How the Roosevelts Brought Wal-Mart to Your Town

Back when Obama was still the apple of progressive eyes, I talked to a guy who couldn't be more thrilled that the president was going after "Big Auto."

I was still libertarian back then but I was already thinking about unchecked economic power. I envisioned a wrestling ring, Royal Rumble style, with giants trying to toss one another out of the ring. Big Auto, Big Pharma, Big Insurance. I tried to explain to the guy that he was rooting for Big Government.

Big Government was the favorite to win, with or without fans. He had the power to set the rules as he went along. He had the monopoly on violence. He had the deepest pockets.

I argued that it was better to have the giants struggling with each other. At least they were more likely to start dominating us little guys. If Big Government won supreme over all, then there's no limit to what he might do with that power.

The guy nodded and we dropped the subject. The vision stayed with me and started me down the road I'm following now.

Power tends to centralize as minor power-holders coalesce around greater power-holders. Power corrupts. If Big Government stands in the ring alone, the only check against tyranny is the goodness of his heart.

If the power centers are large and few, then there are two options. The powers can either work to eliminate the others or they can form an alliance. For the former, think of the left's long-standing siege of Christianity, which it tars as either sadly backwards or downright immoral. For the latter, think of cronyism.

I was a reluctant libertarian because I didn't see any check against greed. If an business gets big enough it can start altering the playing field to favor itself. A hypothetical:  If the minimum wage increases, it will cost Wal-Mart, say, $100 million. If they lobby enough to stop the increase, it will cost them $99 million. Which do you think they'll choose?

Some might say that's libertarianism corrupted. I think it's inevitable. If the business can change the rules for its own benefit, it will. It's only good business. But is it good?

There are a whole host of problems that stem from this centralization of money and power. It seems to that it's best to keep power centers a great deal smaller than they are now.

With that in mind, I often think about the action against monopolies taken at the end of the Gilded Age. Preventing monopolies just results in oligopolies, a handful of companies that have the option of destroying one another or working together to extract maximum profits. Wouldn't it have been better to break them down even further, limiting their operations by industry and geography?

So I was excited to learn about a proposal for just that, from Zen Pundit. (Unfortunately, the link is currently held hostage due to exceeded bandwidth.)

Teddy Roosevelt, William Howard Taft and Woodrow Wilson were all running for president in 1912 and each had a proposal for dealing with the new economic centers of power in the US.

[Taft] sought to contain large economic concentrations by using the Federal government to selectively break them down into smaller pieces and regulating them around the edges by controlling their interactions with each other.

In other words, smack 'em down if they got too big and uppity.

[Roosevelt] sought to build the United States federal government into an over-awing Leviathan that could cow large concentrations of wealth by subjecting them to tight scrutiny and regulation.

In short, creating federal regulatory agencies. If this sound familiar, it's what we have today. But Wilson's proposal would have made a much different, much more stable America:

Woodrow Wilson proposed breaking up large concentrations of wealth into so many tiny pieces that each tiny piece could be overawed by just one of the forty-six little leviathans of the several states of the Union.

 Looking back, Wilson seems like exactly the wrong sort of man for the presidency. How many other men seemed so puritanical about his convictions and were seduced so completely by power? The article doesn't give Wilson's justifications, but he more or less enacted Roosevelt's proposal. Perhaps we shouldn't blame Wilson too much; technocracy was in the air and the federal bureaucracy was on the rise.

The article goes on to show how Franklin Roosevelt developed his cousin's proposal by using  government-created and -supported centers of power. Unions and ethnic voting blocs would hold powerful economic actors in check, with the coup de grace being the bloc created by implementing Social Security. (The thinking behind this strikes me as similar to how dictators create their own separate armies to counter the established military.)

Typical leftist stuff, dividing by creating a win/loss game, but FDR at least knew something that our current rulers have forgotten:  If the people are happy, then no one cares who's in charge. The structure that FDR put in place helped to launch the US as the premier economic superpower after WWII (the destruction of Europe helped a little, too).

What I find most interesting is this:

FDR also carried forth cousin Theodore’s belief that these competing power blocs would be overseen by enlightened regulators with the discretionary flexibility to intervene in their internal affairs and their interrelationships from time to time as dictated by the latest principles of scientific management. These regulators would be freed from the taint of crony capitalist corruption because, since FDR, like Theodore, assumed that these regulators would be Old Money like themselves, too wealthy and too imbued with noblesse oblige to be bought by grubby capital.

I'm a student of the Dark Enlightenment, but it seems to me that even they don't think about the natural decay of the system. Monarchy, aristocracy, authoritarianism, democracy--they all depend on the rulers having some quality that will prevent the failure of the system. But human nature dictates that every system will be gamed, no matter how well it's set up.

After all, the kings who declared their divine right to rule eventually descended to the exquisitely-educated dolts who lost or gave up all their power. The old money WASPs who planned to steer America with wisdom eventually gave up their roles to prevent looking overweening or racist.

So now we have these big concentrations of power, "too big to fail," swapping employees with the agencies that are supposed to regulate them. Power always eventually falls into the hands of those that are better at getting power than having power.

So why not make sure that every power is small? The answer should be obvious:  if a large economic power develops, then federal power will have to grow even larger to keep it in check.

The dangers of a centralized system are too numerous to list here but we're living the end stages of them. The powers that be expect that every problem can be solved by federal diktat. When their solutions fail, they double down or propose yet another layer of regulation and bureaucracy.

But, had Wilson's proposal been enacted, we wouldn't have enormous corporations on whose vitality the entire nation depends. The failure of a bank wouldn't send the economic world into convulsions. Big chains couldn't run old robber-baron scams and eliminate their competition. Our national conversation wouldn't be dominated by a handful of media companies.

Our society would be more stable and more flexible. Without the ability to dominate completely, competition keeps us sharp. When we can't command a force of a million employees, we can't avoid the human costs of our decisions.

Which is why I more or less identify as a distributist.