Regulation and Public Utilities

0:00So, or rye whiskey. So then in the 1880s, when blended whiskey becomes this first discover, instead of speaking, they started taking these whiskeys and blending them, he thought it was evil, it was adulteration, sin, because whiskey means pure whiskey, and any blending then becomes evil and sinful and adulteration. It should be outlawed. If they were outlawing blended whiskey, it's a schmuck, a really bizarre point of view, but it fits in with the definition. Somehow, the definition has to be fixed forever. It means you can't innovate. You can't innovate in business. If you ever change the name, the name always has to be whiskey means pure rye and can't mean a blend. So this freezes the status quo, it means you can't compete, you can't innovate very well.

0:47And this, of course, is the purpose of the whole thing. Anyway, on sugar, he says that the United States should be self-sufficient in sugar, it should outlaw sugar imports. He calls for very high power upon sugar imports. And notice there's a very little sugar in the United States, it's not economic, there's no sugar in the United States, essentially it's much more economic to import sugar over the Dominican Republic and Cuba, Hawaii, which is then not U.S. property, etc., etc. He says, no, no, you have to have self-sufficiency in sugar, so he, of course, joins the Republican Party, but the Republican Party wasn't the party of pietism and pie tariffs, and it immediately fits in beautifully with the Republican ideology.

1:32He becomes a state chemist for the state of Indiana and he calls for passing a law regulating the manufacture and sale of chemical fertilizers to try to restrict that. And then he starts going into the sugar manufacturing business himself. He buys a defunct sugar plant, beet sugar plant, and tries to organize a glucose plant in Indiana. It always flops, the guy's a total flop-a-roo, a terrible entrepreneur, and tries to make sugar from sorghum cane, that doesn't work either. January 1883, by this time he's one of America's leading sugar chemists and he gives a speech before the Indiana State Board of Agriculture and he says, quote, the consumption of sugar is a measure of progress in civilization.

2:19He thundered, quote, childhood without candy would be heaven without hearts, unquote. And then these days, of course, everybody's anti-sugar, it brings a beautiful note, childhood without candy, it would be heaven without harps. He then added without any trace of irony that nothing is ever gained for a cause by an overstatement of its claims. He also kept pushing the idea of manufacturing sugar from sorghum, which is one of his big shticks that he flopped as an entrepreneur of this. He kept pushing that for many years until it finally became a total flop-a-roo to try to get government aid and government subsidies for this and so forth and so on. At this point, the Federal Commission of Agriculture had one department, one agricultural chemist and they fired him. He was an obstreperous, notorious character named Dr. Peter Kodyer. He was a big pro-sorghum fan and one of the specialized, subsidized sorghum.

3:06So the sorghum growers were apparently politically powerful, so when they kicked him out, they wanted to replace him with some kind of also pro-sorghum, and they got Wiley in as the Department of Agriculture chemist, the chief chemist in 1883. He then takes over and becomes a federal government official from then on. So he immediately agitates for protective tariff for foreign sugar, subsidies for domestic sugar and all that. He was asked, by the way, this question, interestingly, a typical racist Republican at that time, he was asked, what would happen if foreign sugar growers, they were put out of work by a high American protective tariff? and he said, the native, he said, quote, suddenly lolling in the sun, can look up and see coconuts and bananas, he will not starve nor freeze, let him eat coconuts, typical attitude of the Republican Party toward the third world, period, and in scientific work for the part of agriculture he spent most of his time and energy trying to subsidize the sugar industry, searching

4:08for methods to produce sugar from sorghum, wasting on a lot of research funds in this by the way, his sorghum experiments were custom flops, even though he was a big shot, he gained more and more of a big shot during the 1880s his experiments were like trying to get sugar out of sorghum with custom flop-a-roos this by the way often happens in the world, you find out people flop all the time, yet they keep rising and eminent as they flop they become bigger shots with each failure he got congressional appropriations all the time from Senator Plum of Kansas Well, he came from Kansas. Kansas had a lot of sorghum growers, and so of course he kept feeding Wiley funds to try to help out the sorghum people in Kansas, sorghum farmers.

4:56Anyway, but he kept growing in eminence, and when Cleveland came in 1884, he wasn't kicked out for some reason. Cleveland appointed Wiley's old friend as the commissioner of agriculture and he got the guy to keep him in office even though he was a Republican and by the mid 1890s it was clear to everybody, even Wiley, that sorghum was not the way out he couldn't produce sugar from sorghum with any kind of economic, economically he blamed the misfires not on his own crazy schemes nor on his own consistent string of research failure He didn't blame him on the subsidy or the whole idea. He blamed him on the fact that sugar tariff wasn't high enough yet to keep increasing the prohibit foreign sugar. So his other big shtick was, one of the big things was to subsidize the American sugar industry and keep out foreign sugar.

5:45His other big thing was to outlaw impure products, what he called impure. And he meant things like, let's say, changing definitions, like when whiskey was impure. He also was the main guy behind the outlawing of olium margarine. The olium margarine was a big new thing in the 1890s, let's say. Looks like butter, tastes like butter, is much cheaper. Therefore, of course, the butter interests were headed by the Wisconsin dairy people, one of the outlaws. Why are they, of course, leading the pack? It's an evil thing. It's adulteration. It's changing the definition. It's not really butter. You kind of confuse the public. And so they levied a special tax on olium margarine. As a matter of fact, only a margarine until the 1940s was illegal. You had to sell it white, because you couldn't make it have it look like butter. And so you could buy a margarine in the stores with an icky white sort of gray color, along with it you had a tube of yellow color.

6:36You could squirt the yellow tube over and make it look like butter. Since World War II, the stranglehold of the butter interests, dairy interests, was broken. We couldn't have decent-looking only a margarine. He tasted okay but looked terrible, you see. Of course, the butter interests knew that and they wanted to keep it, don't outlaw the idea of yellow oil and margarine. Of course, Wiley is behind with leading the pack in this thing. So, why did he call for a National Pure Food and Drug Act? Pure food to outlaw these so-called impurities, outlaw changes really, competition with butter, competition with oil products. But he was not alone, he was joined with this idea of a national pure food and drug app by a whole bunch of the organized retailers, organized wholesale grocers, organized retailers, organized food interests, for example, the organized grocers, the National Grocers Association had a convention in 1888, they called for a law, quote, to protect the honest businessman from the competition of the adulterator. What they meant by adulterator was not poison or anything, or fraudulent,

7:43The dairy producers said they wanted protection for such fraud as oleomargeron, corn and hog roasters, and wanted protection against adulterated lard, as they called it, different kinds of lard, which competed with heavy butterfat lard, heavy greasy lard, and of course, so the dairy interests wanted to have this outline, the roastering interests, and intellectuals, technologists, like Wiley, wanted to have cushy jobs for inspectors, for chemists, would test and see whether it was adulteration, quote-unquote.

8:23The adulterated law, the law against adulterated law passed the Senate, the House, but it failed in the Senate because of the cottonseed oil interests who were making law of cottonseed, new kind of law which is better and tastier or whatever it is, cheaper, whatever the thing is, and of course they managed to stop that. At any rate, after many years of this agitation, with Teddy Roosevelt coming in, they finally got their way, this whole organ on the farm interest, the grocery interest, the dairy interest, et cetera, plus Wiley and his technologists. By the way, speaking for one of these bills, before the Franklin Institute scientific body, Dr. Wiley conceded that only a small part of food adulteration injures the consumer. He wasn't worried about that. He didn't say they poisoned the consumer. There's nothing to that, he said. He said, he was more worried about the consumers spending their money in ways that he widely considered unwise.

9:10He was trying to defend our pocketbook. He said, the poor were purchasing food, quote, was ostensibly pure and nutritious, but in reality valueless. The idea is you outlaw food that technology is considered not valuable, like outlawing junk food. I knew kids in Virginia were raised on Coca-Cola instead of milk. What are you going to do? Outlaw Coca-Cola. But see, his concern for the consumer's pocketbook is very much like doctors, like physicians who want to outlaw what they consider quack cures, because the public is wasting their money on them. Not because it harms the public. They say they're wasting their money and it's not really valuable. Well, their concern for the consumer's pocketbook doesn't extend to their own money, of course. They want to be the only ones fattening on the consumer. They don't want any competition in rating the consumer's pocketbook. And so, in the name of helping the consumers, protecting them against oleomarginine, protecting against Coca-Cola, whatever happens to me, against blended whiskey, the idea is to cartelize the existing status quo, freeze the status quo, so to speak.

10:15Yeah, as I say, Wiley considered a fraudulent to call blended whiskey, whiskey. He said, no, no, the term whiskey must be confined to straight whiskey, it's impure. Beach Sugar Association, of course, they all love Wiley, all these guys, the sugar people, of course, are crazy about him.

10:38Anyway, when Penny Roosevelt comes in, he of course pushes this, and the Pure Food and Drug Act, which Wiley had been agitating for for twenty-five years or so, was finally passed. And of course when it was passed, Roosevelt obviously appoints Wiley as the Food and Drug Commissioner, the educator for that and Wiley reaches the summit of existence in 1906 as our first food and drug commissioner interesting thing is what happens, he gets his comeuppance though, Wiley, he's kind of cute here he was a big sugar fan as we know with the big love of his life the first thing that Wiley calls for after he gets to be commissioner of the food and drug commissioner that was saccharin saccharin was of course the big competitor of sugar and none of the nonsense about saccharin causing cancer then, the saccharin just didn't like saccharin He says we have to outlaw saccharin, it's impure, it's adulterous, and it so turned out that Teddy Roosevelt used to have to take saccharin in his coffee every morning, he was one of the early saccharin people, so he had a big clash on this, and Teddy Roosevelt said this guy's a nut, he's trying to outlaw my saccharin, so what he does is, not only does he point a higher board than the department of pass on this Teddy Roosevelt, and he finally, in a special

11:54So he goes over Wiley and he appoints a new commission, a new board of the society's matters. As chairman of the board, he appoints Ira Remsen, the guy that discovered sacra, the inventor of the discoverer of sacra, the special dig at Wiley. So Wiley gets his comeuppance at long last, and as I say, it was Wiley, it was a great poetic justice for Wiley to be hoisted on the part of sacra, the big sugar thing. The biographer, if you're interested in reading about Wiley, there's an interesting biography of him by a guy named Anderson called Health of a Nation. Anderson, of course, loves Wiley, thinks he's the greatest God since Jesus practically, but he had an interesting summation of Wiley. He said about Wiley, quote, Science filled a void left by loss of faith.

12:39In other words, here he grows up as a pious Campbellite, he loses his religion, but he becomes a salvation by science. Science full of void left by loss of faith. Perhaps Wiley's views stem from his heritage of evangelical Christianity, a heritage whose theological superstructure had lost its meaning for him, but his burning zeal for social justice remained. I mean, he's crushing everybody else, imposing his power on everybody else through government. He can call that social justice. I've got another name for it. Anyway, that's the basic fact. And Wiley is really typical of all these guys, all these progressive intellectuals and technocrats. It's a good case study. Okay, well, last time the National Civic Federation was the main organization, as Weinstein points out, which provided the impetus for what you can call corporatism or the new dispensation of government-industry partnership or welfare-statism or welfare-warfare-statism.

13:37It was first founded in Chicago, the Chicago Civic Federation back in 1898, I think. and they had a conference on trusts and we generally liked it, etc., and finally became a, was organized in 1900 out of that Chicago conference, went national, so to speak, to the National Civic Federation and was organized by Ralph Easley, he was a former school teacher and journalist and executive director of this outfit. The Chicago Civic Federation, which is the start of all this, first came about, began because of a guy, a very interesting Englishman, a very important English journalist named William T. Stead, who was the editor of the London Times, which still is, in those days certainly was the most influential English organ, and sort of reflected government opinion.

14:47And the editor at that point of the reviewer views, he became editor of London Times a little bit later, anyway, he was a big corporatist type, he was essentially a friend and disciple of Cecil Rhodes, organized the secret, in those days the secret Rhodes organization, and both fellowships and both society to push the idea of one of the British Empire and two of general statism, state and capitalist, capital government, partnership and intervention. He's also a big, he came to Chicago, he's a big pietist of course, he came to Chicago to denounce vice, gambling and prostitution and he, as we'll see a little bit later, this This also comes in with urban progressive reform, a progressive period, a big urban reform situation.

15:36I'm about to close that door. Who are these jerks? It's not a hall of higher learning. Okay. And we'll see either today or probably the next time that the urban reform comes along with us, along with the general corporatist welfare state idea, the idea of cleaning up of Cities and essentially purging ethnic liturgicals and working class types and seizing control by pious businessmen, upper class businessmen. The Weinstein book talks a lot about that of course, we'll get into that a little bit later. Anyway, it was a mass meeting in November at Chicago Civic Center Club in November 1893, where Stead was railing against prostitution against Prostitution and Vice, etc. and he formed the so-called Civic Church in London and he tried to set the same thing up in Chicago and they were interested in this and they set up the Chicago Civic Federation as a result the president of the Chicago Civic Federation was Lyman Yage who later became Secretary of the Treasury, head of the First National Bank of Chicago

16:46and a big Rockefeller person, in other words you have to realize that Rockefeller was a dedicated Baptist all his life and so this was fitted in very nicely with pious concerns and the secretary of this after was the same Ralph Easley, a later founder of the National Civic Federation. So it gets its start in 1893, 1894 after instead, yeah, first National Bank of Chicago. That was by

17:19name Gage who was the president of this thing and Easley was the executive director. Gage He later became Secretary of the Treasury under McKinley when McKinley became President. And another thing about Stead is that he was a disciple of John Ruskin who was a big art critic and medieval socialist and was somebody who was very pro-state, very anti-capitalist. Yeah, that's the guy. No, that's the guy named Gage. He was the president of the Chicago Civic Federation. Instead of being an Englishman, he was simply inspired by the Chicago Civic Federation. He spoke and so forth, and then he got the, he inspired these businessmen in Chicago to set up the Chicago Civic Federation and continue the great work that Stead has.

18:09Stead was like an evangelist. He comes to Chicago, he puts everybody up, they form this in this organization and he goes back to England, okay, sorry that was, Stead was on the executive committee of Cecil Rhodes, what happened was at Oxford, Cecil Rhodes was also influenced by Ruskin and this idea of new form medieval socialism so to speak, and Rhodes instead formed in 1891 a secret society called the Circle of Initiates and which Rhodes was the I'm the leader of the executive committee, and most powerful people in England became members of this group, this secret group, including Lord Rothschild, who essentially helped finance it. We now have the Rhodes, of course, the big diamond magnate, so Rhodes helped finance it, and also Rothschild.

19:00They have a Rhodes-Rothschild secret society devoted to promoting British imperialism number one and two, statism, in other words, domestic statism, domestic welfare state, state control of Industry, and so forth, and so on. Anyway, the new economists, guys like Jencks, of what he mentioned, and Cummins, a corporatist economist, spoke at this conference, the Chicago Civic Federation Conference in 1900, a conference on trusts, and this inspired, I'd say, the success of this inspired easily in these guys to set up a national, to go national, set up a national civic federation, to push this and this thing on a large scale. They had in this National Civic Federation all the big business interests, the Rockefellers, the Morgans, the Rothschilds, they're all dumb-wits, they're all involved in this thing.

19:51Because even though they had differences of opinion on what the state should do, what the government should do, they all agreed on government intervention as a key thing. The, for example, by 1903, it was only founded in 1900, by 1903, the National Civic Federation

20:15included representatives of one third of world large American corporations. In other words, all corporations that were over 300 that had more than $10 million of assets, one third of them were involved in the National Civic Federation. George Perkins of course was heavily involved in it, being Morgan's main political person. And a whole bunch of people, Elihu Root, William Howard Taft, later president, Teddy Roosevelt I think himself was in it, the whole gang was in it, everybody was in it. Anyway, there was a clash, interestingly, between them and the National Association of Manufacturers, which also started about the same time, which in those days was a small business group. Nowadays, of course, it includes large as well as small business, but the NAM began as a small business anti-union group and they soon had big clashes, the NAM being much more of a laissez-faire asset at the time, and Easley writes an interesting and revealing He says, he condemned the NAM, he said, our enemy, he says, our major, our enemies, he

21:26writes this to a friend and supporter of the National Civic Federation, he says, quote, our enemies are the socialists among the labor people, it means the Marxists, etc., and the anarchists among the capitalists, what he meant by anarchists was NAM, in other words, laissez-faire and their advocates on capitalism, which he referred to as anarchists. So they saw themselves as a third force, and by the way, all the intellectuals saw themselves as a third force. On the one hand you have laissez-faire, which they consider to be outmoded or too competitive or whatever. On the other hand you have Marxian socialism, which is rising up in Europe, which they were against because it was essentially for some worker-proletarian oriented, allegedly anyway. So they saw themselves, these people, as a third force between Marxism, Leninism on the on one hand and laissez-faire capitalism on the other. This is the third way, the way of government industry cooperation, of cartelization, of general monopoly, corporatism as we can call it. And this same idea, so this idea is now in the air, it's being held by the

22:23Morgans, even by the Rockefellers, the whole most big businessmen in the United States and also in Western Europe. And we have to realize that same sort of thinking is going on in England and France and Germany, et cetera, that we have a third way and a way where, which the, instead of having class struggle, you don't have laissez-faire competition, and you don't have class struggle by politarying a capitalist, what you have is the nation, the organic nation, headed by the strong state, running everything, healing everything, collaborating, molding all forces together, headed by big government, the king, the president, whoever happens to be, and collaborating through associations of businessmen, associations of unions, associations and Intellectuals to Run the System, essentially the corporate state, as Mussolini would later call it.

23:10So this idea is now in the air in Western Europe and the United States. I mentioned before, it really starts in Germany with Bismarck and the German cartelists, the first real modern compulsory cartel system in the 1870s and 80s, where all the firms Professors are forced into a cartel association, forced to abide by the state-dominated price and production decisions. The cartel is run by the German government. And the intellectuals at the time, the German professors who were handing out the PhDs and American graduate students were going to, were calling themselves, Gustav Schmoller, the famous professor of history and economics at the University of Berlin, said very proudly, we at the University of Berlin, our function is to be the intellectual bodyguard of the House of Hohenzollern.

23:58In other words, the intellectual bodyguard of the emperor, of the dynasty. So this is a very frank statement, in other words, the function of intellectuals is the apologists for the government, apologists for the state, state is supposed to be absolute, running everything, interfering in everything, controlling everything, and the function of intellectuals is to propose it, to propagandize for it, apologize for it and help run it. This is the great blend of throne and order again, I don't know if I mentioned it last time. which has throughout history, has a throne and all, we have the king and the government and the president, whoever that happens to be, running everything politically, taxing, controlling, building up power, etc., and the church or the intellectuals apologizing for it, helping the planet and getting part of the loot in return from the state.

24:44In the case, of course, the new guilds coming out, intellectuals and technocrats, they also get restricted entry into the field, restricted entry into medicine, into engineering or whatever, The law doesn't increase their income through state privilege. We can talk about medicine a little bit later on, how this thing works in medicine. It's a real scandal. This is what happened in 1910 with the famous Flexner Report, which totally transformed the medicine in the United States. At any rate, in the case of unions, the laissez-faire people were against unions. The National Civic Federation were in favor of unions. Union, we've already seen unions hardly exist except in craft unions, except in small building trades and small craft unions. The National Civic Federation people have different visions, they believe in large unions, they wanted big unions so as to run the labor force, the organized labor force in collaboration with big business and big government, in other words, to be sort of like the transmitting orders to the working class, so to speak.

25:50And World War I, as we'll see, the federal government essentially created mass unions of the United States, almost de novo, through World War I collectivists, through orders of World War I collectivism. And another thing that unions helped do is to cartelize the system. For example, to leap ahead a bit, the 1930s when the Wagner Act created, brought into to Affect Mass Industrial Unions of the United States, John L. Lewis of the United Mineworkers Union, a coal, by Tumans Coal Industry, what he essentially did was, he essentially understood about the demand curve and went up it, in other words, you have the demand curve for labor, and this is wage rates, and the quantity of labor higher, he understood if you, if you increase, you jack up wage rates, you will unemployed, disemploy a whole bunch of people, he was a favor of it, he didn't care, but Lewis' view is, what you do is you jack He'd check up wage rates for these union workers of seniority, people in the coal mines who

26:51had like 20 years seniority. That's all he cared about, to maximize their income. He didn't care about the unemployment for the younger workers and for those who were coming up, you know, people who were growing up and wanting to be coal miner people. He collaborated with the coal mining industry because they then, what they did is they collaborated the idea of pushing out wage rates so as to essentially put out of business all the smaller So what you had in other words was a cartelization through the industrial unions or industry-wide unions, deliberately putting out of business a whole bunch of coal miners for the benefit of the employers, the large coal miners, and causing unemployment for the younger co-workers of that seniority.

27:37And John L. Lewis understood this really well and did it, in other words a pure monopolistic It's often thought by many people that unions and businesses are always clashing, but they're not necessarily clashing, sometimes they have common interests, such as screwing the smaller coal mines, and that sort of thing. It's the same way with the Teamsters Union, for example, the Teamsters Union bitterly fought the idea of trucking deregulation a few years ago, and when deregulation came came in in 1978, the Teamsters fought along with the large trucking people, fought the idea they didn't want to have small trucks coming in, mom and pop trucks, because they obviously are not going to join a union, so they fought bitterly against it, a mighty collaboration between the large trucking interests and the Teamsters' union.

28:26So this happens all the time, you should understand that, understand the way the real world works. So at any rate, so as a part of this drive, the National Civic Federation starts pushing for workmen's compensation laws, it seems to be very progressive, if a worker gets injured on the job, the government should pay for it through the alleged insurance or whatever through the various firms kicking into a fund, yeah, they promoted unions, they also promoted of Workman's Compensation Laws. You probably do, I don't really know that much about British history. I think they had, I don't know if they had the exact, the name wasn't the same, probably the same sort of thing, you know, I would think so.

29:17Yeah. Yeah, yeah. I'm trying. Well, what happened in the coal industry is that the 19, well, there's a special situation with the, after World War I. After World War I, it was really wacky because the pound, the pound sterling was always 487, $4.87, had been for a hundred years. World War I comes with general inflation. Everybody goes off the gold standard and inflates in order to pay for the war effort. Every country, including the United States, which only partially went off the gold standard. At any rate, at the end of course, we only had war for 18 months. In Europe, there was war for four years. At the end of the war, by 1920 or so, the pound had sunk on the free market to about 320. Everybody wanted to get back to the gold standard. It was generally agreed to have a sound international financial systems to go back to the gold standard. The rational thing would have been done, bring on the cut their losses, okay, the pound is appreciated from 487 to 320, they go back

30:21to the gold standard at 320, okay, that's it. That would have been perfect, nothing would have been no problem, would have been great. Instead of that, these jerks, and one of the craziest, wackiest and most unproductive or counterproductive decisions in 20th century history, said we have to go back to the gold standard at the original par of 487, because that's what it always was, London was always 487, the old pound must be restored and also they kept the prestige of the pound and they wanted to reestablish London as the great financial center of the world because the United States of New York was coming up fast. In order to do that they insisted on going back to 487, a totally wacky and nutty decision. And no economist, I don't think any economist in England said let's go back to 320.

31:06Some said we should have irredeemable paper money, most of them said we have to go back So, in other words, this meant, of course, that British exports, if you go back at 487, British exports are now unsellable because they're now at a very high price, and you're going back at a highly overinflated pound, means a product which would be, let's say, one loafer, whatever it is, one widget, which would originally cost 320 in the United States and now cost 487 because they're going back at a highly overvalued pound. So in other words, it's a very deflationary decision. In order to make this viable, it would mean they have to have an internal deflation. They have to contract the money supply and lower domestic prices so as to make the exports competitive.

31:54The major export is coal and the other one is textiles, how I got into this thing, because coal was their big export, and textiles. So in other words, they deliberately placed a tremendous burden on the coal industry and on the textile industry because they were now uncompetitive. They would have had to have deflation. They didn't want deflation. They wanted an inflate. They hear the British government insist, one, on going back to a pound, very overvalued pound, which would have required a big deflation to have the export competitive. Instead of that, they inflate. So they have a, they're totally screwed up. They have a totally, very, very odd situation. In order to make this sustainable, they have to try to get every, so in other words, England had a depression all during the 1920s. Everybody else had a big boom in the 20s. England had a big depression, heavy unemployment, especially in coal and then textiles, the export industry. and the way they try to solve this is to force everybody else to inflate, so they wouldn't lose gold, force the United States to induce the United States to inflate, to force us, they suckered us into it through the Morgan connection, JP Morgan connection, the countries in Europe which they ran through the League of Nations, they forced to inflate, Bulgaria and all these countries, they literally arm-twisted to get them to inflate so the England would gain exports, it was a horrible situation, self-defeating and precipitated, finally the collapse

33:09The Unionism came about in England during World War I because of massive unemployment Unemployment Insurance, where unemployment insurance is almost equivalent to the wage rate. If you had a wage rate of $10, $3 an hour, you've got an unemployment insurance of $3 an hour for a long, long time, which helped the union sustain a high, high wage, excessively over market wage rate. What you have to realize is unemployment insurance and welfare also, what they do is subsidize unemployment.

33:58They create unemployment basically, but they prevent pressure of the unemployed upon union wage rates or minimum wage rates. So anyway, that was the cold situation. So anyway, they pushed for what Workman's Compensation was, looking very progressive and humanitarian. What it really meant was to put burdens on smaller firms which haven't got, just to write out the, to pay fixed costs, to write out the forms and everything, is an excessive of Cost Burden on the smaller competitors of these bigger businesses. So the name of humanitarianism you put, you again help to cartelize the system by placing high costs on small firms. For example, take the liquor industry, the liquor industry is always complaining about high taxes and properly so, however, the liquor industry is in favor of very high taxes on stills.

34:47In other words, you pay essentially a fixed cost, a fixed fee per still, it was the still rate of liquor. So if you pay a fixed court, whatever the fixed court is, let's say $5,000 is still, I don't know what it is, let's see something like that, this means of course Seagrams can pay it pretty easily or Jack Daniels, but Hiram Jones in West Virginia can't pay it, he only makes about $2,000 a year, he can't pay a $5,000 a year fee. This drives Hiram Jones into an illegal moonshine production, in other words the moonshiners are a product of this fixed fee by which the big liquor companies squeeze the smaller firms is out of business, they have a high fixed cost per distillery, per still, deliberately done in order to screw the poor small competitors, the poor moonshiners, and then force them to illegal production.

35:35So in other words, what you have to look at the welfare state, and we'll be giving most of the rest of the term will be examples of this, in other words, examples of situations where alleged welfare state situation where big business gets together to impose government regulation in order to screw their smaller competitors, to drive smaller competitors and then they started out a business one way or the other, either officially drive them out of business like medical licensing or imposing high fixed costs on them one way or the other. And with the National Civic Federation what they would do is they would push for this, they would write a model law, their experts would help write a model workman's compensation law and then they'd start lobbying for it in every state. And state governments of course like this because they get, the work is cut out for them, they don't have to write the legislation.

36:21is written for them by the National Civic Federation, they just adopt it. So another reason for this is the liability question. And the common law, if you're a worker and you get an accident on the job, your employer is liable only if the worker himself is not responsible or if another worker is not responsible or the employer is not liable if you voluntarily assume the risk. In other words, if you're a high-wire construction person and you fall off, obviously you've assumed the risk, you know what's going on, the employer's not liable. So in this kind of common law structure, usually employers, most accidents, employers were not liable. Well, the government started changing the laws about 1900, so it's to make employers liable for more and more accidents.

37:09As a result, the employers started pushing for work with compensation legislation, they wouldn't be liable, and they let the fund pay for it. So that was another reason for it, at any rate. Another aspect of progressive reform I want to mention is the so-called public utility question. Again, this is now, for many years, up until very recently, it was considered that public utilities have to be either government-run or government-monopolized because of the natural monopoly that's called. It's not a monopoly of gas and electric, it's not a national monopoly, it's a lot of nonsense. There's no reason why Con Ed has to have a monopoly of all electricity sold in the city of New York. Columbia University, for example, generates its own electricity.

37:57That's legal. You can have your own generator for your own building. It's illegal, however, for Columbia University to sell electricity to the guy across the street. You know, probably they could do it cheaper than Con Ed. It's illegal because Con Ed has a territorial monopoly on all sales of electricity and and Gas. So most of course this stops, it restricts all kinds of technological innovation. If Connet has a monopoly on all New York City electricity, it means there's no incentive for anybody to discover a way to have better decent, more efficient decentralized electricity because it's illegal. Most people are not going to waste their time trying to invent something which turns out to be illegal. So at any rate, the idea of monopoly privileges for public utilities only comes down in the progressive era.

38:47It's not eternal. It comes in about 1900, 1905. It first was established by the National Civic Federation in a commission on public ownership of public utilities. And the idea is, this is true for trolleys, buses, gas and electric, and for telephones. The idea is this, you create a monopoly privilege by the government, nobody else can compete in this area, and then you set the rates, you regulate the rates so as to guarantee a certain fixed rate of profit, try to guarantee it anyway. The rates are based, the rate of profit is based on the value of capital, so let's say it's 8%, let's say the capital invested in this electric company is a million dollars, And you set the rate so as to get 80,000 profit, right, 80,000 all-year profit.

39:42The higher the value of the capital, the higher the government fixes the rate, the Public Utility Commission fixes the rate. So it's the interest of each firm, each electricity firm or a trolley firm or whatever, to keep the value of the capital as high as possible. So the government will then jack up the rate. Well, the value, on orthodox accounting principles, the value of capital is based on how much the So if you pay a lot of money for the equipment, it's fixed at that price, and if you don't depreciate it much, it just stays there, and you can set the rate on that basis. As a result, Con Ed, for example, never depreciates their capital, they try not to depreciate their capital at all, because if you depreciate, it means the value of the capital goes down, and you have to lower their rates, it's a totally crazy system.

40:27Most firms, for example, like IBM, is depreciating all the time, they want to depreciate very very fast, so they got a lot of funds, they can plow back money to new equipment, so it won't be obsolete, but Con Ed or AT&T before deregulation, they weren't interested in depreciation because if they depreciated, they have to lower the value of their capital and the government's rates would go down, I mean the rates the government set would go down, so as a result Con Ed almost never depreciates, Con Ed is still hanging on in 1910 equipment because if they depreciate the equipment, the official orthodox accounting value of their capital goes down, they have to lower their rate. So that's one of the reasons why you have these damn blackouts all the time, that is operating an equipment 60 years old, it's their economic interest to do so, contrast the free market firms, the interest is to keep up a competition and get as innovative as possible.

41:16Not if however, if you're a regulated monopoly like the public utility system. Stress today the fact that progressivism goes not just on the federal level as we've been are talking about, but also on the state and local level. The whole revolution in the United States, state and local as well as federal regulation. Last time I mentioned public utilities, there's no reason why public utility has to be monopolistic. There's no natural monopoly. It should come about naturally, not by government fiat. What happened was the utilities began to realize this was a good thing and get a monopoly franchise for 20 or 50 years duration or something and get the utility commission to grant a cost plus or a profit, set the rate at a return which would guarantee a profit on its capital investment.

42:17The, and this was pushed by the National Civic Federation and other organizations, electrical utility manufacturers, for example, to push for government monopoly, so-called utility, public utility regulation, public utility status. The, one of the first guys on this, coming to this conclusion was Charles Yerkes, who He was a big Chicago attraction magnate, which meant especially bus and trolley, and he came to the conclusion that he'd be more profitable with a government monopoly than a free market company. So what he did is he found out that he couldn't, he would get monopolies for 20 years of monopoly, and he found out he had a whole bunch of monopoly franchises and trolleys, et cetera, but each time he had to bribe the city councilman every time it got renewed, and so every couple of years they'd have a new set of bribes, in other words the renewal would come up, and he couldn't float 20-year bonds because the bondholders couldn't be guaranteed that he and they keep getting this monopoly status.

43:35So what he did is he had some bills introduced in the Illinois Legislature in 1897, a premature person here, which would extend the beginning of the progressive movement, so quote unquote progressive movement and utility franchises, instead of having a 20-year monopoly, have have a 50-year monopoly and instead of having the city council set the rates, the rates would be set by quote non-partisan unquote state utility commission which would be objective and scientific and blah blah blah. This by the way as we'll see today, one of the big goals of progressivism and economics and industry is to quote take something out of politics In other words, take blank out of politics. You can fill in the blanks.

44:28Elective utilities, telephones, post office, almost anything can be taken out of transportation. Taking out of politics means that the government runs it, or runs it in connection with a monopoly company, without any public, without any check by the taxpayers or the voters. It then becomes a sort of hermetically sealed outfit for the tally. What makes it a monopoly? AT&T wasn't indeed a monopoly. It was put in by the federal government. The Federal Communications Commission is regulating it. It was a guaranteed monopoly. It was allegedly because telephones are supposed to be a natural monopoly. The only case, there might have been a case for that in 1890, although even then you couldn't release.

45:16I mean, if something is a natural monopoly, let it be formed naturally, not by government coercion. The argument was, if you've seen movies about 1900, movies about that period in Mexico, everybody had ten phones on their desks, they had ten different phone companies. Well, I mean, so it's more convenient to have one phone company. And on the other hand, of course, phone companies can interlock with each other, nothing prevents them from calling on each other's line and have an interconnecting cable. It's okay, but it's free competition within that, in other words, it's like using a public road, in a sense, you pay a fee on the same line, it doesn't really make any difference, you can have a competition anyway, although one of the problems for the AT&T monopoly not only to keep out, prevent other companies from using phones, for example, data interconnect, when monopoly was eliminated about 10 years ago, 10-15 years ago, it gave rise to an entire new industry called a data interconnect industry, you know, different phone systems, first within

46:27each corporation, closed circuit TV from New York, Chicago, it was all prohibitive, it because of the damn monopoly. Eliminating that monopoly gave rise to this whole industry. Also you could have other communication systems where it couldn't occur because it was illegal. Technologically you can eventually have all sorts of phone type, communication type systems like TV, face-to-face TV from different cities and stuff like that, all sorts of things could happen. Once you eliminate a monopoly, you allow that to take place. So you might have eventually, I don't know, you could go into some phone booth and call somebody up and have a face-to-face TV conversation.

47:16It's technologically feasible, just not much in demand yet. And all sorts of stuff could occur, just satellite communication, don't know what else, except was prohibited by the AT&T monopoly, unfortunately that's now over, unfortunately they went too far, not only did they eliminate the monopoly, they also broke up AT&T, there's no reason for that, breaking up the New York phone system and the AT&T system, preventing the same assets and having a local and interstate phone, no reason for that, that was just destruction on behalf of a crazy economic theory, yeah they wanted to have a, they want to be able This is forcing you to have another company even if you don't want it.

48:01Most people will be happy to continue with AT&T, both domestic and interstate, they just can't do it because AT&T is not allowed to participate in local phone stuff anymore. That went too far. That was the antitrust stuff, but the real thing that liberated the phone industry was eliminating the FCC monopoly about 10, 15 years ago. So at any rate, so of course now you can have hundreds of phone conversations on the same cable, there's no reason not to have, technologically it's very easy, you don't have to have 50 different phones. So what Yerkes wanted to do as I say is to have, set up a quote, non-part of the commission have a 50-year monopoly for his company, so he wouldn't have to keep bribing the city councilmen every couple of years. It would have reduced his bribery costs. However, he came a cropper because he didn't... part of the mystique of urban progressivism, as we'll see in a minute, attacks so-called corruption. And he was, of course, attacked as being a

49:11corruptor and a bribery type, so his bill was defeated in 1897, only to be resurrected as a so-called progressive tactic ten years later. So Learning from Yerkes is a board of programs, Samuel Insull, later was accused of being a crook in the late 1920s, probably unfairly, Samuel Insull starts the idea of progressivism learning from Yerkes, Yerkes is his mentor in Chicago, starts the idea of monopoly public Electrical Utilities. In his presidential address before the National Electric Light Association in June 1998, he urged his fellow electrical utility magnates to get the industry regulated by state commissions with full power, fixed rates and quality of service, and he stressed the government's rate-making power rather than monopoly, although monopoly was there, he was more sensitive One of the public relations of poor Yerkes was obviously just all out for the bribe.

50:17So most of the utility magnates said, no this is a terrible thing, it's violating laissez-faire, but he got a few supporters and he set up an association committee on legislative policy and he got in charge of Chicago Edison and Commonwealth electorate and was pushing this and of course as I was saying, in about ten years this became the general public utility of the Doctrine. Once again, Wisconsin, National Civic Federation, Wisconsin was the leader in this whole state progressivism, including public utility monopoly, headed by the Wisconsin economist Richard T. Ely, who's the big so-called progressive, John R. Commons as a disciple, Ely was also a big shot pietist type, post-millennial pietist, in other words he believed that the way to achieve salvation is through, first the government has to, first we have to have and Millennium and then Jesus will come and this means again that and he does it through government, through government action. A great quote from Ely is that government is God's major instrument of redemption. In other words, he achieves salvation through government action,

51:46through government control, etc., etc. Commas was his disciple, student and so on and so on. Now here's Weinstein quoting out from the book what you should have read but anyway Wainstein quotes about public utility, it's a good quote, he says, by 1909 many industry people within public utilities have begun to look favorably on regulation by state commissions and understand the advantages of taking utilities regulation out of politics, once again. Taking out of politics means that you have your own kept board, so-called nonpartisan board to do it and not really regulated by the people. For example, the postal service has been taken We used to have a post office. The head of the post office used to be the chairman of the Democratic, Republican, National Committee, a big politician, and he'd staff the post office with all his tools. That's the way most of the patronage jobs at the local level were postmasters. You're a loyal Democrat or a loyal Republican, you have to be a post

52:44master. In order to fix up the post office, the post office every year has had a deficit. The post office, of course, also, the only outfit I can think of in the United States where not only does the price go up every year, but the quality of the service goes Usually in private industry, even if the price goes up because of inflation, at least the service goes up, the quality goes up, and the postal service, every year the quality is going down, every year it gets, it takes longer and longer to get a mail, a letter delivered. When I was growing up in the 1930s, we used to get two mails a day, two deliveries a day, every house, every apartment, every house, two a day without a sale, now you're lucky if it's one a day, and Saturday often they drop out, things like that. So it takes longer and longer for a letter to be sent, as you well know. It used to be, when I was growing up, within New York City, the price was two cents a stamp.

53:32It makes like, say, 16 cents now, an equivalent of an eight-fold increase in prices. Three cents a stamp for regular first-class mail, of course, now it's much higher. Not only is it much higher, but the service is worse. We used to have air mail as a special thing, that's been eliminated now. Everything goes by air, and therefore everything is slower. A few years ago, in order to grammatize the inefficient postal service here, some guy took a letter in Philadelphia and rode a horse from Philadelphia, dressing up on a Paul Revere uniform, and rode a horse to Washington and lived with a letter by hand from the horse. It took about ten hours, something like that. Grammatizing, in fact, takes about two weeks to get by, high-speed electronic postal service.

54:18So a few years ago, the Postal Service, in order to make it more efficient, they took it out of politics. They created the Postal Service on a so-called business basis, which means the Congress can't do anything about it. It can't get to it. In other words, you seal off the funds, you seal off the administration, and from then on, even the voters and the taxpayers can't do much about it, hermetically seal off. It's called taking it out of politics, making it a business-like basis. So the voters can't get to it. The same thing was done with the transportation authority in New York, a miserable, rotten subway system. It was taken out of politics about 20 years ago. They set up the transit authority, the metropolitan transportation authority on a so-called business-like basis. It means the state legislature and the voters can't get to it. It's a steal-off.

55:03It's an oligarchically self-run oligarchy. And the first payment goes to the bondholders, by the way. What happened was they nationalized the subway system and intersupplies in the 1930s, took it over. They were losing money because the government was fixing the fare of five cents, and of course this wasn't fixed with five cents since 1900, so they were losing money as prices went up, costs went up, and the city government took over the subways, IRT and BMT at a very high price, big subsidy to the stockholders, the stockholders loved it, and then these They became New York City bondholders and then got first lien on every subway revenue. In other words, the first guys who get paid off, even if there's a big subway deficit, the bondholders get paid off off the top.

55:53And they get paid off at an increasingly higher rate because the interest rates in those days are like 3%. Now, of course, they refinance. The bonds refinance is 20% or 12% or something. The city's subway riders and bus riders are total hawkish bondholders from the last 50 years. This is called putting it out of business, this is called taking the subway system out of politics. At any rate, continue on. The underlying principles of the regulatory legislation support a responsible private ownership, and the experts appointed to the new commissions were almost invariably conservative in that they did not question the framework of the utilities industry. The result, therefore, was to introduce stability in the industry and to quote, raise public morality, unquote, This was a move of discriminatory rights, a move of competition, as we well know now.

56:44The electric utility industry was the major trolley, so the major backers of this. By the fall of 1913, Ralph Easley, the head of the National Civic Federation, wrote to President Seth Lowe, president of the National Civic Federation, At the great success of the drive for public utility regulation, twenty-five years ago he exulted that we would have regarded this as a species of socialism. But now, utilities are submitting with many railways even embracing regulation joyfully. Okay, so this is the most joyful regulation, in other words, businessmen became more and more to see the monopolistic advantages of this kind of regulation. Okay, in the National Civic Federation, all the big shots, all the Morgans, Morgan himself, the Morgan Partners, Carnegie, Rockefeller, Charles Francis Adams, the whole Mark Hanna, The whole gang was involved in this thing, plus the politicians, Cleveland Taft, Teddy Roosevelt, Eli Hill Root, and Samuel Gompers of the AFL, everybody was involved in this thing, one big happy family of the top, George Perkins of course, top corporate and leadership and union leadership. I guess I already quoted easily saying, the socialists among the labor people and the anarchists among the capitalists, and these are laissez-faire types.

58:05Okay, and I'll get to the Workman's Compensation again, we're also pushed by the same people. When I get to the local government, well, here's a great quote, I can't avoid it, from the National Civic Federation, Frank Muncie, the publisher of Harper's Publishing Company and Harper's Magazine, wrote a letter to Teddy Roosevelt in January 1912 and he said, quote, is the work of the state, that means the government, is the work of the state to think for the people and plan for the people, to teach them how to do, what to do, and to sustain them in the doing. The function of the government is to run everything. And this is a typical state corporatist progressive at work.

58:57When you get to local government, again the theme is, local and state government, local government, to take everything out of politics. When I was growing up in the 1930s, the big slogan was, it doesn't matter whether Republican or Democrat gets elected because there's no such thing as a Republican or Democratic way of sweeping the streets. In other words, all problems become technical, there are no political problems anymore, no value problems, everybody's supposed to agree on all values, so all matters of at least local government become technical and if all matters are technical and not valuational, not political, who should take care of them but technocrats, economists, social workers, engineers, etc. etc. This leaves a power vacuum for these guys to take over and run everything and the basis of so-called non-political, there's no such thing as non-political government, that's the whole point I'm trying to make here, but they're trying to do is to take government out of politics is what really matters to them. They don't quite say that because it sounds too idiotic but

59:54So basically what they're doing, the progressive dream is to take all government decisions out of politics, make it scientific, quote unquote, and of course if it's scientific it means that the bureaucrats run it, it means the taxpayer pays up, everything is monopolized in the name of so-called efficiency or so-called non-profit, non-partisan. Everything becomes non-partisan, street sweeping, local government, all these things become allegedly only technical problems, they're not technical problems, they're all value Problems, government and political period. Citizens are not engineers, they're not garbage disposal experts. So if all government decisions are scientific or technological, it means there's no room for voting. The public is not supposed to vote, they're supposed to ratify the decisions of the technocrats. So this whole thing is an ideological, deeply ideological doctrine in the name of non-ideology by the progressives. And it comes at a time I remember when, after 1896, there was no laissez-faire political party.

1:00:51Political parties themselves were becoming unimportant, there was no choice, no real ideological choices anymore after 1900, and so this leaves a power vacuum for the progressive technocrats and big business types, their allies, to take over. In local government, this meant, and generally it meant, trying to eliminate, trying to play down and minimize the decisions of the voters, and minimize voters, the role of voters. So how do you do that? Because voters are, can be, of course, they're not part of this whole clique. Voters can be disruptive. Voters can be a pain in the neck. They can disrupt, dislodge all these technocratic decisions.

1:01:36Therefore, you're trying to play down the role as far as possible, first of all by making Minimizing the two parties about the same as they were after 1900 basically, both centrist statists and they were neither very fanatical, they were both basically progressive, both in favor of the corporate state or state corporate capitalism or whatever you want to call it. So you minimize the role of voters by having both parties about the same, that's been achieved more or less, and you also minimize the amount of, the range of votes, for example part of One of the progressive drives after 1900 was the so-called short ballot movement. In the old days, people used to vote on every office, like a hundred different... you have a ballot and you have a hundred different things you can vote on.

1:02:22The idea of the short ballot movement, people don't know how to vote, therefore you should limit their voting to the top of the ticket, governor, lieutenant governor, blah, blah, blah. More or less, this has been achieved, you're not able to vote on it anymore. and even now we can vote on judges and the technocrats are trying to get rid of that, they're always saying the government, the public is not qualified to vote on judges, therefore they shouldn't do it, the judges should be appointed by the Bar Association or whatever the public should only vote for the governor who appoints judges, you see, this is a this is the doctrine allegedly scientific doctrine, it really is the limit, to minimize the scope of the public and have any choice at all It's true that judges are experts and the public isn't. On the other hand, the judges rule over the public. The public should have some kind of a role in picking them, therefore. We're choosing our rulers, so to speak. It's not just like choosing a lawyer or engineer in the abstract.

1:03:15So the short ballot movement, in the name of expanding democracy, in the name of giving the public, having the public a better choice or something like that, essentially restricting democracy by shortening the ballot. Another thing that happened was the arrival of the so-called Australian ballot. Before that, this is by 1900, before that the ballot was secret, but what you did is you see everybody distributed their own ticket, in other words, let's say there's six candidates for an office. Each candidate had his own ticket, his own color, let's say. If I'm running for governor on the independent labor ticket, let's say, I give you a green, I distribute green tickets. You take whichever ticket you want and put it in the box. There was no official ballot. So what the Australian ballot did, in the name of so-called reform, it eliminated that. The ballots are now supplied only by the government. In other words, the government has a ballot like that. And the government restricts the number of names on

1:04:17it. So if you're in a third party, if you're any third party and you're trying to get on the ballot, it's a big headache to get on it. You have to take, you know, get ten thousand Signatures, the Petition, blah, blah, blah. In the old days you didn't have to get, there was no single ballot, so this means a government monopoly ballot, and thereby restricts voting to two major, basically the two major parties. It's very difficult for any third party to get on and out, because the government, since the government runs the ballot and decides who gets on it, it makes the decisions as to, you know, signatures and all that, and they try to raise it as much as possible. Each state is different. Yeah. Now, shortening the ballot is keeping the ballot minimal. In other words, shortening the ballot means shortening the number of electoral offices, increasing the number of appointed offices. In other words, shortening the number of elections.

1:05:05In other words, see, in the old days, I'd say the public used to vote on, say, 50 different jobs, let's say. Now it's only like five. All of us are now appointed by the governor or whatever, or the mayor, something like that. See, you eliminate the number of elective offices. So, alright, you have a government monopoly ballot. You also have registration requirements. There were no registration requirements in the old days. In the old days, everybody could vote. What you'd do is you'd say, my name is Murray Rothbard, I live on a certain address and I vote, period. There's no registration. Registration came in as a deliberate attempt to restrict, particularly, city voters. For example, in New York, the first registration requirement was only for New York City.

1:05:52Rural people, upstate, didn't have to register. The idea is to restrict evil voters in New York City. In other words, ethnic liturgical voters, as I'm going to answer to. This is part of the Wasp Piatist Move for Domination. So registration requirements come in to reduce the number of votes, voters, remember I talked about how the republicans try to eliminate, restrict the immigration, well this is one way to do it, if you don't want to restrict immigration, you want to restrict the number of people who can vote by registration requirements, and also eliminate alien votes, in the old days aliens could vote, there were no restrictions, you didn't have to be a citizen to vote, of course this is now eliminated, so only citizens can vote, and then the increase in the amount All this is to reduce the amount of time you have to spend before you even become a citizen. All this is to reduce the amount of voting, only citizens can vote.

1:06:45So these are the deliberate attempts to restrict democratic choice, is what it amounts to, to limit it, to make the ballot short, to have a monopoly ballot, have registration requirements, to eliminate alien voters. So this is very cunning, but at the same time they claim they're expanding democracy by by having the primary system. There's a lot of discussion now on political scientists about this, because it's become pretty obvious what's happened. In the old days, when political parties were important, the political parties then chose their own candidates, Democrats, Republicans, whatever, and chosen either by convention or by state committee vote, didn't make any difference. But this meant that only a party activist could vote. The party activists were the ones, the party members and activists were the ones who chose the candidate. The primary system, compulsory primaries, which is a progressive move, allegedly to expand American democracy, and now, of course, we have primaries for everything.

1:07:41This is supposed to make everything much more democratic, but it really doesn't, because it means that any schmoke can vote in a Democrat or Republican ticket, you only have to sign up as a Democrat or Republican, you don't have to be an actual activist member. So this means anybody can get the nomination, it means that nomination is decided by public like relations, by TV ads, by money, whatever it is, it means the role of a party as such, the party as a mechanism for gathering, collecting ideas and principles gets eliminated, the political party is now just a shell, Democrats and Republicans, the party don't mean anything, it's all because of the cursory primary system, it's all up for grabs, and this is now admitted by most political scientists, these are terrible things, they think it all came in the 1960s, it really started coming in 1900 with the progressive, the whole primary concept and this was deliberately done to destroy the role of the political party as an ideological

1:08:36and vote-gathering movement in other words, as a group which means something the idea is to make the party meaningless and leave a power vacuum for technocrats and progressive so-called non-partisan scientists This is all accomplished, it was all done very cleverly, and one of the things they try to do most is to eliminate the great war on the cities. By this time, the cities are almost all ethnic, although the cities are mostly liturgical, mostly Irish and Italian and Polish, etc., and the rural areas are mostly WASP, getting them out of the point where this is more and more true. These cities become a focus of attack by wasp-pietists as being sinful per se, as being nests of evil and sin.

1:09:26The whole rural versus urban thing really comes in about this time as an attack on urban ethnics. And one of the things which becomes most important now, again, for wasp-pietists is to smash the saloon, and the prohibition to eliminate the saloon as a political power of ethnic politics. Since most ethnic, most Italian, Irish, etc., Catholic people, the neighborhood saloon still is the focus of politics. Most of the socializing gets done in the saloon, and the saloon keeper becomes the major, the ward healer becomes the political power. And so if you outlaw that, you can smash the liturgical politics.

1:10:18So prohibition gets restored now as a big objective. Another thing to do is to try to eliminate city voting altogether, eliminate the mayor and put in the non-political, quote-unquote, city manager. This is the result of the so-called city manager movement, or city commission movement. Very powerful, took over most of the small cities in the United States. It didn't win out in New York or Philadelphia or Boston, but in most of the small cities, Dayton, Ohio, and also Galveston, Texas, and now have city managers. The city manager gets a high salary, the mayor gets almost no salary, the mayor gets 20 bucks a year or something. The mayor therefore has very little power, the city manager is in there full-time, gets and he has his own bureaucracy in there and runs everything mostly to his own liking.

1:11:07Again, this is the political power by the bureaucrat, by the technocrat bureaucrat taking over from the voters. Voters almost no say in this anymore, it's eliminated, very indirect. Another thing that happens is the nationalization of the public school system. The public schools until about 1900 were essentially, first of all, they were not compulsory outside New England and the Yankee area. In the South, there's no compulsory attendance laws. And second of all, the public school, remember the idea of the public school as a Protestantizing device, this comes in even much more now with progressives. If you can't get the Catholic adults, Catholic adults are hopeless and steep in sin, therefore get the kids, Christianize the Catholics as they call, you get to force the kids into the public school system and then Protestantize them to the public schools.

1:11:55So there's a big drive for public school, expansion of the public school system in New York and the South and every place else, post-re-public school attendance, there's an informal requirement in most jurisdictions, in order to be a public school teacher you had to be a Protestant church member. It was not official, it was unofficial but just because it was important. In San Francisco we had a constant fight for 50 years between the Catholics and the Protestants in San Francisco, control of the public school system, control of the city in general, the public school in particular. Behind the public school drive are the upper class and wasps, upper class business people and wasps, many places coincidental.

1:12:41So another thing about public schools is when you force Catholics into it, and Christianize them, quote unquote, And two, business people began to use the public schools as a device to socialize their costs. This is an important form of subsidy we have to realize. One way in which the government subsidizes business is by socializing the cost of business. In other words, taking over some of the costs and loading it onto the taxpayer. For example, in the time of slavery in the South, slavery would not have been efficient, would not have been economic, I should say. Because one of the problems of slavery is that slaves tend to run away. You have a problem with slaves running away, you don't have capital equipment, machines don't decide to run away, slaves do. So in order to get the, in order to minimize the cost of enforcement, the slave masters loaded onto the shoulders of the average white taxpayer in the South by having so-called slave patrols, the slave patrol draft.

1:13:40Every Southerner was required to join a slave patrol for two weeks out of a year or something. Slave patrols patrol the highway, the roads at night, and catch slaves who have run away. Slave patrols are like five people on the patrol. Every black person had to have an identity card, something like South Africa, in other words, you have to have an ID card, in this case from your master telling you where to go, allowing you to go on this particular road. If you didn't have an ID card from your master, you were immediately seized by the, if they didn't know who your slave master was, the slave patrol people were drafted, by the way. So the way they got their jollies was, every once in a while they'd find a slave who didn't have an ID card, they didn't know who the slave master was, and they would then own the slave, assume homestead ownership of the slave and sell the slave at auction and get

1:14:22the proceeds. This is the way they got their little boodle, part of the loot. So in the same way, in a sense the same way that the slave masters were able to load the slave patrol costs onto the shoulders of the average white person in the South, in the same way, the public school system socialized a lot of business costs. For example, businessmen began to want to send a lot of salesmen to South America. They said, why don't they get their businessmen to learn Spanish? Well, how do they get the kids and the guy to learn Spanish? They either have to train them themselves at their own course or they also get the public school system to teach them Spanish. What the hell? Load the course onto the taxpayer. So the national NAM and other business groups began to agitate that public schools should teach Spanish so that then they can take the guy who's already trained in Spanish.

1:15:09You're loading the course onto the taxpayers, that amounts to. So with all this, in addition to that you have the education, professional educationists, who, John Dewey and other so-called progressives, who are talking about the new theory of progressive education, every individual, instead of becoming an individual, learns to be part of a group, part of a collective, so to speak, and fits into the collective. And this of course suited very well, this new kind of progressive doctrine, you fit into the collective, whatever it is, government or business agency, we're not causing any trouble. So you have a whole municipal reform movement. Part of the public school movement, by the way, I think in the old days public school used to be decentralized. The school boards were voted on by each neighborhood, the parents of each neighborhood, they would vote for the school board in that neighborhood.

1:15:56This is the general way in which most schools were operated. This was considered inefficient, too democratic, too much in control of the parents, the theory The theory of progressive educators was that only educationists know how to teach a kid. Parents know nothing. Educationists know everything because they got a PhD in education, a teacher in college. So you have a total graph of power on the part of the educationists and part of the graph of power was that you minimize the voting procedure, first of all you have a huge school board covering the whole city and then a school board hopefully appointed by the superintendent of Schools, or appointed by the mayor, it eliminates the parent's role altogether. In other words, the whole idea was to have huge districts, where the parents wouldn't know who the administrators are anyway, and have the mayor, you have to elect the mayor, there's no way you can get around that, but you have everything then appointed by the mayor.

1:16:48The mayor appoints the superintendent, the school board, everything becomes a cozy technocratic thing with the parents having no say in the matter. This, of course, is what happened after the 1900s, probably a progressive situation. The 1960s was a slight move away from this, in the so-called New Left period, where New York, for example, we now have regional school parent elections with a tremendous, after a tremendous blockage, a tremendous opposition by the trench teachers unions who were battling this to the hilt. At any rate, this is an ideological drive in the name of so-called value-free science and financial value for your education, to grab control of the kids on the part of the professional educationists, or in with upper-class lost types, those things fitted in beautifully.

1:17:37Also another thing about urban reform is, in addition to city manager, you make, before that, before 1900, you had the ward district, for example the legislature in New York City the so-called Board of Aldermen and you had very a lot of each small neighborhood have its own aldermen you have like 400 people in the Board of Aldermen it means that everybody more or less knew their aldermen so you have a certain amount of democratic check on a situation you can put pressure on your aldermen where you knew who he was you put pressure on him in order to take power out of the hands of ethnic liturgical Irish, Etanian, et cetera ethnics in the name of so-called efficiency the progressives then changed all that to very big, very small city council. Instead of 400 people, you have 20 people. You reduce that and you run them preferably at large for the whole city. First of all, nobody knows any of your representatives. Second of all, it's very costly to run an at-large election.

1:18:35It means to run for the whole of New York or the whole of San Francisco costs a lot of money. You have to be quite wealthy or have wealthy backers to do it. To run from East Bay Ridge costs very little. To run from the whole city costs a lot. In this way, they deliberately got rid of most of the working class, poor or working class and ethnic supporters or ethnic administrators and shifted the control of the city through a few upper class WASPs, upper class WASP businessmen. This is all done deliberately. I'll quote a few things, but Weinstein has a lot of this and there are other sources if you're interested. There's all sorts of data on this thing. It was done in Pittsburgh and Des Moines, etc. There are data about how originally, say, Pittsburgh had a lot of working-class aldermen.

1:19:23Then they shift this thing and you wind up with a few upper-class physicians. And the name again of efficiency. So this is done in Rochester, George Eastman does it, sets up a recent codex, sets up a Bureau of Municipal Research, in the name of so-called good government, business-like efficiency. It's all done in order to get the shift of political power from liturgical, working-class liturgical and liturgical machine to upper-class businessmen, it all fits the ethnic and the economic will fit in. In Pittsburgh, for example, the drive for civil reform was led by the Civic Club and the Voters League, which were both upper-class WASP groups and essentially businessmen, bankers, corporate officials and their wives and physicians.

1:20:23There's usually one or two kept physicians in this group who come in as allies. So in general, before the progressive reforms, cities were decentralized, there were confederations of local wards, they were quite democratic, there were local working-class representatives and middle-class representatives, in Pittsburgh, for example, in 1910, before the reform period, the city council consisted of about 300 members or so, of which two-thirds were small business manner workers, in other words, two-thirds were either employee clerks, laborers, or Rosers and things like that. After the reform movement took over, you have almost all were big businessmen, professional managers, and lost types. There's all sorts of data on this to deal with. In city after city, Pittsburgh and Galveston and Dayton, et cetera, et cetera.

1:21:22In Pittsburgh, they didn't want, many of these cities didn't want to have a city manager for City Manager Reform. What they did is in the United States, what you have to realize is that cities are a pure tool of the state. I mean, constitutionally, the state has total power over every city within the state. So in Pennsylvania, for example, and Pittsburgh resisted the idea of this progressive reform, the Pennsylvania legislature simply ordered Pittsburgh to do it. They just took over Pittsburgh. They seized Pittsburgh, kicked out the mayor, kicked out the school board and put in their own people. So, for example, Pittsburgh got The governor simply appointed, kicked out a city council, appointed a new city council based on its at-large voting, and of the nine people in it, they had six upper-class businessmen and two upper-class doctors, and one KEP union official, and the school board they appointed, the state appointed in order to change this whole school board thing, they again had ten

1:22:16big businessmen, one upper-class doctor and one KEP union official, so totally different from the way it had been elected before that. One of the ways in which they did this, one of the areas of agitation was so-called corruption, reform versus corruption. So one thing we have to realize is that this is really an ideological attack on the big On the big city machines, which are pro-corrupt unquote, actually they're no more corrupt than others, they're just more visible. I mean, for example, if some small town in upstate New York is corrupt, it's very small. New York City is corrupt, as we've seen recently. It's huge.

1:23:07Hundreds of millions of dollars get siphoned off. So big city corruption is more visible. and also it's more, it's more visible in other sense. See, the guys who are doing it, if you have a reform group, you give a business a contract above cost, it's less visible than say, something like Lindenauer, just taking money out of the tilt, more rapish in the case of Lindenauer. It's more visible, so to speak. It's less smooth, put it that way. So we have then, as the use by the reformers of the corruption charge, much of which is, I think, It's misfiring. For example, in the big business machines in the 1900s or so, instead of having a big welfare system, you had a lot of poor people, you had more poor people than you have now, proportionally. You didn't have any welfare state. What you had was Tammany Hall, let's say, which is the New York, Manhattan Democratic Party known as Tammany Hall. The way they would take care of the poor is they had like a private welfare mechanism by the

1:24:11This is sort of a party structure. In other words, they give away free turkeys at Christmas or Thanksgiving. They have turkey dinners for the poor, handled by a democratic party, a local democratic party. It's kind of lovable. So you have sort of a private welfare state organized by the democratic party. This way, of course, they buy the vote. In other words, the people would be grateful to the local democratic party and vote democratic. In a sense, there's nothing much wrong with that. It's sort of like a tit-for-tat situation where they fix... They fixed traffic tickets. When I was growing up, for example, a local Democratic clubhouse person would fix traffic tickets and also fix jury service. He didn't want a jury summons. He handed it to your local Democratic leader and he would quote, take care, unquote, of the jury summons.

1:24:56This is, I suppose, corruption. It's also helpful corruption. It's helpful to the public. It's getting the public off their neck. and also alleviating poverty, in many extent, out of essentially non-governmental, at least it's not funded by a tax payer, it's funded in general, I guess, from government office. So it's kind of a raffish kind of corruption, which is not nearly as unfortunate, I think, as a non-corrupt big government, so to speak. There were the worst things in the world of corruption, one of them is incorruptible government. In communist countries now, for example, the only way they can operate at all is by having a huge amount of corruption, by bribery and so forth. Another thing they did was, as a result of this reformed government, they had a much bigger government pool of taxes to have municipal garbage disposal, municipal construction, new sewers, new bridges, contracts for businessmen, and much more money to play around with.

1:26:00with welfare departments, playgrounds, all these things now come in with so-called non-corrupt reform government. In other words, reform government turns out to be much bigger government than non-reform. I'll just give you one quote before the break. H. L. Mencken, my favorite writer, was a German-American growing up in Baltimore, had a great story in his autobiography of his attitude to reform, he said, was set by him when his father was a small cigar manufacturer He said his father had a cigar factory in Baltimore. He hung out a sign in 1885 outside a factory, saying August Mencken and Brothers. He called in his corrupt city councilman, so-called corrupt city councilman. He said, look, here's 20 bucks. For 20 bucks you keep the government off my neck forever.

1:26:52In other words, the agreement was you pay the city councilman 20 bucks, in return for which he takes care of all easement fees, license requirements, all the rest of this crap. As Mencken said, this is in full settlement forevermore of all present and privilege fees, all permanent and privilege fees, easement taxes and other such costs and imposts. The city councilman pocketed the money in return was supposed to stave off any cops, billing inspectors or other functionaries who had any lawful interest in the matter or try to horn in for private profit. Being an honorable man according to his lights, he, at least the city councilman, kept his bargain and the sign flapped and squeaked in the breeze for ten years. In other words, from 1885 to 1895, Mencken and Co. was free of all government fees because the city councilman pocketed twenty bucks and kept the government off his neck.

1:27:40Then he says in 1895 a reform wave struck Baltimore and the reformers came in, the city The city councilman was kicked out and quote, the idealist in the city hall sent word that a license to maintain the sign would cost $62.75 a year, in other words, he had paid 20 bucks for a 10 year sentence, would now cost $62.75 a year. This was proof to my, the sign came down the next day, this was proof to my father that reform was mainly only a conspiracy of prehensile charlatanists and multi-tax payers. and Mencken says that, and he believed that political corruption was inevitable under democracy and was even argued out of his own experience that it had its uses. So anyway, this is Mencken's view of the reform movement, I think he was right.

1:28:25In the urban reform front, since in the cities wasps are on a minority after all, and liturgicals and working class are majority, the way in which the reformers, which is almost always Upper Class, WASP, the way they can win out from time to time is by using moral arguments, by saying that the big city machines corrupt, they're boss-ridden, it's true they're corrupt and boss-ridden, but the thing's worse than boss-ridden corruption, namely reformers, and alleged efficiency, which really winds up with tremendous, tremendously increased rates on the taxpayer, plus of course pietist elimination or wiping out of entrepreneurial activities like gambling, prostitution, etc.

1:29:14So one of the things which reformers use, one of their moral arguments is the attack on organized, so-called organized crime, and it has been a very interesting article in Journal of American History, I recommend, in December 1970, called Urban Crime and Criminal Justice, a Chicago case, which really deals with how the whole class struggle around organized Organized Crime with the reformers using the, of course, the argument of the ethnic bosses and legal organized crime and using this as an argument to have state corporatists control over the city. And this turns out, for example, in the legal profession, a corporate lawyer is a big class struggle between the corporate lawyers and the criminal lawyers.

1:30:00The corporate lawyers, of course, the elite in the law and legal profession, they make The criminal lawyers tend to be less polished, they're raffish types, often in Brooklyn, and they're less suave, etc., and they're attacked as being affiliated with organized crime. Of course, everybody's entitled to a lawyer, so if somebody is a criminal up for indictment, he's going to turn to some lawyer or other, and criminal lawyers, therefore, often toward are part of the brush of being quasi-criminals themselves, it seems to me unfair since everybody is entitled to some lawyer, but as a matter of fact there is now a drive on by the legal professional limit the fees the criminal lawyers get to put a cap, of course they're not putting any cap on corporate lawyers, it's all part of this class struggle so to speak, business These are just corporate types and more raffish ethnic types.

1:31:00I remember one point about 20 years ago, Jacob Fuchsberg was an distinguished criminal lawyer in New York, ran up to the State Court of Appeal, which was the highest New York State judicial arm, and was bitterly attacked by the entire corporate law profession, and was very upset that he's a criminal lawyer, he has no business in the, I mean, the Court of Appeal people should always be corporate Wall Street lawyers, there's nothing, there's There's no divine commandment, it has to be a corporate lawyer, but there's a big fight against them. One of the ways in which the WASP reformers can use their moral outlaw is the media, of course. The media is usually, of course, WASP-controlled, and so what you have then in the cities, New York, Chicago, etc., whatever, the reformers are pushed by the New York Times, let's say, which is not WASP, but this is a reformer outfit.

1:31:48and so you have then prestige or respectable newspaper behind the reformers. In New York, for example, which is of course largely a democratic party city, was run by a reform fusion ticket for about all during the 1930s. Mayor LaGuardia was elected by a Republican fusion government, fusion party, and coming in on the wave of so-called reform, To get even more ethnic here, it's interesting that the Italian-Americans, for example, have been very difficult to make it politically until very, very recently, of course, with Cuomo. Before that, in New York State, the only Italian-Americans who succeeded politically were Protestant-Atlanteans.

1:32:37That's a very small percentage of the Italian-American population is Protestant, as you can imagine, to be one percent, but somehow the Italian-Americans in politics who made it politically and so very recently were Protestant, LaGuardia and Pecora, people like that who were really, Italian Protestant therefore becoming a very small percentage of the Italian population, not really in with basic Italian-Americans, so of course we're Catholic, so again this is all part Part of the loss versus catholic and high Lutheran struggle. And again an attack, big city machines were basically Irish, after 1900 or so, Protestant loss were kicked out, so you had basically an old Calvinist loss, basically the city The big city machines were Irish, and so an attack on the big city forces essentially was an anti-Irish or anti-Catholic assault in the name of so-called reform.

1:33:50So what you had then is the reformers were able to capture the high moral ground. There's very few people who can take a sophisticated argument in favor of corruption. The argument basically is the Mencken argument. It's better to be corrupt and have an efficient high-tax government. It's very difficult to make that argument, and basically so the reformers can use the media, the press, etc., taking a high moral tone and attacking everybody else as being immoral, which is basically their view. Also along with this comes the upper-class WASP moral theorists, so to speak. upper-class females who start running around 1900 the social work movement, social worker, settlement house movement, Jane Addams, people like that who were a whole bunch of WASP reformers, Jane Addams in Chicago, Seth Lowe in New York, Jacob Rees, Jacob Rees Housing, all these people were upper-class WASP millionaires and Jane Addams was the daughter of an upper-class Coming in to uplift the poor, in those days it was uplift. In other words, you are upper

1:35:02class females, let's say, coming in and uplifting the lower east side. How do you uplift? Of course, you hand out food and so forth. Basically, the uplift is also using compulsion, forcing, kicking out, getting rid of sweatshop employers, which really meant getting rid of employers, getting rid of conditions they didn't like, getting rid of prostitution saloons, you know, Prohibition comes in beautifully, all these people were prohibitionists, and prohibition was part of the idea of uplifting the poor, you uplift the poor by stamping out immoral conditions, immoral conditions meant liquor, saloon, prostitution, pornography, whatever. So all this was part of the moral reform movement, part of the progressive seizure of power on a local level.

1:35:50Another way to do this, this is known as urban imperialism, this is something which which is very little known. I know of only one book that really mentions this in any length, it's written by Kotler, a book called Neighborhood Government. One of the ways in which the cities grew in this period is by seizing power over the other areas. In other words, much of the urban political growth, urban population growth from 1900 to 1910 was not growth by people being born or people migrating, it was growth in the sense of seizing control over by expanding Originally a city geography, in other words, originally in 1900 New York City was Manhattan and Brooklyn was its own city, actually Brooklyn was a combination of a whole bunch of different cities, Black Bush, New York, all these were originally cities, Brooklyn was the fourth largest city in the United States in 1900, it was seized by New York, Manhattan had conquered the Bronx by that time, and seized in this sense compulsory seizure, Brooklyn did not

1:36:47want to be amalgamated with New York, so New York went to the New York State Legislature, New York State Legislature forced Brooklyn into it, in other words the state legislature remember was all powerful and so this happened in Philadelphia, it happened in Pittsburgh where the cities would just simply incorporate areas, other cities around it. Philadelphia crushed Germantown, seized Germantown by using a Pennsylvania legislature. In other words these cities, Brooklyn did not want to be incorporated into New York. Germantown did not want to be incorporated into Philadelphia. It's simply they used the state legislature to force these other cities into it. It's been called urban imperialism over its neighbors, I think it's a pretty good term here. By urban, so what was the accomplishment here, what they did is you bring in more tax revenue, in other words, many of these areas, for example in Pittsburgh, which grabbed a whole bunch of neighboring cities, there was more, these cities, these downtowns, for example, let's Pittsburgh was originally built around the railroad terminals. In other words, before

1:37:52automobiles came in and trucks came in, the city had a railroad terminal and cities were built around it. They had factories and people living there, etc. So the downtowns were heavily indebted with railroad bonds and so forth, subsidized railroads. They're paying heavy taxes on these bonds. If you grab a whole bunch of other cities around it and incorporate into Pittsburgh, then you can tax these guys to pay for the railroad bonds. That's actually what happened. In other words, to use this downtown interest, downtown businessmen are heading up the inner city, seize power in the suburbs, bring them into the city and then tax them. That's basically the point. Assess these billings at a higher rate, so forth and so on. So, and especially New York is the same thing, the Brooklyn and the Bronx, which was really part of Westchester.

1:38:40So this happened a lot between 1900 and 1910, this growth of urban imperialism that annex neighboring towns, neighboring cities, bring them into the tax base. There has been for many years now a so-called metro movement. The idea is to grab Westchester, I would say, and grab parts of Nassau, force them into New York City and tax them. In other words, it's really just a tax gimmick to bring these poor guys into a higher tax and get downtown New York for the subsidies

1:39:16This process happened during the 19th century but in this progressive period it reached its peak So they deliberately, for example in Pittsburgh, they deliberately tax the other wards much more heavily than the downtown wards, much higher assessment per dollar property on the outlying wards that they were trying to take, they were taking over. In Pittsburgh for example in 1912, after the compulsory seizure of Allegheny and other In the other towns, incorporating to Pittsburgh, the old rate, well in one case, Boehm-Houven, which was a new town, incorporating to Pittsburgh, was paying 90 times the property assessment, property tax, than the old Third Ward, the old downtown Third Ward.

1:40:07That's of course very unusual, usually not that big a range, but basically that's what happens. You take the new ward, you tax it more heavily than the old one and thereby subsidize the Brooklyn was annexed in 1898 by the New York City Collaboration and New York State Legislature. So for example, Pittsburgh grew from 1900-1910, grew from a population of 320,000 to 530,000 largely by incorporating other areas, not by real growth, doesn't mean it really grew, you know, in the sense of growth per mile, simply just by taking in, incorporating other regions into Pittsburgh.

1:41:00And as this happened, as the cities got larger and larger, it meant that the city, as the city councils got smaller, remember, because they were being voted on at large, and school boards got smaller at large, it meant that the representatives per person got less and less, in other words the cities got larger the city council got smaller in number and larger in representing more people, you wind up with less and less democratic voting, you have less and less fewer and fewer government officials per person and the city council, for example in the Columbus, Ohio, for example, had In the 1830s, they had one city council member for every hundred people. They had two thousand people and twenty city councilmen. And that's the situation. Everybody knew there, obviously knew there were city councilmen. They could more or less ride herd over them. Jimmy is goofing up, get him to change his vote, pay him a visit. By the current period, Columbus Ohio has 500,000 people, instead of 2,000, and has 9 city councilmen, so you have one

1:42:10city councilman for every 50,000 people instead of for every 20 people, except for every 100. They obviously have much smaller representation per person than you have before

1:42:30Anyway, to get back to the social work movement which becomes a professional uplift movement around 1900 with Jane Addams the daughter of one of the richest men in Illinois Mary Kingsley, same way, a whole bunch of them, Lillian Wall and the Henry Street settlement and again bringing in professional social work, trying to stamp out alleged immorality

1:42:58and making social work from a charitable thing into a profession, people living off of. And most of the New Deal, many of the New Deal officials in the 1930s came out of this original, of the social work movement. Most of the women, most of the women New Dealers for example, originally upper class social workers in this whole house, settlement house movement. Eleanor Roosevelt came out of that, and Francis Perkins, Secretary of Labor, and a whole bunch of others. A part of the public school reform movement was to also run the whole kit. In other words, the idea of school reform, not just to Christianize the Catholics The Open Bureau doesn't have a lot of space, was there a growing subsidy for people or wasn't there a well-fitted space?

1:44:13Well most of it was still, it really comes in in the 1930s, the welfare state. Then it was mostly a lot of first workmen's compensation, there was public works, there was a building of sewers and stuff like that. Not too much, the welfare system, government welfare system really comes in in the 30s. in the 30s, that's not really before, but the 30s were really an extension, the New Deal was really an extension of the progressive period, really just a bigger progressive period rather than the last two, it was a similar system except more of it than it was in the last two. Again with the schools, the cry was take the schools out of politics, you know, don't have people voting from school boards, have it appointed by the mayor, have professional as one historian says, the reformer's battle cry, take the school out of politics, not only meant take the schools out of the hands of Tammany Hall, but also out of the hands of the Roman Catholic Church, in other words, the idea was, you make it into a Protestantizing device and take it out of the hands of the ward boss and the hands of the technocratic educationists

1:45:38And also the idea is you run the whole kit, in other words the educationists had the idea the whole kit should be molded by the professional educators and molded into the system, molded into how to conform and so forth and so on, which is essentially what they did. Also from this came the idea of reducing content of the schools and making it into a sort of a general socializing device. Elwood Cumberley, who was the major historian of education, a big educationist, big progressive educator, summed it all up in 1916, summed up the idea of school reform and he said one of the important results of the change from ward representation to election from the city at large is that the inevitable representatives from these poor wards is eliminated, representation is eliminated, and the board comes to partake of the best characteristics of the city as as a whole, I mean of course the upper class, upper class pietates, what do you call the better elements? Who, he said, are the better elements who are now making up the school

1:46:41board? Quote, men who are successful in their handling of large business undertakings, manufacturers, merchants, bankers, contractors, and professional men of large practice, I mean of course doctors would perhaps come first. There's an open recognition that the whole idea of the school school reforms to take over, seize the control of the schools from the hands of the ethnic people's representatives to the technocrats and big businessmen, and also to take these new immigrants, mostly Catholic, and homogenize them into becoming good Protestants, as far as possible of course. Prohibition was a great example, a marvelous example of the combination and the combination of the moral uplift, pseudo-science, pseudo-value-free science, technocracy and smashing the ethnic politics, liturgical politics, and all these guys combined on the drive for prohibition which only of course gets here in World War I but is revved up during the progressive period.

1:47:44The businessmen, big business, lost big businessmen, attack the idea of liquor as quote a, an enemy of efficiency. In other words, the workers, the workers are allowed to drink, they get drunk and absenteeism goes up. I suppose at night, so therefore you, if we prevent the workers from getting drunk by eliminating alcohol, outlawing alcohol, you notice for example in Disney World, the beautiful example of the best and worst of lost capitalism, Disney World, if you've ever been to Disney in the world. It's a magnificently run, beautifully run outfit. Everything is private, of course. The sewers are private, the streets are private. Everything works beautifully. The bathrooms are spick and span, it's all great. However, you can't get any liquor there. Liquor, if you wander around Disney World forever, you get non-alcoholic punch.

1:48:33Because liquor, of course, because all these people still have this pious view that somehow liquor is... If you have liquor at all, it should only be for the wealthy, the masses and shouldn't and so you can drink liquor by checking in at Disney World Hotel and there you have a cocktail lounge which does have liquor, but the masses, I mean the rest of us are wandering around the streets there, can't get any liquor. It's great except for that, of course it's a real blight. George Pullman had his own private, he was the founder of Pullman Cars, was a progressive If a businessman, he had his own city, Pullman, Illinois, now part of Chicago, for the workers, the idea of the workers would live there, rent houses, his workers would live in Pullman, Illinois, rent his houses.

1:49:19And it was supposed to be a well-planned city, sort of a privately planned city for his workers. Unfortunately, what happened was that he engaged in pious moral domination of these people. In other words, there'd be Gestapo-type checks raised on every home to make sure everybody was walking around with jackets, the men were always supposed to wear jackets at all times, not be in shirt sleeves. To prevent shirt sleeves, they'd be raised on the porch, you know, busted on the home to make sure everybody's got jackets on. Of course, there was no liquor available, no pornography, of course, and no liquor was available in all of Pullman, Illinois. The masses began to get restless, edgy as a result. and sneak across the border to free whatever the name is, Decatur, Illinois, to get liquor and all the other sinful delights of big cities and the famous strike of the Pullman Railroad workers in the 1890s was basically a result of this, living conditions getting more and

1:50:11more edgy and restless and there was moral domination of this because it was creep, we were trying to uplift them and shape them up. So they had then the moral out, they had the efficiency argument that workers shouldn't They shouldn't be allowed to drink because otherwise they have absenteeism. The moral argument that liquor is sinful, and for example, Walter Rauschenbusch, the famous social gospeler, the head of the social gospel movement, said, quote, the liquor industry is 1912. He wrote a book called Christianizing the Social Order, very interesting title, Christianizing the Social Order. He said, quote, the liquor industry is seeking to fasten on an angry people a relic of barbarism in which the awakened conscience and the scientific intellect of the world are combining to condemn the awakened moral conscience against liquor and the scientific intellect.

1:51:03Why should the scientific intellect? Because liquor is unscientific. Liquor, at least absenteeism, at least a liver trouble, you know, there's lots of arguments against liquor. Nowadays, there's a return on prohibition sentiment. You drink liquor, it tends to have rare car accidents, so therefore ban liquor seems to So, as a result, you have this mighty prohibitionist movement on religious grounds and on so-called scientific grounds. Now, the scientists were usually also wasp-pietists. One hat was wasp-pietists and the other hat, they were value-free scientists saying we should outlaw liquor, but the liquor will lead to more accidents and liver trouble and God knows what. And particularly, this, of course, was an assault on German, Lutheran, and Catholic Beer Drinking, and this is a fantastic clash over beer. The Germans love beer and beer was part of alcoholic beverages, a fantastic clash over that.

1:52:04Reverend Josiah Strong, a prominent social gospel person, said in 1909 that high wages are bad because you buy drink with them and acquire the liquor habit before the workers had developed a more refined pace of a higher civilization, in other words, the workers aren't ready for high wages yet because of the drink, maybe you have more refined pace eventually, I don't know what they'd be doing with refined pace, anyway. Strong also attacked what he called personal liberty in 1914, he said, quote, this is a fascinating quote, he said, personal liberty is at last, after many years of progressivism, We are, among our own liberties, at last, an uncrowned, dethroned king with no one to do him reverence. We are no longer frightened by that ancient bogey paternalism in government, which, of course, the liturgicalism had been attacking for decades.

1:52:57We affirm boldly it is the business of government to be just that, paternal. Nothing human can be fraud to a true government." It was a function of government to run everything, regulate everything, probe in everybody's life. The scientific argument, which went along with the so-called scientific argument for liquor, This is a so-called scientific argument for liquor, for prohibitionists, of course, the uplift, the poor are now being destroyed by liquor, which is therefore outlawed, has harmful effects if people drink too much, they, you know, have liver trouble, whatever, and since according to the new so-called scientists, people are determined by their environment, therefore you have to change the environment. How do you change the environment? You eliminate liquor, because part of people's equal environment is the ability to buy liquor.

1:53:43So all these pseudo-scientific arguments are being called into being here, plus progressive sociologists and social scientists like Edward A. Ross, one of my least favorite people, he was a disciple of Commons and Ely, Edward Osworth Ross, professor of sociology in Ritchie, Wisconsin, also a big racist, you have to realize that scientific, allegedly scientific racism now comes in here as part of the progressive movement. All these Wisconsin people have a belief that non-Anglo-Saxons are inferior races, of course including Italians, Poles, Irish, etc., who are Catholics, all types of fit in, you see. Other races are inferior, it should be kept out of and should be, of course, not allowed to immigrate to the United States.

1:54:32It's part of the immigration restriction movement, which is also an attack on liturgicals. Now we get the scientific patina as being determined by biology, by social Darwinism biology. The biology is now brought in as an allegedly scientific reason to eliminate immigration of Catholic and Jews later and so forth countries. Ross is one of the leading figures in this, as well as advocating state control of almost everything. The economic argument that says this is necessary for workers to be sober if you allow them Another thing is that the drive for prohibition came about because the railroads were getting to be liable, liability laws were coming in, the railroads were liable for accidents caused by their engineers or firemen or whatever, so if you have a long switch you have an accident.

1:55:26The railroads became liable. The railroads now wanted to start a pass making rules that so that their engineers or whatever can't drink even off-duty it's like pilots now can't drink I think 12 hours before they fly or something, that sort of thing they start, so the railroads began to enforce temperance on their own employees and then of course they said well look, if we have temperance voluntarily let's get the government to pass compulsory temperance for our competitors so therefore they start agitating for prohibition another group in favor of prohibition, I kid you not was the Coca-Cola, Coca-Cola in those days had a big competitor alcohol, had some cocaine

1:56:13in it, that by the way was the origin of the word coca, coca leaf, had a little bit of cocaine in it, which apparently gave you a certain kick, it's now, it's disappeared long since in the formula, so Coca-Cola was a big competitor to liquor, Coca-Cola was was one of the main agitators for prohibition. You outlaw your competitor, and you have to turn the coke for getting the missing kick. Another big lobbyist for prohibition was Walsh's grape juice, which of course came in a communion when wine was outlawed. By the way, grape juice, most Protestant churches already had Walsh's grape juice as a communion drink. So most of the big competitors of the wine, they were lobbying for prohibition, two prominent business lobbyists for prohibition, eliminate their competition.

1:57:09The Catholics of course and Lutherans were heavily against prohibition, the Catholic businessmen like Dupont were leading the fight against prohibition and were during the 1930s. The unions were sort of split, they didn't know what to do. Socialist unions or WASP unions were a favor of prohibition. Socialist unions, Knights of Labor originally, the Railroad Brotherhoods were a favor of prohibition. The other hand, of course, the brewery workers were also unionized and they were, of course, against prohibition. It means their livelihood would be taken away from them, the spillery and brewery workers. So the AFL was sort of split. They didn't take an official position on it because they had brewery workers. But mostly most of the socialists and labor union people were in favor of prohibition. They attacked the liquor industry, they took the usual leftist line of somehow businessmen were creating demand so if people wanted liquor it wasn't there for them because the evil businessmen were supplying them with alcohol and so therefore the liquor, you have to attack

1:58:09the liquor lobby. Social workers, of course, were all in favor of abolishing the saloon, here's a great quote from a prominent social worker, Paul Benjamin, who wrote in the Survey magazine, which is one of the big progressive publications, in 1915, he said, abolish the saloon quote, and the task of Americanizing the conglomerate foreign population will be lightened by 50% unquote. In other words, Americanizing, meaning making good Protestants out of them, is what it really So, again, it's all part of the same sort of schtick, and as the war begins, as World War I begins to loom, and America begins to join the war effort, anti-German hysteria becomes part of the argument for prohibition, as we'll see later.

1:59:02One of the great quotes was that the biggest German agents in this country, the most important German agents are not spies, but their names are Schlitz, Busch, Budweiser, whatever, Paps, Miller, in other words, the German brewers, or subverting American boys by subverting their moral fiber by spying them with beer. The Anti-Saloon League said, quote, the German brewers in this country have rendered thousands of men inefficient, thus crippling the republic in its war against Prussian militarism. So, in other words, the war, the entry into World War I supplied the final push over the top. The anti-German hysteria, and therefore the anti-Beer hysteria along with it, provided the opportunity to get to, for the Democratic Party to impose prohibition notice. As we'll see, Wilkson, by this time, of course, was a progressive, and oddly enough, prohibition comes to the United States as a democratic maneuver during World War I.

1:59:59becomes, excuse me, as American boys, American soldiers have to be protected from liquor, and so by, first they sort of made all bars off limits and so forth, then they thought well the best way to do it is to eliminate liquor altogether by outlawing it, and making it unconstitutional, so as a result of World War I, liquor becomes an insane thing, a constitutional amendment saying all liquor is outlawed, both the possession and the sale and production of liquor becomes unconstitutional, and it's incredible it could even be a constitutional Amendment, that's the way it was, as a result of World War I. One prohibitionist said, yeah, this is a quote, we have German enemies in this country too. The worst of all German enemies, the most treacherous, the most menacing are Paps, Schlitz, Blatt and Miller.

2:00:45These are the big beer manufacturers. This is, we'll start next time by talking about the way the medical profession was screwed up by progressivism.