Woody vs Teddy

Below, when Woodrow Wilson refers to “the third party” he’s referring to Theodore Roosevelt’s party that claimed to be for the common man while supporting monopolies. Their argument was that you can’t stop them, so the best you can do is hope that they will be kind. See where that gets us.

“The third party says that the present system of our industry and trade has come to stay. Mind you, these artificially built up things, these things that can’t maintain themselves in the market without monopoly, have come to stay, and the only thing that the government can do, the only thing that the third party proposes should be done, is to set up a commission to regulate them. It accepts them. It says: “We will not undertake, it were futile to undertake, to prevent monopoly, but we will go into an arrangement by which we will make these monopolies kind to you. We will guarantee that they shall be pitiful. We will guarantee that they shall pay the right wages. We will guarantee that they shall do everything kind and public-spirited, which they have never heretofore shown the least inclination to do.”

“Don’t you realize that that is a blind alley? You can’t find your way to liberty that way.”

Wilson, Woodrow. “Chapter 9/Benevolence or Justice?” The New Freedom; a Call for the Emancipation of the Generous Energies of a People. New York and Garden City: Doubleday, Page, 1913. 196-197. Print.

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How Monopolies Think They’re Doing You A Favor

Are unregulated businesses making life easier for you? You know what happened when we deregulated the banks? Remember what they said when they did away with regulation? “We don’t need it; we’ll be good; we’ll police ourselves!” How did that go? And yet Citicorp is trying to get rid of the provision in Dodd Frank that would’ve banned the government from bailing out banks that deal in high-risk swaps. Citicorp made certain that Congress would pass a special exception for them so that the taxpayers are on the hook for bailing them out the next time they gamble with everyone else’s money. I don’t understand why Congressmen get away with inserting these provisions into a huge funding bill at the last minute without their constituents being mad about it.

Roosevelt said he was anti-trust, that he was going to break up the monopolies, but he only said that to gain popularity. In truth, he was backed by the trusts (read: monopolies)! Things really haven’t changed much, have they. Read what Roosevelt’s predecessor says of Teddy’s presidency.

“The doctrine that monopoly is inevitable and that the only course open to the people of the United States is to submit to and regulate it found a champion during the campaign of 1912 in the new party, or branch of the Republican party, founded under the leadership of Mr. Roosevelt, with the conspicuous aid,—I mention him with no satirical intention, but merely to set the facts down accurately,—of Mr. George W. Perkins, organizer of the Steel Trust and the Harvester Trust, and with the support of more than three millions of citizens, many of them among the most patriotic, conscientious and high-minded men and women of the land. The fact that its acceptance of monopoly was a feature of the new party platform from which the attention of the generous and just was diverted by the charm of a social program of great attractiveness to all concerned for the amelioration of the lot of those who suffer wrong and privation, and the further fact that, even so, the platform was repudiated by the majority of the nation, render it no less necessary to reflect on the significance of the confession made for the first time by any party in the country’s history. It may be useful, in order to the relief of the minds of many from an error of no small magnitude, to consider now, the heat of a presidential contest being past, exactly what it was that Mr. Roosevelt proposed.

“Mr. Roosevelt attached to his platform some very splendid suggestions as to noble enterprises which we ought to undertake for the uplift of the human race; but when I hear an ambitious platform put forth, I am very much more interested in the dynamics of it than in the rhetoric of it. I have a very practical mind, and I want to know who are going to do those things and how they are going to be done. If you have read the trust plank in that platform as often as I have read it, you have found it very long, but very tolerant. It did not anywhere condemn monopoly, except in words; its essential meaning was that the trusts have been bad and must be made to be good. You know that Mr. Roosevelt long ago classified trusts for us as good and bad, and he said that he was afraid only of the bad ones. Now he does not desire that there should be any more bad ones, but proposes that they should all be made good by discipline, directly applied by a commission of executive appointment. All he explicitly complains of is lack of publicity and lack of fairness; not the exercise of power, for throughout that plank the power of the great corporations is accepted as the inevitable consequence of the modern organization of industry. All that it is proposed to do is to take them under control and regulation. The national administration having for sixteen years been virtually under the regulation of the trusts, it would be merely a family matter were the parts reversed and were the other members of the family to exercise the regulation. And the trusts, apparently, which might, in such circumstances, comfortably continue to administer our affairs under the mollifying influences of the federal government, would then, if you please, be the instrumentalities by which all the humanistic, benevolent program of the rest of that interesting platform would be carried out!

“I have read and reread that plank, so as to be sure that I get it right. All that it complains of is,—and the complaint is a just one, surely,—that these gentlemen exercise their power in a way that is secret. Therefore, we must have publicity. Sometimes they are arbitrary; therefore they need regulation. Sometimes they do not consult the general interests of the community; therefore they need to be reminded of those general interests by an industrial commission. But at every turn it is the trusts who are to do us good, and not we ourselves.

“Again, I absolutely protest against being put into the hands of trustees.”

Wilson, Woodrow. “Chapter 9/Benevolence or Justice?” The New Freedom; a Call for the Emancipation of the Generous Energies of a People. New York and Garden City: Doubleday, Page, 1913. 192-195. Print.

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How Monopolies Will Be Broken

Was Wilson an idealist to think that the monopolies would be broken up?

I think that the monopolies will die a slow death by communities working together to make their processes and market more flexible. They will dodge and weave, they are more nimble and aware of what is going on locally. The monopolies will be blindsided by small, agile concerns that speak directly to the people. When monopolies become too old, when their banks have fallen apart because the people refuse to carry them on their backs, when the labor force becomes wise to the manipulation and thievery, when their pensions are completely stolen and the Medicare fund is gambled away, then and only then the people will agree that we must act locally. And they will stop supporting industries who don’t care about them.

“When we undertake the strategy which is going to be necessary to overcome and destroy this far-reaching system of monopoly, we are rescuing the business of this country, we are not injuring it; and when we separate the interests from each other and dismember these communities of connection, we have in mind a greater community of interest, a vaster community of interest, the community of interest that binds the virtues of all men together, that community of mankind which is broad and catholic enough to take under the sweep of its comprehension all sorts and conditions of men; that vision which sees that no society is renewed from the top but that every society is renewed from the bottom. Limit opportunity, restrict the field of originative achievement, and you have cut out the heart and root of all prosperity.

“The only thing that can ever make a free country is to keep a free and hopeful heart under every jacket in it. Honest American industry has always thriven, when it has thriven at all, on freedom; it has never thriven on monopoly. It is a great deal better to shift for yourselves than to be taken care of by a great combination of capital. I, for my part, do not want to be taken care of. I would rather starve a free man than be fed a mere thing at the caprice of those who are organizing American industry as they please to organize it. I know, and every man in his heart knows, that the only way to enrich America is to make it possible for any man who has the brains to get into the game. I am not jealous of the size of any business that has grown to that size. I am not jealous of any process of growth, no matter how huge the result, provided the result was indeed obtained by the processes of wholesome development, which are the processes of efficiency, of economy, of intelligence, and of invention.”

Wilson, Woodrow. “Chapter 8/Monopoly, or Opportunity?” The New Freedom; a Call for the Emancipation of the Generous Energies of a People. New York and Garden City: Doubleday, Page, 1913. 190-191. Print.

 

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When It’s Time for the Great to Fall, Let Us Dissect

The bigger they are, the harder to dissect. But let us begin by taking one step at a time…

“What we have got to do,—and it is a colossal task not to be undertaken with a light head or without judgment,—what we have got to do is to disentangle this colossal “community of interest.” No matter how we may purpose dealing with a single combination in restraint of trade, you will agree with me in this, that no single, avowed, combination is big enough for the United States to be afraid of; but when all the combinations are combined and this final combination is not disclosed by any process of incorporation or law, but is merely an identity of personnel, or of interest, then there is something that even the government of the nation itself might come to fear,—something for the law to pull apart, and gently, but firmly and persistently, dissect.”

Wilson, Woodrow. “Chapter 8/Monopoly, or Opportunity?” The New Freedom; a Call for the Emancipation of the Generous Energies of a People. New York and Garden City: Doubleday, Page, 1913. 188. Print.

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Who Controls Our Money?

Woodrow Wilson explains in his book, The New Freedom, published in 1913 that U.S. currency was controlled by private concerns. If you weren’t already aware of how the Federal Reserve was created by private tycoons of banking and industry, here is some more proof:

“The great monopoly in this country is the monopoly of big credits. So long as that exists, our old variety and freedom and individual energy of development are out of the question. A great industrial nation is controlled by its system of credit. Our system of credit is privately concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men who, even if their action be honest and intended for the public interest, are necessarily concentrated upon the great undertakings in which their own money is involved and who necessarily, by very reason of their own limitations, chill and check and destroy genuine economic freedom. This is the greatest question of all, and to this statesmen must address themselves with an earnest determination to serve the long future and the true liberties of men.

“This money trust, or, as it should be more properly called, this credit trust, of which Congress has begun an investigation, is no myth; it is no imaginary thing. It is not an ordinary trust like another. It doesn’t do business every day. It does business only when there is occasion to do business. You can sometimes do something large when it isn’t watching, but when it is watching, you can’t do much. And I have seen men squeezed by it; I have seen men who, as they themselves expressed it, were put ‘out of business by Wall Street,’ because Wall Street found them inconvenient and didn’t want their competition.”

Wilson, Woodrow. “Chapter 8/Monopoly, or Opportunity?” The New Freedom; a Call for the Emancipation of the Generous Energies of a People. New York and Garden City: Doubleday, Page, 1913. 185-186. Print.

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Insider Trading

The insider advantage. A conflict of interest. But who is watching these people? Makes you wonder.

“You will notice from a recent investigation that things like this take place: A certain bank invests in certain securities. It appears from evidence that the handling of these securities was very intimately connected with the maintenance of the price of a particular commodity. Nobody ought, and in normal circumstances nobody would, for a moment think of suspecting the managers of a great bank of making such an investment in order to help those who were conducting a particular business in the United States maintain the price of their commodity; but the circumstances are not normal. It is beginning to be believed that in the big business of this country nothing is disconnected from anything else. I do not mean in this particular instance to which I have referred, and I do not have in mind to draw any inference at all, for that would be unjust; but take any investment of an industrial character by a great bank. It is known that the directorate of that bank interlaces in personnel with ten, twenty, thirty, forty, fifty, sixty boards of directors of all sorts, of railroads which handle commodities, of great groups of manufacturers which manufacture commodities, and of great merchants who distribute commodities; and the result is that every great bank is under suspicion with regard to the motive of its investments. It is at least considered possible that it is playing the game of somebody who has nothing to do with banking, but with whom some of its directors are connected and joined in interest. The ground of unrest and uneasiness, in short, on the part of the public at large, is the growing knowledge that many large undertakings are interlaced with one another, are indistinguishable from one another in personnel.”

Wilson, Woodrow. “Chapter 8/Monopoly, or Opportunity?” The New Freedom; a Call for the Emancipation of the Generous Energies of a People. New York and Garden City: Doubleday, Page, 1913. 182-183. Print.

 

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Bigger, and Less Taxing

Monopolies. The bigger they get, the less taxes they pay. In the following quote, use “monopoly” instead of “trust.”

“That is the difference between a big business and a trust. A trust is an arrangement to get rid of competition, and a big business is a business that has survived competition by conquering in the field of intelligence and economy. A trust does not bring efficiency to the aid of business; it buys efficiency out of business. I am for big business, and I am against the trusts. Any man who can survive by his brains, any man who can put the others out of the business by making the thing cheaper to the consumer at the same time that he is increasing its intrinsic value and quality, I take off my hat to, and I say: “You are the man who can build up the United States, and I wish there were more of you.”

“There will not be more, unless we find a way to prevent monopoly. You know perfectly well that a trust business staggering under a capitalization many times too big is not a business that can afford to admit competitors into the field; because the minute an economical business, a business with its capital down to hard pan, with every ounce of its capital working, comes into the field against such an overloaded corporation, it will inevitably beat it and undersell it; therefore it is to the interest of these gentlemen that monopoly be maintained. They cannot rule the markets of the world in any way but by monopoly. It is not surprising to find them helping to found a new party with a fine program of benevolence, but also with a tolerant acceptance of monopoly.”

Wilson, Woodrow. “Chapter 8/Monopoly, or Opportunity?” The New Freedom; a Call for the Emancipation of the Generous Energies of a People. New York and Garden City: Doubleday, Page, 1913. 180-181. Print.

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Crushing the Little Man

“The people of this country are being very subtly dealt with. You know, of course, that, unless our Commerce Commissions are absolutely sleepless, you can get rebates without calling them such at all. The most complicated study I know of is the classification of freight by the railway company. If I wanted to make a special rate on a special thing, all I should have to do is to put it in a special class in the freight classification, and the trick is done. And when you reflect that the twenty-four men who control the United States Steel Corporation, for example, are either presidents or vice-presidents or directors in 55 per cent of the railways of the United States, reckoning by the valuation of those railroads and the amount of their stock and bonds, you know just how close the whole thing is knitted together in our industrial system, and how great the temptation is. These twenty-four gentlemen administer that corporation as if it belonged to them. The amazing thing to me is that the people of the United States have not seen that the administration of a great business like that is not a private affair; it is a public affair.

“I have been told by a great many men that the idea I have, that by restoring competition you can restore industrial freedom, is based upon a failure to observe the actual happenings of the last decades in this country; because, they say, it is just free competition that has made it possible for the big to crush the little.

“I reply, it is not free competition that has done that; it is illicit competition. It is competition of the kind that the law ought to stop, and can stop,—this crushing of the little man.”

Wilson, Woodrow. “Chapter 8/Monopoly, or Opportunity?” The New Freedom; a Call for the Emancipation of the Generous Energies of a People. New York and Garden City: Doubleday, Page, 1913. 176-177. Print.

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Price Fixing

Have you ever thought about how monopolies fix prices? Here, in Woodrow Wilson’s The New Freedom, he explains how a monopoly (which he calls a “trust”) shuts out competition.

“Did you ever look into the way a trust was made? It is very natural, in one sense, in the same sense in which human greed is natural. If I haven’t efficiency enough to beat my rivals, then the thing I am inclined to do is to get together with my rivals and say: ‘Don’t let’s cut each other’s throats; let’s combine and determine prices for ourselves; determine the output, and thereby determine the prices: and dominate and control the market.’ That is very natural. That has been done ever since freebooting was established. That has been done ever since power was used to establish control. The reason that the masters of combination have sought to shut out competition is that the basis of control under competition is brains and efficiency. I admit that any large corporation built up by the legitimate processes of business, by economy, by efficiency, is natural; and I am not afraid of it, no matter how big it grows. It can stay big only by doing its work more thoroughly than anybody else. And there is a point of bigness,—as every business man in this country knows, though some of them will not admit it,—where you pass the limit of efficiency and get into the region of clumsiness and unwieldiness. You can make your combine so extensive that you can’t digest it into a single system; you can get so many parts that you can’t assemble them as you would an effective piece of machinery. The point of efficiency is overstepped in the natural process of development oftentimes, and it has been overstepped many times in the artificial and deliberate formation of trusts.

“A trust is formed in this way: a few gentlemen ‘promote’ it—that is to say, they get it up, being given enormous fees for their kindness, which fees are loaded on to the undertaking in the form of securities of one kind or another. The argument of the promoters is, not that every one who comes into the combination can carry on his business more efficiently than he did before; the argument is: we will assign to you as your share in the pool twice, three times, four times, or five times what you could have sold your business for to an individual competitor who would have to run it on an economic and competitive basis. We can afford to buy it at such a figure because we are shutting out competition. We can afford to make the stock of the combination half a dozen times what it naturally would be and pay dividends on it, because there will be nobody to dispute the prices we shall fix.”

Wilson, Woodrow. “Chapter 8/Monopoly or Opportunity?” The New Freedom; a Call for the Emancipation of the Generous Energies of a People. New York and Garden City: Doubleday, Page, 1913. 166-167. Print.

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The Throat of Congress

Let’s get the grip of special interests off the throat of Congress.

“…As for the rest of us, the time is coming when we shall not have to subscribe. The people of this land have made up their minds to cut all privilege and patronage out of our fiscal legislation, particularly out of that part of it which affects the tariff. We have come to recognize in the tariff as it is now constructed, not a system of protection, but a system of favoritism, of privilege, too often granted secretly and by subterfuge, instead of openly and frankly and legitimately, and we have determined to put an end to the whole bad business, not by hasty and drastic changes, but by the adoption of an entirely new principle,—by the reformation of the whole purpose of legislation of that kind. We mean that our tariff legislation henceforth shall have as its object, not private profit, but the general public development and benefit. We shall make our fiscal laws, not like those who dole out favors, but like those who serve a nation. We are going to begin with those particular items where we find special privilege entrenched. We know what those items are; these gentlemen have been kind enough to point them out themselves. What we are interested in first of all with regard to the tariff is getting the grip of special interests off the throat of Congress.”

Wilson, Woodrow. “Chapter 7/The Tariff.” The New Freedom; a Call for the Emancipation of the Generous Energies of a People. New York and Garden City: Doubleday, Page, 1913. 160-161. Print.

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