Machine-Age Ideology: Social Engineering and American Liberalism: 1911-1939.

WHATEVER DOES OR DOESN'T happen in the 104th Congress, the American welfare state faces a decidedly bleak future. It suffers a central and seemingly intractable problem: Fewer and fewer people believe in it anymore. Power without legitimacy can't be sustained indefinitely, and the welfare state's legitimacy appears to be in terminal decline. Unless that decline can be reversed, a substantial contraction in the size and scope of government is inevitable.

If you're a skeptic--if you think 1994's election may have been a fluke, if you doubt there has been a generation-long shift in the political culture away from big government--you ought to read John M. Jordan's Machine-Age Ideology: Social Engineering and American Liberalism 1911-1939. This fresh and interesting examination of the origins and development of big government shows just how different things used to be.

Jordan, who teaches at Harvard, tells the story over three decades of the "rational reformers," otherwise known as technocrats or social engineers. Theirs was a particular strain of American liberalism, and a particularly influential one. They shaped the Progressive era in the 1900s and 1910s, the corporatist embrace of the "associative state" in the 1920s, and the New Deal in the 1930s. And while Jordan's narrative leaves off there, he acknowledges that the story continues: "In the indistinct but crucial realm of political culture, the engineering and managerial influence persisted well after World War II, finding its highest expression in the 1950s and 1960s...."

The rationalist visions of any era share certain key features--among them, according to Jordan, "fascination with scientific method, machine process, and large-scale managerial organizations as analogues for government." Equally characteristic is disdain in equal measure for market competition and democratic persuasion, since both are too messy and too unpredictable to fit in the social engineers' blueprints. Sound familiar, Mr. Magaziner?

Jordan traces the roots of this worldview back to the efficiency craze that took hold in the first generation of industrialization: "A discussion of the 'best and the brightest' of the Great Society must begin with what Taylorites called 'the one best way' in the first years of the century."

The preoccupation with efficiency, epitomized by Frederick Winslow Taylor's scientific management and its time-and-motion studies, produced rhetoric that sounds distinctly odd to contemporary ears. For instance, Louis Brandeis, who helped to popularize the term "scientific management" in his celebrated challenges to railroad rate increases, declared that "efficiency is the hope of democracy." Even more strangely, a 1913 article in System magazine characterized Teddy Roosevelt as "the most efficient human machine of our time."

MECHANISTIC METAPHORS WERE INEScapable in what was widely known as the Machine Age. Born into a technological, urban society, we take industrial culture for granted; for contemporaries, it was breathtakingly novel and disorienting. Unsurprisingly, many took their bearings from the most obvious characteristic of the times: the new mechanical marvels and the engineers who built them. "[The] engineering profession generally rises yearly in dignity and importance as the rest of the word learns more of where the real brains of industrial progress are," Herbert Hoover, known as the "Great Engineer," wrote in 1909. "The time will come when people will ask, not who paid for a thing, but who built it."

It was an easy next step to conclude that engineers and engineering principles were needed to transform not just business, but the whole of society. Charles P. Steinmetz, a well-known engineer with General Electric and an avowed socialist (he kept an autographed photo of Lenin in his G.E. laboratory), summed up the viewpoint in his 1916 book America 'and the New Epoch: "All that is necessary is to extend the methods of economic efficiency from the individual industrial corporation to the national organism as a whole."

This one idea--that the rationality of the factory, of the machine, could be extended to society generally--was the driving impulse of the rational reformers. Though technocrats are still with us, and their instincts are still the same, they are now on the intellectual defensive, and hence vague and evasive. Jordan provides the service of pulling together a wide variety of voices, famous and obscure, from a time when Hayek's fatal conceit was still conceited. Consider the following gems:

* Stuart Chase, journalist and author, writing in Harper's in 1931: "Plato once called for philosopher kings. To-day the greatest need in all the bewildered world is for philosopher engineers."

* George Soule, an editor of The New Republic, writing in that magazine in 1931: "As more and more people--both engineers and others--come to understand the inherent superiority of the engineering approach, the traditional business way of doing things is bound to lose its popularity."

* Howard Scott, head of Technocracy Inc., in his organization's Study Course: "There is only one science, and there is no essential difference between science and engineering. The stoking of a bunsen burner, the stoking of a boiler, the stoking of the people of a nation, are all one problem."

* Rexford "Red Rex" Tugwell, Columbia University economics professor and New Dealer at the Department of Agriculture, in his 1935 book The Battle for Democracy: "There is no invisible hand. There never was....[W]e must now supply a real and visible guiding hand to do the task which that mythical, non-existent invisible agency was supposed to perform, but never did."

* Arthur E. Morgan, head of the Tennessee Valley Authority, in his 1936 book The Long Road: "[C]onsensus of judgment would not mean taking formal votes on the 'one man, one vote' principle. Consensus of judgment may be arrived at by the deference of the many who do not know to the superior judgment of the few who do."

THE IDEA OF SOCIAL ENGINEERING PERMEated the political culture in the early 20th century. It attracted prominent intellectuals, among them John Dewey, Charles Beard, Herbert Croly, and Walter Lippmann (some of whom later became disillusioned). It inspired the establishment of such institutions as The New Republic (1914), the Institute for Governmental Research (later the Brookings Institution) (1916), the New School for Social Research (1919), and the National Bureau for Economic Research (1920).

The idea attracted doers as well as thinkers. It infused the corporate liberalism of organizations like the National Civic Foundation. And most fatefully, it lent powerful momentum to politicians--from the Progressive era, through wartime mobilization, to Hoover's dry-run New Deal and FDR's real thing--bent on a dramatic expansion of government's responsibilities and powers.

Jordan's book focuses much more on the thinkers than on the doers. Politicians, other than Hoover, are given scant attention, and business leaders who embraced social engineering are almost completely ignored. The latter omission is particularly unfortunate; more discussion of such people as George Perkins of New York Life, Elbert Gary of U.S. Steel, Gerard Swope of General Electric, and Henry Harriman of the U.S. Chamber of Commerce would have underscored the extent to which belief in central planning (and rejection of market competition) spanned the conventional political spectrum.

Nevertheless, Jordan's book does an excellent job of recreating a lost world of ideas. Moreover, he points out that there were dissidents, however lonely: He includes discussions of Frank Knight's views on the limitations of social science, Walter Lippmann's renunciation of central planning in his The Good Society, and Friedrich Hayek's unflinching defense of competition.

Admittedly, there is more to the history of American statism than technocratic folly. There have been populists who clashed with the social engineers' anti-democratic and centralizing tendencies. And of course the contemporary left has been much more concerned with social and cultural issues than with economic concerns. That said, the misplaced faith in centralized expert control was surely central to big government's rise, just as disenchantment with that control is central to the current political environment.

At bottom, the belief in social engineering grew out of a profound misunderstanding of industrialization. Confronted by the technological breakthroughs of the new age, contemporaries saw not the creative power of the free market, but rather the benefits of top-down bureaucracies and central planning. Dazzled by the role of the engineer in industry, they ignored the less obvious, but still fundamental, contribution of the entrepreneur. They did not grasp that without entrepreneurship, without decentralized and competitive investment, engineering brilliance leads not to prosperity, but to pyramid building.

The misunderstanding was total. Not only did the social engineers fail to grasp the unplanned and unpredictable process by which all the new machines were being created, they saw society itself as a giant mechanism, running according to deterministic laws which they would be able to discern and manipulate. The law they didn't count on, the one that has haunted and mocked their every attempt to control society from above, is the law of unintended consequences--which is just another way of saying that people with minds of their own make very poor machine cogs. It is a law that, at long last, we may be learning to live with.

Contributing Editor Brink Lindsey practices international trade law in Washington, D.C.