The emergence of the Democratic Socialists of America and their political victories, from New York City across the fruited plains of Michigan and Wisconsin, all the way to Colorado, strikes many as a new thing in U.S. politics.
Previous movements have, in fact, increased, sometimes significantly, the size and scope of government. But it has been their opponents who have accused them of “creeping socialism,” while advocates have avoided the S-word.
Some major policies of Franklin Roosevelt’s New Deal — Social Security most of all — remain part of the fabric of American life, and elements of the social safety net have been expanded quietly but effectively enough that, as former Sen. Phil Gramm has argued, the government transfer payments have effectively equalized the incomes of those on the bottom 60% of the economic ladder.
But virtually no attention, so far as I can see, has been paid to the period in U.S. history when the government took maximum control of the private-sector economy, including the dissemination of information and communication of opinion.
That moment came more than 100 years ago, before the emergence not only of the internet, but also of radio and talking motion pictures. It lasted only briefly and its implications have mostly been glossed over by historians.
It has been chronicled recently, however, and with the help of artificial intelligence, by the iconoclastic economist Arnold Kling. The centerpiece is the policies adopted by President Woodrow Wilson’s administration and an acquiescent Democratic Congress during the 19 months from April 1917 to November 1918, in which the United States was at war with Germany and its allies in World War I.
This creation of an American state that would “seize the railroad, ration the coal, set the price of wheat, conscript four million men, and prosecute the printed word” was the work of progressive reformers, convinced that experts could do better than seemingly chaotic markets in running the economy, but had been limited in their efforts by public opinion and courts’ constitutional doctrines.
Wilson’s War Industries Board, headed by Wall Street speculator Bernard Baruch, set out “to decide, for the whole nation, what got made, from what materials, in what quantities, at what price, and in what order of priority.” His food administration, headed by mining engineer Herbert Hoover, pushed for “meatless Tuesdays and wheatless Wednesday, victory gardens” and doubled the price of wheat so that U.S. farmers could feed allies in Europe.
The government seized the railroads in December 1917, and Treasury Secretary William McAdoo (who was also Wilson’s son-in-law) “set the schedules, the rates, the wages, unified the equipment, and cut the competitive duplication.” It ran the system “imperfectly, expensively, but it moved the troops and the coal,” the essential fuel then for both heavy industry and home heating.
The fuel administration enforced “heatless Mondays,” the National War Labor Board set the eight-hour day, and the War Finance Corporation built an emergency fleet. In November 1917, the 35-year-old Assistant Secretary of the Navy Franklin Roosevelt imposed a strike settlement on Bethlehem Steel’s Fore River Shipyard manager, a 29-year-old bank president named Joseph P. Kennedy.
This socialist America was anything but friendly to civil rights and civil liberties. Wilson imposed racial segregation on the federal workforce and shut down German cultural organizations. His government prosecuted and jailed the Socialist presidential candidate Eugene Debs for defending men imprisoned for obstructing the military draft.
“Everything,” Arnold Kling writes, “so far has described a state expanding—seizing, planning, rationing, prosecuting, persuading. The last movement is the one the buildup does not prepare you for, and it is the heart of the matter: how fast nearly all of it came apart.”
The War Industries Board voted to dissolve itself on New Year’s Day 1919, less than two months after the Armistice; the War Labor Board lapsed; the food and fuel controls ended; Congress (Republican after the November 1918 election) returned the railroads to private owners in the Transportation Act of 1920.
Wilson’s Democratic Party was punished in the presidential election that year. The Democratic ticket of James Cox and Franklin Roosevelt got 34% of the popular vote. The Republican ticket of Warren Harding and Calvin Coolidge got 60%, the highest percentage in any election up to that date.
You can find elements of Wilson’s wartime socialism in some self-described experiments within Franklin Roosevelt’s New Deal. But when war came, he didn’t choose to nationalize the railroads and industries. Instead, he got William Knudsen to enlist executives in moving toward wartime production.
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Even the top-secret Manhattan Project got private firms to produce the weapons it invented. Rationing and price controls were employed, but the government didn’t use Wilson’s overbroad Espionage Act — still on the books today! — to suppress opposition speech as Wilson had.
If you listen to a tape of Roosevelt’s speech to Congress on Dec. 8, 1941, the loudest applause, cheers, and rebel yells came after he said, “The American people, in their righteous might, will win through to absolute victory.” Socialism, he evidently thought, was not the way to get there.
Maybe there’s a lesson there for the public today.