Important Clinton administration advisors Robert Reich and Ira Magaziner, in their book Minding America's Business reveal a curious justification for their proposals to employ comprehensive national planning. With these respected liberals evoking the names of two conservative giants in American history, Alexander Hamilton and Henry (Clay, much is revealed about the confusion that plagues modern politics. ¹ That Reich and Magaziner feel free to use the economic ideas of Thomas Jefferson's bitter antagonist in defense of national planning reveals how far the conservative drift of liberal ideology has progressed over the last two centuries. Modern liberal thought currently embraces a wide range of Old World mercantilist notions: import and export restrictions, tariffs, subsidies, price supports, agricultural production restrictions and occasionally even wage-price controls and government-fostered monopolies—ideas astonishingly similar to those imposed by King George leading up the American Revolution in 1776.

The Drift into Conservatism
The drift away from the classical liberal position of free trade and economic liberty within a free economy began with the Washington and Adams administrations and continued, surprisingly, during the Virginia Dynasty of Jefferson, Madison and Monroe. With pro-authority policies like Jefferson's trade embargo, liberal War Hawks seeking to conquer Canada in 1812, Madison's Second National Bank and taxpayer financed internal improvements, liberals of the period moved steadily toward the economic nationalism of Hamilton—the nationalism that was America's first secular collectivism.

This early conservative thread in American liberalism was carried forward by Henry Clay in developing his American System, a blueprint for centralized economic power that with its protective tariffs and subsidized transportation facilities looked backward toward mercantilism and at the same time marked the first step toward the authoritarian economic patterns of the twentieth century. ² Portending American liberalism in general, Clay closed his public career as the prime mover of the conservative Whig Party.

Dissent over the growing statism among liberals rose throughout the Monroe Presidency. Then, in the election of 1824, Andrew Jackson commanded more popular votes than John Quincy Adams but was denied the Presidency in the House of Representatives. The House thus bestowed the legacy of Jefferson on Adams, a man with views that in many respects were indistinguishable from those of his Federalist father. This became the straw that broke the camel's back. Jackson was swept into office in 1828 as a new liberal challenge arose to face the apologists for authority and control.

Jackson's largely successful challenge to the decayed liberalism of the National Republicans fell short of a new revolution, however. The centralizing tendencies of Jeffersonian and Jacksonian Democracy and the failure of both to come to terms with slavery soon decimated the political structure that had been established with the founding of the Republic. In failing to resolve America's ethical defilement at the hands of slavery, freedom's liberal spirit was set directly opposed to the decentralized political system established to defend liberty. With centralized authority possessing the upper hand morally in the issue of slavery, the Revolution as Jeffersonians defined it was overthrown with the Civil War. It was the death knell of classical liberalism in the United States, although the sentence wasn't carried out for another generation.

Counterrevolution
Collapse of the liberal coalition that had included the South opened the doors for the post-war triumph of conservative mercantilism under the guise of emancipation and liberty. Fulfilling the visions of Hamilton and Clay, government became the sponsor of business through subsidies and preferred treatment of favored industries. High protective tariffs, railroad land grants and financial subsidies to business became fixtures in federal policy. Although these techniques were but an updated rendering of Hamilton's mercantilism and, as such, were a far cry from honest free market capitalism, they were sufficiently laissez-faire to allow significant capital formation and dramatic, although distorted, industrial growth.

The great error entered into by liberals during this period was their acceptance of the Plutocracy's use of the term "capitalism" or "laissez faire" to define policies more accurately described as corporate welfare.

Liberals of the period were not at all reticent about admitting their abandonment of classical individualism Sociologist Lester Ward, deeply influenced by German philosophy (Idealism), which contributed to the rise of Bismarck and conservative war-socialism in Germany, believed, "The intellect was developed as an aid to the will in furthering the personal ends of the individual...." Ward thereby assigned a separate existence to the will beyond that of an individual's mind. Along the same philosophical lines, Ward wrote, referring to the need to challenge the Plutocracy, "...there is one power and only one that is greater than that which now chiefly rules society. That power is society itself . . . The individual has reigned long enough. The day has come for society to take affairs into its own hands and shape its own destinies." ³

A more explicit dismissal of the Republic's founding outlook is difficult to imagine. Not only was society granted an existence outside of the individuals that made it up, but additionally that abstract entity was assigned the property of free will. Accordingly, Ward railed against the policies of the Gilded Age, but dismissed out of hand the political philosophy employed so successfully by Jefferson end Jackson against the ideological ancestors of Ward's Plutocratic antagonists, conservative nationalists such as Hamilton and Clay.

This Germanic philosophical influence, that eventually contributed to statism and economic cartels in both countries, colored the political philosophy of American reformers of the period. People like John Dewey and Charles Beard were influenced early be George Hegel and Karl Marx. Hebert Croly was influenced by the French Positivist, Auguste Comte, who had some similarity to Hegel.⁴

Josiah Royce, also an adherent of Idealism's belief that the true constitution of reality is mental, held that "We ourselves exist as fragments of the absolute life, or better, as partial functions in the unity of the absolute and conscious process of the world (emphasis added)."; Not only did such thinking subsume "life, liberty and the pursuit of happiness" under the authority of an alleged higher, collective, conscious "purpose," but it was only a short jump (especially to secular minds) from there to granting the state a large measure of control over the American citizen.

Such an idea encompassed the economic collectivism of Hamilton, and more; it represented the beginnings of the philosophic framework for the construction of the welfare warfare state that has dominated the twentieth century.

This development was also an indirect descendant of conservatism's traditional collectivist view of humans as component subjects of the royal family and/or church. Liberals, like Ward, merely substituted a supreme collective consciousness for church or royalty, vested its authority in the secular, democratic state, and then often fell into lockstep with conservative nationalists at the political level.

Corporate Welfare is Institutionalized
Theodore Roosevelt took the Hamiltonian concept of Government assistance to business to a higher plane. "The goal [of Roosevelt] was to shape the right kind of regulation that would block radical proposals and prevent a return to 'laissez-faire,"' noted historian William Appleman Williams. "Business cannot be successfully conducted," Roosevelt himself bluntly explained, "in accordance with the practice and theories of sixty years ago." The same point was made by the report that J. P. Morgan had nightmares about the return to tooth-and-fang competition. ⁶ Of course sixty years earlier had American government had followed a policy that could be considered laissez-faire. while Morgan's concern with competition revealed the shelter he enjoyed in an increasingly regulated environment. Roosevelt experienced no difficulty in adapting the collectivist, power-based methodology of anti-Jefferson progressives like Ward and Croly, to ends that Hamiltonians of the day found perfectly acceptable, even superior to the crude methods of industrial favoritism that had held the field since

The election of 1912 was a three-way race which handed the presidency to Woodrow Wilson. In his early career, Wilson believed that reform was largely a matter of good individuals replacing evil ones. As late as 1907 he was full of praise for J. P. Morgan's role in American society. ⁷ Like other "reformers", Wilson apparently mistook the growing closeness between big government for meaningful progressive reform. In fact, business leaders like Morgan, through their relationship with regulatory bodies, were able ways never possible through economic means alone. ⁸

Wilson, like many Democrats who have followed him, was perfectly willing to assume the mantle of Jeffersonian Democracy for rhetorical purposes. He criticized Hamilton as a "great man but not a great American, and vigorously rejected theories of the paternal state." ⁹However, a measure of Wilson's ideological flexibility can be gleaned from the fact that Wilson, who disdained French philosophy, had earlier said exactly the same thing about Jefferson!

Along similar lines, Richard Hofstadter noted the broad parallel between the conservatism shown by Wilson before 1910 and Theodore Roosevelt before 1902, even quoting Wilson himself as saying: "Ever since I have had independent judgments of my own, I have been a Federalist." ¹⁰ Gabriel Kolko quotes Wilson as saying in 1912, "When I sit down and compare my views with those of a Progressive Republican I can't see what the difference is, except that he has sort of a pious feeling about the doctrine of protection that I have never felt." ¹¹

Wilson was being honest. Professor Kolko pointed out that Wilson initiated substantially fewer trust cases than Harding and Coolidge in their two terms. J.. P. Morgan, on his deathbed, was full of optimism for the Wilson administration. ¹³ Historian John Tipple commented: ". . . Wilson won the presidency only to taste the bitter fruit of his own contention that Hamiltonian means lead to Hamiltonian ends." ¹⁴ Even before the election of 1916, Wilson had moved a long way toward the position of Theodore Roosevelt. ¹⁵ "All in all," commented John Morton Blum, "the nullification of liberal legislation by conservative administration, the encouragement of trade associations, so effective in restraining competition, the invitation to homemade cartels set a precedent for the kind of business-government relationships that was in the 1920s to become the pattern of Warren G. Harding's normalcy." ¹⁶

The Paternalistic State
Easy credit during the 1920s distorted the nation's capital structure and led to an economic downturn that Herbert Hoover's interventionist policies turned into the Great Depression. Franklin Roosevelt took Herbert Hoover's Progressive formula to extremes. The extent to which he augmented government power is, of course, well recognized. But what is seldom acknowledged is the debt his approach owed to mercantilist theories popular in seventeenth-century England. The alphabet soup of endless federal bureaucracies Roosevelt established were in many cases twentieth-century descendants of political organizations in mercantilist England.

In gathering unprecedented authority around itself, the Roosevelt administration was charged at the time of the New Deal with an affinity for Fascist policies. While the charges were far from totally accurate, the philosophic parallels between emergency reform measures imposed by Roosevelt and the economic policies enacted in Italy and Germany were undeniable.

So close to home did the charge of Fascism strike that Roosevelt felt it necessary to respond: "Some people call our new policy Fascism," he wrote in 1934. "It is not Fascism because its inspiration springs from the mass of the people themselves rather than from a class or group or marching army." ¹⁷

Roosevelt's response was weak and revealing. Both Hitler and Mussolini had, at times, experienced strong support among the masses; Hitler's electoral foundation before he assumed power in 1933 had been substantial and growing for years. In addition, Roosevelt's implicit assumption that democracies had no affinity for tyranny had been questionable as far back as the execution of Socrates. Furthermore, as was mentioned earlier, the philosophical foundation upon which New Deal collectivism stood had been brought to the United States by thousands of students of German Idealism as the nineteenth century wound down. So in at least that sense, the New Deal and European totalitarianism sprang from common soil.

After Roosevelt, Truman's policy thrusts were at times seemingly more radical, for the crisis of depression and war had ended. After six months in office the new President proposed: increasing the minimum wage, a national housing and slum clearance program, the creation of a Fair Employment Practice Commission, government-sponsored scientific research, a national program for resource development, subsidies for farmers and small businesses, a public works program as well as retention of the draft, retention of certain wartime powers and assorted economic controls. Faced with these proposals, some, especially Southern Democrats, can be excused if they thought they discerned John Quincy Adams' brand of liberalism on the throne and began desperately and futilely casting around for another Andrew Jackson.

Truman's ideas here are reminiscent of broad-minded mercantilists who in their conception of a society collectively whole sought to use power to command a balance within the nation. While Truman's goals were more rounded than those who simply advocated commercial domination, the effort to impose a just order has always been futile. Even in earlier centuries, human existence had been too dynamic and complex for a social balance ever to be achieved by authority, much less maintained. The whole notion of an imposed order was an explicit rejection of a free society and a natural order. One is reminded of Ben Franklin's admonition about those who would trade freedom for security deserve, and will get, neither.

Frustrated in its attempts to command the fruits of liberty at home and committed to an unpopular "Police Action" in Korea, the Truman administration gave way to Eisenhower.

The Eisenhower administration, despite its announced desire of "reining in the galloping pace of federal spending and balancing the budget within two years," ¹⁸ did not challenge any vital Progressive assumptions about the need for power to exert control. After all, from Hamilton to Lincoln to Theodore Roosevelt to Herbert Hoover, the idea of a powerful activist central government was, until the Progressive age, exclusively a conservative notion.

Old Wine in a New Bottle
Eisenhower's restraint gave way to Kennedy's youthful aggressiveness, both foreign and domestic. While much of it was not implemented during his lifetime, President Kennedy's domestic agenda was comprehensive and costly. His general program included expansions of Medicare and Social Security, greater federal involvement in education, civil rights legislation, a time extension for unemployment compensation, increased minimum wage, a larger food stamp program and increased subsidies and price supports for farm products. ¹⁹ And, of course, responding to Soviet advances in rocketry, the President initiated the race to the moon. As a result, the federal budget grew from $81.5 billion to $97.7 billion. These numbers seem small today, but they nonetheless represented a 19.8% increase in government spending in less than 1,000 days, and continued the march of liberal political theory into an apology for the traditional conservative structure of a powerful central state.

It was during the Kennedy Johnson era that the economic theories of collective control which had been evolving for decades in the United States were given free rein under the administration's desire to reinitiate neo-mercantilist expansion. Professor Nicolas Spulber noted: "Walter Heller, the chief architect of the New Economics, stressed that only heavy reliance on the budget [meaning deficit spending and inflation] could guarantee the maintenance of steady growth." ²⁰ Arthur Okun, looking back proudly on this period from a 1969 vantage point emphasized what he called "unprecedented prosperity" thanks to their (New Economists) "vigorous and more consistent application of the tools of economic policy which contributed to the obsolescence of the business cycle pattern and the refutation of the stagflation myths." ²¹ Okun was indulging in some wishful thinking. Throughout the back half of the decade, inflation had been clearly rising even as economic growth slowed. Before long, liberal economists like John Kenneth Galbraith, who had casually dismissed traditional free-market theories, were incorporating coercive methods thousands of years old into their New Economics by calling for wage and price controls. Even more outlandish, economist Paul Samuelson, who would be awarded the Nobel Prize in 1970, was proclaiming about this time that "whatever rate of capital formation the American people want to have, the American system can, by proper choice of fiscal and monetary program, contrive to do." ²²

This was heady stuff—and complete nonsense. The assumption that personal savings, entrepreneurial investment, and thus capital formation was programmable by some astute social engineer; that the product of choices made by hundreds of millions of Americans on a daily basis could be distilled into policies that could be coordinated and directed by political authority revealed what F. A. Hayek in his Nobel Prize acceptance speech called a "pretense of knowledge" and a remarkable capacity for self-delusion—to say nothing of its acute implications for economic freedom. The desire for higher growth rates under the liberals' New Economic theory meant still more increases in the money supply and in government spending. This was undertaken with the result that an elevated inflation rate arrived with increasingly distorted economic growth. During the late 1950s and throughout the 1960s, dramatic expansion of the money supply brought America's promise to redeem overseas dollars in gold under extreme pressure. In 1965 the United States abandoned silver coinage as the market value of silver rose above the legal tender value of the coins. The year 1968 was characterized by currency crises and devaluations. By 1971 the flight from reality had ended. The Nixon administration finally admitted the fraudulence of the nation's promises and ended gold redemption for overseas dollars (it had been illegal to possess gold in the U.S. since FDR called in all privately owned gold). With the artificial prop for the dollar removed, foreigners began dumping dollars and America's exported inflation soon came roaring back home.

After the two futile conservative administrations of Richard Nixon and Gerald Ford, Americans sent Jimmy Carter to the White House. Despite Carter's portrayal of himself as offering a fresh approach, the policies he followed were fully in line with a by now very tired Progressive attempt to structure the economy in accordance with the wishes of political authority. In bona fide mercantilist fashion, Carter created new central bureaucracies to attack symptoms rather than root problems. The Department of Education was authority's response to the growing failure of government schools while price controls, rationing and the Department of Energy represented the administration's futile answer to price hikes associated with an Arab oil cartel replacing a Western oil consortium.

The Carter administration, under the influence of conservative, mercantilist assumptions that now dominate liberal political philosophy, was overwhelmed by events it did not understand—events that led to the election of Ronald Reagan and George Bush. With these two men, the inability of conservatives to effect a return of America's classical liberal values became obvious.

One result of the philosophical inbreeding that has characterized conservatives and liberals for a century has been the ability of "conspiracy" figures to manipulate both sides of America's ostensibly different political ideologies. Groups like the Roundtable, the Bildebergers, the Council on Foreign Relations and the more recent Trilateral Commission have been well-represented in leadership positions on both sides of the political debate.

The persuasiveness of their presence has created an aura of a powerful and personal conspiracy. But the issue runs far deeper than that. Power has always conspired against liberty in the effort to retain its authority, and until liberty achieves its final victory, conspiracies always will be present. While conspiracy theories among the oppressed can help propel liberty's challenge to illegitimate authority—as they did in America during the 1760s and '70s—it is important to remember that those who would control us are totally dependent on our ignorance. The day the American people recognize that they have no ethical right to employ third-rate lawyers as politicians to coerce their neighbors, all conspiracies seeking to subjugate liberty to authority will see the basis of their power evaporate and will collapse.

Freeland Chew has his Bachelor of Science in Electrical Engineering and a Master of Science in Systems Management. It was from a serious and self directed study of American history that he developed the individualism that characterizes his perspective on events current and past.

Footnotes
1. Magaziner, Ira C. & Reich, Robert B, Minding America's Business, Page 197; Hardcourt Brace Jovanovich, New York, 1982.
2. Gabriel, Ralph Henry, The Course of American Democratic Thought, Pages 83-84, The Ronald Press
Company, New York, 1956 (second edition).
3. Ward, Lester, Sociocracy, an essay contained in American Thought Civil War To World War I, edited by Perry Miller; Holt, Rinehart and Winston, New York, 5th printing (1961).
4. Chambelain, John, Farewell to Retorm, Pages 202, 203 and 230; Peter Smith, Gloucester, Ma., 1958
(initially published 1932). For the similarities between Hegel and Comte see Hayek, F.A., The Counter-Revolution of Science.
5. Royce, Josiah, The Problem of Job, an essay contained in American Thought Civil War To World War L
6. Williams, William Appleman, Americans in a Changing World, Page 86; Harper & Row, Publishers, New York, 1978.
7. Kolko, Gabriel, The Triumph of Conservatism Page 257.
8. see Gabriel Kolko's The Triumph of Conservatism for a full treatment of this critical issue.
9. Schlesinger Jr.,., Arthur Crises of The Old Order, Page 28.
10. Hofstadter, Richard, The American Political Tradition Page 315.
11. Hofstadter, Richard, The American Political Tradition, Pages 315-317.
12. Kolko, Gabriel, Main Currents in Modern American History, Page 93; Harper & Row, Publishers, New York, 1976.
13. Kolko, Gabriel, The Triumph of Conservatism Page 257.
14. Tlpple, John, The Capitalist Revolution, Page 155; Pegasus, NewYork,1970.
15. Blum, John Morton, Woodrow Wilson and the Politics of Morality, Page 81-82, Little, Brown and Company, Boston, 1956.
16. Blum, John Morton, Woodrow Wilson and the Politics of Morality, Page 80.
17. Gardner, Lloyd C., in an essay enticed "New Deal Diplomacy," printed in Watershed of Empire— Essays On New Deal Foreign Policy; Ralph Myles, Publisher, Colorado Springs, 1976.
18. Richardson, Elmo, The Presidency of Dwight D. Eisenhower, Pages 43 -44; University of Kansas Press, 1979.
19. Carson, Clarence, The Welfare State 1929-1985 Pages 201 -202, Volume 5 of a Basic History of the United States.
20. Spulber, Nicolas, Managing The American Economy From Roosevelt To Reagan, Page 64.
21. Spulber, Nicolas, Managing The American Economy From Roosevelt To Reagan, Page 52.
22. Spulber, Nicolas, Managing TheAmerican Economy From Roosevelt To Reagan, Page 60.