http://bostonreview.net/class-inequality-politics/chris-hong-robert-manduca-nic-johnson-common-interest

In an influential 1943 essay, Polish economist Michał Kalecki staged a contest between capitalism’s pursuit of profit and its pursuit of power. While the benefits of government-sponsored full employment would benefit capitalists economically, Kalecki argued, it would also fundamentally threaten their social position—and the latter mattered more. If wide sections of the country came to believe that the government could replace the private sector as a source of investment and even hiring, capitalists would have to relinquish their role as the ultimate guardians of national economic health, and along with it their immense power over workers. Kalecki thus saw how the desire to maintain political dominance could override purely economic considerations. This analysis finds a striking illustration in historian Ariel Ron’s award-winning new book Grassroots Leviathan, which advances a major reinterpretation of the contours of U.S. political economy and the origins of the U.S. developmental state—the government institutions that have played an active role in shaping economic and technological growth. In Ron’s revisionist account, the groundwork for the rapid economic development in the second half of the nineteenth century was less industrial and elite than agricultural and popular. “Despite the abiding myth that the Civil War pitted an industrial North against an agrarian South,” he writes, “the truth is that agriculture continued to dominate the economic, social, and cultural lives of the majority of Americans well into the late nineteenth century.” This central fact—at odds with familiar portraits of a dwindling rural population in the face of sweeping urban industrialization—carried with it shifting attitudes toward the state and the economy, dramatically altering the course of U.S. politics. Far from intrinsically opposed to government, a consequential strain of agrarianism welcomed state intervention and helped developed new ideas about the common good. The initial groundwork for rapid U.S. economic development was less industrial and elite than agricultural and popular. To make this case, the book chronicles the vibrancy of U.S. agricultural society in the first half of the nineteenth century, culminating in legislative fights in 1862 over federal agricultural policy in the midst of the Civil War. At first glance, these debates may seem puzzling. How did land policy come to be a central concern for Congress during a war on slavery, and why, in the years leading up to the war, were boons to the agricultural sector opposed by the “rural” South and embraced by the “industrial” North? The puzzle is resolved, Ron suggests, if we view the Southern plantocracy as a Kaleckian ruling class. Forsaking narrowly economic rewards in an effort to retain sociopolitical dominance, slaveholders strenuously resisted new forms of state power even as they were advanced under the banner of popular agricultural interests. In this Kaleckian emphasis on the social dimension of power, Grassroots Leviathan runs against the grain of influential trends in Civil War historiography, including a narrowly “economic interpretation” that emphasizes the material divergence between Northern capitalists and Southern slaveholders. Looking beyond the familiar cast of Northern characters in these accounts—urban merchants, bankers, and industrialists—Ron argues that a central antebellum challenge to planter hegemony came instead from a mass coalition of farmers, whose embrace of federal power threatened not just the material but the social foundation of slavery. It was precisely this rural majority, amounting to a two-thirds voting majority throughout the first half of the nineteenth century, that took the most consequential political initiative in the tumultuous decades of sectional crisis leading up to the founding of the Republican Party in 1854. At the grassroots level, millions of mostly Northern farmers organized themselves into a heterogeneous but powerful “agricultural reform movement” that looked to the burgeoning U.S. state for wider fiscal and regulatory powers in the countryside—a nightmare scenario for slaveholders. In this context, agricultural rather than industrial policy was the main arena for sectional strife. At stake were two fundamentally different visions of what an agricultural society should be. In contrast to Southern planters, Northern farmers looked to increase productivity and efficiency and embraced a role for the public sector, since federal investment—whether in transport, communications, geological surveying, or land development—would socialize the overhead costs of private producers and boost aggregate profits. Meanwhile, state support for universal education, public health, and consumer protection would make for better, more productive farmers. This vision of capitalism was perfectly compatible with an interventionist state, which became, in a sense, a fourth factor of production alongside land, labor, and capital. In this way, the Northern vision helped give rise to what Ron calls the “Grassroots Leviathan,” a nod to the seventeenth-century English political philosopher Thomas Hobbes’s use of the term: a powerful, administrative government collectively “authorized” by the people, erected in order to accomplish what the people cannot accomplish by itself, but over which the people retain ultimate sovereignty. It was in the course of elaborating the Northern vision that the young republic entered its first and most violent Kaleckian moment, as Southern planters and their representatives in office waged an uncompromising battle to preserve their traditional political dominance against the encroachment of an innovating, developmental state from the North. In recovering these stakes of antebellum agricultural society, Grassroots Leviathan upends conventional wisdom about urban-rural divides in U.S. society and revives a remarkable political economic formation in which popular, democratic developmentalism successfully won out over reactionary, vested interests. That achievement is worth revisiting now as a new economic agenda of government investment—what some have called “Bidenomics”—seeks to unseat the prevailing neoliberal consensus of the last four decades. If anything, Ron’s study reminds us, neoliberalism has been the historical aberration in the course of U.S. economic development, which instead has been marked by a strong and activist state with legitimacy won through grassroots popular support. At the same time, the agricultural reform movement’s successes were matched by notable failures, particularly around race and ongoing exploitation of land and labor, in the aftermath of the Civil War. The result is a contradictory legacy that any popular movement for reform should both learn from and reckon with today. section separator The reform movement Ron tracks largely unfolded in the “Greater Northeast,” stretching from New England to St. Louis, where some two-thirds to three-quarters of the population remained rural as late as 1860. Despite nascent urbanization and industry, agriculture overwhelmingly remained the center around which the economic, social, and cultural lives of the majority of the population in this region revolved. It was in this antebellum period, Ron shows, that Northern farmers built a mass movement for reform in the countryside on the foundations of “scientific agriculture.” Far from intrinsically opposed to government, a consequential strain of agrarianism welcomed state intervention and helped developed new ideas about the common good. Drawing from the intellectual resources of the Enlightenment, this discourse stressed the productivity gains to be reaped from scientific farming strategies (crop rotations, intensive soil-maintenance regimes) as well as new technologies, both mechanical (farm implements) and biological (manuring). Far from the mythological image of the Jeffersonian yeoman farmer carving out an isolated subsistence living from the wilderness, “the new farming,” Ron explains, “would be intensive, sustainable, and profitable, its practitioners market and technology savvy.” By the early 1800s, scientific agriculture had taken root in the rural North, whose greater population density and literacy relative to other regions in the early republic facilitated the popular civic associations of the movement’s early phase. An energetic network of sociability organized around agricultural societies and fairs physically connected rural peoples in unprecedented ways, and a booming “agricultural press” further democratized access to expert knowledge and education. This explosive combination transformed agricultural affairs “from a quasi-aristocratic voice of the rural patriciate—claimed especially by southern planters—into a quasi-democratic voice of the mostly northern rural middle class.” Beyond technical and economic innovations, then, this agricultural reform movement was also “a kind of novel political technology,” Ron stresses. While social movements often make claims on behalf of society in opposition to the state, Northern farmers sought to achieve their goals through a graduated process of state-building. Yet they did so through a distinctive strategy Ron dubs “nonpartisan anti-politics.” As the movement gathered strength, its ambitions increased in scale, and so too did the capital costs of its projects. Agricultural societies—local or state groups of farmers—thus sought to transcend budget constraints by lobbying for government investment, first at the local and eventually the state and federal level. “Societies, journals, and fairs allowed farmers to imagine themselves as both the nation itself and as a distinct class within it in order to lobby government like never before,” Ron explains. “Agricultural reformers insisted that farmers had a uniquely legitimate claim on the collective resources of the republic but shunned the partisan arena that contemporaries equated with politics itself.” The result was “an increasingly ambitious program of government-sponsored agricultural education and research,” and these “efforts led state and federal officials to adopt entirely new ways of governing rural America.” Ron furnishes two case studies of these efforts: the Morrill Land-Grant Act of 1862, which laid the basis for the establishment of agricultural colleges using grants from the federal public domain, and the creation of the U.S. Department of Agriculture (USDA) the same year, both major achievements of democratic state-building. The Morrill Act came at the tail end of many previous unsuccessful (because underfunded) private and state attempts to institutionalize agricultural education in the form of farmers’ colleges. For reformers, expertise, knowledge, and training in the latest science and technology increased agricultural labor productivity in the aggregate. Rural capitalism required an effective land-grant university system, which, in turn, required an expansion of the federal government’s legislative and financial capacity. Education was a public good; its benefits were social and, therefore, its costs socializable. Likewise, the creation of the USDA, a federal agency with expansive powers over the structures of rural life, reflected the reform movement’s promotional and regulatory concerns around agricultural expertise and consumer protection, which could not simply be left to the free market. Here the challenge lay, as Ron puts it, in “establishing institutions of authoritative knowledge to structure emerging markets for new-fangled agricultural technologies.” In response to both farm demand and soil exhaustion, the 1850s witnessed an explosion of new (and uncertain) product markets in mowers and reapers, fertilizers, and soil analysis. Product fraud, performance, and safety rapidly rose to the fore of consumer concerns, and reformers began to demand a governmental body charged with distinguishing between fraudulent and factual claims. The systematic push for public field tests, fertilizer inspection laws, and vetted soil research came from the side of business, who opted for “orderly growth” over the fragility of unregulated, information-poor markets. Reformers addressed these concerns through graduated developmentalism, moving from regional agricultural societies to the Agricultural Division of the Patent Office to the United States Agricultural Society (USAS). The 1862 creation of the USDA institutionalized “authoritative knowledge” at the federal level. The Department’s budget socialized the costs of market information—field testing, for example, to identify fraudulent farm products—while subsidizing productivity-enhancing R&D in soil fertility and pest control. The parliamentary struggles over these two pieces of legislation played a key role in the growing 1850s sectional crisis. Ron’s careful reading of Senate debates demonstrates how they polarized congressional politics, with Southern Democrats fighting tooth and nail against both bills on behalf of their slaveholding constituents. Against the plantation economy of the South, agricultural reformers proposed a mixed economy that welded a robust domestic market to a strong federal state. How exactly did “nonpartisan anti-politics” transmute into the platform of the newly minted Republican Party? At its core, the fight over the Morrill Act and USDA was a fight over whether federal dollars should be invested in increasing agricultural activity. At stake, in Kaleckian terms, was political control over the investment function. From the perspective of the slaveholding planter, the proposals had only limited material appeal: scientific agriculture’s emphasis on labor-saving technology did not necessarily mesh with chattel slavery. More important was the fact that wealthy planters were a “minority regional elite committed to a fundamentally hierarchical social structure.” While they occasionally formed state agricultural societies along Northern lines, planters usually rejected the egalitarian bent of the reform movement, catering instead to the private libraries and field experiments of the well-educated few. Education and expertise were private, not public goods. One of those who decried federal meddling in agricultural education was Andrew Calhoun, president of the South Carolina State Agricultural Society. For Calhoun and other Southern Democrat opponents of the Morrill Bill, federal aid—and public investment generally—had no business meddling with productivity or costs: these were the sole prerogatives of the planter on his private estate. And even if Calhoun wouldn't be forced to let federal agents onto his plantation without permission, the fact that every farmer around him could benefit from state largesse at his expense meant potential encirclement by free farms—and eventual political vulnerability—if the USDA should exist. Foreseeing this, slaveholders opposed any such farm policy. This is not to say that slaveholders were always and everywhere opposed to federal expansion. Indeed, as the Fugitive Slave Act of 1850 shows, slaveholders sometimes welcomed federal power when it reinforced their own political position and hierarchical social vision. In the case of the developmental arm of the state, however, expansion harbored a dangerous democratic potential. Federal investment threatened public acceptance of the private fount of slaveholder prestige and status, and hence their way of life. In this way, the federal promotion of scientific agriculture became a wedge issue that threatened nothing less than the political balance of the Union itself. section separator A second remarkable feature of the antebellum North that Ron brings to light is the political economic configuration he terms the “Republican developmental synthesis.” In the 1850s, the newly formed Republican Party achieved an impressive political dominance across both rural and urban areas in the North. How was the GOP, founded only in 1854, able to sweep the free states by 1860, winning Philadelphia alongside rural Pennsylvania, Boston as well as the Berkshires, Chicago along with most of Iowa? The key, Ron argues, was a political economy that aligned the economic interests of rural areas with those of urban ones and built widespread political support for a specific conception of national development. The economic component of the synthesis was a grand bargain. Farmers everywhere have the choice of producing for local consumption or for export. Exports offer the possibility of higher prices, which often proves attractive. The South centered its economy in this era around cotton production for export to Europe, integrating itself into the global economy even as it doubled down on the production of raw materials. In the North, by contrast, a series of politicians and economists from the early nineteenth century advanced the idea of the “home market” system, in which farmers would forgo the potential windfalls of the export market in favor of the more stable demand provided by nearby cities. By focusing on selling to other parts of the United States, Northern farmers could inoculate themselves against the uncertainty of the world commodities market or the capricious nature of European governments. The Republican synthesis saw development as a process of creating ever denser and more intricate links between urban and rural areas. The political consequences were substantial. By tying the fortunes of rural farmers to those of the urban areas that were now their primary customers, the home market system aligned the incentives facing the entire Greater Northeast. The surest way to prosperity for farmers was now to make sure that the booming cities kept up their growth—more mouths to feed meant more profits to make. But farms were also more than sources of food. Cities, for their part, needed prosperous farms as markets for their manufactured goods. The prosperity of the countryside thus depended on the prosperity of the city, and vice versa. In this network of dependency, it was possible for rural and urban areas to reach political consensus on a broad pro-development program, centered on tariff protections for manufacturers, infrastructure investment, and agricultural reform. And so the Morrill Act of 1862 was preceded by the Morrill Tariff of 1861, both named for Republican Senator Justin Morrill. In the 1840s and 1850s, as the sectional crisis gained steam, a new generation of political economists deepened the intellectual underpinnings of the home market system. Among them was Henry Carey. To the basic pragmatism of a stable market for crops, Carey added both technological and biological arguments that close economic linkages between cities and nearby rural areas were inherently beneficial. Technologically, Carey observed that thriving cities not only provide farmers with markets for their crops; they also supply the farmers with new technologies that increase agricultural productivity. Steel plows were made in cities, for instance, but they brought enormous benefits to farmers. Close connections between agricultural areas and cities would allow farmers to take advantage of new technologies. And interactions between farmers and urban industry would prompt further technological development, since frequent interactions with farmers would provide urban tinkerers with both knowledge of agricultural needs and a large market for any new tools or agricultural products. The Republican synthesis was thus centered on a conception of development as a process of creating ever denser and more intricate links between urban and rural areas, resulting in ever greater advances in productive technology. This perspective is remarkably similar to that of the economist and urban planner Jane Jacobs a century later. Writing in 1969, Jacobs describes in The Economy of Cities how close connections between many mutually dependent consumers and suppliers are the key to technological innovation and economic growth: they allow new economic niches to be continuously identified and filled with new companies and products. As an example, Jacbos considers the case of Minnesota Mining and Manufacturing, Inc. The company began as a simple producer of abrasive sand, but soon realized that by gluing the sand down it could have a much larger market for sandpaper. From there, its expertise in adhesives could be applied to other surfaces, leading to improved painter’s tape and eventually such products as Scotch Tape and Post-It notes. Soon 3M was a global manufacturing powerhouse, all centered on products spun off from its original sand. While Jacobs was fundamentally an urbanist—perhaps the most iconic in history—she also touted the connections between urban and rural areas. In her follow-up book, Cities and the Wealth of Nations (1985), Jacobs again channels Carey in describing how the postwar boom of Tokyo brought massive technological progress to the agricultural hamlet of Shinohata, some 100 miles away. Consistent access to the enormous Tokyo market spurred the development of revolutionary techniques for mushroom farming, while urban manufactured goods greatly enhanced residents’ home and work lives. In his writings, Carey made the technological case for the home market system, articulating a theory of economic development that anticipated the entire academic subfields of Evolutionary Economic Geography and Economic Complexity today. But if there were technological reasons to value urban-rural connections, Carey also thought they made sense from a biological standpoint. In the 1850s urban transportation was powered by horses, while farmland was largely fertilized with biological refuse: manure, bone meal, even human waste. This meant that the home market would create a closed nutrient system. Hay grown in the fields was sent to the city to feed horses, who in turn supplied fertilizer to the farms. Carey’s “manure theory” argued that producing for the home market was both naturally and morally superior to producing for export. Even in the 1850s, the act of recycling and leaving the land better than you found it was seen as virtuous, and the manure economy offered the prospect of a zero-waste society. Conversely, when agricultural products were exported abroad, that was literally sapping the land of its nutrients and shipping them to a foreign country. It was a powerful rhetorical move. In laying the groundwork for these forms of state action, agricultural reform helped usher in new checks on capitalism and new forms of public goods. A striking feature of the writing of Carey and his peers is its lived familiarity with the day-to-day practice of agriculture. Nowhere is this more apparent than in Carey’s refutation of Malthusian pessimism. The economists Thomas Malthus and David Ricardo had famously proposed that the ability to produce food will never keep up with population growth, since the most productive land will be farmed first and cultivation will slowly deplete farmland over time. Carey dismisses such thinking as the armchair theorizing of someone who has obviously never farmed a day in his life: as every farmer knows, soil fertility must be maintained through constant tending and investment. As he put it, “The whole business of the farmer consists in making and improving soils.” Carey predicted that the trend of increasing fertility would continue indefinitely—as if he had a periscope into the modern Netherlands, where fleets of micro-drones, precision lighting, and acres of greenhouses combine to produce 78 percent of the agricultural exports of the entire United States on less than 1 percent of the arable land, with minimal use of water, pesticides, or fossil fuels. The political and intellectual work that went into creating this remarkable economic dynamo can serve as an example for our own times. The young Republican party and its predecessors were able to see how a system could be created that would meet the needs of both urban and rural areas. They then used federal government policy—most notably the imposition of protective tariffs, combined with investments in infrastructure and education—to make that system a reality. And they recognized that both the economic and the political components of the approach were critical. There had to be an upside for everyone—or at least a majority of voters. As the political dominance of both the Republican Party and home market developmentalism for the next half-century illustrates, they were able to form a durable political coalition around linked urban-rural development. section separator What are we to make of the agricultural reform movement at the center of this book? In the end, Ron’s protagonists succeeded in implementing their vision: the USDA and the Morrill Act became a reality, as did the home market and democratic development. The vision proved durable, and by the early twentieth-century the republic was quite powerful. From the Interstate Commerce Commission that terrorized the railroads, those great midwestern antagonists, to the Fed’s agricultural discounting program, which put public pressure on Wall Street to bend to farmer’s interests, the United States had become a fearsome “Grassroots Leviathan.” In laying the groundwork for these forms of state action, agricultural reform, rather than industrial development, helped usher in new checks on capitalism and new forms of public goods. But the movement was not an unmitigated success. Northern farmers succeeded largely because they were a majority; their “sectional” interest could thus easily lay claim to the “national” interest. We should take care to consider the contradictions that a democratic movement premised on majoritarian nationalism may generate. For one thing, the economic engine of agricultural reform reconciled intensive and extensive forms of growth. The former involved exploiting new forms of productive capital and labor-saving techniques; the latter was premised on settler colonialism, white land grabs of Indian possessions in the geographical extension of farms across the American interior. “The conquest of territory,” Ron points out, “allowed Euro-American settlers, for a time, to substitute landed abundance for intensive soil restoration.” If Northern reformers recognized, at least in theory, the eventual closing of the frontier—implicit in their concerns around soil depletion and labor productivity—the extensive, land-grabbing programs of the USDA and the Morrill Act nevertheless continued to be premised on an endless frontier, and thus on native dispossession. Democratic development today might take a page from this history, while reckoning with its racial and colonial legacy. Another glaring weakness of the movement is its legacy on racial inequality. A lasting irony of emancipation, Ron writes, was that it “removed a basic obstacle to white solidarity” among the nation’s farmers. By destroying slavery, agricultural reform also destroyed the very basis for a cross-racial coalition of free farmers after 1865. And as it would turn out, for all of its newly won power and popular legitimacy, the USDA would fail to intervene to protect the legal and economic gains of Southern Black people, just as Reconstruction was beginning to give way to Jim Crow. The Grange, a postbellum, populist offshoot of the USDA’s grassroots base, would lobby for state and local laws that restricted the freedoms of Black rural inhabitants for the benefit of their white membership. Perhaps the central achievement of the agricultural reform movement is in laying bare the political aspects of democratic state-building in an agrarian society irreparably split by the question of chattel slavery. Against the export-dependent, plantation economy of the slave South, it supplied a powerful alternative vision of a mixed economy that welded a robust domestic market to a federal, developmental state. Democratic development today might take a page from the inclusive political economy of the Republican synthesis, while at the same time working to complete the long, unfinished struggle against the racial and colonial legacy it left behind.