The Promise of American Life

"The book provided the clearest distillation of American liberalism to date: “The use of Hamiltonian means to achieve Jeffersonian ends.” From the foundation of this country, there was a great debate between Hamiltonians , who had a vision of a strong state, and Jeffersonians, who advocated a yeoman’s republic with limited government. The genius of that aphorism is that it synthesises what liberals believe. We believe in individual freedom – we just believe that you need a strong state to realise that vision. When Croly wrote the book, he was an obscure architecture critic. Then, when Teddy Roosevelt returned from one of his African safaris, he began waving the book around and proclaiming it to be the great distillation of his own thinking. The publication of the book coincided with a radical turn for Roosevelt. He delivered a famous speech in 1910 about a “new nationalism”. The press was excited to discern the impact of this unknown philosopher on Roosevelt. The speech helped make Croly’s book a phenomenon. Herbert Croly had a vision not just of what liberal policy should look like, but of what liberal politics should look like. He really believed that it was necessary to have an elite that could help educate and elevate public opinion. So he founded The New Republic to speak to a very small audience of influential thinkers."

"It was written in 1909 and it had an electrifying effect on America and in the formation of modern American capitalism. Teddy Roosevelt used the book in formulating his so-called “New Nationalism” which he presented to the country shortly thereafter. Barack Obama used the occasion marking Teddy Roosevelt’s speech in Kansas in 1911 on New Nationalism – I believe it was the 100th anniversary of the speech – to give what I consider the best speech of his presidency just last December, setting forth a similar set of problems and a similar set of solutions. Herbert Croly was the first to understand that modern capitalism required a government that was robustly democratic, but was large enough and strong enough to counterbalance the forces of large corporations. In a sense, he married the national vision of [Founding Father and first US Secretary of the Treasury] Alexander Hamilton to the commitment of [Founding Father and principal author of the Declaration of Independence ] Thomas Jefferson toward average people, rather than the wealthy and the privileged. That fusion of the two strands of American political thought was extremely important for the 20th century and I dare say that Croly’s influence and the influence of his thinking spread beyond the United States. Yes, and some of these people seem to believe that a smaller government will give them more freedom. But they overlook the overwhelming power of big corporations and Wall Street. The only way they are going to have more freedom is if government, as Croly envisioned, counterbalances the enormous power of the large corporations and Wall Street. But in order to do so, government has to be more responsive to average people. This, of course, gets us back to the points I was making a moment ago. We have got to have a democracy that is not corrupted by great wealth and power. Otherwise the government simply becomes another vehicle for the wealthy to entrench their privileged position. Yes. Modern American capitalism has been tested several times over the last century. At least twice, reformers have preserved capitalism by responding to its excesses. The first was during the progressive era, the first decade and a half of the 20th century before World War I. It was not just at the federal level but, perhaps even more strikingly, at the level of state government where you had the beginnings of the reforms that found their full flowering in the 1930s. You mention anti-trust. Yes, anti-trust laws were designed to break up the big monopolies and oligopolies that essentially ran much of the American economy at the end of the 19th century. There were laws to improve the functioning of democracy, to get money out of politics, to reduce the power of the political bosses. The Federal Reserve Board was created in an attempt to provide some orderly and predictable means of maintaining economic policy and avoid the patterns of booms and busts that had marred the era of monopoly capitalism. Income tax was instituted. Labour protections, at the state level in particular, were introduced – a five-day working week, time-and-a-half for overtime, health and safety measures. The list was quite long. “Whatever happened to enlightened self-interest?” Croly was not entirely responsible obviously, but his book came at a time when there was great optimism about the capacity of our democratic process to control the excesses of capitalism and to make capitalism work for the people. The second era [of reform] was obviously the 1930s when, after the Great Crash of 1929, [President] Franklin D Roosevelt enacted everything from the minimum wage to social security, unemployment insurance, the 40-hour working week nationally and also the requirement that employers bargain with unions in good faith, thereby laying the foundations for very strong labour unions in the United States. Much of what the progressives accomplished, and what the New Deal accomplished 25 years later, had to do with changing both the economic and social structure of the country – widening the circle of prosperity, enabling far greater numbers of Americans to participate in the economy and to gain advantages as the economy grew, and at the same time strengthen democracy. We are now at another crisis. The Great Recession was symptomatic, but as I said before, it’s been building for 30 years and when you look at the allocation of income or wealth or the decline of our democracy under the weight of money, you see many of the same things that reformers in the early part of the 20th century, such as Herbert Croly, saw."