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Triumph of Conservatism

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No book details the historical relationship between big business and the Federal government better than this one. Though confined merely to the so-called Progressive Era in American history (1901-1914), Kolko manages to overturn all the misconceptions about the formation of government regulation in America. Instead of accepting the standard view that federal regulation of business was inspired by the Progressive intellectuals and activist political leaders eager to put a check on the rising power of big business, Kolko shows that it was really inspired by the drive of businessman to limit competition and bring "stability" into the market. The result is what Kolko calls, appropriately enough, "political capitalism." Some earlier reviews have attempted to draw an ideological lesson from this book. This is a mistake. If there is a lesson to be drawn from Kolko's work, it is the failure of all ideologies (whether from the right, left, or center) to adequately explain the rise of political capitalism in America. Both the right and the left share the common assumption that government regulation hurts big business. Kolko proves that this isn't the case, that Big Business is in favor of regulation and the throttling of competition. Kolko's book is a must read for anyone who wants to understand what capitalism and politics is really all about.

In this reinterpretation of the Progressive Era, Gabriel Kolko marshalls a host of historical sources from the National Archives, the Library of Congress and other great outposts of scholarship to advance a bold thesis: that the Progressive Era was a "triumph of conservatism," the business reforms of the time having been fought for and shaped by not only the reformers but also the very business interests that were to be regulated. Kolko is a socialist, and his case is actually more radical than I have indicated. But it is his dispelling of many widely believed myths that I find the most enticing.

Take the "merger movement" at the turn of last century. It was and is popularly believed that competition was at an all-time low, monopoly an all-time high and Theodore Roosevelt's trust-busting the necessary and proper response. But Kolko proves this conventional belief false. In case studies of the big powerhouse industries of the time, he shows that, in spite of (or because of) the merger movement, they were more competitive than they had ever been. Whether the industry was steel, oil, automobiles, agricultural machinery, telephones, copper or meat-packing--Kolko's conclusion is the same: mergers, if anything, decreased companies' efficiency relative to their competitors. In the new century's first decade, the total number of competing firms in each industry grew; market shares of the dominant players, meanwhile, shrunk. As Kolko states, "There was *more* competition, and profits, if anything, declined. Most contemporary economists and many smaller businessmen failed to appreciate this fact, and historians have probably failed to recognize it altogether" (emphasis Kolko's).

The stage thus set by the failure of the merger movement, Kolko moves on to the myth that Progressive Era reforms were uniformly or even predominantly opposed by their affected industries. The key is to realize that, economic strategies like corporate consolidation having failed, companies turned to political strategies to freeze the status quo or to gain new competitive advantages. As Kolko states, "the essential purpose and goal of any measure of importance in the Progressive Era was not merely endorsed by key representatives of businesses involved; rather such bills were first proposed by them." Food companies, for example, wanted the Food and Drug Act so that they could turn its regulations against their competitors (e.g., oleo versus butter). Big meat packers desired to save their industry from tainted meat, which hurt business, but were unable to ensure the quality of small packers' meat and unwilling to pay for independent meat inspection--so they themselves initiated the meat inspection movement, lobbied for and won passage of the Meat Inspection Act, thereby forcing inspection onto the industry and its costs onto the federal government. As for the Federal Reserve Act, it was the product of a banking reform movement "initiated and sustained" by big bankers who sought to protect themselves from small bank competition. The Clayton Antitrust Act and the Federal Reserve Act? Most businessmen supported them to better protect themselves from antitrust prosecution under the Sherman Act's vague provisions or (among smaller businesses) to gain such advantages as enforced "fair trade price-fixing." Thus, Kolko shows that whether for protection from competition or from the government, businesses themselves initiated or shaped these Progressive Era reforms and others that most Americans regard as being part of an anti-business (or at least not pro-business) reform movement.

This book will fascinate students of American business and reform history. Ironically, given Kolko's philosophical disposition, even ardent pro-capitalists should relish it. That audience will likely be reminded of Burton W. Folsom's distinction, in his eye-opening *Myth of the Robber Barons*, between "market entrepreneurs" and "political entrepreneurs." Dominick Armentano's *Antitrust and Monopoly: Anatomy of a Policy Failure*, a work of heavier scholarship, may also be recalled to mind. His thesis that antitrust laws, even when not passed unequivocally to benefit special business interests, have "solved" nonexistent problems (and caused a few real ones) and should be repealed is entirely confirmed by Kolko's *Triumph of Conservatism*, which Armentano even cites in support (in addition to another of Kolko's works, on railroad regulations).

Kolko does an excellent job of making the case that business regulations enacted during the Progressive Era (1900-1916) were due not to liberal reformers, but big business itself! From meat industry regulations to the FTC and the Federal Reserve Board, Kolko shows over and over again how industries sought Federal regulation in order to protect themselves from competition or secure other advantages.

Whether you're liberal, conservative or libertarian, this book is a must-read for understanding the relationship between government and big business.

_The Triumph of Conservativism: A Reinterpretation of American History, 1900 - 1916_, subtitled "A radically new interpretation of the Progressive Era which argues that business leaders, and not the reformers, inspired the era's legislation regulating business", published in 1963 by the Free Press, by economic historian Gabriel Kolko, is a radical new interpretation of the reforms of the Progressive Era which attempts to show that the leaders of big business and not the reformers sought to regulate business to counteract the effects of competition and economic decentralization and to achieve concentration and monopoly. Gabriel Kolko (1932 - ) is a leading historian who has made an extensive study and reinterpretation of economic regulation and American militarism and was frequently associated with the New Left. Kolko's claims challenge the conventional wisdom which see business leaders as promoters of laissez-faire economics, by arguing instead that business leaders sought to regulate business so as to concentrate their power and avoid competition. This behavior has been termed "corporatism", but Kolko defines it to be "political capitalism" in this work. This book will focus primarily on the role of such business leaders and the corporations in the furthering of their interests through the power of the state. In another work, _Railroads and Regulation: 1877 - 1916_ (1965), Kolko focuses on the situation with the railroad monopolies so that is left out of this work. Kolko maintains that progressivism rather than being a fundamental movement for reform was actually a conservative movement aimed at furthering the goals of big business and for this reason he refers to the triumph of regulation as the "triumph of conservativism" and the "triumph of political capitalism". This book remains important for what it shows about the true nature of regulation and who really desires it. It can be seen that through regulation the corporations and monopolies are able to stifle competition and in that manner assure their continuing dominance.

In his "Introduction" to this book, Kolko lays out his fundamental themes explaining that this is not a book about "what might have been" but rather a book about what really did happen. Kolko explains his understanding of "progressivism" which he defines as "a movement for the political rationalization of business and industrial conditions, a movement that operated on the assumption that the general welfare of the community could be best served by satisifying the concrete needs of business." Kolko explains how business interests sought to achieve control over politics in order to achieve their goal of "political capitalism" (which Kolko defines as "the utilization of political outlets to attain conditions of stability, predictability, and security - to attain rationalization - in the economy"). Kolko explains how business interests sought the intervention of the federal government in business and the return of the Hamiltonian unity of politics and economics. Kolko remarks on the theories of Karl Marx noting that both Marx and Weber (as opposed to "Marxists") both noted that the central development of the economic trend of capitalism was towards centralization. Chapter One is entitled "Monopolies and Mergers: Predictions and Promises". Kolko explains how his interpretation differs from that of most historians (including many conservative historians) who see concentration of economic power as an inevitable result of the growth of capitalism and industrialism. Kolko explains how the monopoly was seen as "inevitable" ("The Inevitable Monopoly") and shows how men such as John D. Rockefeller came to argue that. Kolko also considers "Mergers and Promoters" noting how many argued that monopoly led to greater efficiency. Chapter Two is entitled "Competition and Decentralization: The Failure to Rationalize Industry". Kolko explains how the first decades of last century involved intense competition, however this competition resulted in a failure to rationalize industry and many industrialists found that overcentralization was less efficient. Kolko points out cases of this in "The Iron and Steel Industry", "The Oil Industry", "The Automobile Industry", "The Agricultural Machinery Industry", "The Telephone Industry", "The Copper Industry", and "The Meat Packing Industry". Chapter Three is entitled "Theodore Roosevelt and the Foundations of Political Capitalism, 1901 - 1904" which shows how the efforts of Morgan to rationalize and stabilize industries were leading to failure which resulted in the call for antitrust legislation from Roosevelt. Kolko considers the use of Social Darwinism by prominent conservative intellectuals and professors as a justification for laissez-faire, but shows how ultimately big business was to lead the move towards regulation. Kolko also shows how with various reform movements such as the Grangers, Populists, and trade unionists, change seemed inevitable. Kolko considers such topics as "The Antitrust Legacy" (of Theodore Roosevelt and the Sherman Antitrust Act), "A New President" (mentioning various aspects of Roosevelt's presidency), and "The Executive and Business". Chapter Four is entitled "Roosevelt as Reformer: 1904 - 1906" and considers the case of Roosevelt as reformer mentioning such topics as "Roosevelt as Reformer", "Insurance and Regulation", "Meat Inspection: Theory and Reality" (explaining the role of the muckrakers and Upton Sinclaire). Chapter Five is entitled "Roosevelt and Big Business: 1906 - 1908" and explains the role of Roosevelt and his relationship with big business mentioning such topics as "The Good Trusts" and "The Evil Trusts" (and the false dichotomy between them), "The Rule of Reason", and "The Attempt at Political Consolidation". Chapter Six is entitled "The Failure of Finance Capitalism: 1890 - 1908" and explains the failure of finance capitalism and the call for banking reform mentioning in particular the Morgan interests. This chapter includes topics discussing "Banking Reform Movements: 1893 - 1903" (mentioning the role of "Bryanism" and silver), "Roosevelt and Banking Reform", and "The Panic of 1907" (which led to the Aldrich Bill). Chapter Seven is entitled "The Ordeal of William Howard Taft: 1909 - 1911" explaining how William Howard Taft took up the legacy of Roosevelt. This chapter includes topics discussing "The Legacy of Reform", "Taft the Trustbuster", "U.S. Steel and Roosevelt", "Business and Regulation", and "The Banking Reform Movement" (explaining centralization of banking and the Aldrich Plan). Chapter Eight is entitled "The Politics of 1912" and includes such topics as "A Party is Formed" (explaining the role of the Progressive Party) and "The Democratic Victory" (explaining how the victory of Woodrow Wilson was achieved). Chapter Nine is entitled "Woodrow Wilson and the Triumph of Political Capitalism: Banking" which discusses how centralization of banking was achieved. This chapter includes topics discussing "Writing a Reform Bill", "The Bankers and the Glass Bill", "The Authorship of the Federal Reserve Act", and "The Fruits of Victory". Chapter Ten is entitled "The Triumph of Political Capitalism: The Federal Trade Commission and Trust Legislation" explaining how Wilson's "conservativism" under the guidance of Colonel House led to further regulation, the triumph of political capitalism. This chapter includes sections discussing "Wilson and Business", "The Campaign for Legislation", "The End of the New Freedom", and "The Commission Defines the Law". Kolko ends with a chapter entitled "Conclusion: The Lost Democracy" which discusses the fact that regulation was achieved to further the ends of business during the Progressive Era and that such regulation allowed for the triumph of political capitalism. Kolko discusses such topics as "Marx and Weber: Economics Versus Politics" (explaining how Marx and Weber misunderstood much of the goals of business and capitalism and explaining how Thorstein Vebel of all the economists of the Progressive Era offered the most trenchant understanding), and "Theory and the American Reality" (in which the author considers whether political capitalism changed after 1916 and whether the economic structure of the United States could have been different). Kolko ends by noting that the Progressive Era was noted by a failure of alternatives to grow and develop which ultimately led to the shaping of American economic civilization into the twentieth century and beyond.

This book offers a fascinating reinterpretation of the Progressive Era which attempts to show that business leaders to achieve their interests promoted regulation to stifle competition and achieve consolidation and centralization. This process is frequently referred to as "corporatism" and called "political capitalism" by Kolko. Kolko shows how through the machinery of politics big business was able to use the state to further its own interests and maintain monopoly power. This is an important book to read and understand if one wants to understand the economic history of the United States and the role of regulation as supported by business interests.

I am not a Socialist. I am a hard-core Laissez-Faire Libertarian. This is a MUST READ for anyone of any political/economic doctrine. This book is well documented, and in my opinion, Kolko`s conclusions are irrefutable. It is an offense to justice that more people don`t know that this book exists.

We need more books like The Triumph of Conservatism. Kolko looks at the facts and dispels the myths using an eye to details that is lacking in most books today. He follows the money in industries, the actions taken by Roosevelt, Taft and Wilson and ignores what people say. Actually he does not ignore what they say but he shows us why we always need to know the purpose of what they say. It takes a lot books to get a clear picture of those times but Kolko looks closely at the actions and leaves the reader with a much better understanding of the progressive movement in terms of the relationship between the government and business.

I have read a good many books in my day- and economics books are my forte- but once in a while one comes along that truly are usefull in the rhetorical war that is politics. This is one of those books.

The author makes the excellent point of the real history of the age that changed the lives of the American worker the most. By showing that business was the major progressive force of change, he puts to rest the notions that the era's mounting social capitol were hard won gains by progressive forces.

This book is central to the argument that the trrue revolutionary forces that have become mete and standard throughout the ages have come from the most revolutionary force in history- that of capitalism.

Gabriel Kolko's book is a fun read, which if you know little about the Progressive Era will be very enlightening. The major critique I have of this book is its naive conclusion that business worked together as class, that there was one opinion across the board. This is ridiculous. If you enjoy this period read this book, but read Colin Gordon's book, New Deals to be a little more complete.

Anyone without a firm grip of economic theory and, more importantly, economic vocabularly will struggle with this rather turgid book. However, if you can deal with the writing style, and are interested in progressivism, Kolko certainly gives a good negative reference point at the extreme end of the historiographical spectrum.