AUT: Book Review of the "Corporate Ideal in the Liberal State"

[Michael Handelman <mhandelman1@xxxxxxxxx>]

Since we're discussing the welfare state, it might be
relevant for me to post this book review I did of an
(old) book, James Weinstein's "The Corporate Ideal in
the Liberal State" which explains the origins of the
welfare state:

http://www.dualpower.net/modules.php?op=modload&name=Reviews&file=index&req=showcontent&id=3

Book review of The Corporate Ideal in the Liberal
State

"A serious problem I?ve noticed, is that some people
in the so-called ?anti-globalization movement? refer
to something like the Tobin Tax, as ?anti-corporate?,
let alone ?anti-capitalist?. There is a distinct body
of theorizing, within the ?movement? who argue that
prior to neo-liberalism, there was some sort of golden
age of ?democracy?. According to them, the welfare
state, was a project to contain the power of big
business. In essence the welfare state, according to
these theorists, was ?anti-corporate?.
This is a very misleading position, and it?s caused by
a failure to understand the nature and origin of the
welfare state. And this is why I am reviewing ?The
Corporate Ideal in the Liberal State: 1900-1918? by
James Weinstein, because it explains the origins of
the welfare state, not as a project of the working
class as a means to restrain the power of ?big
business?, but rather as a project of the capitalist
class, as a social engineering project to contain
class struggle.

The preface of this book is quite excellent at
outlining the major themes.  He has two main theses,
as follows:

?The first is that the political ideology now dominant
in the United States, and the broad programmatic
outlines of the liberal state (known by such names as
the New Freedom, the New Deal, the New Frontier, and
the Great Society) had been worked out and, in part,
tried out by the end of the First World War. The
second is that the ideal of a liberal corporate social
order was formulated and developed under the aegis and
supervision of those who then, as now, enjoyed
ideological and political hegemony in the United
States: the more sophisticated leaders of America\\\'s
largest corporations and financial institutions.?
He argues that while many of the social reforms that
were initially proposed came from those at the bottom,
almost all of these reforms were co-opted by the
capitalist class to serve their interests."

The first chapter, is about an organization known as
the ?National Civic Federation? (NCF). The NCF was
primarily dominated by members of the capitalist
class. Their goal was to create a new relationship
between capital and labour. This group was devoted to
weakening the growing class struggle that was
developing, at this time. For example, the NCF would
support some degree of legalization of unions, but in
return, the unions would have to give up any
revolutionary goals. The development of social welfare
programs was also an important goal of the NCF. This
welfare system that was developed was very
paternalistic, and promoted the ideology that because
the corporation was providing for you, that one
?should be grateful? and ?loyal? and they felt they
?owed something? to the corporation. Such an attitude
would mean that a lot of workers would be more
productive and obedient to the company, which would be
useful for capital accumulation purposes.

Chapter 2 expands on the nature of these welfare
programs. Many of the social welfare proposals were
opposed by labour organizations. For example, take
?disability compensation?: Workingmen?s Federation
wanted to have ?modification of the traditional common
law defenses so that employers would be liable for all
injuries where the injured worker himself was not
negligible?. However, many businessmen including the
directors of the largest corporations, ?had come to
favour? social welfare legislation, because they were
very fearful of employer liability laws. (And these
projects would tend to replace working class
solidarity, with the ideology that the company will
?take care of me?). Many of these programs were drawn
up by NCF, but the court, lagging behind the times,
regarded these programs as unconstitutional. However,
after a while, the courts realized that supporting
these programs would head off the labour movement, so
they eventually ruled them constitutional.
Chapter 3 discusses the emergence of the Federal Trade
Commission. He explains that the so called anti-trust
Sherman Act (which on it?s face ?declared illegal
Every contract, combination in the form of trust or
otherwise, or conspiracy in restraint of trade or
commerce?), contrary to its apparent anti-trust
language, actually accelerated the process of
monopolization of the trusts. In practise, Roosevelt,
for example, would prosecute corporations which he
considered ?irresponsible? with lawsuits, and rewarded
co-operation with the government with informal
agreements not to institute action under the law.
Contrary to the liberal historical view that he was a
?trust-buster?, Roosevelt would only denounce trusts
that were not associated with the National Civic
Federation (like the Rockefeller?s Standard Oil
Company), but not J.P. Morgan (because Morgan was part
of the NCF). The emergence of the FTC helped to
further the process of consolidation. Unlike the
Sherman Act, which at least on the surface, would be
opposed to monopolies, the FTC replaced attacks on
monopolies with the goal of ?regulating the
monopolies?.

Chapter 4 discusses the role of the small businessmen,
in the municipal reform movement. Originally, the
municipal reform movement was an attempt to weed out
corruption in municipal governments, however, it was
quickly co-opted by small businessmen, to turn
municipal governments into municipal corporations.

Chapter 5 is a discussion about the ideological battle
between ?socialism? and ?corporate liberalism?. The
Socialist Party?s votes in 1904 increased 4 times,
thus the corporate liberals were starting to run
scared, with the growth of socialism. The Catholic
Church would soon start a counter-attack in the
trade-union movement through ?The Militia of Christ?
as a means to weaken the growing strength of the
Socialist Party. The NCF would soon follow suit. The
strategy that they eventually adopted was this:
?Officially, a soft line was taken, as a means to woo
away people who shared its morality and social goals,
but were not firmly to underlying socialist theories
of capitalism and antagonistic class interest?.
?Unoffically, the NCF leaders worked closely with
those who were prepared to do what was necessary to
destroy socialist influence, especially in the mass
media and in the educational institutions?. The NCF
was developing a strategy (that would later be
employed more extensively during WWI) to achieve
?control of the public mind.?
Chapter 6 is likely Weinstein?s best chapter. He
discusses the politics of 1912, and the underlying
ideological assumptions of the Progressive Party. The
Progressive Party was a mixture of various tendencies,
from the conservative- disguised-as-a-progressive,
Theodore Roosevelt, to the somewhat naive social
reformism of Robert La Follette. La Folette and
Roosevelt both broke away from the Republican Party in
1912 because of disagreements with Taft, and
eventually worked together to form the Progressive
Party (it was more like an alliance of convenience).
La Follette?s thought is permeated with populist
thinking; for example he argued that ?America was
ruled by a closely related group of interests, which
have fastened monopoly upon the people by means of
legislation. They form an economic oligarchy. They run
and ramify into every congressional district. They
send their friends and stockholders to Congress to do
their will. They form a class as sympathetic as any
board of directors and they control the tools of
democracy as readily as they ever controlled the tools
of the countries of Europe? (sounds like Ralph Nader
today, doesn?t it?). What La Follette wanted was a
return to an idealized 19th century capitalism.
Businesses were worried about La Follette winning, so
they heavily backed Roosevelt for the Progressive
Party nomination. Both Roosevelt and Wilson (the
Democratic candidate for Presidency in 1912) saw the
usefulness of anti-corporate rhetoric, and
specifically used it to win votes. Neither one was
working against corporate interests, but their
anti-corporate rhetoric hid this fact.

Chapter 7 is entitled ?The Federal Government as
social investigator: The Commission on Industrial
Relations, 1913-1915?. This section is an examination,
of how the federal government, contrary to its
appearance, is not a neutral investigator, but rather
is an instrument of the capitalist class.

The final chapter discusses a bit the development of
how war gave the corporate liberals an opportunity to
refine propaganda techniques, the sponsoring of
pro-war socialist groups, and the use of this war as a
cover to engage in repression of socialist groups.
I felt this was a good, but not great book. The major
problem I felt with this book, was it?s ideological
assumptions: The author is a social democrat, and this
is reflected heavily in his work. Throughout the book,
he talks about how the NCF was in response to the
rising (social democratic) Socialist Party. However,
given the fact that social democratic parties can
easily be deradicalized and then integrated into
capitalist democracy (as in western Europe), his
thesis fails quite miserably. Contrary to Weinstein?s
ideology, the Socialist Party, like corporate
liberals, served as an important tool to channel
militant anti-capitalist struggles into reformist
struggles. However despite this (serious fault), this
book is nonetheless excellent, in refuting those in
the anti-globalization movement who are nostalgic for
the welfare state."



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