Cronyism: Liberty versus Power in Early America, 1607– 1849
by Patrick Newman
Mises Institute, 2021, 362 pp.
Patrick Newman commits Cronyism to Murray Rothbard, and it is a fitting choice, as this exceptional book continues and extends Rothbard’s dazzling analysis of American history. Newman is eminently qualified to do so, having actually modified both the fifth volume of Rothbard’s Conceived in Liberty and his The Progressive Era.
Like Rothbard likewise, he tells us exactly the principles he uses in setting forward his account of events. Among these is that “history is a clash in between the forces of liberty, or those in favor of individual-decision-making and the market allocating resources, and the advocates of power, the factions that support browbeating and government organization of production” (p. 14). This view leads him to the book’s main subject, the “history of cronyism: when the government passes policies to benefit special-interest politicians, bureaucrats, organizations, and other groups at the expenditure of the general public” (p. 13).
Newman’s second thesis is that “those who manage the government’s power are damaged with time … I define corruption as the willingness of government officials to promote interventions that benefit themselves and other preferred interests … Lord Acton’s famous quote can be modified appropriately; ‘Power tends to incentivize cronyism and absolute power incentivizes cronyism absolutely'” (p. 14). This tendency makes libertarian reform challenging, though not impossible: to remove an interventionist state, the reformers need to take power, but doing so tempts them to cronyism.
I question whether Newman has actually put too much pressure on his second thesis. Lord Acton said that power tends to corrupt, and Newman maintains this phrasing in his modification of Acton’s dictum, however throughout the book, he takes it to be inescapable that power does lead to cronyism. Need this be so? But whether power needs to result in cronyism, it typically did, and this Newman generously reveals. In what follows, I’ll mention just a couple of the many topics the author discusses.
In his account of the Constitutional Convention, Newman worries the malign impact of the Revolutionary financier Robert Morris, who hoped that he might gain financially from a powerful central federal government: “The Federalist-dominated Constitutional Convention quickly ditched the Articles and developed a completely new federal government. Unsurprisingly, Robert Morris’ ambit– Gouverneur Morris, Wilson, and Madison– played the biggest function … Robert Morris also rested on the sidelines since he knew his extensive involvement would generate too much controversy. Overall, the convention’s Constitution laid the structures for a corrupt American Empire” (pp. 59– 60).
Lots of opponents of today’s powerful state look back with yearning to a strict construction of the Constitution, however Newman is not amongst them. He believes that the Anti-Federalists were correct in warning versus constitutional tyranny. The “strict construction” of John Taylor of Caroline and others, though exceptional in its aims, was incorrect. Lots of readers will be inclined to object, however here Newman consistently follows Rothbard. It may be helpful for readers to compare Newman’s interpretation with the extremely various analysis of Kevin Gutzman’s The Politically Inaccurate Guide to the Constitution. (See my review of it here.)
As will currently be evident, Newman is no admirer of the Founding Daddies. Madison was an extreme centralizer, though he disappointed the monarchical Hamilton, and his half-hearted conversion to states’ rights in the Virginia Resolutions showed no genuine change of mind. His scruples about the constitutionality of a national bank were authentic however soon conquered, and with his bellicose policies resulting in the War of 1812, he deserted any form of constitutional principle. “After the war, the New National Republicans– the direct descendants of the moderate Republicans– continued to enact Federalist policies: another central bank, peacetime protective tariffs, and prepare for a federal transportation network. Madison came full circle: he began his career preparing for a Federalist government and ended it by adding the finishing touches” (p. 181).
Newman’s viewpoint of Jefferson is greater, however he too was damaged by power. When he prepared the Declaration, “Jefferson also started to envision an American Empire various from the reactionaries’ dream. The theoretician did not want an Empire of Power; he wanted an Empire of Liberty composed of independent yeomen who would homestead the frontier. He did not care if a loose confederation of states or multiple confederations controlled the continent”(p. 38).
The temptation greatly to expand American area through the Louisiana Purchase showed excessive for Jefferson’s libertarian principles. “Jefferson and his Republicans analyzed the Constitution in the way the federalists actually assured, needing its powers to be confined to those explicitly identified, expandable just with modifications. So, according to the Republicans, the Louisiana Purchase must have been unconstitutional. But it was a lot of land … The consequences of the Louisiana Purchase were seismic, rupturing the Empire of Liberty at the seams”(pp. 156, 159). Throughout the war of 1812, Jefferson said, “‘The acquisition of Canada … will offer us experience for the attack of Halifax the next, and the final expulsion of England from the American continent.’ The Empire of Liberty was now an Empire of Power” (p. 188).
In part owing to the impact of the film Amistad, John Quincy Adams is often nowadays held up as a virtuous crusader against slavery, however he does not leave Newman’s severe examination. “The main blame for their [the imperialists’] global empire, from obtaining Florida to the Monroe Doctrine and after that the Panama Congress, can be laid at the doorstep of John Quincy Adams” (p. 243). Prior to his loss to Andrew Jackson in 1828, Adams was quite going to jeopardize with proslavery interests.
Some challengers of central government seek to John C. Calhoun for inspiration, however Newman dissents. He too was a time server. “In the late 1820s, at the threat of losing his house state to Radicals …, Vice President John Calhoun privately prepared the Exposition and Demonstration. In essence, this influential pamphlet articulated Calhoun’s doctrine of nullification … the Exposition was far less radical than Jefferson’s Kentucky Resolutions … First, Calhoun formerly supported huge federal government and never ever truly stuck to stringent constructionism. Second, Calhoun grounded the Exposition in The Federalist Documents … Calhoun’s nullification is closer to the Federalist opportunism of the Jeffersonian age than Antifederalist ideology.” For a different view of the matter, a lot more favorable to Calhoun and to Jefferson also, see Marco Bassani’s Chaining Down Leviathan and my evaluation of it here.)
I have actually been able to discuss just a few of topics in this erudite book, which is filled with items of interest; and I shall point out simply one more of these. Typically individuals think of Friedrich List just as a German economist whose protectionist teachings were commonly influential in Europe. But in fact he invested a bargain of his life in the United States, and Newman points out that he played an active function in the pro-high tariff Harrisburg [Pennsylvania] Convention, kept in 1827: “Notably, the arch– American system economist Friedrich List hoped the convention would ‘lay the axe to the root of the tree, by declaring the system of Adam Smith and Co. to be erroneous'” (p. 227).
In his dedication to liberty and his enormous academic industry and knowledge, Newman brings Murray Rothbard to mind, and I make certain that Rothbard would have appreciated Cronyism and found in its author a worthwhile follower.