The Money Power in Politics

I

A DOZEN years ago, in a notable speech before the New York Constitutional Convention, Mr. Elihu Root startled his hearers by a dramatic reference to what he called ‘our invisible government.’ ‘ What is the government of this state?’ he asked. ‘The government of the constitution?’ ‘Oh, no,’ ho replied. ‘Not half the time, nor halfway.’ The greater part of it, Mr. Root went on to declare, was government of the invisible variety, a government controlled by forces operating beneath the surface, forces which the great majority of the governed neither see nor understand.

Mr. Root was correct in his portrayal of the driving mechanism in American politics. His characterization can be applied to every branch of government, national, state, or local. All governments, wheresoever they operate, are subject to the pressure of invisible influences. This pressure is unrelenting; it comes from many quarters; it is exerted upon voters, legislatures, executives, and courts alike; and its sources are often so well concealed as to be unrecognizable even by those against whom it is directed.

The study of government and politics has concerned itself too largely with the visible apparatus, with the established structure and the public functions, disregarding the motive power that keeps the whole apparatus going. ‘Governments are like clocks,’ said William Penn; ‘they go from the motion that men give them.’ And men supply the motion because they have ends to serve. Only a small part of what we call ‘ government ’ is conducted in the open, or ever becomes a matter of public record. How, then, can the average citizen, absorbed in the task of paying his ever-recurring installments on an automobile, a radio, a frigidaire, and a vacuum cleaner, expect to gain any adequate idea of what his government is or does? It has become far too complex for him to follow, save by devoting to it more time than he can spare. The average citizen is busy. When he is not busy he is tired. His research in the field of government does not go deeper than the newspaper headlines.

Take, for example, the process by which the laws of the land are made. When I ask, ‘Who makes the laws?’ I am told that Congress and the state legislatures make the laws. They are our institutions for transforming the public will into legislation. But if you will reflect a moment you will realize that our legislatures do not by any means control the whole process of lawmaking. Instead of saying that legislators make the laws, it would be far more nearly correct to say that legislatures merely put the finishing touches on the laws. To say that they ‘make the laws’ is like saying that books are made by bookbinders, forgetting that there are authors, printers, and proofreaders too.

The motive power in lawmaking is all supplied from somewhere outside the legislative halls. The making of a law begins with the birth of an idea — somewhere, in somebody’s mind. There is no law on the statute books that did not have its beginning in that way. Of itself a government initiates nothing. It merely responds, more or less tardily, to the urgings that are put upon it. The Congress of the United States did not originate the idea of an income tax, or woman suffrage, or national prohibition, or any of the other statutory innovations which now add so mightily to the charm of American life. Some fertile intellect outside the realm of active politics first conceives an idea. It spreads to the minds of other individuals, slowly at first, but gradually gaining momentum. Presently there is an organized movement in its favor; then comes the deluge of propaganda, until the proposal becomes an issue and the politicians begin to take note of it. A law is half made, or more than half made, when a large body of aggressive support has been mobilized among the voters; yet during this part of the process the legislative bodies have nothing whatever to do with it.

Most of the momentum in government is provided, therefore, by the action of various organized groups among the people, groups which have definite interests to serve and which are aggressive in promoting them. These interest-groups, as we may call them, work for the most part within the ranks of the party organizations. Indeed, the chief function of the party organization is to furnish a cover or screen for the political activities of groups which desire to keep their true objectives invisible. When any racial, sectional, or economic element desires to make government serve its own special interest, there is never any open avowal of this design. That would be fatal to the end in view. The special interest must be, in some way, put forth as identical with the general interest, and must usurp a slogan that suggests democracy, justice, Americanism. Hence when we demand that the laws shall guarantee the worker more than he is worth, we call it social justice. And when the ex-service man proceeds to raid the public treasury he calls it adjusted compensation.

II

From first to last in the history of government the money power, the interest of vested wealth, has been the best organized and, on the whole, the most enlightened determinant of public policy. Racial and sectional groups rise to importance and after a season arc placated. Divisions among the people are occasionally moulded by issues of a definitely political sort, such as state rights or foreign policy. But nothing can be plainer to the student of political history than the tolerable regularity with which, in all ages and countries with amazingly few exceptions, the power of the well-to-do has strongly influenced the course of public affairs. It must inevitably be so, and I am not sure that its being so is a matter for either regret or criticism. Indeed, it is this unremitting guidance by a stabilized, intelligent self-interest that has injected order into the process of political evolution. One might even go so far as to say that without the consistent direction of government by organized wealth throughout the ages we could not have either the form or the spirit of those political institutions which exist in the United States to-day. The Great Charter of 1215 was wrung from a reluctant king by barons and landowners, not by peasants and proletarians. It was the knights of the shire who built up the powder of the House of Commons, Hampden, Pym, and Oliver Cromwell were men of substance, gentlemen of England, not members of any laboring or exploited class. Civil liberty owed far more in the early stages of its development to the landed man than to the landless, and in its later stages it is much more deeply indebted to the leadership of wealth than to the riotous emotionalism of that phantom fellow, the common man.

Some years ago our sociologists announced as a new and startling discovery the doctrine of economic determinism. They burst upon us with the tidings that economic self-interest is, and always has been, the chief determining force in affairs of statecraft. It was in truth no new discovery. Aristotle, twenty centuries ago, pointed out thal Greek politics were ruled by economic factors, and almost every writer on political theory since Aristotle’s day has adverted to the same obvious phenomenon. The founders of the American republic were by no means oblivious of it. John Adams proclaimed his conviction that the economic status of various elements among the people was the chief factor in determining their attitude on political issues. James Madison averred that property, or the lack of it, formed the inevitable basis of political cleavage. Assuredly there is nothing new in the assertion that the ruling classes in government have been mindful of their own advantage. On the other hand, there is no warrant for the assumption, so commonly made, that the interests of the well-to-do are necessarily inimical to the well-being of the whole people, or that there is an essential antagonism between wealth and the common good. In the main, as history proves, the two have been identical, or measurably identical; they have not usually been in conflict.

The student of political history, when he has traced power to its source, is too prone to say, with Dante, ‘Here we found Wealth, the Great Enemy.’ When wealth comes into politics, he believes, virtue must go out. Its influence is pernicious as a self-evident proposition; it is easier for a camel to pass through the needle’s eye than for a rich man to be a patriot. Even so distinguished a student of politics as Lord Bryce has said that ‘democracy has no more persistent or insidious foe than the money power.’ Yet the history of government does not seem to support that proposition. Nor do interpretations of history, although some of the ‘new historians’ have worked hard to have it so.

It is made a reproach by them, nowadays, that the Constitution of the United States was framed and ratified, one hundred and forty years ago, by men who were large landowners, capitalists, and holders of government bonds — by men who had a direct pecuniary interest in the establishment of a strong centralized authority. A whole volume has been written by a distinguished American scholar to prove — what anyone might have suspected — that the framers of the national Constitution were for the most part men of means, not frontiersmen or factory workers. Washington, who presided at the Convention of 1787, was the richest Virginian of his day, and probably the wealthiest man in the thirteen states. A dozen others were entitled to a high financial rating. At least three fourths of the delegates in the Philadelphia Convention could properly be called opulent according to the standards of the time. There was not a single small farmer or manual laborer among the fifty-five men who helped to make the Constitution. On the other hand, there were many who had bought, during the war, government bonds which had become heavily depreciated, and who stood to profit from the establishment of a strong government, able to pay its debts.

These facts of history being easily established, the imputation of sinister self-interest is not difficult, if you want to make it. The Founding Fathers had wealth; their controlling motive must have been to protect and to increase it. Holders of bonds, they were naturally governed by the desire to make two coupons sprout where one grew before. Their work must be construed in the light of their motives. Yet the same basis for an imputation of self-seeking is equally warranted in the case of the men who signed the Declaration of Independence, eleven years previously. They also were men of wealth, most of them. John Hancock was probably the richest man in Massachusetts. Thomas Jefferson was a large owner of property. Benjamin Franklin and Robert Morris were both of them rich. So were Elbridge Gerry, Robert Treat Paine, and others. No one has yet made an intensive study of the economic status of the Signers, but I will venture the prediction that such a study would show relatively as much wealth represented in this galaxy as in the group which framed the Constitution. It can readily be demonstrated, in fact, that certain important economic interests stood to gain financially, and did gain, through the achievement of independence. Shall we therefore conclude that the Declaration was also motivated by class consciousness or by an ungenerous desire on the part of wealth to promote its own advantage?

Granted that the Constitution was largely the work of the money power and that its ratification was effected by the aggressive support of the same groups. Did the money power thereby render posterity a bad turn? Is there any reason to believe that a constitution framed by Patrick Henry, Samuel Adams, Daniel Shays, and the other rabble-rousers of their day would have served the nation better during the past fourteen decades? France has had more than one republican constitution given to her by the foes of wealth and property. Let history attest the extent to which they have profited her people.

Not only the Declaration and the Constitution, but most of the landmarks of national legislation during the past century and a half, are the work of men whose affiliations were with big business. Their work began in Washington’s first administration under the ægis of Alexander Hamilton, with the funding of the national debt, the inauguration of a tariff policy, and the chartering of the first bank of the United States. Since Hamilton’s time the general direction of American national policy by the money power has been fairly consistent, with the exception of a few hectic interludes of which the reign of Andrew Jackson is the best remembered. The outstanding issues of this whole period have been chiefly economic, — the tariff, the banking system, the preservation of the gold standard, regulation of the railroads, labor questions, the curbing of big business, taxation and surtaxes, — all of them calculated to promote the solidarity of the propertied class. Time and circumstance have meanwhile changed the custodians of the money power. Of old it was the landowner who typified big business and the vested interests. To-day it is the corporation, the banker, the railroad operator, the manufacturer, the shipowner, the merchant. The money power has varied its outward semblance, impelled thereto by the industrial transformation of the past hundred years. It will keep changing, no doubt, but there are no signs that its influence will diminish so long as cupidity remains a trait of humankind. Wealth will have power so long as wealth remains.

III

Philip of Macedonia was in the habit of boasting, twenty-two hundred years ago, that he could capture any city on earth by driving into it an ass laden with gold. To-day there are men who can capture city halls and state capitols with the same facility and in the same way — except that it is a ‘ bagman’ who now carries the coin. These bagmen have become an essential part of our invisible government. ' Legislative counsel’ is the name by which they are known in polite society.

It is an interesting and significant fact that the whole course of American political development during the past fifty years has served to accentuate and facilitate the accumulation of political power in the hands of these emissaries of the rich. Franchises, patronage, and other gifts from the public authorities are worth a good deal more to the recipients than they used to be. The newer agencies of democracy, such as the direct primary, the initiative, referendum, and recall, the extension of the suffrage to women, and the removal of party designations from the ballot in local elections — all of them have served to increase, not to diminish, the cost of operating our electoral machinery. They have caused the diversion to politics of vastly larger sums than were formerly used. And it ought to be reasonably clear that, in so far as we make our politics more expensive to all who engage in it, we proportionately strengthen the power of those who have the money at their command.

Most of these electoral ‘reforms’ have been founded upon a false hope. They have been based upon the expectation that the whole people would act wisely, and in their own interest, if they could only be safeguarded against political guidance, leadership, and influence. Lest leadership develop into bossism, we deprive the people of it. We suggest that they inform themselves, make up their own minds on rival candidates and on complicated issues — which is just what the demos has never done and will never do. People will seek and obtain guidance and leadership from some source, and it is the absence of a leader that produces the boss. The function of informing the voter must be performed by somebody, and it has become a very expensive function. It involves building up an organization and spending large sums of money.

Take the direct primary as an illustration. It is a device intended to make the corruptible put on incorruption. In various ways it has demonstrated its superiority over the older method of nominating candidates by conventions of delegates. There is no doubt that it has at times encouraged independent voters to take a more active interest in the nominating process. It has brought out a larger vote than was customarily cast for delegates to nominating conventions and has helped to raise the tone of politics, especially in local elections. But on the other hand there can be no question as to the expensiveness of the direct primary to all concerned. A stiff primary contest always develops into a publicity combat aà outrance. Victory demands that the candidate shall ‘sell himself’ to the people. He must do this by using all the agencies of self-marketing that are open to him; hence the campaign becomes a spirited competition in selfsalesmanship and radio perorations.

Those who are unfamiliar with the workings of our invisible government were shocked and surprised, not long ago, when senatorial investigations disclosed what seemed to be unduly large expenditures on behalf of various candidates at some of the state primaries, more particularly in Pennsylvania and Illinois. The figures ran into the hundreds of thousands. There was a fine display of indignation in purist quarters that so large a “slush fund’ should be spent in ‘debauching the electorate.’ Yet these revelations afford no occasion for surprise. Democracy is the most expensive form of government known to man; its cost increases as the square of the degree of direct popular participation in it. The adoption of universal suffrage doubled the size of the voters’ list and made it far more than twice as costly to cover the ground. Primary campaigns are conducted under the law of increasing cost per capita. The more voters to be reached and informed, the higher is the cost per voter. We say that every candidate for a nomination should appeal to the people on his own merits, but how few of us ever stop to figure what such an appeal involves. It means literally tons of campaign literature, the hiring of halls, paying for space in newspapers, placarding the billboards, the transportation of speakers to rallies all over the state, clerk hire at headquarters, ‘messengers’ by the hundred, the chartering of radio broadcasting stations, organizing political clubs, getting endorsements, and all the rest of it.

In a word, we make politics a highly organized business and then seem surprised that business involves the spending of money. Broadcasting appeals by radio is a mere incident of the campaign; yet this diversion costs every candidate from fifteen to twenty dollars per minute. When the citizen receives a campaign circular in the mails it does not always occur to him that the cost of sending this missive, including the preparation of the material, the printing, the addressing, and the postage, is about ten cents per voter — in other words that it costs a hundred thousand dollars to reach a million voters with a single appeal sent through the mails. There are more than two million registered voters in Pennsylvania, and more than three million in Illinois.

I am not trying to justify the amount of money expended by individual candidates in these two commonwealths, much less the manner of spending or the sources from which the campaign funds were derived. I am merely pointing out that our philosophy of a direct appeal to the electorate, as we have embodied it in the state-wide primary, is bound to be regularly associated with big spending — and the money must be furnished by those who have it. The idea that a man of high personal merit, but without an organization, without funds, without powerful interests behind him, can burst into the arena of politics and win a party nomination — that idea is the outstanding hallucination upon which the direct primary rests. It is political poppycock of the first order. The human herd does not seek the thoroughbred and follow him. It trails the bellwether with the loudest clang.

IV

Six years ago the Kenyon Committee of the United States Senate reported that the expenditure of vast sums at primaries and elections was a ‘growing menace to the nation.’ The menace is relatively no greater to-day than it was fifty years ago. It is estimated that the Republican national organization spent only $100,000 to elect Abraham Lincoln in 1860; it reported an expenditure of $3,000,000 to elect Calvin Coolidge in 1924. Thirty times as much! But wait a moment. The population of the country has nearly quadrupled since Lincoln’s first election, and woman suffrage has virtually doubled the proportion of qualified voters in it. This alone would warrant an eightfold increase in campaign expenditures. And the cost of everything connected with political campaigning has also mounted during these sixty-odd years. The cost of advertising, printing, renting halls, clerk hire, transporting speakers, and all the rest has certainly doubled in this interval — in some cases it has more than doubled. Campaign methods have also improved in quality, with the inevitably greater cost that this involves. The crude broadsides and dodgers have given place to lithographed circulars and handsomely printed campaign handbooks. All in all, therefore, an expenditure of three millions in 1924 is relatively not much larger than the increase of population, voters, prices, and the improved quality of campaigning would seem to warrant. It is certainly not so great an increase over the modest figure of 1860 as to warrant its being called a menace to the nation.

V

But it is not merely at primaries and elections that the money power is said to show its pernicious hand. There are the lobbyists who frequent the legislative halls, endeavoring to coerce or cajole the lawmakers as the tactics of the moment may dictate. And it is a nation-wide impression that these lobbyists represent only the vested interests— that is, the railroads, the big business corporations, the beneficiaries of a high tariff, Wall Street, and the public utility companies. The plain citizen is egged on by the hinky-dinks and the yellow press to boo at the packers and the profiteers, the trusts and the stock exchanges, the money octopus in general. It has become a national recreation. In earlier days, when men wanted to work off their surplus animosity they were encouraged to burn heretics, whip witches, or bait the Jews. Nowadays many of them seem to find just as much enjoyment in assailing the open shop and the company union, baiting the supersurtax victims, and taking pot shots at the World Court. We are expected to believe that righteousness is always on the side of the dirt farmer or the hornyhanded fellow in the factories, and that it is he who always gets the short end of the lawmaker’s solicitude in Congress and elsewhere.

Yet the fact is that the most formidable lobby which has functioned in Washington during the past half-dozen years is the one which represents the American Farm Bureau Federation. It is the most formidable because it has the widest ramifications and the least compunction in putting the screws on senators and congressmen from the agricultural states. The lobby of the Anti-Saloon League runs it a close second. And that of the American Federation of Labor, in the extent and effectiveness of its coercive power, deserves third place. None of these three organizations, be it observed, is controlled by big business; two of them are avowedly hostile. The money power, in its tussles with clodhoppers from the hookworm belt and labor lobbyists from the industrial cities, has chalked up more defeats than victories. It would have fared worse during the past decade but for the superior adroitness of its political strategy.

Mark you, I am not trying to whitewash the plutocrat in politics. It would be a thankless task, for nobody loves him. It would be an impossible task, for there are too many sins on his conduct-sheet. The money power is no myth in American political life; it is an active, relentless, and for the most part an invisible factor there. But a good deal of the popular antipathy to it rests upon a myth — on the illusion that the money power is all-dominating in politics, and that its activities are invariably detrimental to the best interests of the people as a whole. It is with this contention that I take issue.

It was the money power that rallied to the Revolution from motives of sheer patriotism and carried the cause of independence through the darkest days. It was the money power that secured the ratification of the Constitution by the several states; committed the country to the policy of protection, and thus laid the basis of our present industrial supremacy; established the American banking system; gridironed the continent with railroads; secured the resumption of specie payments after the Civil War; and preserved the gold standard in 1896. Vested wealth in politics has often sinned against both the truth and the light, but it is by no means the scarlet woman that our self-constituted tribunes of the common man would have us believe. In the great crises of political history its own interests have often coincided with those of the people.