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February 1971

Big Business and the Rise of American Statism: Preface

This 1971 essay was serialized in Reason. In this opening part of the essay, Childs discusses history, philosophy, and revisionism.

This essay constitutes a part of “revisionism” in history, largely domestic history. The term revisionism originally came into use referring to historiography after World War I. A group of young historians, eager to uncover the realities behind the blanket of myths surrounding the origins of this crucial conflict, discovered as a result of their investigations that Germany and Austria were not, contrary to popular mythology, solely responsible for the outbreak of that crisis. Thus, reevaluating the history of the immediate past, these historians came to see the Treaty of Versailles, forced upon the losers of that war, as monstrously unjust, and maintained that the rigid enforcement of its terms would lead to further world conflict. They came to advocate a radical overhauling and revision of the Versailles Treaty – whence the term “revisionism.”

Since then, revisionism has been applied to virtually any renegade school of thought in historiography that took issue with the “official government line” on important events in history. As it is used today, revisionism is a general concept subsuming a wide variety of schools, or integrating conceptions of man’s past. For at the time when any set of events occurs, in any context, there is almost always a specific set of interpretations of events, a given historical paradigm, which spreads throughout a given culture to the relative exclusion of other interpretations.

Those schools of historiography that are responsible for refuting the popular myths, for revising the historical record in accordance with new evidence, are thus called revisionist in nature. In this preface, it is my intention to sketch briefly what I consider to be the nature and status of history as a field of investigation. I want especially to focus on the crucially important, yet neglected, relationship of philosophy to history. In the nineteenth century, practically every great philosopher made extensive use of history, particularly in fields such as social philosophy; and, every great historian was usually well acquainted with philosophy. Yet today historians and philosophers often seem to be completely cut off from one another. This is unfortunate, for history is vitally important to the philosopher, at the very least in illustrating his theories, in filling in the outlines of an abstract theory with concrete units and events. Similarly, philosophy is critically important to history in at least two interrelated ways: philosophy necessarily serves as a critic, and a guide, on two important levels – methodology, and evaluation. No one who deals with questions of responsibility, causality, or even the problem of “knowing” concrete events to which the human mind no longer has direct access through immediate awareness (as opposed to inference), can escape the importance of philosophy.

But the problem is more complicated than that. Today, certain philosophers tend to dismiss specific social theories, such as libertarianism and laissez-faire, almost out-of-hand, usually because of alleged historical figures regarding centralization of economic power, depressions, unemployment, imperialism, war and so forth. And certain historians (usually those operating from an implicit philosophic base such as Marxism), in an attempt to pump “relevance” into history, insist on drawing explicitly nonhistorical conclusions from purely historical data. Thus, such key revisionist authors as Gabriel Kolko and William Appleman Williams often mention in the course of their historical studies that such-and-such was “a necessary consequence of American capitalism.” Aside from the enormous problems involved in the question of “necessity” as such in all fields, surely we face here more than a strictly historic judgment! At the barest minimum, such a statement would put the responsibility of proof on the shoulders of the proponent, who must marshal not only historical data, but economic theory and social philosophy as well – not to mention epistemology, which alone can provide him with a systematic methodology. Notice this intricate statement in Joyce and Gabriel Kolko’s masterly The Limits of Power: “A society’s goals, in the last analysis, reflect its objective needs – economic, strategic, and political – in the light of the requirements of its very specific structure of power.” This is certainly not a strictly historical judgment. These questions immediately arise: What does it mean to talk of a “society’s” goals? What are a “society’s׆ objective needs, and how does one determine them? What are the “requirements” of a specific structure of power, and what is meant here by the term “specific structure of power”? The point is not to fall back on agnosticism and skepticism, but to raise the question of whether or not such questions can be answered – or even raised – from within the context of history alone. If they cannot be, then we obviously fall into such fields as economics and philosophy. But philosophy first: it is only philosophy that, properly speaking, will give us the means of answering the very question of whether or not such-and-such a problem can be answered by historical inquiry alone.

Although I have stressed the dependence of history on philosophy, I do not mean to imply that history is merely tangential to philosophy. The philosopher, in my view, should, if nothing else, regard history as a testing ground, an experimental laboratory in which he conceptually can apply his theories (particularly social and political theories, and ethics) in an attempt to see if they make sense. A philosopher who preaches total state control of individual human actions and decisions, for instance, might profitably look at history for instances of what has happened as his ideal has been approached, approached as a limit case. If he finds destruction, chaos and the like, then the burden of explaining this within the confines of his assertions of the supposedly beneficial nature of state control comes into play. Similarly, if an advocate of laissez-faire holds that depressions are impossible or unlikely in a free market economy, then he must be prepared to explain the nature and genesis of historical depressions by another theory than the prevalent ones, and to call into play historical data which other schools either neglect or misinterpret. Finally, the philosopher can profitably regard historical evaluations and interpretations as practice for actually applying his theories in interpreting contemporary events.

Since space does not permit me to detail every major issue in the philosophy of history, I shall restrict myself to presenting some of the more interesting points which a developed philosophy of history should focus on. And within these limits, I shall summarize my own approaches to some key problem areas.

What is history? History is a selective recreation of the events of the past, according to a historian’s premises regarding what is important and his judgment concerning the nature of causality in human action. This selectivity is a most important aspect of history, and it is this alone which prevents history from becoming a random chronicling of events. And since this selectivity is necessary to history, the only remaining question is whether or not such judgments will be made explicitly or implicitly, with full knowledge of what one considers to be important and why, or without such awareness. Selection presupposes a means, method, or principle of selection. The historian’s view of the nature of causality in human action also is determined by a principle of selection. He can have a conscious theory, such as economic determinism, or attempt to function without one. But without one, the result of historical investigation is likely to appear disintegrated and patched together. In this case, the historian depends necessarily on philosophy, on economics and on psychology. If he is not aware of his selections and presuppositions, then the result is a bad historian, or at best a confused one. Charles A. Beard was more self-conscious than most about the problems of historical method, yet he still could write, at the apex of his career, an essay entitled “Written History as an Act of Faith.” Of philosophical evasion and bankruptcy are bad historians born, as are professionals in so many other fields. A professional in any field has the unshakable responsibility to be aware of and name his primaries, those presuppositions which function as axiomatic in his field. If he intends to be taken seriously, then he should be prepared to defend them. Evasion on any level produces disastrous consequences for man; on the highest political and intellectual levels, evasion can result in such things as physical destruction, or in entire generations of scholars being misled in their scholarly pursuits.

A popular philosophical doctrine holds that the methodology of history is entirely different from the methodology of other sciences. Yet fundamentally the methodology of all sciences is the same – logic. The nature of the evidence relevant to one field may differ from that relevant to another, and this indeed accounts for the apparent differences of method. Yet truths in any field are in fact verified by a process of applying man’s reason to objective evidence. By “reason” I mean simply the faculty of integrated awareness which is responsible for all of man’s knowledge above the perceptual level; by “objective evidence” I mean reality as presented to the intellect – “objective” meaning that which is determined by the nature of the entities existing in reality, and “evidence” referring to that context or “segment” of reality which a consciousness has become aware of.

The nature of the objective evidence which is largely considered in history is simply human testimony, direct or indirect. History as a field deals with past human thought and actions. Since we have no direct awareness of the contents of anyone’s consciousness but our own, we must rely on inference from what a person says, and what he does. Considered from a different perspective, history deals with the ends that men have held in the past, and the means that they have adopted to attain these ends. Since no two individuals are specifically alike in every particular characteristic, it is impossible to recreate the past in the form of a laboratory experiment and to observe the effects of single causal factors on human action. Thus, all that one can do is to collect evidence concerning the context of individual men, their ideas and their actions, using a theory or model of the nature of causality in human action that interprets or selectively reconstructs events of the past, omitting what one judges to be unimportant, and offering an explanation for what one does consider to be important, in light of the evidence available. Utopian “completeness” is neither possible nor necessary in knowledge – in history or anywhere else. All knowledge is contextual, but this does not in any way hinder knowledge from being valid.

Turning from this sketch of historical method, I shall indicate, briefly, the value of history. Traditionalists often seek to use history as a guide to action, spurning abstract guides to conduct provided by the science of ethics, and adopting conventions and traditions instead. Yet it should be noted at the outset that to use history in any reasonable way to find rules of conduct presupposes a rational ethic. One must use a rational ethic to differentiate “good” traditions from bad, and in fact to supersede history altogether in projecting what is possible to man. If something has happened in history, then one rationally can conclude that it is possible for man; if something has not happened in history, the reverse is not true – one cannot conclude that it is not possible for man. History can illustrate principles, but cannot verify or refute them. It is important to point out the submission of history to a rational ethic in this regard.

People distraught with the present often seek stability and refuge in the past, idealizing it beyond recognition. Such an attitude, however, will only lead to a life built on illusions, to despair that tomorrow things will only be worse, and a general feeling of impotence and inefficacy, with the result that those who accept such a view will not act to attain a better future.

But to act to change things for the better presupposes not only that one understands a rational ethic and its principles, but that one has some idea of “where one is,” historically speaking. One has to answer the question: what is the present context of man? To answer this takes a knowledge of what ends men have sought up to now, in a broad cultural and political sense, and what means they have adopted to attain them. One then applies the principles of a rational philosophy to his actions; understanding his context, he acts to change things in a certain direction.

If either history or philosophy, specifically, ethics, is left out of this, an ideology is necessarily incomplete. On the one hand there is the error of those who, like William Appleman Williams, “are committed to the proposition that History is the most consequential way of learning who we are and what we should do.” On the other hand, there is the fallacy of those who develop a social philosophy and attempt to apply it without any knowledge of what is going on in the world.

In response to Williams, it can be said that history cannot tell us “what we should do.” At best, it can pinpoint problems which people historically have faced, and solutions which they have attempted to apply.

In response to the others, it should be stated that the application of the most consistent philosophy to real events requires a journalistic knowledge of the state of the world. This differentiates ideology from philosophy. Whereas philosophy abstracts from time, and hence from history, the fundamental truths about man and his relationship to reality, ideology is a consistent world view. It integrates philosophy with one’s context, applies the principles of philosophy to the concrete realities of the world. Philosophy is concerned with the nature and validity of human knowledge, with validating and detailing the precepts of a rational ethic with truth. Ideology is concerned with applying philosophy to any given historical context – with making truth relevant, which comes from an integrated focus on man as he is in any historical context.

The transition from philosophy to ideology is largely accomplished by history. To use an analogy, philosophy discovers a rational ethic, but every given individual must apply its precepts to his own life by identifying the context he faces and making concrete choices by means of logic. The “major premise” in this version of the Aristotelian “practical syllogism” is the ethical premise itself. The “minor premise” is the concrete in anyone’s life which the principles subsume. The “conclusion” is the action to be taken.

Similarly in the transition from philosophy to ideology, the major premise is the ethical-philosophic principle; the minor premises are the concrete details, or “existential premises” summarizing some aspect of the context of man in some historical period. The conclusion is the ideological stand to be taken.

It is important to emphasize the overwhelming necessity of having a valid existential premise in either the individual or the general case. In ideology, invalid historical or existential premises can make the stand taken totally inconsistent with the basic thrust of the philosophy which generated it initially. The result of errors may be that the ideological stand ends up on the wrong side of the fence.

Now a word on some of my own positions on basic issues. Believing that the universe consists of a number of distinct entities which are related to each other by both real and mental relations (having an objective foundation in fact), I hold that things necessarily act in accordance with their individual natures, producing results in accordance with such natures. Concepts and theories are therefore formed by integrating particulars according to common characteristics into new mental entities.

In history, I hold that events consist of the actions of individuals motivated toward certain ends and using certain means to attain them. But since individuals often have the same values and conceptions of appropriate means to attain their ends, they often work together. In fact, the whole function of institutions is to enable individual human actions to be systematically and consciously integrated in producing common ends. It is this fact which gives rise to all classifications and hence all “class analysis.” “Classes” in social theory, or political theory, or historical investigation, must of necessity be groups of individuals having common characteristics. It is my view that man has free will, and that the concept and existence of free will is a necessary postulate if an obvious fact of man’s nature is to be explained: his capacity for conceptual and propositional speech, and his ability to identify facts of reality. Determinism, in the strict sense, is contradictory. For if a man’s mental processes – specifically, his attempts at reasoning – are not free, if they are determined by environment and heredity, then there is no means of claiming that theory x is true is true and y is false – since man can have no way of knowing that his mental processes might not be conditioned to force him to believe that x is logical, when in fact it is not.

This means that “classes” in history are not primarily economic, in the usual sense of the term, but rather, are ethical. Man is not born with values, or preferences except on a sensory level (pleasure or pain), and he does not merely absorb values from a culture like a sponge absorbs water. Rather, men must choose their values, by intention or default. And the realm of chosen values is the realm of ethics. This belief in ethical classes is the root of my disagreement with Marxism.

A related fallacy of Marxism, especially in relation to its effect in guiding historical investigation, is its simplistic conception of what constitutes a class “interest.”

“Interests” are not primary, nor automatic. Apart from that category of things which actually benefit men (whether or not men are aware of them) “interests” can only be arrived at through a process of consciousness; evaluation. This means that, given an objective standard of the organism’s life and well-being, a given man’s values and conception of his own or his “class’s” interests can be right or wrong. More importantly, classes are derived from and validated by reference to concrete individuals, actions and values, not vice versa. Classifications are derived from things, not vice versa.

This is important to focus on for a moment. For Marx, despite all his anti-Idealistic and anti-Hegelian rhetoric, is really an Idealist and Hegelian on the issue of classification. Whatever attempts he makes to get around this point, Marx is still asserting, at root, that a classification (a social class) precedes and determines the characteristic of those who are members or units of the classification. Marx is, in fact, very unclear on the nature of the exact process of causation which occurs in the interaction between those people who own the “means of production,” their ideas (“interests”) and actions, and those people relating to them. Since any such theory of causality in human action is vitally important in historical investigation, it is to be expected that Marxism corrupts historical investigation.

Interestingly enough, this is very relevant to the subject of this essay: the role of big business in promoting American statism. For if nothing else, this essay shows that the “class lines” in American history are different from what they were thought to be. Some of the men in larger businesses supported and even initiated acts of government regulation while others, particularly relatively smaller and more competent competitors, opposed such regulation. Thus we have a clear-cut case in American history that contradicts Marxian theory: the lines of battle and conflict were not drawn merely over the issue and criterion of individuals’ relation to the means of production, but on much more complicated grounds. A better classification might be along the lines set down by Franz Oppenheimer: the state-benefited and the state-oppressed – those who gained their wealth by means of confiscation, robbery and restriction of other people’s noncoercive activities, and those who gained their wealth by means of free trade in a free market, by the method of voluntary exchange. But even here the lines are not clear-cut, and we find cases of those who were honest producers sanctioning theft and parasitism, as well as cases of those who were parasites and benefiters from statism opposing controls – twin cases of hypocrisy and altruism.

Needless to add, many contemporary Marxists have responded to the challenge with ever new wings being added on to classical Marxist theory to “explain,” in an ad hoc fashion, the events which do not fit into classic Marxist paradigms. Historically, whenever defenders of some classic paradigm, in any field, begin to confront problems which conflict with the basic theory, they begin increasingly to modify the particulars of the theory to conform to fact without ever questioning the basic paradigm itself. But sooner or later any such imitation of the path taken by the followers of Ptolemy must end in the same way: the paradigm will collapse and be replaced by a new paradigm which explains all the known facts in a much simpler manner, thus conforming to a fundamental rule of scientific methodology: Occam’s razor.

The new paradigm, I think, will be the paradigm of libertarianism.

The purpose of this particular essay is simply to apply some of the principles of libertarianism to an interpretation of events in a very special and important period of human history. I have attempted to give a straightforward summary of New Left revisionist findings in one area of domestic history: the antitrust movement and Progressive Era. But I have done so not as a New Leftist, not as a historian proper, but as a libertarian, that is, a social philosopher of a specific school.

In doing this summary, I have two interrelated purposes: first, to show Objectivists and libertarians that certain of their beliefs in history are wrong and need to be revised under the impact of new evidence, and simultaneously to illustrate to them a specific means of approaching historical problems, to identify one cause of the growth of American statism and to indicate a new way of looking at history. Secondly, my purpose is to show New Left radicals that far from undermining the position of laissez-faire capitalism (as opposed to what they call state capitalism, a system of government controls which is not yet socialism in the classic sense), their historical discoveries actually support the case for a totally free market. Then, too, I wish to illustrate how a libertarian would respond to the problems raised by New Left historians. Finally, I wish implicitly to apply Occam’s razor by showing that there is a simpler explanation of events than that so often colored with Marxist theory. Without exception, Marxist postulates are not necessary to explain the facts of reality.


Reprinted, with permission, from the February 1971 (pp. 12-18) and March 1971 (pp. 9-12) issues of Reason magazine. Copyright 2004 by Reason Foundation, 3415 S. Sepulveda Blvd., Suite 400, Los Angeles, CA 90034: www.reason.com.

Originally delivered as a speech before the first convention of the Society for Individual Liberty, University of Pennsylvania, 15-16 November 1969.

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