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Review: The Triumph of Conservatism
The Triumph of Conservatiam
Gabriel Kolko. The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916. New York: The Free Press, 1963. Pp. 334. $21.95.
At the start of the twentieth century the United States began a phase of its history known as the Progressive Era. The period has been labeled as such largely because of the hands-on approach the federal government employed in regulating big business. The dominant theme of historical writings on the period suggests that regulations were imposed on industry by the government in spite of laissez-faire economic theory. In The Triumph of Conservatism Gabriel Kolko argues that the entire period has been mislabeled and misunderstood. The author contends that conservatism is actually the dominant ideology of the period and puts his thesis succinctly into a single sentence when he writes, “Big businessmen feared democracy, especially on the local and state levels where the masses might truly exercise their will, and they successfully turned to the federal government for protection.”
Kolko contends that government and business became intertwined entities in which business interests trumped representative government. In order to reach this decidedly unique position, Kolko contests a series of axioms about the purpose and effect of regulation, which challenge almost all previous scholarship on the time period. Kolko’s argument is provocative and, even if not entirely persuasive, certainly helped to crack the consensus interpretation of the period. The work includes a mixture of economic, historical, and theoretical arguments, very much in step and contributing to the ”new left” of the 1960s.
While competition is the central component of laissez-faire economics, it is also a force of decentralization and instability. The emergence of monopolies and trusts has thus been almost universally viewed as a logical and inevitable conclusion to the chaos of the free market. It has been widely accepted that when a monopoly emerges, competition subsides. The principle impetus for business regulation is therefore conventionally thought to derive from the masses who oppose centralized wealth. This kind of big picture, theoretical argument has tended to pay little attention to specific actors and interests. It also lends itself to the assumption that any time the federal government intervenes in the economy, it is doing so to promote competition and the general welfare of the people.
Kolko assails the concept of monopolies being inevitable and profitable. Lamenting the way in which even the socialists have accepted this conclusion, Kolko uses economic data to demonstrate that monopolies never actually took hold of any given industry, and that mergers and trusts were not actually effective at reducing competition nor did they tend to be profitable. Using several case studies, including the steel, copper, telephone, oil, and automobile industries, Kolko demonstrates that during periods of attempted monopoly competition actually increased and big business tended to lose value despite its preeminence. It must be noted that some of these case studies leave much to be desired as they represent only a few paragraphs and tend to be light on citations. This makes it difficult to ascertain the reliability of the information.
Nevertheless, compelling conclusions can be drawn from the limited documentation that is available. For example, U.S. Steel, which at one time consisted of 138 separate companies all managed by industry men, merged into one entity that was controlled principally by a financial board whose members knew nothing of steel production. Under the direction of the board, the price of U.S. Steel shares fell from $55 in 1901 to $9 in 1904, and despite U.S. Steel’s size and capital it ranked only third in its profit as a percentage of gross fixed assets. Furthermore, despite the dominance of U.S. Steel in the industry, the price of steel continued to fluctuate, keeping business perpetually veering between boom and bust. Fearing instability, the extreme majority of industry leaders attended conferences in New York City’s Waldorf Astoria in 1907 and ‘08 where, despite the illegality of price fixing, a series of “gentleman’s agreements” were sought to prevent undercutting and stabilize prices. These agreements ultimately failed as the competitors could not agree on self-regulation.
Even the most ascendant companies, like U.S. Steel, were incapable of completely controlling the market and providing stability for themselves much less for the industry as a whole. Using factors such as the price of shares, the percentage of industry output, and the value of a given company, Kolko goes through several industries to show that what happened at U.S. Steel was not unique, nor purely a product of poor management. Across industries, business leaders soberly reached the conclusion that their ability to ”rationalize” the economy and create stability through monopoly, mergers, and voluntary self-regulation could not be realized. Kolko argues that the federal government was the only source of power that[O1] could stabilize the market and provide business with the security it wanted. Kolko spends two full chapters on economic data because it is critical to his later argument that one sees the reality of big business floundering before government intervention. Accordingly, leaders of industry used their influence within the political realm to create regulations that were favorable to themselves. This served a second purpose: By pushing for regulations out of an insincere sense of altruism, big business was able to create a guise of radicalism which helped pacify the growing populist sentiments by fooling people into believing that the system was being reformed by outside forces. Thus, the major economic ‘players’ also held sway over the ‘referees’ though the public remained mostly in the dark, believing its own influence on government to be the decisive factor in regulation.
Demonstrating this phenomenon, Kolko is careful and thoughtful in his consideration of actual people, their relationships to each other, and their specific intentions when enacting legislation. The richest and most persuasive aspect of his argument is made by the countless letters he reproduces between members of government and big business leaders. These letters and conversations tend to compellingly demonstrate that the government was never interested in straying far from the interests of corporations, the leaders of which were often former colleagues and financiers of political campaigns.
Theodore Roosevelt absorbs a majority of Kolko’s antagonism, and for good reason. Roosevelt, who surrounded himself with industry leaders, has been dubbed a ‘trust-buster’ in history though the majority of his policies were specifically designed with business interests at the center and he did less to bust trusts than President Taft. The Department of Commerce for instance, Roosevelt’s creation, was endorsed by the extreme majority of business leaders and conservatives as a way to trump the various unfriendly state regulations. Yet the public by and large thought this was meant to reign in business interests. This is largely because Roosevelt, in a politically savvy stunt, released a telegraph sent by a minority business dissenter, John D. Rockefeller Jr., in which Rockefeller had implored a handful of senators to vote against the commerce department bill. Seizing the opportunity, Roosevelt made this telegraph known to the public, exaggerating its contents and the number of people it had been sent to, and helping to shed the image of the bill as conservative.
Perhaps the most revealing example of conservatism hiding behind the progressive label is offered by the example of the treatment of the meat packing industry. Made notorious by Upton Sinclair’s work The Jungle, the meatpacking industry was gruesome and utterly incapable of self-regulation. Conventional historical interpretation states that after Sinclair’s exposé in 1904, public outcry became so deafening that in 1906 Congress passed a reform law seemingly against the will of the industry. However, Kolko considers the issue far more complex. He points to the fact that American beef was so diseased that for decades the European markets refused to purchase American meat, closing off the largest international market to US producers. The Department of Agriculture began clamoring for federal regulations to improve America’s business position as early as 1885, and in 1891 a measure was in fact passed to put American beef on par with European standards. In retaliation to the introduction of cheap American meat, the Europeans raised the bar of acceptability to protect their own producers. The meat packing industry in the United States then responded by endorsing federal inspections of beef that would meet the new burden. In 1904, when Sinclair arrived in Chicago, the U.S. government was already inspecting 73% of all of the beef slaughtered in the USA (a figure which had grown each year since 1891)! Most of the remaining beef was being produced by independent, small-time producers. Thus, feeling that the smaller producers had a competitive advantage in not having to be inspected, while also lowering the quality of American meat as a whole, the meat packers themselves pushed for the 1906 regulations as a way to both ensure new market access while also removing competitors who could not meet the new federal code. If Kolko’s interpretation holds, then the centerpiece of Roosevelt’s ‘progressivism’ is really nothing more than an opportunistic capitalization of business interests under the veil of reform.
The examples of U.S. Steel and the meatpackers have been used to demonstrate the core of Kolko’s argument, but The Triumph of Conservatism does have certain flaws which must also be considered. The volume contains ten chapters and generally involves two types of sources, those which are economic in nature and those which involve personal correspondence. Writing in 1963, Kolko admits that his sources of economic data are limited although he rationalizes that his sources are no worse than those available to other researchers. Given the nature of Kolko’s argument, however, it is disappointing that the vast majority of Kolko’s sources come in the form of letters of correspondence between business leaders and government. These sources are useful to Kolko’s argument, but without the concrete economic data to supplement them, the reader is left assuming the connection between the sentiments of the correspondence and the limited economic argument. The work is also quite combative to other historians and theorists; this is not in itself a bad thing, but, if one is going to challenge the entire field, the burden of proof must be made high. Kolko does not shy from this burden, but does not quite reach it either. Arguing that theorists such as Karl Marx and Max Weber were both incorrect about America, while mixing historical, economic, and theoretical arguments in which it is also stated that the leading contributors to each, have been inconsiderate of the evidence is difficult to do in only several hundred pages. As the author has rejected much of the secondary literature on the subject, comparatively little secondary literature can be found in the notes of a work of history. This creates a straw man fallacy in which the author is arguing against positions which are not well defined within the work as the reader is assumed to have knowledge of all that Kolko is trying to refute.
Kolko’s work may be well outside the norms of historical writings and interpretations, but nevertheless The Triumph of Conservatism is not a conspiracy theory but rather, as the subtitle states, a reinterpretation of the past. Kolko is arguing that as economic issues arose, the specific attitudes and relationships of those in power produced conservative outcomes. Of course, the interests of business and society sometimes run parallel, but the motivation behind the actions of government almost always favored business. Consider that in the 1912 election year, Roosevelt (Bull Moose Party), Taft (Republican), and Wilson (Democrat) all ran for President, all claiming to be progressives. Whatever concessions these Presidents made to labor, and whatever their differences on other issues, they retained the label of “progressive” in Kolko’s view because of their commitment to business. Kolko’s argument is persuasive and while a critical reading also reveals some deficiencies, the work as a whole is a tremendous addition to the historiography of the period.
 Gabriel Kolko, The Triumph of Conservatism: A reinterpretation of American History, 1900-1916 (New York: Free Press, 1963), 161.
 Ibid., 33-34.
 Ibid., 35-39.
 Ibid., 71.
 Ibid., 99-101.