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THE RISE OF BIG GOVERNMENT

Americans tend to believe that their country is very different from Europe. Yet
over the past half century they have imported and embraced the most transfor-
mative social idea of modern Scandinavia: egalitarianism. Today, the United States
is more like Sweden than it is different, dedicated to economic redistribution and
to vigorously defending its big government. What price, morally and economically,
are today’s Americans willing to pay to preserve their egalitarian welfare state? Are
they willing to turn life into a fiscal cost item? Will they sacrifice their children’s
future prosperity to defend their entitlements?
The Rise of Big Government: How Egalitarianism Conquered America pursues the
answer to these questions by going back to the ideological origins of the modern,
egalitarian welfare state. Specifically, the book asks why this idea has been able to
set such deep roots in the United States, a country that is often perceived as funda-
mentally different when it comes to the role of government in the economy. It is
shown that there are more similarities than differences between the welfare state in
the United States and its Swedish “template.”
This book is essential reading for anyone interested in understanding how the
egalitarian ideology conquered the United States, and who seeks to gain a deeper
understanding of its strength, its resiliency, and the problems it faces in the future.

Sven R. Larson is an American political economist and policy analyst. His

research, which is published in peer-review journals and by free-market think
tanks, covers fiscal policy, the welfare state and the application of economic
freedom. He is the author of Industrial Poverty (Gower, 2014) about the role of the
welfare state in the European economic crisis.
Economics in the Real World

For a full list of titles in this series, please visit

www.routledge.com/Economics-in-the-Real-World/book-series/ERW

1 Education Is Not an App

The Future of University Teaching in the Internet Age
Jonathan A. Poritz, Jonathan Rees

2 The Privileges of Wealth

Rising Inequality and the Growing Racial Divide
Robert B. Williams

3 Neuroliberalism
Behavioural Government in the Twenty First Century
Mark Whitehead, Rhys Jones, Rachel Lilley, Jessica Pykett, and Rachel Howell

4 The Rise of Big Government

How Egalitarianism Conquered America
Sven R. Larson
THE RISE OF BIG
GOVERNMENT
How Egalitarianism Conquered
America

Sven R. Larson
First published 2018
by Routledge
2 Park Square, Milton Park, Abingdon, Oxon OX14 4RN

and by Routledge
711 Third Avenue, New York, NY 10017

Routledge is an imprint of the Taylor & Francis Group, an informa business

© 2018 Sven R. Larson

The right of Sven R. Larson to be identified as author of this work has

been asserted by him in accordance with sections 77 and 78 of the
Copyright, Designs and Patents Act 1988.

All rights reserved. No part of this book may be reprinted or reproduced

or utilised in any form or by any electronic, mechanical, or other means,
now known or hereafter invented, including photocopying and recording,
or in any information storage or retrieval system, without permission in
writing from the publishers.

Trademark notice: Product or corporate names may be trademarks or

registered trademarks, and are used only for identification and explanation
without intent to infringe.

British Library Cataloguing-in-Publication Data

A catalogue record for this book is available from the British Library

Library of Congress Cataloging-in-Publication Data

Names: Larson, Sven R., 1965- author.
Title: The rise of big government : how egalitarianism conquered America /
Sven R. Larson.
Description: First Edition. | New York : Routledge, 2018. |
Series: Economics in the real world ; 4 | Includes bibliographical
references and index.
Identifiers: LCCN 2017020820 | ISBN 978-1-138-29698-5 (hardback) |
ISBN 978-1-138-29699-2 (pbk.) | ISBN 978-1-315-09957-6 (ebook)
Subjects: LCSH: United States–Economic policy. | United States–
Social policy. | Equality–United States. | Fiscal policy–United States. |
Budget deficits–United States. | United States–Politics and government–
21st century.
Classification: LCC HC106.84 .L37 2018 | DDC 330.973–dc23
LC record available at https://lccn.loc.gov/2017020820

ISBN: 978-1-138-29698-5 (hbk)

ISBN: 978-1-138-29699-2 (pbk)
ISBN: 978-1-315-09957-6 (ebk)

Typeset in Bembo
by FiSH Books Ltd, Enfield
To Christina, my dear wife, my best friend, and my one
and only love
CONTENTS

Acknowledgments ix

1 The problem 1

2 Where it all started 5

3 The Swedish roots of the American welfare state 20

4 Exporting egalitarianism to America 47

5 Problem 1: Fiscal Eugenics 60

6 Problem 2: Slow Growth 79

7 Problem 3: Government Debt 102

8 Conclusion 122

References 126
Index 129
Income distribution has the form of a pyramid with a broad basis and a
narrowing top. In a democracy with effective universal suffrage, this is one of
the explanations why we are steadily proceeding in the direction of govern-
ment control and direction. Even the conservative and liberal parties will
have to become the vehicles for this development, or else disappear from the
political scene.
Gunnar Myrdal, 1958
ACKNOWLEDGMENTS

This book would not have been possible were it not for Swedish economist Sven
Grassman. As a lowly undergraduate student majoring in economics, I found a true
mentor in him and his fearless quest to give economic research a purpose. To him,
the dismal science was not just an eclectic exercise in math and correlative statistics.
It was a method, a comprehensive toolkit, for making people’s lives better.
Sadly, he passed away 25 years ago, long before I had learned to put his teachings
to work. He would probably not agree with everything in this book – perhaps he
would criticize most of it – but it is thanks to his example as an economist, as a
public-policy scholar, and as a man of high moral stature, that I have been able to
pursue the research that laid the groundwork for this book.
I am also deeply indebted to James Galbraith, who was kind enough to review
an early manuscript of this book. Currently the Lloyd Bentsen Chair in Govern-
ment and Business Relations at the Lyndon B Johnson School of Government of
the University of Texas, Austin, Galbraith is an authority on the subject covered in
this book. Anyone interested in economic redistribution, egalitarianism and the
welfare state must study Galbraith’s decades-long scholarship.
I am sure Galbraith will, as Grassman would, find reasons to criticize my argu-
ments and conclusions. There is nothing wrong with that. A book like this one is
not written in pursuit of points of agreement. It is written to add to an ongoing
conversation that hopefully, at some point, will influence public policy. Only an
informed, civilized and purposeful conversation can do that.
I would also like to thank Michael Tanner, Senior Fellow of the Cato Institute,
whose prolific and tireless research continues to inspire me. In the pursuit of the
ideas that went into this book, I have also benefited from conversations with
Cynthia Lummis, Steve Moore, Dan Mitchell, Ronny Noren, and Eva Schliephake
Fidalgo. I also greatly appreciate comments on a paper I presented at the World
Interdisciplinary Network for Institutional Research in Boston in September 2016,
x Acknowledgments

and comments from an anonymous referee on another paper, published in

December 2016 by the Journal of Governance and Regulation.
Last but definitely not least, I want to thank my wife Christina, who is blessed
with endless patience with my absent-mindedness.
1
THE PROBLEM

In 2014, when I published Industrial Poverty, my ambition was to explain that the
European economic crisis was more complex, and more systemic in nature, than
conventional economic wisdom would suggest. I pointed to several macro-
economic factors that seemed to conspire in bringing the European economy to a
halt. My thesis was that this systemic stagnation had systemic causes, and that the
welfare state was the main origin of those causes.
In the three years that have passed since then, Europe’s macroeconomic ailment
has continued, with the perennial Greek crisis as its masthead. My conclusions from
then, namely that a large welfare state has negative systemic effects on the economy,
have again been verified by a couple more years of suppressed private consumption,
anemic GDP growth and the redundancy of up to one fifth of the young
workforce.
As much as it is important to understand the economics of the stagnation in the
European economy, it cannot explain why politicians would choose to continue
policies that, from a dispassionate economic viewpoint, either do not work as
intended or have outright destructive consequences. Since it can be demonstrated
that the welfare state plays a big role in creating Europe’s economic quagmire, the
inescapable question is: why would elected officials in so many countries not take
the appropriate measures to roll back the welfare state?
This book is an attempt to answer that question, but not as a documentalist
endeavor. The purpose is not to present evidence of the actual line of thinking of
individual politicians. The scope of this book is instead to show how the ideology
behind the welfare state was turned into political practice, how it can conquer an
economy – and how its inherent flaws, which brought about Europe’s economic
stagnation, represent a genuine threat to the future of every nation that chooses to
cling to the welfare state.
These problems do not only apply to Europe, but are highly relevant to the
2 The problem

United States as well. In fact, there is a prevailing opinion among Americans in

general, and to a large degree among scholars, policy experts and politicians, that
Europe’s problems are irrelevant to the United States. After all, the argument often
goes, we do not have a European welfare state.
Yes, we do. The American welfare state has much more in common with its
European peers than what sets them apart. In fact, the welfare state that emerged
in the United States as a result of President Johnson’s War on Poverty can trace its
ideological roots with direct lineage back to the Swedish welfare state, which is
often – and rightly so – held up as the most radical of them all. In both ideological
architecture, economic execution and macroeconomic effect, the American welfare
state has more in common with the Swedish welfare state than it has with, e.g., the
British one.
The similarities between the Swedish and American welfare states also mean
that the ailments that characterize the former are highly relevant to – and to some
degree already present in – the latter. Without a thorough understanding of the
common ideological roots between the two, it is extremely difficult to fully grasp
the nature, and the consequences of, those similarities.
It is easy to dismiss the shared egalitarian roots of the Swedish and American
welfare states as simple rhetoric. After all, in January 2017 President Trump took
office and immediately began working on a rollback of many policies from his
predecessor. Understandably, a consensus emerged across political dividing lines
that America was no longer heading down the welfare state downslope. Quite the
contrary: conservatism was now back in charge. In the dust of Hillary Clinton’s loss,
Democrats were shocked at how voters continued to abandon them, adding a
pivotal presidential election loss to the party’s decline in the states and Republican
majorities in Congress.
On the other side of the aisle, joyous Always-Trumpers overcame their differ-
ences with Never-Trumpers and shook hands. They quickly agreed that with
Congress behind him, the Donald is going to make America great again – whatever
that means – and that the Trump presidency is going to be a conservative victory
lap.
Superficially, both sides were right. Secretary Clinton, openly committed to new
entitlement programs and higher taxes, was no doubt a representative for a
traditional progressive political agenda. From an equally superficial viewpoint, Mr.
Trump comes across as a traditional conservative, suggesting that the cheers and
jeers from the November election were correct.
However, when Trump is put in his proper context, his victory is no longer the
defeat of egalitarianism, and it is certainly not the beginning of the end of the
American welfare state. To the chagrin of Trump voters, and to the reassurance of
distraught Clinton and Sanders backers, conservatism is not back in charge. Donald
Trump will not challenge the political victories that egalitarians have scored since
the War on Poverty.
The left, whether they call themselves liberals, progressives or social democrats,
can rest assure that their ideological common ground, also known as egalitarianism,
 The problem 3

will continue to define the American future, just as it has dominated the past several
decades.
In short: egalitarianism, the ideology that was imported to America from
Sweden to create a platform for the War on Poverty, will not go away any time
soon. On the contrary, it will prevail; its political practice, the welfare state, will
survive both the Trump presidency and the Republican Congressional majority.
Neither President Trump nor any influential member of the GOP in Congress
has the ambition to substantially reform the entitlement programs that consume
more than two thirds of the federal budget. Social Security, Medicare, Medicaid,
TANF, SNAP, WIC, housing subsidies, and many more programs will continue to
exist, dispense benefits and require tax dollars to pay for them.
If anything, Republicans in Congress will work with President Trump to try to
make the welfare state more fiscally sustainable.
Simply put: there is no ideological challenge to the welfare state in American
politics today, nor is there any challenge in the foreseeable future.
For this reason, it is fundamentally important that Americans of all ideological
backgrounds put aside their false notions that this country is too different from
Sweden, and Europe in general, to be immunized against the systemic ailments of
the welfare state.
Recognition of the cross-Atlantic similarities comes with an assignment: to
understand in detail that if the welfare state is going to survive for the foreseeable
future, its proponents must address its serious moral and macroeconomic
challenges.
The problems of the federal debt and the long-term drift toward macro-
economic stagnation are serious enough to jeopardize the welfare state’s future. In
addition, it faces a sharp moral challenge from within itself, a challenge that has
increasingly put the welfare state at odds with core values of our civilization.
There is limited understanding of these problems among conservatives,
primarily the economic problems. So far, though, the left appears unwilling to even
recognize the existence of these problems, which begs two questions:

• If left unsolved, will the problems inherent to the welfare state grow serious
enough to be the henchman of egalitarianism itself? In other words: will the
left pull the carpet out from underneath its own historic political victory by
simply looking the other way?
• If America’s egalitarians are unwilling to step up to the plate and save the
welfare state, is it not logical to bring the entire egalitarian project to an end,
roll back entitlements and return responsibilities for welfare, education, health
care and income security back to the private sector?

This book will not – and cannot – answer the first question. Only those who
belong to the egalitarian camp can do so. What this book can do, though, is provide
a detailed analysis of the systemic problems that are built into the welfare state. In
response, conservatives and egalitarians can choose to either apply sustainable
4 The problem

solutions to these problems, or they can organize a peaceful transition from the
welfare state to a genuinely free-market economy with a state strictly limited to its
core functions.
Either of these two solutions is better than the alternative: a period of disorderly
collapse of the welfare state, hurling us into social and economic turmoil where the
future will, at best, be fundamentally uncertain.
2
WHERE IT ALL STARTED

The welfare state was not built overnight. It is the brainchild of a decades-long
advance of egalitarian ideas in Europe, from where it was imported to the United
States. The welfare state has fundamentally redesigned society and the economy,
changed cultural and social values and affected the daily lives of almost every one
of us.
Politically, the welfare state is the biggest victory ever for the American left. It
redistributes trillions of dollars from the rich to the poor, from the wealthy to the
middle class. On a daily basis, it turns the ideology and the values of egalitarianism
into economic reality. In the shape of entitlements, taxes and regulations, it has
fundamentally redrawn the architecture of America.
Its presence in our society and our economy is so overwhelming, and so
entrenched, that no Republican – not even a devout libertarian like Senator Rand
Paul – utters a word about doing away with the welfare state. No conservative in
Congress has proposed that the United States returns to a pre-egalitarian era.
Part of the reason is, undoubtedly, that up to half of all Americans get some sort
of benefit from government. The benefits are often generous: in 35 states, tax-paid
programs such as SNAP, WIC, TANF, Medicaid and housing subsidies make life so
comfortable that it does not pay to take a minimum-wage job.1
Another reason for the lack of challenge to the welfare state is its sheer size.
Almost three quarters of federal expenditures are directly or indirectly used for
entitlements. In 2015, that meant $2.6 trillion to health care, income security,
education, social services, housing and other items for people who, government
said, were entitled to a higher standard of living than they could afford on their
own. Any reforms to such an enormous amount of government spending would
require a very hefty investment by members of Congress and others in crafting
legislation and enduring the political battle that could certainly be expected.
6 Where it all started

There is also a third reason why conservatives plead no contest on the welfare
state. The ideological purpose of the welfare state is economic redistribution. Its
goal, in turn, is to reduce and eventually eliminate differences in standard of living
between Americans. This egalitarian end goal has defined the welfare state since
President Lyndon Johnson’s State of the Union speech declared the War on Poverty.
At the time, conservatives were unprepared for – and under-educated on – the
ideological, economic and political force of egalitarianism. Frankly, they never saw
what was coming and have never really caught up to a point where they have been
able to forcefully, comprehensively and successfully produce a counter-alternative
to egalitarianism.
The welfare state’s entrenched presence, sheer size and ideological fervor explain
why President Johnson became the first truly egalitarian president, but also why
others who have followed him in the Oval Office have allowed his egalitarian
project to continue. A case in point is conservative icon Ronald Reagan, who as
president was a bigger friend of the welfare state than most others: on his watch,
spending on economic redistribution increased by 6.7 percent per year.
President Bush Jr. spearheaded the most radical expansion of Medicare in the
history of the program. He did so with passionate support from a Republican
Congressional majority.
Over the decades, Republicans have successfully competed with Democrats
over being the best stewards of the American welfare state. Like Democrats,
Republicans defend Social Security and Medicare; if they bring up any criticism,
it is concentrated in fiscal sustainability concerns. They take the same attitude to
all the programs that were created under President Johnson’s War on Poverty; tax
cuts, a Republican staple, are never coupled with structural reductions in govern-
ment spending. The only purpose of those cuts, therefore, is to increase economic
growth and thereby expand the tax base for the welfare state. A stronger economy
helps perpetuate entitlement funding.
Nothing will change with Donald Trump’s presidency. He and Congressional
Republicans may twist and tweak programs, but overall they will keep and
continue to fund the welfare state just like Congress and the executive branch have
done uninterruptedly since Lyndon Johnson’s Economic Opportunity Act became
law in 1964.

Redefining the purpose of government

That year was a watershed mark in American political history. Up until then, the
share of federal spending that was focused on helping the poor had been guided
by the economic, social and cultural heritage from the founding of the Republic.
Social policies were guided by, for lack of a better term, social conservatism. That
all changed with the 1964 Economic Opportunity Act, which marked the
beginning of a new era. From that point on, social policies were guided not by
principles of limited government, but by egalitarianism. The political spotlight
turned from alleviation of poverty to economic redistribution.
 Where it all started 7

The effects of this ideological shift did not materialize abruptly, but became
gradually visible as the War on Poverty expanded entitlement programs and
reached broader layers of the American people. To the left, it was a victory of
political gradualism that slowly but relentlessly gained universal acceptance.
There was opposition to the egalitarian project, but it gradually withered from
the political mainstream.2 Over time, Republicans de facto surrendered – and
egalitarians won.
However, their victory is not one of moral, social or economic superiority.
Their victory was as much a case of ideological over-reach, a case of not being
careful enough about what to wish for, as it was a matter of conservative failure to
understand the true nature of the welfare state. When criticizing the welfare state,
and the War on Poverty, they explicitly point to the rate of poverty: since a larger
share of the American population lives in poverty today than when the War was
declared in 1964, critics claim that the welfare state has failed.3
This criticism would have been correct if poverty reduction was the right
metric for evaluating the egalitarian political project. Yet egalitarianism does not
operate by those metrics; the rate of poverty is irrelevant. What matters to the
egalitarian is instead the reduction of economic differences between citizens; in its
absolute form, egalitarianism is an argument for the complete eradication of any
differences between citizens in terms of income, consumption and wealth.
These metrics are to be taken literally. The idea that every man and woman
should earn the same amount of money, regardless of profession and performance,
is not just a theory, but a guiding principle for egalitarian policy.
As a political practice, egalitarianism is every bit as radical as it may sound. The
pursuit of absolute egalitarianism takes revolutionary proportions, eventually
altering every aspect of our economic system, from the meaning of property rights
to the purpose of the free market.
In order to transform a society and its economy according to their principles,
egalitarians build entitlement programs. At first appearance, these programs appear
to be innocuous and ideologically harmless. After all, they provide select groups of
needy citizens with cash or in-kind benefits. Is it not what social conservatives have
always done, too?
The difference between egalitarianism and social conservatism is that the latter
used poverty alleviation as a means to preserve and improve a society where
individual income was – and should be – the result of individual effort and pursuit
of opportunity. Therefore, entitlement programs are constructed to provide a
passive safety net, available only as a last resort for those to whom no other means
of subsistence is available.
Egalitarianism, on the other hand, replaces the social conservative’s absolute
poverty concept with a relative one. Poverty is no longer a defined minimum of
existence, but a life at a standard that is relative to the economic performance of
society as a whole. The immediate, and transformative, consequence of this new
poverty definition is that entitlement programs now have a new purpose. Where
their job was previously temporary and contingent upon a population living at the
8 Where it all started

subsistence level, they are now a permanent, integral part of government. In fact,
under the relative poverty concept they become more relevant as society grows
more prosperous: as median income rises, so does the threshold for poverty. With
the increase in the poverty threshold, the share of the population defined as poor
will also increase – quite the contrary effect from what one would see under the
socially conservative absolute-poverty definition.
This effect of the relative poverty concept is no accident. On the contrary, the
egalitarian poverty concept deliberately redefines the purpose of government
spending: increasingly, fiscal policy drifts away from an economy with limited
government. The main purpose is now income redistribution; over time, all other
policy goals take the back seat to redistribution.
Taken together, the ideological, institutional and policy elements of the welfare
state constitute the egalitarian project. As intended, this project has redefined the
social and economic organization of modern industrial societies. Its success lies in
its entirety; conservative critics remain fragmented in their criticism of the
egalitarian project, focusing on the erroneous metrics of poverty, on the volume of
spending, or on the negative effects of high and progressive taxes needed to pay for
the redistributive welfare state.
It is almost unheard of that conservatives challenge egalitarianism systemically.
Outside of ideological challenges in Robert Nozick’s stellar tradition, criticism of
the egalitarian project is predominantly concentrated on elements of the
government budget. 4
This does not mean conservatives have been ineffective or without influence in
the egalitarian era. They have made a considerable difference, especially in terms
of tax policy. Under the banner of supply-side economics, conservatives led the
charge against the extreme taxes that President Reagan inherited from President
Carter. The tax cuts that Reagan signed into law boosted revenue by means of
stronger growth;5 similar policies had similar effects – though in smaller pro-
portions – under the Bush Jr. administration.
However, the conservative practice of supply-side economics has actually
epitomized their surrender before the welfare state. While the success of the tax
reforms has been claimed as evidence of the strength of free-market and supply-
side economics, at no point did conservatives use that success to challenge the
egalitarian project per se. In fact, the success of supply-side economics gave the
welfare state new fiscal life; in its absence, the American welfare state would, already
in the late 1980s, have fallen into the same economic problems that led several
European countries down the road of austerity and stagnation.
The fact that the United States has avoided encounters with European-style
austerity does not mean that we won’t have such encounters in the future. On the
contrary they are increasingly likely, primarily because our welfare state is based on
the same egalitarian principles that define Europe’s welfare states. The American
and European welfare states differ in degree – not in kind – and in terms of the
pace of advancement.
The cross-Atlantic similarities also mean that the problems facing the American
 Where it all started 9

welfare state are essentially similar to those that Europe’s welfare states have been
dealing with in increments since the 1980s. These problems …

• A long-term decline in economic growth;

• Structural budget deficits; and
• Policies guided by ethical principles that subordinate the individual to the
interests of the collective;

are serious enough that, if left unaddressed, will destroy the very foundation upon
which the welfare state is built. In fact, with egalitarianism as the prevailing
ideology of our time, there is a formidable weight of responsibility on the shoulders
of egalitarians to solve these problems – or else the welfare state’s ailments will
eventually eradicate prosperity from the Western world for the foreseeable future.
By historic standards, these problems have surfaced relatively recently. The first
30–40 years of the European welfare state’s evolution were not characterized by
slow growth and chronic deficits. Those problems emerged, on a broad scale,
during or after the 1970s, yet it is not difficult to link them back to the welfare
state itself.
The same is true for the welfare state’s increasingly serious ethical problems.
In fact, the welfare state carries within itself the seeds of its own ailment. To see
why, it is necessary to review the historic advancement of egalitarianism and its
welfare-state practice.

Egalitarianism arrives in America

The founding of the American welfare state is a matter of dispute in the literature.
Some have placed its ideological roots in the late nineteenth century,6 while others
locate it in the Franklin Roosevelt presidency. Falling into the latter category,
Walter Trattner, former professor of history at the University of Wisconsin, points
to the Social Security Act of 1935 as a milestone in building the American welfare
state.7 His account of the welfare state’s history is one of an evolutionary process,
from ancient ideas of charity in Jewish and Christian theological practice to
government-provided care for the poor in the early twentieth century.
However, Trattner distinguishes between two eras of welfare, separated by the
line between the nineteenth and twentieth centuries. He does this while charac-
terizing the Reagan presidency as an era of “war on the welfare state.” To President
Reagan, the 1800s was the “golden era” of individualism, free enterprise and
laissez-faire (Trattner 1999, p. 406):

This nostalgic view of the past and obsession with self-sufficiency precluded
the President from understanding not only the problems faced by the victims
of systemic oppression … but the plight of millions of others as well … who
were working but who could not support themselves and their families on
their meager earnings.
10 Where it all started

While it may be possible that President Reagan harbored deep animosity toward the
welfare state (although Trattner does not provide any evidence) his fiscal policy sends
a different message. During his White House tenure, Reagan signed budgets that
expanded entitlement spending by, on average, 6.7 percent per year in current prices.
In other words, President Reagan did not reverse America’s trend of a growing
welfare state. The fact of the matter is that there has never been any such reversal:
the only changes that have taken place to the American welfare state is in the pace
of its expansion. Overall, it is a continuing project with widespread support in both
liberal and conservative circles.
The welfare state’s widespread support would be easy to understand if Trattner
were correct in his argument that the welfare state is a long continuum of
expanding government. His image is one of a centuries-long trend of government
increasingly taking on more responsibilities for the poor, the destitute and the
downtrodden. Over time, the caretaker role has expanded as the standard of living
has increased and more resources have become available for redistribution.
If this continuum were true, it would mean that statism would transcend
ideologies, and the welfare state as it were known to Chancellor Bismarck in late
nineteenth-century Prussia would differ only in size from the Swedish welfare state
as it stood a century later.
The problem is that this statist continuum does not exist. The welfare state that
Bismarck pursued was not the same welfare state that Swedish economist Gunnar
Myrdal and his sociologist wife Alva envisioned in their 1934 book The
Demographic Crisis. The welfare state that Lord Beveridge outlined in his report of
1946 to the British Parliament was different in kind from the welfare state that
sprung from President Lyndon Johnson’s 1964 State of the Union speech.
The fallacy in the centuries-long lineage argument is that it does not distinguish
between a welfare state built on conservative principles, and one that rests on an
egalitarian foundation. Bismarck, like Lord Beveridge and the authors of the English
Elizabethan Poverty Law of 1601, all had the ambition to alleviate suffering among
the poor. Similarly, the proliferation of unemployment insurance in the United
States during the Great Depression was motivated by compassionate conservatism.
By contrast, Mr. and Mrs. Myrdal, who in their book of 1934 outlined the
architecture of the Swedish welfare state, sought not to alleviate poverty but to
establish a system of permanent economic redistribution. The goal was not to
provide for a person in case he fell into poverty; the goal was to give working
people, with steady jobs, steady income and a generally stable life, more money and
more resources to spend than they made on working. 8
President Johnson concurred. He did not wage his War on Poverty to alleviate
poverty, not even to eradicate it (even though that was his battle cry), but to sever
the ties between a man’s earnings and his standard of living. If he earned “less,” he
would be provided with more by government; if he earned “more,” government
would take a disproportionate share of his income for the purposes of redistribution.
Behind the ambitions of the Myrdals and of President Johnson lay the
ideological principle of egalitarianism, the goal of which is to minimize – and in
 Where it all started 11

its absolute form eradicate – economic differences between any two randomly
selected citizens. This is an inherent goal, desirable in itself to those who embrace
egalitarianism.
It is important not to under-estimate the significance of a shift in welfare-state
policy from its socially conservative base to one of egalitarianism. Under social
conservatism, welfare programs – and thereby the size of government – are
naturally limited: the ambition with government spending is to raise the absolute
standard of living of the poor. The object of comparison, in other words the
metrics for success of welfare policy, is whether or not the poor have more
resources as a result of welfare policy, compared to how they would live otherwise.
At no point does it matter to the social conservative how the rest of the
population is doing.
By contrast, under egalitarianism the absolute standard of living of the poor is
irrelevant. Here, the metrics of success for welfare policy is to what degree it
reduces the difference in standard of living between the poor and the non-poor.
Put simply, yet accurately, the choice is between:

• The poor making $1 per day and the rich making $2 per day; and
• The poor making $10 per day and the rich making $40 per day,

social conservatism endorses the latter while egalitarianism prescribes the former.
By fundamentally rewriting the purpose of government spending, egalitarianism
marks a new era for government, and for our Western civilization. Where the
socially conservative welfare state was a limited assignment, the modern, egalitarian
welfare state is an open-ended commitment to growth in government. For the
United States, that open-ended commitment began in 1964 when President
Lyndon Johnson explained (emphasis added):9

Unfortunately, many Americans live on the outskirts of hope – some because

of their poverty, and some because of their color, and all too many because of
both. Our task is to help replace their despair with opportunity. This adminis-
tration today, here and now, declares unconditional war on poverty in America. I urge
this Congress and all Americans to join with me in that effort … our joint
Federal-local effort must pursue poverty, pursue it wherever it exists – in city
slums and small towns, in sharecropper shacks or in migrant worker camps, on
Indian Reservations, among whites as well as Negroes, among the young as
well as the aged, in the boom towns and in the depressed areas. Our aim is not
only to relieve the symptom of poverty, but to cure it and, above all, to prevent it.

He also presented his policy arsenal:

• Special help to very under-developed areas such as Appalachia;

• Work programs for the young and “modernized” unemployment benefits for
adults;
12 Where it all started

• Big expansion of the food-stamp program (today known as Supplemental

Nutritional Assistance Program);
• A major expansion of the minimum-wage law;
• Federal money for schools in impoverished areas;
• An urban renewal program aiming for “a decent home for every American
family”;
• More libraries, hospitals and nursing homes; and
• Health insurance for “our older citizens financed by every worker and his
employer under Social Security … without cost to the Treasury.”

The last point gave us Medicare. President Johnson also signed Medicaid into law,
making both programs essential to the War on Poverty.
As these and other entitlement programs went into effect, federal spending
began following a new path forward, namely that of economic redistribution. New
metrics were applied to the success of entitlement spending, metrics that had
nothing to do with the officially stated goal of eliminating poverty.
Many critics of the War on Poverty have yet to understand that criticizing the
War based on a trend in the poverty rate is a moot point to egalitarians.
Nevertheless, the following data is often used by conservatives and other opponents
of egalitarianism:

16%

14%

12%

10%

8%

6%

4%

2%

0%
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014

Of all Americans Poverty trend

FIGURE 2.1 Percent of population at below 100 percent of FPL

Source: Census Bureau
 Where it all started 13

James Bartholomew, a British writer and fellow of the Institute for Economic
Affairs and the Adam Smith Institute, uses this very trend in American poverty to
declare the War on Poverty a failure.10
Others have concurred:

• Rachel Sheffield, writing for the Daily Signal in January 2016, held up built-in
mechanisms in welfare programs, such as weak work requirements and strong
marriage penalties, as reasons why the War has perpetuated, not ended, poverty.
• In a September 2014 commentary for the Heritage Foundation, Robert
Rector pointed out that the sum of all welfare aid in the United States in 2013
was “five times what was needed to eliminate all poverty” in the country.
• In March 2014 Louis Woodhill, contributor to the Forbes Magazine, declared
the War on Poverty a “catastrophe”.
• In April 2012 Michael Tanner estimated that nearly $1 trillion is being spent
every year on fighting poverty in the United States, with no success in sight.

In 1998 The New York Times sent a reporter to Appalachia, the region specifically
mentioned by President Johnson in the Declaration of War. The Times described a
region that, in terms of socio-economic status, had barely changed at all since 1964.
Not all critics of the War on Poverty are as quick to declare it a failure. A more
measured conclusion, reflecting the need for more complex metrics than the poverty
rate, is presented in Cato Institute Senior Fellow Michael Tanner’s 2014 evaluation of
the first 50 years of the War. Tanner and his co-author, Cato Research Associate
Charles Hughes, acknowledge that the War on Poverty has indeed alleviated the
material deprivations of life in poverty. However, they explain, the benefits from the
War on Poverty primarily helped those who were already leading a socio-econom-
ically stable life, not those whose lives were burdened by other problems: 11

Moreover, other factors like the passage of the Civil Rights Act, the
expansion of economic opportunities to African Americans and women,
increased private charity, and general economic growth may all have played
a role in whatever poverty reduction occurred.

They conclude that “the programs [the War on Poverty] spawned have long since
reached a point of diminishing returns.”
Understanding the War on Poverty as an open-ended fiscal commitment helps
explain the unending expansion of its entitlement programs. The food-stamp
program is a good example, with significant increase in enrollment since the
program was reformed and placed under the Food and Consumer Service in 1969.
The agency is now known as the the Food and Nutrition Service and the food-
stamp program has been renamed the Supplemental Nutritional Assistance Program
(SNAP). In 2015 it distributed $74 billion worth of benefits to 45 million people.
A comparison of SNAP enrollment and the poverty rate reveals that the goal
behind this program is not ending poverty, but economic redistribution:
14 Where it all started

17%
16%
15%
14%
13%
12%
11%
10%
9%
8%
7%
6%
5%
4%
3%
2%
1%
0%
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
SNAP ratio Poverty Poly. (SNAP ratio) Linear (Poverty)

FIGURE 2.2 Poverty rate: SNAP enrollment rate

Source: Census Bureau; Department of Agriculture, Food and Nutrition Service

Today, there are as many Americans on food stamps as there are Americans living
in poverty, yet the program is alive and well.
The same thing is true for Medicaid. In the 25 years from 1989 to 2014 the
number of poor Americans increased by 15.8 million. During the same time the
enrollment in Medicaid increased by a staggering 40.9 million.
Less than half of that increase, 19 million to be exact, was due to President
Obama’s Affordable Care Act. But what is really interesting here is that every one
of the four last presidents has signed budgets increasing Medicaid enrollment more
than the increase in poverty (see Figure 2.3).
The key to understanding the egalitarian purpose behind SNAP and Medicaid
is in the definition of poverty.

Relative poverty: the key to the egalitarian transformation

of America
Historically, the United States relied on an absolute poverty concept, which defines
poverty independently of the general standard of living in a society.12 Prior to the
invention of the relative poverty concept, federal welfare programs had been
specifically designed to relieve absolute poverty. While those programs expanded
 Where it all started 15

30,000,000
28,000,000
26,000,000
24,000,000
22,000,000
20,000,000
18,000,000
16,000,000
14,000,000
12,000,000
10,000,000
8,000,000
6,000,000
4,000,000
2,000,000
0
Bush Sr. Clinton Bush Jr. Obama
–2,000,000
–4,000,000
–6,000,000
–8,000,000

Enrollment change Medicaid Enrollment change SNAP Change in the number of poor

FIGURE 2.3 Change in poverty and in medicaid and SNAP enrollment

Source: Census Bureau; USDA Food and Nutrition Service

radically in the wake of the Great Depression,13 the purpose, and the definition of
entitlements in the programs, were all intended to make an absolute level of
poverty as palatable as possible.
So long as government was concerned with providing relief from absolute
poverty, its task was limited in terms of spending per poor person. In a manner of
speaking, every person who met the absolute-poverty measurement would be
handed a basket of food, be granted subsistence shelter and a sparse supply of
clothes. He would be granted access to a minimum, life-saving supply of health
care and whatever else he needed to survive.
Regardless of one’s moral reaction to this concept, it important to understand
its practical implications. By putting a limit on the commitment of government
resources, the absolute poverty concept necessitates private charities, whether
affiliated with churches or entirely secular, and the rest of the volunteer community
to provide the bulk of help to those in need.
Because of its natural limitation of government and its encouragement of
private charity, the absolute poverty concept is compatible with both traditional,
minimal-state libertarianism and socially compassionate conservatism.
Egalitarianism was the one ideology that the absolute poverty concept was
incompatible with. Logically, it was replaced with a concept that emphasized
16 Where it all started

economic redistribution: in 1963, a new concept saw the light of day. Developed
by Social Security Administration economist Mollie Orshansky,14 the relative
poverty concept defines a person as poor relative to the standard of living that
other, better-off people enjoy.
President Johnson’s working group that created the War on Poverty were quick
to pick up on Orshansky’s new, relative poverty concept. It is not clear whether
their motivation was entirely ideological, or if it appealed to them because it
removed the cap on government spending. The important effect of the concept
was that people’s status as entitled to government money now depended on a
simple percentage number: if the income threshold for poverty is defined as 60
percent of median household income (the definition currently used by the
European Union) then as median household income increases in actual dollars, so
does the poverty threshold. As the poverty threshold rises, government must
automatically spend more money on entitlements for the purposes of economic
redistribution.
Relative poverty allows government to guarantee that the differences between
the incomes of the poor and the incomes of others (or at least median-income
households) will not change over time. This is the egalitarian essence in the relative
definition of poverty.
By linking poverty to median income, President Johnson’s Economic
Opportunity Act marked the establishment of egalitarianism as the official ideology
of the United States government. Since then, egalitarian thinking has guided the
evolution of entitlement programs under the American welfare state. The food-
stamp program is a good example. In 1964, when President Johnson signed the
Food Stamp Act to make the program permanent, he also reconfigured the
program so that its benefits would no longer be absolute. The basket of food that
people could buy on food stamps evolved over time by means of the Cost of Living
Adjustment (COLA) instrument, which protects the purchasing power of food
stamps against inflation.
Because of annual COLAs, the food-stamp budget remains in constant relation
to the standard that an average-income family enjoys. This keep-up-with-the-
Joneses effect of the relative-poverty concept is reinforced by the income eligibility
requirements of the program.
It has also been applied in entitlement programs created after the launch of the
War on Poverty. Among those, the largest and probably best known program is the
cash-redistributing Earned Income Tax Credit. Owing to its design, its entire
purpose is to redistribute income; as it does, though, it also comes to represent one
of the deeply rooted, inherent problems that burden the welfare state and,
ultimately, pose a threat to its long-term survival.

The Earned Income Tax Credit

Simply put, the War on Poverty marked the start of the remaking of the United
States from a free-market capitalist country to an egalitarian welfare state. It marked
 Where it all started 17

the phase-out of an era with strictly limited government, individual liberty, and
unabridged property rights. In its place emerged an era where the balance between
property rights and entitlements was reversed. Philosophically, the right of the
entitled, which is tight under absolute poverty, becomes open-ended under relative
poverty. The economic equivalent of this is a shift from natural limitations of
government to an open-ended government spending commitment.
The philosophical shift manifests itself in a shift in the balance of rights between
the taxpayer and the entitlement consumer. Under absolute poverty the taxpayer’s
right to keep his money supersedes the right of the entitled to receive entitlements.
Under relative poverty the balance is altered, ranking the entitlement recipient’s
right to his money above the right of the taxpayer not to part with his money.
Egalitarianism is strongly reflected in the Earned Income Tax Credit (EITC),
which is about a decade younger than Lyndon Johnson’s War on Poverty. Created
in the 1970s, it is clearly the product of the same egalitarian ideology as the War
on Poverty: its benefits vary between eligible persons depending on their income
and family size. Just like the relative-poverty concept, the EITC is redistributive
both in theory and in practice. It also demonstrates how egalitarian thinking is not
limited to entitlement programs, but also defines the design of the personal federal
income tax system.
Over time, the EITC has become one of the most important entitlement
programs in the federal budget. At $66.7 billion (2015), it costs almost as much as
SNAP.15 Its redistributive effects are clearly visible, with the benefits varying based
on income and family size. The largest credit anyone can qualify for is $6,242 per
year, but part of the real redistributive effect on people’s income is in the amount
of the credit relative to people’s incomes.
In accordance with the purpose of income redistribution, the EITC gives more
the less a person earns. Below is how the tax credit changes the income of a family
of four, married, filing jointly.16
For the lowest income groups in Table 2.1, those making $20–$30,000 per
year, the EITC is so big that they actually end up with more cash in their hand
than their pre-tax income. For the upper-income groups, the EITC drops
dramatically, leaving them with less money in their pockets than their pre-tax
income.

TABLE 2.1 EITC impact

Income Income tax Net income EITC Adj. Income

$20,000 $2,081 $17,919 $5,348 $23,467
$25,000 $2,831 $22,169 $5,254 $27,423
$30,000 $3,581 $26,419 $4,201 $30,620
$35,000 $4,331 $30,669 $3,148 $33,817
$40,000 $5,081 $34,919 $2,095 $37,014
$45,000 $5,831 $39,169 $1,042 $40,211
$50,000 $6,581 $43,419 $0 $43,419
18 Where it all started

The EITC amplifies the redistribution effect already built into the federal
personal income tax code. In 2013 households within the top 10 percent of
incomes paid 69.8 percent of all personal federal income taxes.17 At the other end
of the income ladder, 28 million Americans shared the $67 billion given out by the
EITC. As a result, they paid a minimum of federal income taxes, or none at all.18
In fact, as Table 2.1 shows, the EITC turns some people into negative taxpayers as
they get a bigger tax refund than the taxes they paid.
The sole purpose of the EITC is income redistribution, making it a perfect
example of egalitarianism in practice. At the same time, it also represents one of the
problems that are built into the welfare state and egalitarian political practice.
Suppose the parent, in a family of four, earns $30,000 and is offered a promotion
with a $5,000 raise. As Table 2.1 shows, his adjusted income, in other words income
after federal income taxes and the EITC they qualify for, increases by $3,197. The
tax effect, $1,803, is 36 percent.
All other things being equal, if this couple made twice as much and got a $5,000
raise, their marginal-income tax rate would only be 15 percent. To pay a marginal
tax higher than 36 percent they would, by 2016 tax rates, have to make $467,000.
This effective marginal income tax is high enough to discourage many benefi-
ciaries of the EITC from accepting a promotion or putting in extra hours at work.
As more entitlement programs are added to the picture, the effective marginal tax
rate rises rapidly, and with it, so does the threshold that discourages people from
pursuing income-raising career moves.
Disincentives toward work-driven income improvements negatively affect labor
supply, especially with higher skills and productivity. This uncontroversial fact
should be open to discussion, not only among critics of the egalitarian project but
first and foremost among its proponents and defenders. After all, a long-term trend
of weak economic growth is like a slowly progressing venom to the welfare state;
any factors that contribute to a slowdown in growth should be of great concern to
all egalitarians.
That is not the case, though. On the contrary, disregard for the problems with
slow economic growth is in fact widespread among the left. A good example is
Senator Bernie Sanders, whose bid for the Democratic presidential ticket in 2016
catapulted him straight into the limelight of national politics. On more than one
occasion he made himself the voice of the surprisingly well-received viewpoint
that economic equality matters more than economic growth.
Egalitarians should think twice on this matter. Concern for economic growth is
not just something that free-market economists like to talk about. As the next
chapter explains, prominent economists whose contributions to the advancement
of egalitarianism have gone down in history, were well aware that the egalitarian
project – the welfare state – would not survive over time unless supported by
strong economic growth.
Another random document with
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 the approval of the governor of the islands, authorize the
cities and towns to form among themselves associations or
communities for determined ends, such as the construction of
public works, the creation and foundation of beneficent,
charitable, or educational institutions, for the better
encouragement of public interests or the use of communal
property.

{389}

"ARTICLE 54.
It shall be the duty of commanding officers of military
districts, immediately after the publication of this order, to
recommend to the office of the military governor in which towns
within their commands municipal governments shall be
established, and upon approval of recommendations, either
personally or through subordinate commanders designated by
them, to issue and cause to be posted proclamations calling
elections therein. Such proclamations shall fix the time and
place of election and shall designate three residents of the
town who shall be charged with the duty of administering
electors' oaths; of preparing, publishing, and correcting,
within specified dates, a list of electors having the
qualifications hereinbefore set forth, and of presiding at and
making a due return of the election thus appointed. The
proclamation shall specify the offices to be filled, and in
order to determine the number of councilors the commanders
charged with calling the election shall determine, from the
best available evidence, the class to which the town belongs,
as hereinbefore defined; the classification thus made shall
govern until the taking of an official census. The first
alcaldes appointed under the provisions of this order shall
take and subscribe the oath of office before the commanding
officer of the military district or some person in the several
towns designated by said commanding officer for the said
purpose; whereupon the alcalde so sworn shall administer the
said oath of office to all the other officers of the municipio
 there elected and afterwards appointed. The election returns
shall be canvassed by the authority issuing the election
proclamation, and the officers elected shall assume their
duties on a date to be specified by him in orders.

"ARTICLE. 55.
Until the appointment of governors of provinces their duties
under this order will be performed by the commanding officers
of the military districts. They may, by designation, confer on
subordinate commanding officers of subdistricts or of other
prescribed territorial limits of their commands the
supervisory duties herein enumerated, and a subordinate
commander so designated shall perform all and every of the
duties herein prescribed for the superior commanding officer.

"ARTICLE. 56.
For the time being the provisions of this order requiring that
alcaldes be elected, in all cases shall be so far modified as
to permit the commanding officers of military districts, in
their discretion, either to appoint such officers or to have
them elected as hereinbefore prescribed. The term of office of
alcaldes appointed under this authority shall be the same as
if they had been elected; at the expiration of such term the
office shall be filled by election or appointment.

"ARTICLE 57.
The governments of towns organized under General Orders No.
43, Headquarters Department of the Pacific and Eighth Army
Corps, series 1899, will continue in the exercise of their
functions as therein defined and set forth until such time as
municipal governments therefor have been organized and are in
operation under this order."

United States, 56th Congress, 1st Session,

House Document Number 659.

PHILIPPINE ISLANDS: A. D. 1900 (April).

Appointment of the Second Commission to the Philippines and
the President's instructions to it.
Steps to be taken towards the establishment of civil
government, and the principles to be observed.

On the 7th of April, 1900, the President of the United States

addressed the following communication to the Secretary of War,
appointing a Second Commission to the Philippines, "to
continue and perfect the work of organizing and establishing
civil government" in the Islands, and defining the principles
on which that work should proceed: "In the message transmitted
to the Congress on the 5th of December, 1899, I said, speaking of
the Philippine Islands: 'As long as the insurrection continues
the military arm must necessarily be supreme. But there is no
reason why steps should not be taken from time to time to
inaugurate governments essentially popular in their form as
fast as territory is held and controlled by our troops. To
this end I am considering the advisability of the return of
the commission, or such of the members thereof as can be
secured, to aid the existing authorities and facilitate this
work throughout the islands.'

"To give effect to the intention thus expressed I have

appointed the Honorable William H. Taft of Ohio, Professor
Dean C. Worcester of Michigan, the Honorable Luke I. Wright of
Tennessee, the Honorable Henry C. Ide of Vermont, and
Professor Bernard Moses of California, Commissioners to the
Philippine Islands to continue and perfect the work of
organizing and establishing civil government already commenced
by the military authorities, subject in all respects to any
laws which Congress may hereafter enact. The Commissioners
named will meet and act as a board, and the Honorable William
H. Taft is designated as President of the board. It is
probable that the transfer of authority from military
commanders to civil officers will be gradual and will occupy a
considerable period. Its successful accomplishment and the
maintenance of peace and order in the meantime will require
the most perfect co-operation between the civil and military
authorities in the island, and both should be directed during
the transition period by the same executive department. The
commission will therefore report to the Secretary of War, and
all their action will be subject to your approval and control.

"You will instruct the commission to proceed to the City of

Manila, where they will make their principal office, and to
communicate with the Military Governor of the Philippine
Islands, whom you will at the same time direct to render to
them every assistance within his power in the performance of
their duties. Without hampering them by too specific
instructions, they should in general be enjoined, after making
themselves familiar with the conditions and needs of the
country, to devote their attention in the first instance to
the establishment of municipal governments, in which the
natives of the islands, both in the cities and in the rural
communities, shall be afforded the opportunity to manage their
own local affairs to the fullest extent of which they are
capable, and subject to the least degree of supervision and
control which a careful study of their capacities and
observation of the workings of native control show to be
consistent with the maintenance of law, order, and loyalty.
The next subject in order of importance should be the
organization of government in the larger administrative
divisions corresponding to counties, departments, or
provinces, in which the common interests of many or several
municipalities falling within the same tribal lines, or the
same natural geographical limits, may best be subserved by a
common administration. Whenever the commission is of the
opinion that the condition of affairs in the islands is such
that the central administration may safely be transferred from
military to civil control, they will report that conclusion to
you, with their recommendations as to the form of central
government to be established for the purpose of taking over
the control.
{390}

"Beginning with the 1st day of September, 1900, the authority

to exercise, subject to my approval, through the Secretary of
War, that part of the power of government in the Philippine
Islands which is of a legislative nature is to be transferred
from the Military Governor of the Islands to this commission,
to be thereafter exercised by them in the place and stead of
the Military Governor, under such rules and regulations as you
shall prescribe, until the establishment of the civil central
government for the islands contemplated in the last foregoing
paragraph, or until Congress shall otherwise provide. Exercise
of this legislative authority will include the making of rules
and orders, having the effect of law, for the raising of
revenue by taxes, customs duties, and imposts; the
appropriation and expenditure of public funds of the islands;
the establishment of an educational system throughout the
islands; the establishment of a system to secure an efficient
civil service; the organization and establishment of courts;
the organization and establishment of municipal and
departmental governments, and all other matters of a civil
nature for which the Military Governor is now competent to
provide by rules or orders of a legislative character. The
commission will also have power during the same period to
appoint to office such officers under the judicial,
educational, and civil service systems and in the municipal
and departmental governments as shall be provided for. Until
the complete transfer of control the Military Governor will
remain the chief executive head of the Government of the
islands, and will exercise the executive authority now
possessed by him and not herein expressly assigned to the
commission, subject, however, to the rules and orders enacted
by the commission in the exercise of the legislative powers
conferred upon them. In the meantime the municipal and
departmental governments will continue to report to the
Military Governor, and be subject to his administrative
supervision and control, under your direction, but that
supervision and control will be confined within the narrowest
limits consistent with the requirement that the powers of
government in the municipalities and departments shall be
honestly and effectively exercised and that law and order and
individual freedom shall be maintained. All legislative rules
and orders, establishments of Government, and appointments to
office by the commission will take effect immediately, or at
such times as it shall designate, subject to your approval and
action upon the coming in of the commission's reports, which
are to be made from time to time as its action is taken.
Wherever civil Governments are constituted under the direction
of the commission, such military posts, garrisons, and forces
will be continued for the suppression of insurrection and
brigandage, and the maintenance of law and order, as the
military commander shall deem requisite, and the military
forces shall be at all times subject, under his orders to the
call of the civil authorities for the maintenance of law and
order and the enforcement of their authority.

"In the establishment of Municipal Governments the commission

will take as the basis of its work the Governments established
by the Military Governor under his order of Aug. 8, 1899, and
under the report of the board constituted by the Military
Governor by his order of January 29, 1900, to formulate and
report a plan of Municipal Government, of which his Honor
Cayetano Arellano, President of the Audencia, was Chairman,
and it will give to the conclusions of that board the weight
and consideration which the high character and distinguished
abilities of its members justify. In the constitution of
Departmental or Provincial Governments it will give especial
attention to the existing Government of the Island of Negros,
constituted, with the approval of the people of that island,
under the order of the Military Governor of July 22, 1899, and
after verifying, so far as may be practicable, the reports of
the successful working of that Government, they will be guided
by the experience thus acquired, so far as it may be
applicable to the conditions existing in other portions of the
Philippines. It will avail itself, to the fullest degree
practicable, of the conclusions reached by the previous
commissions to the Philippines. In the distribution of powers
among the Governments organized by the commission, the
presumption is always to be in favor of the smaller
sub-division, so that all the powers which can properly be
exercised by the Municipal Government shall be vested in that
Government, and all the powers of a more general character
which can be exercised by the Departmental Government shall be
vested in that Government, and so that in the governmental
system, which is the result of the process, the Central
Government of the islands, following the example of the
distribution of the powers between the States and the National
Government of the United States, shall have no direct
administration except of matters of purely general concern,
and shall have only such supervision and control over local
Governments as may be necessary to secure and enforce faithful
and efficient administration by local officers.

"The many different degrees of civilization and varieties of

custom and capacity among the people of the different islands
preclude very definite instruction as to the part which the
people shall take in the selection of their own officers; but
these general rules are to be observed: That in all cases the
municipal officers, who administer the local affairs of the
people, are to be selected by the people, and that wherever
officers of more extended jurisdiction are to be selected in
any way, natives of the islands are to be preferred, and if
they can be found competent and willing to perform the duties,
they are to receive the offices in preference to any others.
It will be necessary to fill some offices for the present with
Americans which after a time may well be filled by natives of
the islands. As soon as practicable a system for ascertaining
the merit and fitness of candidates for civil office should be
put in force. An indispensable qualification for all offices and
positions of trust and authority in the islands must be
absolute and unconditional loyalty to the United States, and
 absolute and unhampered authority and power to remove and
punish any officer deviating from that standard must at all
times be retained in the hands of the central authority of the
islands.
{391}
In all the forms of government and administrative provisions
which they are authorized to prescribe, the commission should
bear in mind that the government which they are establishing
is designed not for our satisfaction, or for the expression of
our theoretical views, but for the happiness, peace, and
prosperity of the people of the Philippine Islands, and the
measures adopted should be made to conform to their customs,
their habits, and even their prejudices, to the fullest extent
consistent with the accomplishment of the indispensable
requisites of just and effective government.

"At the same time the commission should bear in mind, and the
people of the islands should be made plainly to understand,
that there are certain great principles of government which
have been made the basis of our governmental system which we
deem essential to the rule of law and the maintenance of
individual freedom, and of which they have, unfortunately,
been denied the experience possessed by us; that there are
also certain practical rules of government which we have found
to be essential to the preservation of these great principles
of liberty and law, and that these principles and these rules
of government must be established and maintained in their
islands for the sake of their liberty and happiness, however
much they may conflict with the customs or laws of procedure
with which they are familiar. It is evident that the most
enlightened thought of the Philippine Islands fully
appreciates the importance of these principles and rules, and
they will inevitably within a short time command universal
assent. Upon every division and branch of the government of
the Philippines, therefore, must be imposed these inviolable
rules: That no person shall be deprived of life, liberty, or
property without due process of law; that private property
shall not be taken for public use without just compensation;
that in all criminal prosecutions the accused shall enjoy the
right to a speedy and public trial, to be informed of the
nature and cause of the accusation, to be confronted with the
witnesses against him, to have compulsory process for
obtaining witnesses in his favor, and to have the assistance
of counsel for his defense; that excessive bail shall not be
required, nor excessive fines imposed, nor cruel and unusual
punishment inflicted; that no person shall be put twice in
jeopardy for the same offense, or be compelled in any criminal
case to be a witness against himself; that the right to be
secure against unreasonable searches and seizures shall not be
violated; that neither slavery nor involuntary servitude shall
exist except as a punishment for crime; that no bill of
attainder or ex post facto law shall be passed; that no law
shall be passed abridging the freedom of speech or of the
press, or the rights of the people to peaceably assemble and
petition the Government for a redress of grievances; that no
law shall be made respecting an establishment of religion, or
prohibiting the free exercise thereof, and that the free
exercise and enjoyment of religious profession and worship
without discrimination or preference shall forever be allowed.

"It will be the duty of the commission to make a thorough

investigation into the titles to the large tracts of land held
or claimed by individuals or by religious orders; into the
justice of the claims and complaints made against such
landholders by the people of the island or any part of the
people, and to seek by wise and peaceable measures a just
settlement of the controversies and redress of wrongs which
have caused strife and bloodshed in the past. In the
performance of this duty the commission is enjoined to see
that no injustice is done; to have regard for substantial
rights and equity, disregarding technicalities so far as
substantial right permits, and to observe the following rules:
That the provision of the treaty of Paris pledging the United
States to the protection of all rights of property in the
islands, and, as well, the principle of our own Government,
which prohibits the taking of private property without due
process of law, shall not be violated; that the welfare of the
people of the islands, which should be a paramount
consideration, shall be attained consistently with this rule
of property right; that if it becomes necessary for the public
interest of the people of the islands to dispose of claims to
property which the commission finds to be not lawfully
acquired and held, disposition shall be made thereof by due
legal procedure, in which there shall be full opportunity for
fair and impartial hearing and judgment; that if the same
public interests require the extinguishment of property rights
lawfully acquired and held, due compensation shall be made out
of the public Treasury therefor; that no form of religion and
no minister of religion shall be forced upon any community or
upon any citizen of the islands; that, upon the other hand, no
minister of religion shall be interfered with or molested in
following his calling, and that the separation between State
and Church shall be real, entire, and absolute.

"It will be the duty of the commission to promote and extend,

and, as it finds occasion, to improve, the system of education
already inaugurated by the military authorities. In doing this
it should regard as of first importance the extension of a system
of primary education which shall be free to all, and which
shall tend to fit the people for the duties of citizenship and
for the ordinary avocations of a civilized community. This
instruction should be given in the first instance in every
part of the islands in the language of the people. In view of
the great number of languages spoken by the different tribes,
it is especially important to the prosperity of the islands
that a common medium of communication may be established, and
it is obviously desirable that this medium should be the
English language. Especial attention should be at once given
to affording full opportunity to all the people of the islands
to acquire the use of the English language. It may be well
that the main changes which should be made in the system of
 taxation and in the body of the laws under which the people
are governed, except such changes as have already been made by
the military Government, should be relegated to the civil
Government which is to be established under the auspices of
the commission. It will, however, be the duty of the
commission to inquire diligently as to whether there are any
further changes which ought not to be delayed, and, if so, it
is authorized to make such changes, subject to your approval.
In doing so it is to bear in mind that taxes which tend to
penalize or to repress industry and enterprise are to be
avoided; that provisions for taxation should be simple, so
that they may be understood by the people; that they should
affect the fewest practicable subjects of taxation which will
serve for the general distribution of the burden.

{392}

"The main body of the laws which regulate the rights and
obligations of the people should be maintained with as little
interference as possible. Changes made should be mainly in
procedure, and in the criminal laws to secure speedy and
impartial trials, and at the same time effective
administration and respect for individual rights. In dealing
with the uncivilized tribes of the islands the commission
should adopt the same course followed by Congress in
permitting the tribes of our North American Indians to
maintain their tribal organization and government, and under
which many of those tribes are now living in peace and
contentment, surrounded by a civilization to which they are
unable or unwilling to conform. Such tribal governments
should, however, be subjected to wise and firm regulation;
and, without undue or petty interference, constant and active
effort should be exercised to prevent barbarous practices and
introduce civilized customs. Upon all officers and employés of
the United States, both civil and military, should be
impressed a sense of the duty to observe not merely the
material but the personal and social rights of the people of
 the islands, and to treat them with the same courtesy and
respect for their personal dignity which the people of the
United States are accustomed to require from each other. The
articles of capitulation of the City of Manila on the 13th of
August, 1898, concluded with these words: 'This city, its
inhabitants, its churches and religious worship, its
educational establishments, and its private property of all
descriptions, are placed under the special safeguard of the
faith and honor of the American Army.' I believe that this
pledge has been faithfully kept. As high and sacred an
obligation rests upon the Government of the United States to
give protection for property and life, civil and religious
freedom, and wise, firm, and unselfish guidance in the paths
of peace and prosperity to all the people of the Philippine
Islands. I charge this commission to labor for the full
performance of this obligation, which concerns the honor and
conscience of their country, in the firm hope that through
their labors all the inhabitants of the Philippine Islands may
come to look back with gratitude to the day when God gave
victory to American arms at Manila and set their land under
the sovereignty and the protection of the people of the United
States.
WILLIAM McKINLEY."

PHILIPPINE ISLANDS: A. D. 1900 (April).

Speech of Senator Hoar against the subjugation and
retention of the Islands by the United States.

See (in this volume)

UNITED STATES OF AMERICA: A. D. 1900 (APRIL).

PHILIPPINE ISLANDS: A. D. 1900 (May).

Filipinos killed, captured and surrendered from the breaking
out of hostilities with them to May, 1900.
Losses of American army.

In response to a resolution of the United States Senate, May

 17, 1900, the following report, by cable, from Manila, was
made by General MacArthur:

"Filipinos killed, 10,780;

wounded, 2,104;
captured and surrendered, 10,425;
number prisoners in our possession, about 2,000.

No systematic record Filipino casualties these headquarters.

Foregoing, compiled from large number reports made immediately
after engagements, is as close an approximation as now
possible, owing to wide distribution of troops. More accurate
report would take weeks to prepare. Number reported killed
probably in excess of accurate figures; number reported
wounded probably much less, as Filipinos managed to remove
most wounded from field, and comparatively few fell into our
hands. Officers high rank and dangerous suspicious men have
been retained as prisoners; most other men discharged on field
as soon as disarmed. Propose to release all but very few
prisoners at early date."

56th Congress, 1st Session,

Senate Doc. 435.

For returns of casualties in the American army during the same

period,

See (in this volume)

UNITED STATES OF AMERICA: A. D. 1900 (JUNE).

PHILIPPINE ISLANDS: A. D. 1900 (May-November).

The question in American politics.

See (in this volume)

UNITED STATES OF AMERICA: A. D. 1900 (MAY-NOVEMBER).

PHILIPPINE ISLANDS: A. D. 1900 {July).

Appeal of citizens of Manila to the
Congress of the United States.

An appeal "to the Congress of the United States," dated at

Manila, July 15, 1900, and signed by 2,006 of the inhabitants
of the city, who were said by Senator Hoar and Senator Teller
to be "the leading people of that section of country—lawyers
and bankers and professional men generally" was presented to
the Senate on the 10th of January, 1901. It opens as follows:

"The undersigned, Filipinos and peaceful inhabitants of this

city, in their own name and in the name of the misnamed
'irreconcilables,' respectfully present themselves and submit
to the worthy consideration of the Congress of the United
States of America the following appeal: "The people of the
Philippine Islands, in view of their calamitous condition,
demand in the name of her sons, in the name of all races, in
the name of humanity, that an end be put to the misfortunes
which afflict them which, while they distress and agonize her,
compel her to struggle for the rights that are hers, and for
the maintenance whereof she must, if necessary, continue to
pour out her blood as she has so constantly and generously
done on battlefields, in the woods, on the mountains, in the
city, everywhere! The blood which has been shed and that is
still being shed, and which will continue to be shed until she
has secured her rights, is not shed because of the intrigues
of a few who, according to misinformed persons, desire to
exploit the people and enrich themselves at the cost of their
brother's blood. It has, gentlemen, sprung from the hearts of
the people, who alone are the real strength of nations, the
sovereign king of races, the producers of the arts, of
science, of commerce, of wealth, of agriculture, of
civilization, of progress, and of all the productions of human
labor and intelligence, in all of which the people of the
Philippine Islands had made great progress. The Filipinos were
not sunk in lethargy, as some untruthfully assert. They
suffered, but the hour to break their chains came to them in
 August, 1896, and they proclaimed to the world their
emancipation."

{393}

The paper proceeds to review the circumstances of the revolt

against Spanish rule which broke out in 1896, and the later
circumstances of the conflict between Filipinos and Americans
at such length that it cannot be given in full. Its aim and
its spirit may be sufficiently shown by quotation of the
following passages from the closing parts of the appeal:

"Even supposing that America should force us to submit, and

after many years of war the country should submit, as the
lesser evil, to the proclamation of an ample autonomy, that
autonomy would not produce a sincere bond of friendship
between the two people, because, having sacrificed herself for
her independence, the country could not look with affection upon
those who would be the only obstacle to her happiness. She
would always retain her aspirations, so that autonomy would be
a short 'interregnum' which the country would necessarily take
advantage of to regain new strength to be used in the
attainment of her high political ideals, happen what may, and
perhaps in some hour of peril strike a fatal blow at a hated
oppressor. … In giving this warning we do not forget the good
Americans whom we sincerely respect; we are mindful of the
rupture of our good relations with the United States; we are
mindful of the blood which will again run on the soil of our
country. We see in that autonomy a new and sorrowful page in
the history of the Philippines, and therefore we can not but
look upon it with horror. Our people have had enough of
suffering. … They steadfastly believe that their independence
is their only salvation. Should they obtain it, they would be
forever grateful to whomsoever shall have helped them in their
undertaking; they would consider him as their redeemer, and
his name will be engraved with bright letters in the national
history, that all the generations to come may read it with
sublime veneration. America, consistent with her tradition, is
the only one which could play that great rôle in the present
and future of the Philippines. If she recognizes their
independence, they could offer her a part of the revenues of
the Philippine state, according to the treaty which shall be
stipulated; the protection in the country of the merchandise
of the United States, and a moral and material guarantee for
American capital all over the archipelago; finally, whatever
may bring greater prosperity to America and progress to the
country will, we doubt not, be taken into account in the
treaty which shall be celebrated.

"That the independence of the country will be attended with

anarchy is asserted only by those who, offending the truth and
forgetting their dignity, represent the Filipinos under
horrible colors, comparing them to beasts. Their assertions
are backed by isolated acts of pillage and robbery. What
revolution of the world was free from such deeds? At this
epoch passions are unrestrained; vengeance finds opportunity
to satisfy itself; private ambitions are often favored by the
occasion. Could such criminal deeds be avoided? Pythagoras
said: 'If you like to see monsters, travel through a country
during a revolution.' …

"In order to end our appeal we will say, with the learned
lawyer, Senor Mabini: 'To govern is to study the wants and
interpret the aspirations of the people, in order to remedy
the former and satisfy the latter.' If the natives who know
the wants, customs, and aspirations of the people are not fit
to govern them, would the Americans, who have had but little
to do with the Filipinos, be more capable to govern the
latter? We have, therefore, already proven—

1. That the revolution was the exclusive work of the public;

2. That in preparing it they were moved by a great ideal, the

ideal of independence;
3. That they are ready to sacrifice their whole existence in
order to realize their just aspirations;

4. That in spite of the serious difficulties through which

they are passing, they still expect from America that she will
consider them with impartiality and justice, and will
recognize what by right belongs to them, and thus give them an
opportunity to show their boundless gratitude;

5. That the annexation of the Philippines to America is not

feasible;

6. That the American sovereignty is not favored by the

Philippine people;

7. That an ample autonomy can not be imposed without violating

the Filipino will;

8. That the Filipinos are firm for self-government.

"From this it results that the only admissible solution for

the present difficulties is the recognition by America of the
independence of the Filipinos. In saying this we do not
consider either the nullity or the legality of the Paris
treaty on our country, but the well-known doctrine of the
immortal Washington, and of the sons of the United States of
America, worthy champions of oppressed people. Therefore we,
in the name of justice and with all the energies of our souls,
demand—

1. That the independence of the Filipinos be recognized;

2. That all the necessary information regarding the events

which are taking place, concerning the peaceful towns and
places which are supporting the arms of the revolution, be
obtained from Filipinos who, by their antecedents and by their
 actual conduct, deserve the respect and confidence of the
Filipino people."

Congressional Record,
January 10, 1901, page 850.

PHILIPPINE ISLANDS: A. D. 1900 (September).

Adoption of civil service rules.

See (in this volume)

CIVIL SERVICE REFORM: A. D. 1900.

PHILIPPINE ISLANDS: A. D. 1900 (September-November).

Civil government of the Islands by the President's Commission.
Legislative measures.
Report of the Commission.

"In April of this year the second Philippine commission, of

which Honorable William H. Taft, of Ohio, Professor Dean C.
Worcester, of Michigan, Honorable Luke I. Wright, of
Tennessee, Honorable Henry C. Ide, of Vermont, and Professor
Bernard Moses, of California, were members, sailed for Manila
with the powers of civil government prescribed in the
instructions of April 7, 1900 [see above]. After devoting
several months to familiarizing themselves with the conditions
in the islands, this commission on the 1st of September, 1900,
entered upon the discharge of the extensive legislative powers
and the specific powers of appointment conferred upon them in
the instructions, and they have since that time continued to
exercise all that part of the military power of the President
in the Philippines which is legislative in its character,
leaving the military governor still the chief executive of the
islands, the action of both being duly reported to this
Department for the President's consideration and approval. …
On consultation with the commission, and with the President's
approval, a note of amnesty was issued by the military
governor, dated June 21, 1900, and supplemented by a public
 statement by the military governor, under date of July 2,
1900, based, in the main, upon the instructions to the
commission.
{394}
… In pursuance of them something over 5,000 persons, of all
grades of the civil and military service of the insurrection,
presented themselves and took the following oath: 'I hereby
renounce all allegiance to any and all so-called revolutionary
governments in the Philippine Islands and recognize and accept
the supreme authority of the United States of America therein;
and I do solemnly swear that I will bear true faith and
allegiance to that government; that I will at all times
conduct myself as a faithful and law-abiding citizen of said
islands, and will not, either directly or indirectly, hold
correspondence with or give intelligence to an enemy of the
United States, neither will I aid, abet, harbor, or protect
such enemy. That I impose upon myself this voluntary
obligation without any mental reservation or purpose of
evasion, so help me God.' This number included many of the
most prominent officials of the former Tagalog government. …

"The commission in its legislative action is following the

ordinary course of legislative procedure. Its sessions are
open, and its discussion and the proposed measures upon which
it is deliberating are public, while it takes testimony and
receives suggestions from citizens as if it were a legislative
committee. Its first legislative act was the appropriation, on
the 12th of September, of $2,000,000 (Mexican), to be used in
construction and repair of highways and bridges in the
Philippine Islands. The second act, on the same day, was an
appropriation of $5,000 (Mexican) for a survey of a railroad
to the mountains of Benguet, in the island of Luzon. The
proposed railroad, about 45 miles in length, extending from
the Manila and Dagupan road, near the Gulf of Lingayen, to the
interior, will open, at a distance of about 170 miles from
Manila, a high tableland exceedingly healthy, well wooded with
pine and oak, comparatively dry and cool, and where the
mercury is said to range at night in the hottest season of the
year between 50° and 60° F. The value of such a place for the
recuperation of troops and foreign residents will be very
great. The third act of the commission was an appropriation
for the payment of a superintendent of public instruction.
They have secured for that position the services of Frederick
W. Atkinson, recently principal of the high school of
Springfield, Massachusetts, who was selected by the commission
for that purpose before their arrival in Manila.

"Before the 1st of September a board of officers had been

engaged upon the revision of the tariff for the islands in the
light of such criticisms and suggestions as had been made
regarding the old tariff. The commission has considered the
report of this board, and after full public hearings of
business interests in the island has formulated a tariff law
which has been transmitted to the Department. … A
civil-service board has been constituted by the commission
[see, in this volume, CIVIL SERVICE REFORM: A. D. 1900). They
have secured from the United States Civil Service Commission
the experienced and capable services of Mr. Frank M. Kiggins,
and a civil-service law has been enacted by the commission
providing for the application of the merit system to
appointments in the island."

United States, Secretary of War, Annual Report,

November 30, 1900, pages 25-27.

A report by the Commission, dated November 30, was received at

Washington late in January, 1901. Of the legislative work on
which it entered September 1st, and which, at the time of
reporting, it had prosecuted during three months, the
Commission speaks as follows:

"It adopted the policy of passing no laws, except in cases of

emergency, without publishing them in the daily press after
they had passed a second reading, and giving to the public an