Winter 2015 – Philanthropy’s Dangerous Rival

The clamor for limitless government threatens every private initiative

The vitality of the American philanthropic community is one of the wonders of the world, but today it is in danger. A robust philanthropic sector requires a large protected social space from which government is largely fenced out. But the government today knows no limits, will respect no boundaries, and increasingly will tolerate no rivals.

This turn of events has deep roots in American history, well represented by the competing ideas of two graduates of my alma mater, Princeton. It’s James Madison, class of 1771, against Woodrow Wilson, class of 1879. Right now, Wilson is winning.
James Madison represented the natural rights doctrine that inherently limits government. In this view, the most important word in our most important document, the Declaration of Independence, is the word “secure”: “We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights.…That to secure these rights, governments are instituted among men…”

Governments don’t give us rights, they merely secure them. The government is inherently limited by its job of protecting the most important things, which pre-exist government and do not come from it. This preserves an enormous private space in which civil society and philanthropic institutions can prosper.

Before Madison, political philosophers had agreed that if democracy were to be possible anywhere, it had to be in a small, homogenous society—something like Rousseau’s Geneva or Pericles’s Athens. The assumption was that factions and pluralism were a problem for democracy. Madison turned this on its head. The worst outcome of democratic politics, he held, would be a tyranny of the majority. “A saving multiplicity of factions would give us the pluralist society in which civil society can flourish,” he wrote in Federalist No. 10.

In Federalist No. 51, he argued not for a small republic but an extensive one in which opposite and rival interests operate in a kind of balance. That is the essence of our Madisonian system: a separation of powers, growing out of an historically based distrust of government’s imperial impulses, its metabolic urge to swallow all of society. Allowing independent powers to exist parallel to, and often in competition with, government is what preserves our freedom.

Government by condescension

Woodrow Wilson had a different view. Wilson was a progressive, and our first academic President. Not coincidentally, he was the first U.S. President to criticize the American founding, which he did not peripherally but root and branch—dismissing the Declaration as “Fourth of July sentiments.” Wilson said that government’s job was to see that “individual rights can be fitly adjusted and harmonized with public duties.”

Rights that can be adjusted by the government are rights that will be apportioned by the government. In the 1912 Presidential campaign, Wilson acknowledged that “the history of liberty is the history of the limitation of government power,” but then argued that the American system of limited government, of delegated and enumerated powers, was all very well when there were 4 million Americans living on the fringe of a continent, but not satisfactory anymore. A country united by copper wires and steel rails needs a more unified, energetic, and unlimited government.

Wilson also noted that crises are periods of unusual opportunity for gaining a controlling and guiding influence on society. Therefore, leaders should maintain a crisis atmosphere at all times. Leaders are not there—in the boring language of Article 2 of the Constitution—to see that the laws are faithfully executed. That’s too cramped.

In contrast, the founders designed a Newtonian Constitution held in equipoise by countervailing forces. But Wilson envisioned its replacement by a Darwinian Constitution; an evolving, living, and always permissive document. The government would be filled with benign, disinterested experts. Forget separation of powers. According to progressive doctrine, if all power is concentrated in Washington, and all Washington power in the executive branch, and all executive branch power in the President—who, at his discretion, can disperse power to expert disinterested czars—there will be nothing left over that the private sector has to do. Science will be brought to bear on society, and progress will bloom.

Wilson got these ideas from Herbert Croly, whose 1909 treatise, The Promise of American Life, is still in print. Croly wrote, “The average American individual is morally and intellectually inadequate to a serious and consistent conception of his responsibilities.” “Unregenerate” Americans, he went on, would be “saved many costly perversions” if “the official schoolmasters are wise, and the pupils are neither truant nor insubordinate.” National life, that is, should be a school. Government is the principal, stern but caring. “The exigencies of such schooling frequently demand severe coercive measures,” said Croly. “But what schooling does not?” Croly was more candid than his modern acolytes.

Alexis de Tocqueville predicted all of this, famously describing what he called a soft despotism:

“Above this race of men stands an immense and tutelary power, which takes upon itself alone to secure their gratifications, and to watch over their fate. That power is absolute, minute, regular, provident, and mild. It would be like the authority of a parent if, like that authority, its object was to prepare men for manhood; but it seeks, on the contrary, to keep them in perpetual childhood: it is well content that the people should rejoice, provided they think of nothing but rejoicing. For their happiness such a government willingly labors, but it chooses to be the sole agent and the only arbiter of that happiness; it provides for their security, foresees and supplies their necessities, facilitates their pleasures, manages their principal concerns, directs their industry, regulates the descent of property, and subdivides their inheritances: what remains, but to spare them all the care of thinking and all the trouble of living? Thus it every day renders the exercise of the free agency of man less useful and less frequent; it circumscribes the will within a narrower range, and gradually robs a man of all the uses of himself.

This image of citizens as timid and compliant creatures over which the government is the shepherd, which terrified Tocqueville, is not far from the ideal of Croly and Wilson and their contemporary heirs. They want our history to unfold under the direction of a clerisy uniquely privileged with expertise, and because of that expertise, uniquely qualified to govern. Because of their unique qualification to government, they should not have to suffer rival sources of social authority and power in the private sector. Progressives acknowledge no limits in principle on the expansion of state power. This necessarily gives rise to government by condescension.

When Uncle Sam knows best

In April 1934, a crime occurred at 138 Griffith St. in Jersey City, New Jersey. I recently visited the area, which 80 years later is still a neighborhood of immigrants. Today, they’re from Latin America and Asia. Then, they were from Eastern Europe. Today, 138 Griffith St. is a barbershop. Then, it was a men’s tailoring and pressing shop run by Joseph Meged, a 49-year-old Polish immigrant and father. He committed his crime in broad daylight. He brazenly put a sign in his shop window advertising that he would press a man’s suit for 35 cents.

This was the second year of the New Deal, progressivism incarnate. The progressives knew that in a depression prices fall; therefore, a recovery could be had if prices were forced to rise. To force prices to rise, outlawing competition was necessary. 

Competition and price-cutting became anti-social. Progressives established the National Recovery Administration, which wrote codes of noncompetition. Businesses were encouraged to put Blue Eagle posters on their shop windows and fly the Blue Eagle flag over their factories. (The Philadelphia Eagles football team was founded at this time and named in honor of the NRA, not the sharp-taloned independent creature that soars above our plains and mountains.)

The National Recovery Administration said the proper price for pressing a man’s suit was 40 cents. Joseph Meged said it was 35 cents. So Meged was arrested, fined $100 (the median family income that year was $1,500), and sentenced to 30 days in jail. He wasn’t the only one. Prosecutions occurred all over this country under a government that demanded a monopoly on power right down to the price of pressing a man’s suit.

The judge sentencing this poor Polish immigrant thought this was a teachable moment in the national schoolhouse. So he cancelled the fine and the sentence and hauled the defendant back into the courtroom so he could correct Meged like a parent. According to the New York Times, the judge “gave him a little lecture on the importance of cooperation as opposed to individualism.” Meged left the courtroom, went back to his shop, and replaced his sign which had so offended with the government poster of the Blue Eagle. The New York Times reported the next morning that Meged was a free man once more. Which is true, so long as one defines freedom as embracing the government’s propaganda symbol under the threat of fine and imprisonment.

Older but no wiser

Economist James Buchanan won a Nobel Prize in 1986 for what is called public-choice theory. It postulates that government always protects its own powers and privileges, and that the factions within government act in self-interested ways. Public-choice teaches, for instance, that government has a permanent incentive for large deficit spending so that it can deliver current benefits while shoving the cost onto future generations, which cannot exact punishment with their votes.

Today we borrow from the future to finance expanding consumption of government goods and services. In the process we ensnare ourselves in an ever-thickening web of dependency. The two largest financial transactions the average American family makes—to get a mortgage and to get a loan for college tuition—are now transactions with the federal government. In the last six years, the number of Americans on food stamps has more than doubled. For every two private-sector jobs we created in the last 15 years, one American went on disability. We have now reached the tipping point at which literally a majority of Americans are either employees of the federal government or its clients.

The Troubled Asset Relief Program was supposed to be for buying toxic assets. Instead, it bought entire industries and increased the dependency of the private sector on the federal government. Banks, under new regulations, are increasingly public utilities susceptible to and dependent upon a government that would dictate credit allocation. Campaign-finance reformers make it the government’s job to decide for the American people the right quantity, content, and timing of political speech. What does the federal bureaucracy think about vouchers that let families make independent choices? It opposes them.

Private property—formerly thought of as a zone of sovereignty—is now at the mercy of environmental controls and eminent domain seizures, which, after the Kelo decision, can take buildings and plots from one private owner and give them to another simply because the second private owner may pay more taxes to the political class. You can keep your health-care plan, except if it does not pass government muster, and in any case you now know you’re dependent on the government. Even before the Affordable Care Act was passed, the majority of every health-care dollar went through the government. The welfare state has made today’s most active voting bloc, retiring baby boomers, heavily dependent on government, and resigned to their dependency. And so it goes.

Where does energizing change come from?

Ted Kennedy once said that all change in America begins at the ballot box—a very clear statement of the progressive view that government is the energizer and organizer of creativity. This was echoed by Vice President Biden, who said that “every single great idea” of the past few centuries “has required government vision and government incentive.”

This view is refuted by every page of American history. Over three centuries it has mostly been restless businessmen, close-knit families and communities, and inventive social entrepreneurs who have created the enterprises, colleges, character-shaping organizations, and talented individuals that have propelled the United States into an unprecedented spot in human history.

Very few of our revolutions began at the ballot box. Most began with the spark of individual genius, struck in virtuous homes, fed with tinder from cooperating fellow private creators, and fanned into open flame by the signals and rewards transmitted by free markets in ideas and goods.

With the government grabbing more and more of our society’s controlling levers, it remains to be seen if our social and economic triumphs of the past continue in the future. The reason the temperature has become so uncomfortably hot in American politics today is because the stakes are now so high. Progressives have developed so much momentum behind their demand that the government should direct the evolution of society that failing to develop at least a defensive ability to pull strings in Washington can damage even the most fertile economic or social entrepreneur.

The great economist Joseph Schumpeter long ago predicted the conquest of the private sector by the public sector. Break all the little platoons in society with regulations, laws, and taxes, and there will be no intermediary institutions to buffer and moderate state guidance of individuals.

Tocqueville would certainly recognize the soft despotism in today’s nanny state. He would, however, also see that the American people have within them reserves of independence that are not yet eradicated. The fermenting pluralism that he marveled at is still alive in two important sectors: our powerfully fecund entrepreneurs, with all the commercial power they can bring to bear on a problem, and our radically decentralized philanthropic sector, which sustains a civil society that still manages many of our most vital social functions.

So far, entrepreneurs and philanthropists (they are often one and the same, in both their small and large variants) have maintained much of their vitality. But it would be a huge and a lethal mistake for these two independent forces not to understand that they are in the cross hairs of a movement that aims to delegitimize all non-state actors. Whether they are conscious of it or not, American philanthropists are on the front lines of an epic battle, and one that cannot be lost.

George F. Will is a syndicated columnist, commentator, and author. This is adapted by the editors from his talk at The Philanthropy Roundtable’s 2014 annual meeting.