The American Economy and the End of Laissez-Faire: 1870 to World War II

Progressive movement came in in 1900 to eliminate political parties. Technocrats and bureaucrats take over political power. Rural versus urban. Eliminate mayors, eliminate voting altogether, have appointed bureaucrats only. Nationalize public school system so costs could be socialized, like getting the public schools to teach Spanish. Children can all be part of a collective, without parental influence. Control shifted from ethnic working class small communities to upper class WASPS.Only synthetic drugs remained legal in medicine. Rockefeller Institute backed it. Homeopathy was outlawed. Hospitals overused fancy equipment and cared about just the doctors not the patients. The Progressive party was created by JP Morgan interests.Lecture 9 of 13 presented in Fall of 1986 at the New York Polytechnic University.

Bernard Baruch ran WWI as an absolute collectivist controller. The Federal Reserve was created in 1913 by Morgan men to cartelize the banking system and limit competition. Production and prices were regulated via the corporate state. Morgan men wrote the FTC- Federal Trade Commission Act. Progressive means statist and corporatist. The New Republic, a proto fascist magazine- appeared.Banks create fake warehouse on-demand receipts. One was a note, but the more sophisticated way was by having open-book accounts by which you have a demand deposit, not a bank note. The check is a transfer order and the temptation for counterfeiting fake warehouse receipts was great. This is fractional reserve banking. Rothbard thinks it is fraud. It increases the money supply in an inflationary manner by creating money out of thin air. All banks are technically insolvent. The Central bank system is a partnership between government and private banks. It is a coercive monopoly cartel.Lecture 10 of 13 presented in Fall of 1986 at the New York Polytechnic University.

Where did Benjamin Strong - head of the Fed - come from? Rothbard continues to reveal the individuals who shaped our world and wars. Morgan's empire brought us the irrational and useless WWI. Foreign policy today rests upon this Morgan outlook. The Versailles Treaty was a harsh thoughtless division of lands and economies. Many powerful politicians get their start under Wilson. Roosevelt and Hoover were both progressive Wilsonians. 1913 gave us the Fed and the income tax.Lecture 11 of 13 presented in Fall of 1986 at the New York Polytechnic University.

Public housing, planned cities, government power plants, and coerced unionism were all part of the great cooperation between corporations and government through WWI and WWII. Milton Friedman proposed the withholding tax in WWII. Statistics came into being. Cartels were created to manage many industries, e.g. railroads and food. Unions were pro-war forces. Fascism was considered great. Civil liberties were dropped. Coolidge continued as a Morgan man.Lecture 12 of 13 presented in Fall of 1986 at the New York Polytechnic University.

With WWII, Morgans get their war in Europe; Rockefellers get their war in Asia. Both sides are happy. Rockefellers take over foreign relations and create the Trilateral Commission, while electing Carter President in 1977. Coolidge had an entire Morgan cabinet. More Morgan men under Roosevelt. Central banks were set up in each country. Deliberate inflation prevented the loss of gold from certain countries. Hoover was the first New Dealer. Roosevelt in 1932 simply expanded it. The National Recovery Association was a creation of the Hyde Park group. The Roosevelts were closely connected to the wealthy Astors. Rockefeller men began replacing Morgan men. The Harrimans were connected to these power elites,running banking interests. Kuhn, Loeb & Co., Goldman Sachs and Lehman Brothers took over investment banking. Major differences are now between the Eastern establishment (cultured, old money - Kennedy) and the Southern Rim (cowboy- Reagan).Lecture 13 of 13 presented in Fall of 1986 at the New York Polytechnic University.

State dominated cartels used intellectuals as apologists for the government. Big unionism was to transmit orders to the working class. Public utilities were government monopolies for fifty year terms, run without any checks by the public. It is the function of government to run everything. Regulation was rampant, e.g. prohibition. Social workers wanted to abolish the saloons. German brewers were suspect of weakening soldiers. Constitutional amendment outlawed liquor.Lecture 8 of 13 presented in Fall of 1986 at the New York Polytechnic University.

Economics is a constant fight between the market and the government. The railroad cartel did not work against the free market even with ideal conditions. Airlines were tightly regulated until the small airlines began to compete in quality. Deregulation followed. Cleveland deviated from laissez-faire because of Morgan interests.After the Civil War, manufacturing thrived - our own Industrial Revolution was underway. Prices fell. Savings rose. Capitalists owned the machinery so the workers no longer had to. The factory system enormously increased productivity.Corporations are legitimate as libertarian entities. Industry made petroleum a natural resource.Lecture 3 of 13 presented in Fall of 1986 at the New York Polytechnic University.

Petroleum entered the industrial scene in 1859 with John D. Rockefeller's hard work. As the first manufacturing corporation, Standard Oil created a monopoly in kerosene refining by buying others out. A huge drop in the price of fuel followed, benefiting consumers, due to production efficiencies. Rothbard, then, discusses pietists, prohibitionists and the big political shift of 1896.Pietists, prohibitionists, anti-immigrationists, and women suffragettes had made a big Republican drive before 1890. But then a big, sudden shift in politics occurred, with Democrats capturing the big Midwest states, due to demographics of Germans, higher birth rates, anti-prohibitionists, and hard money standards. After this, the Republican party got more moderate and the Democratic party got captured by extreme pietists in 1896. The South became a fully Democratic region. The Panic of 1893 resulted in the loss of Democratic seats due to the depression. By 1896 Bryanites were taking over the party. German Lutherans, and Catholics became majority-party Republicans, leaving the Irish to become minority-party Democratic civil servants. This situation lasts until 1932. The parties become non-ideological. Statists prevailed.Lecture 4 of 13 presented in Fall of 1986 at the New York Polytechnic University.

When pietists shift to the Republican party, they form the progressive movement of 1900-1920. Rockefeller- McKinley forms alliances with power brokers like Kuhn, Loeb & Co., and Harriman (versus the Morgans).Teddy Roosevelt (Oyster Bay wing of the family) was financially in with the Morgans. The Panama Canal caper included a fake revolution in Panama in order to give more U.S. money to the French canal company, whose shares were owned by a Morgan group.In industry, iron and steel found double protection through tariffs and greenback inflation. Morgan tried to establish cartels, but failed. The iron and steel companies then turned to government to do it for them- a progressive move.Lecture 5 of 13 presented in Fall of 1986 at the New York Polytechnic University.

The Sherman Act outlawed restraint of trade. The Clayton Act added to that. Anti-Trust hysteria came in the 1940-50s. Whatever you did would be considered monopolistic. The charges didn't come from consumers, they came from whining competitors. It was government-enforced blackmail. The US leather industry was put out of business. The corn starch industry was put out of business. Retail cartels, enforced by the government, imposed artificially higher prices on products. It was the welfare state in action. Claims of economic privilege were whipped up by racial and ethnic claims.Teddy Roosevelt is my least favorite person. He liked killing.Lecture 6 of 13 presented in Fall of 1986 at the New York Polytechnic University.

Assassinations in American are only by lone nuts. No one who benefits is ever suspected, like Lyndon Johnson. The progressive period saw a re-alliance of church and state - secularized extreme Pietism (Protestant sects) with government as savior by intervening in markets. Meat packing regulations and the Sugar Trust under Teddy Roosevelt, passed in June 1906. The myth was that the meat was diseased and people were dying of it. That was false. The big meat packers were asking for regulations because they wanted to sue their small competitors. The Pure Food and Drug Act was a prototype for the whole progressive movement toward purity of body, mind and soul. Adulteration only meant any change in the name of the sugar chemistry.Lecture 7 of 13 presented in Fall of 1986 at the New York Polytechnic University.

How does government intervene in the economy? What are the consequences? What are the motivations behind passing these interventions? The lives of the people involved explain why they do these things. Rothbard delves into the religious views of the leaders in American history to understand motivations. Schools, drink, and Sabbath laws were the focus of Yankees in Northern states for ninety years.Lecture 1 of 13 presented in Fall of 1986 at the New York Polytechnic University.The full series:The Civil War and Its LegacyThe Railroading of the American People The Decline of Laissez-FaireThe Rise and Fall of MonopoliesPietism and the Power BrokersTariffs, Inflation, Anti-Trust and CartelsTheodore Roosevelt: Master ReformerRegulation and Public UtilitiesThe Progressive Era?Cartelization of Banking: The FedWoodrow Wilson and World War IThe Great CooperationPolitics and the Power Elite

The railroads experienced both enormous growth and enormous government intervention. Land was closed off from settlement, causing farmers to oppose the privileged railroads. Markets were skewed. Waste and inefficiencies were high. Graft and corruption were rampant. Only the Great Northern by James Hill was built with private monies. It became the of the few transcontinental railroads not to go bankrupt.Lecture 2 of 13 presented in Fall of 1986 at the New York Polytechnic University.The full series:The Civil War and Its LegacyThe Railroading of the American People The Decline of Laissez-FaireThe Rise and Fall of MonopoliesPietism and the Power BrokersTariffs, Inflation, Anti-Trust and CartelsTheodore Roosevelt: Master ReformerRegulation and Public UtilitiesThe Progressive Era?Cartelization of Banking: The FedWoodrow Wilson and World War IThe Great CooperationPolitics and the Power Elite