deal. But if posing a question is unusual, then asking questions can be a bit heroic on the part of students, because they might feel that the asking makes them look stupid. Nonetheless, it is the responsible thing to do and in this particular setting students can readily see that. The point is that doing what's responsible isn't necessarily what's convenient or what's easy. But it's what is right.
Dissecting this example even more, there can be cases, of course, where the question posed is not a public good. The question may be so off point as to not to be useful. Or it may be that the student asking the question is really just showing off, by asking a question that wouldn't occur to the classmates and hence one where the answer doesn't illuminate on the subject. So it takes some discretion on the part of the student to determine whether the question is appropriate or not. It is simply not possible to specify with precision beforehand which questions are public good and which are not. Thus, part of responsibility is exercising such discretion.
In an academic environment where students and instructors act responsibly in this way a sense of collegiality will develop and the participants will enjoy those interactions for the most part. It is the feeling of collegiality upon which the loyalty arises. Indeed, the collegiality may produce affection for one another. In such a setting it is quite possible to have disagreements that are principled and not personal. Indeed, the collegiality might be a prerequisite for that. So another aspect of responsibility is to offer up a point of view in a respectful way and to keep the discussion from getting personal and overly heated.
I belabored this discussion for the academic setting so I can talk about loyalty and responsibility as a citizen. In my way of thinking, it means acting collegial in this manner in whatever circumstance the person finds herself in - as a neighbor, as a co-worker, as an involved parent at the school, in civic settings, with friends, literally wherever social interaction occurs. Personally, I find this a tough standard to live up to. I'm most comfortable doing so in an academic setting, where I think I have a reasonable sense of how others are thinking and reacting. I find it harder outside the university setting and there am apt to act more like the shy student. Being responsible in less familiar settings may be the ultimate in good citizenship.
We have a tendency to think of public service only formally, if not military service then the Peace Corps or something like that. My sense is that this is too narrow a view. There is a public good aspect to almost all our social interactions. If you're a sports fan this is obvious. The game is more fun when other fans in attendance make a lot of noise cheering for the team. In other social settings, vigorous participation by all makes the group more productive. Good citizenship then demands such involvement, even when there is no government sanction of the activity.
Professor Small actually spends the bulk of the essay on a related question. How does a person become loyal and responsible? His answer, not surprising at all but one to contemplate because we don't discuss it enough, is that the person must be educated to do so. The person must literally be socialized to understand what loyalty means and to implicitly know what burdens attach to being responsible. What individual or group of individuals is charged with socializing people in this way? Professor Small identifies two groups. The family is first. The parents are responsible for socializing their children. A nation can't be effective unless the families do well by their children in this way. It is notable that in our current Presidential campaign Rick Santorum is known as the one making this point. The stereotype is that family values are a Conservative issue. Small makes it quite clear that it is core to Progressivism as well. He goes to lengths to laud the Jewish tradition, perhaps the first of the organized religions to ascribe this role to the family.
The other group that Small signals out is organized religion, not one particular religion, but all of them. Whatever church the person is a member of, it has as one if its goals to socialize the person into becoming a loyal citizen and to behave responsibly in a social setting. Apparently in saying this Small was entirely unconcerned about the separation of church and state. As I will indicate in a bit, in his view a citizen's feeling for country were of a religious nature.
I found it somewhat surprising that Small didn't discuss other groups. For example, school is not part of this list. I'm not sure why. Whether it is because in his own upbringing family and religion were the two primary factors or for some other reason, I do not know. Other Progressivist thinkers did allow for other groups to play this role. For example, Mary Parker Follett advocated informal learning for adults a la the collegiality I discussed above via community centers. More recently the political scientist Robert Putnam, has lamented the decline in social capital in his book Bowling Alone. The new media may be superior to old forms of group interaction in its entertainment value, which of course is why it has caught on, but according to Putnam is far inferior in instilling a sense of responsibility in its participants. If Jeb Bush is right that the country is in decline, perhaps Putnam's argument provides the reason.
I want to return to Small's essay. He has a grander view than I'm capable of describing here. Take a look at how he ends the piece, by discussing a vision of The American Religion. (It's in the smaller font that starts at the middle of the page.) He views citizenship as a spiritual matter. It is the way by which we make our lives genuine. The intensity that one feels while reading this passage is palpable. Though I'm an atheist (one who mumbles about it), I'm inclined to agree with Small here. How would Small's argument be made today? Can it be done without making any explicit reference to religion at all or would that be throwing the baby out with the bathwater?
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When I had first thought about writing this piece I wanted to make a different argument than I've provided above. If nationalism was the answer in the late nineteenth century then today we need a different answer, one on a global scale. We're citizens of the world. Surely the argument that states in the U.S. have collectively offered up an incoherent approach to population migration can be recast in other dimensions and then instead of states we can talk about nations internationally collectively producing incoherence. This certainly seems obvious with respect to macroeconomic policy. And it surely seems correct that large multinational corporations need effective international bodies to regulate them in a meaningful way or they'll will continue to play off one nation against another just as the professional sports leagues have done with regard to where they locate their franchises. But I shied away from drawing out the obvious parallels for one particular reason.
We don't seem anywhere near ready to have an international governing body with authority in economic matters. Look at all the trouble the EU is having in trying to get coordinated fiscal policy across its membership. Having parallel organizations on other continents let alone one very big intercontinental governing body just doesn't seem in the cards, at least not now. When Progressivism got started there already was a national government, though a comparatively weak one. Building a large governing structure from scratch is a much more daunting task. For now it seems best to muddle through with our trade agreements, treaties, international bodies for discussion, and other ad hoc arrangements in a framework that is based on each nation as sovereign. Likewise, focusing on America only, it seems prudent to recognize that the states will continue to have considerable authority, even as the policies they set have national importance.
The thought in marrying the ethical argument to the economic one is not to produce some idealized structure. I know enough at a practical level about campus governance and serving on committees that can be effective or alternatively can be do nothing to be comfortable in asserting that the goodwill and intelligence of the members matters far more than the structure. It is in this sense that I'm hopeful for making a "better muddle," based on the following additional observation.
The history of the robber barons, at least for some of them, Bill Gates offers a latter day example, is that they were absolutely ruthless in amassing their fortunes, but then at some point in their lives they stopped doing that and turned to philanthropy instead. Whether this was atoning for past sins or later in life simply wanting to do good works I can't say. But it does cause one to ask: why not have a more mixed approach in the first phase or why not have a more socially responsible view to wealth creation at that time? Joe Nocera had an interesting recent column on this point, The Safest Bank. A good deal might be achieved in this regard simply by having the wealth creators take a longer term view. There are pressures, to be sure, to consistently show near term profitability as a way to keep shareholders and other investors at bay. But clearly some of this near term focus is pernicious. Effective leadership could help push us in the opposite direction.
Beyond this building social responsibility into a corporation's objectives may be quite controversial. There is a fairly well known piece by Milton Friedman that argues The Social Responsibility of Business is to Increases its Profits. In making effective economic argument, Friedman is without parallel. Nevertheless, I think he's wrong. As one example consider Apple's use of the Double Irish with a Dutch sandwich. Were Apple aware at the time it first considered doing this that the practice would produce a massive amount of copycat behavior, would it still be the socially responsible thing to move ahead with it? Couple the notion of unfair and possibly irresponsible behavior with the idea that in our present hyper connected world such ideas can go viral, quite quickly, and you have a decent argument that the behavior should be nipped in the bud.
This same thought regarding building in social responsibility might occur to lawmakers at every level of government in that the policies they pursue often will have impact beyond their own jurisdiction and that should be accounted for. Given the (lack of) popularity that elected officials seem to have today, one might be less sanguine on this possibility than that social responsibility will emerge among this group. But I'm not saying we should expect this any time soon. Instead, what I'm arguing is that there needs to be a gradual change in social norms that move toward a socially responsible outlook. Leadership, whether in business or in government, will reflect those norms. This is how change might occur. Even if the prospects for that look bleak now, they don't have to remain that way indefinitely.
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I would like to conclude with a few suggestions to move us in the direction this piece suggests we should be heading.
- Demographic Issues - Talk about these directly. Heretofore we've mostly discussed these issues indirectly, speaking instead of the national debt and the size of the current deficit. There are a host of issues to consider that result from increases in life expectancy and the concomitant aging of society. These include labor force participation of senior citizens, the role for immigration in helping achieve a sensible age distribution of the population, the amount spent on medical research and in what domains, and ways that the elderly can contribute to the welfare of future generations so that the flow is more in both directions. We should be talking about these issues directly instead of ignoring them and only considering the financial issues at the Federal level.
- National Service - The principal argument against national service by such notable economists as Gary Becker, is that it inefficiently allocates labor - many doing such service would contribute more socially by working in private sector jobs. The argument is most convincing when national service is compulsory and the unemployment rate for young adults is low. In contrast, consider a program of voluntary national service, one that is open to people of all ages 18 or above, and that the softness in the labor market which prevails now is apt to persist for some time to come. This would seem to get around Becker's objections. It would be a way to build substantial social capital a la Robert Putnam. I'm particularly interested in middle aged persons and senior citizens performing national service, a topic that seemingly gets little or no attention at present.
- Dual Careers and Second Careers - We should follow Peter Drucker in suggesting that all knowledge workers follow a dual career path. The first career is the one that pays the rent and puts food on the table. The second career is volunteer work done either via national service or through some not-for-profit organization aimed at doing good works. The second career is there as a need to satisfy the individual's social conscience and to learn how to be effective in doing so. At some point in middle life, if the individual has amassed sufficient wealth so the person can retire from the first career, the prior second career becomes the primary work. The individual then can continue to make a contribution in this way and in the words of Albion Small lead a genuine life.
- Progressivism as an Emblem of Democracy - The Cold War ended but History did not. Capitalism clearly is on the ascendancy. Democracy's future is less certain. Authoritarian or Feudal regimes may yet win out in the Middle East, China, Russia, and elsewhere around the globe. Material well being matters, certainly. Spiritual well being matters too; it matters quite a lot. Embracing a new Progressivism would be a way to convincingly demonstrate there can be a functioning system that does both.