Regulation of, by, and for Big Business
By Arnold Kling
Michael Strong points out this forty-year-old essay by Roy Childs.
What Kolko and his fellow revisionist James Weinstein (The Corporate Ideal in the Liberal State, 1900-1918) maintain is that business and financial leaders did not merely react to these situations with concrete proposals for regulations, but with the ever more sophisticated development of a comprehensive ideology which embraced both foreign and domestic policy. Weinstein in particular links up the process of businessmen turning to the state for favors in response to problems which they faced and the modern “corporate liberal” system. he maintains that the ideology now dominant in the U.S. had been worked out for the most part by the end of the First World War, not during the New Deal, as is commonly held, and that the “ideal of a liberal corporate social order” was developed consciously and purposefully by those who then, as now, enjoyed supremacy
…we have seen that (a) the trend was not towards centralization at the close of the nineteenth century – rather, the liquidation of previous malinvestment fostered by state action and bank-led inflation worked against the bigger businesses in favor of the smaller, less overextended businesses; (b) there was, in the case of the railroads anyway, no sharp dichotomy or antagonism between big businessmen and the progressive Movement’s thrust for regulation; and (c) the purpose of the regulations, as seen by key business leaders, was not to fight the growth of “monopoly” and centralization, but to foster it.
…Regulation in general, far from coming against the wishes of the regulated interests, was openly welcomed by them in nearly every case. As Upton Siclair said of the meat industry, which he is given credit for having tamed, “the federal inspection of meat was historically established at the packers’ request. … It is maintained and paid for by the people of the United States for the benefit of the packers.”
…In any case, congressional hearings during the administration of Theodore Roosevelt revealed that “the big Chicago packers wanted more meat inspection both to bring the small packers under control and to aid them in their position in the export trade.” Formally representing the large Chicago packers, Thomas E. Wilson publicly announced: “We are now and have always been in favor of the extension of the inspection.”
This is actually consistent with Doug Brinkley’s history of the New Deal. Until the 1930’s, the thinking on the left was that production needed regulation, in order to make it more rational and less cutthroat. One can argue that an ideology of trying to use regulation on behalf of the consumer‘s interest did not really solidify until the 1940’s.
Note the latter paragraphs in the excerpt above. If the muckrakers were the baptists calling for government meat regulation, the large meatpackers were the bootleggers.