Gail Radford

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Gail Radford | From Municipal Socialism to Public Authorities: Institutional Factors in the Shaping of American Public Enterprise | The Journal of American History, 90.3 | The History Cooperative

From Municipal Socialism to Public Authorities: Institutional Factors in the Shaping of American Public Enterprise

In 1914 Daniel Hoan, the socialist city attorney of Milwaukee, pronounced regulation of public utilities a "complete fizzle." Hoan's conclusion was based on years spent battling the imperious Milwaukee Electric Railway and Light Company with the limited legal tools at the city's disposal. He argued that even in Wisconsin, where regulatory agencies were at their most efficient and honest, it was impossible for public utility commissions to force good service at moderate cost from investor-owned companies. Commissioners would only push so far, realistically fearing they might drive private capital out of the state. Thus, in Hoan's opinion, the only sensible course was "to secure the democratic control of collectively owned property." Despite this conviction and his astonishingly successful political career—spanning thirty years as an openly socialist public official, including twenty-four as Milwaukee's mayor—he retired from politics in 1940 having socialized only a stone quarry and the city's streetlights. As with many other local socialist officeholders in the United States, Hoan left a robust legacy of honest, efficient, and humane administration. But when it came to expanding public ownership, his record was meager.¹	1
How can we explain Hoan's lack of success in effecting a program so dear to his heart? Most historical writings on American socialism conclude that Americans were too wedded to capitalist values to support any real overhaul of the U.S. political economy. In that view, the socialist electoral breakthrough, which saw over one thousand victories in town and city races between 1910 and 1912, represented simply a protest against the corruption and ineffectuality of the major parties. Municipal socialists never had the electoral base to function as anything more than the left wing of Progressivism. Rationalizing public administration by mandating competitive bidding or instituting modern cost-accounting systems was fine, but the head-on assault on capitalist property relations that public ownership represented crossed the line of political acceptability. With socialist officeholders able to do little more than fine-tune the system, the major parties found it easy to co-opt their issues and defeat them. That is why it was only in exceptional places, such as Milwaukee or Bridgeport, Connecticut, that socialists held power after the late teens. ²	2
There are two major problems with this analysis. The first is that it deflects attention from what did happen. The United States in the twentieth century did not turn socialist, nor did it develop many publicly owned enterprises of the kind socialists sought. But it did develop a large and important sphere of publicly initiated economic activity. That sphere is not very well known, even by scholars, and it is not generally experienced as "public" or "governmental." It consists of government-created agencies, launched to fulfill public purposes, that produce and often sell goods and services. In the United States today, especially at the state and local level, we find vast numbers of publicly created enterprises, ranging in size and complexity from small-town parking lots to multibillion-dollar transportation and utility empires. Often these bodies are incorporated independently of general-purpose governments, receive most of their revenue as payments for the goods and services they produce, and acquire capital by selling bonds backed by their stream of revenue. Such agencies have mushroomed since the 1930s, and they now constitute a quasi-governmental sector that in some dimensions dwarfs general-purpose government. The story that needs to be told is not so much why we did not get municipal socialism as how we did get a particular kind of public enterprise, how the sector works, and what it has meant for American politics.³	. . .

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