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FORUM: RESPONSE


In Defense of Traditional Stories and Labels

JAMES A. HENRETTA


Forums are not for the faint of heart. My critics offer a searching analysis of my approach and arguments. William Novak questions the basic assumptions and methods of my article; indeed, he dismisses it out of hand as a well-known "traditional" story told in an equally traditional "narrative" fashion. Somewhat more graciously, Daniel Rodgers contests the validity of some of its arguments; more fundamentally, he disputes the legitimacy—at least for a "normal" political actor such as Charles Evans Hughes—of an ideological frame of reference. Just tell the (traditional) story, he says; come to grips with the man and forget the labels. For his part, William Forbath largely accepts my conceptualization but disputes my contention that the traditional liberal state died in 1937. Rather, he argues, the post–New Deal American state was deeply informed by Hughes's "lawyerly" brand of "transitional" liberalism, which balanced a "progressive" commitment to reform and administrative state-building with a "classical" regard for dual federalism and the primacy of courts and common law. Finally, Risa Goluboff contests my suggestion, via Hilaire Belloc, that the new constitutional order subordinated individual economic rights to the interests of the national state and the elites that control it. The quest for economic rights remained strong, she suggests, until the onset of the Cold War, which limited the reach of the American welfare state, and the Brown decision, which gave a racial (and, eventual, gender) definition to liberal reform. 1
      Let me address the concerns of my critics while using their suggestions and insights to present a more refined statement of my understanding of Hughes and the trajectory of American liberalism. 2
      William Novak takes me to task for writing the wrong sort of paper. "Orthodox" in its story line and "traditional" in its methods, my study of Hughes is hopelessly dated amid revisionist studies of "political development" that reveal the "complex interrelationships of society, economy, and polity" and "fundamentally revise our understanding of the evolution of American statecraft." Although Novak (and William Forbath) provide a list of exemplary texts that embody the new methodology and research, Novak does not actually show how that scholarship undermines my account. And for good reason. As we shall see, it buttresses the importance of the traditional story. 3
      In his fine study of America's Divided Welfare State, Jacob Hacker points out that, contrary to the accepted wisdom, the United States spends approximately the same percentage of GDP on social welfare programs as the nations of Western Europe.1 What differs is the sources of that spending. In 1995, American governments spent 16.3 percent of GDP on welfare expenditures and private benefit programs contributed an additional 8.3 percent. This one-third contribution from privately funded programs in the U.S. greatly exceeded that in other industrialized nations, in which private benefits averaged one-tenth of the total expenditure. 4
      Our concern here is the relationship between the public and private welfare programs in the U.S.—precisely the type of institutional study championed by Novak—and especially their chronology. That story is simply told. In 1920, private pensions covered only 5 percent of the private civilian labor force. The percentage rose to 7 percent in 1926 but fell to less than 6 percent in 1935. The percentage of workers who actually received pension benefits was even lower. Of all retired private sector workers in the early 1930s, Jennifer Klein reveals in For All These Rights, only about 2 percent were receiving a pension.2 Among public employees, a small fraction of the work force, only about one-fourth had pension coverage. 5
      Thus, as of 1937, and the 5-to-4 vote of the Supreme Court in Helvering v. Davis, only a very few American workers were part of a pension system. "Welfare capitalism" had failed. The Social Security Act changed all that. The Social Security System not only covered 70 percent of private-sector workers by 1950 (90 percent by 1970) but it also spurred the expansion of private pensions. By 1970, 40 percent of the civilian workforce had private pension coverage, about the same level as today. As Christopher Howard explains, other parts of The Hidden Welfare State of the United States were also the result of the expansion of federal taxation and spending that took place during the New Deal.3 Before 1939, the subsidies provided in the income tax code for home ownership (mortgage interest, property tax deductions, and capital gains deferrals) were minuscule, for the simple reason that the income tax reached only 5 percent of the population. However, by 1995, these subsidies amounted to some $86 billion in lost tax revenue. 6
      The moral of this story is twofold. First, most of the early stories of national "political development" that Novak champions are actually tales of failure and frustration. They merely anticipate the really interesting and important institutional story that comes with and after the New Deal. Second, the appearance of this new story—the joint evolution of public and private welfare systems—was the direct result of the Constitutional Revolution of 1937. Before that time, employers—and other defenders of capitalism—spent their energies and resources on persuading legislators and courts to defeat social welfare proposals and, more broadly, to arrest the development of state and national government. The innovations of the New Deal, validated after 1936 by the decisions of the Hughes Court, transformed that dynamic of confrontation into one of competition. The old story—however orthodox in substance and traditional in telling—turns out to be the crucial one. 7
      How should it be told? "Forget about labels," John Kerry replied when asked if he was a "liberal"; instead, he urged people to look at the legislation and values that he advocated. Like Kerry, Daniel Rodgers would have us believe that politics and history are too messy, contradictory, and complex to categorize with accuracy. Rather than locate Hughes within an evolving liberal tradition, he asks us to consider the "kinds of problems Hughes took on," the solutions that "made deep, intuitive sense to him," the legal-political "language" he preferred, and his instinctive tendency to seek out the "middle ground." Using this technique, Rodgers astutely and usefully highlights various aspects of Hughes's personality and values. 8
      So there is much to be said for Rodgers's argument. Experience is messy, and political actors often adopt complex and contradictory positions. Yet voting citizens and political pundits usually ignore Rodgers's advice and slap labels on actors and events. They mark Kerry as a "liberal" and plaster the same label on the recent eminent domain decision by the Supreme Court in Kelo v. City of New London.4 And both labels are accurate, in that they identify modern liberalism with governmental activism and social welfare politics. So, too, with Hughes. As a Progressive governor of New York, he was such a "liberal." He took aim at the nineteenth-century "classical" polity of "courts and parties" by undermining the power of political bosses and enhancing the power of state bureaucrats and administrative tribunals. As associate justice of the Supreme Court (1910–1916), he consistently supported the expansion of state police powers. Indeed, given his position on the eminent domain cases that came before that court, there is little doubt he would have voted with the "liberal" majority in Kelo.5 9
      Rodgers to the contrary, labels do matter. When Chief Justice Taft disparaged Hoover as "a Progressive just as Stone is and just as Brandeis is and just as Holmes is," he had it right as to their origins but not their destinations. Stone and Brandeis went far beyond their Progressive roots to accept the nationalist and bureaucratic state created by the New Deal. Frightened by the prospect of a "state-controlled or state-directed social or economic system," Hoover became a determined foe of the New Deal—in all of its incarnations, however "overextended and underconceptualized" Rodgers believes them to be. 10
      If we follow Forbath's analysis of Hughes as a "consummate elite lawyer/reformer" who resisted far-reaching legal and constitutional change, Taft was on firmer ground when he applauded Hughes's appointment as Chief Justice. Yet Forbath's portrait of Hughes as a traditionalist may be a bit overdrawn. Hughes's Blaisdell opinion, both in its substance and its affirmation of a "living constitution," deeply offended Justice Sutherland then and rankles conservatives still.6 And, if Hughes's opinion in Jones & Laughlin melded "old and new doctrinal discourses," it did so in a way as to permit the virtually untrammeled expansion of the commerce power for the next six decades. The real question is whether the Hughes Court, following the Constitutional Revolution of 1937, would have approved legislation that embodied the "social citizenship" of T. H. Marshall and William Beveridge had it been forthcoming from Congress. There is some evidence to suggest it would have done so; for example, in 1949, the Court supported workers' rights by upholding a decision of the National Labor Relations Board that required employers to bargain with unions over retirement benefits.7 If so, then we should weigh less heavily than does Forbath the restraining impact of Hughes (and Pound) on the post–New Deal legal order. 11
      Indeed, Risa Goluboff detects in various court decisions of the 1940s a "judicial vindication of a new kind of rights ... a new liberalism of workers' rights." However, she agrees with Forbath that the political power of Southern conservatives and the ideological confrontation of the Cold War scuttled such initiatives, as did the post-1940 expansion of "welfare capitalism." "Brown and its progeny resurrected the Carolene Products dichotomy between economic regulation and racial rights," she concludes, and redefined liberalism as "negative" rights against racial (and eventually gender) discrimination rather than a positive legacy of "social citizenship." In either event, Goluboff maintains, conceptions of individual rights remained strong—so that my reference to Belloc's conception of a "servile state" is either misleading or erroneous. 12
      We need to forget the term and focus on Belloc's argument. As he confronted the "social question," he saw three possible outcomes: state socialism, economic democracy, and a capitalist-run, government-regulated economic-security state. As works by various authors—Hacker, Klein, Howard—attest, the last alternative best describes the post-New Deal order. Prizing a traditional conception of "liberty," Belloc and American conservatives cringe at the thought of an elaborate national regulatory state; those on the left, prizing an ideal of "equality," take even greater offense at the immense percentage of the nation's wealth owned by the capitalist classes. The pity is that we have ended up with both extensive regulation and extraordinary inequality—a high price to pay for a tenuous brand of economic security. 13


Notes

1. Jacob S. Hacker, America's Divided Welfare State: The Battle over Public and Private Social Benefits in the United States (New York: Cambridge University Press, 2002).

2. Jennifer Klein, For All These Rights: Business, Labor, and the Shaping of America's Public-Private Welfare State (Princeton: Princeton University Press, 2003).

3. Christopher Howard, The Hidden Welfare State: Tax Expenditures and Social Policy in the United States (Princeton: Princeton University Press, 1997).

4. No. 04–108, Supreme Court of the United States, 005 U.S. LEXIS 5011.

5. See Hughes's opinions for the court in: St. Louis and Kansas City Land Company v. Kansas City, 241 U.S. 419 (1916); O'Neill v. Leamer, 239 U.S. 244 (1915); Union Lime Company v. Chicago and Northwestern Railway Company, 233 U.S. 211 (1914).

6. Home Bldg. & Loan Asso. v. Blaisdell, 290 U.S. 398; Hadley Arkes, The Return of George Sutherland: Restoring a Jurisprudence of Natural Rights (Princeton: Princeton University Press, 1994), 243–50.

7. Howard, Hidden Welfare State, 122.

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