Gabriel Kolko Revisited
The following article was written by  and published at The Future of Freedom Foundation, September 1 and October 1, 2013.

Part 1: Kolko at Home

An earlier generation of libertarians was interested in Gabriel Kolko, a historian of the Left. Who was he?

Born in 1932 in Paterson, NJ, historian Gabriel Kolko studied at Kent State, the University of Wisconsin, and Harvard University (PhD: 1962). From 1970 until his retirement he taught history at York University in Toronto, where he remains Distinguished Research Professor Emeritus. In Wealth and Power in America (1962) he reflected on persistent poverty in the United States. Other works in American economic history followed. Thereafter, events moved Kolko increasingly into issues of war and peace. Gifted with a definite independence of thought, he was generally seen as part of the New Left.

Kolko’s vision of American economic history overlapped with, but differed from, that of other New Left historians. William Appleman Williams, for example, divided American history into three ages: Mercantilism (1740-1828), Laissez Nous Faire (1819-1896), and Corporation Capitalism (1882 to present). By the early 20th century a “class-conscious industrial gentry” sought to guarantee the dominance of large corporations by using government (1) to engross foreign markets for goods and capital; (2) to provide market stability and predictability, partly through formal or informal cartelization; and (3) to reduce discontent by recognizing union rights (within limits) and instituting a very minimal welfare state. The New Deal rounded out this system of “corporate syndicalism” (Williams’s term). Other New Left historians, including James Weinstein, David W. Eakins, Martin J. Sklar, and R. Jeffrey Lustig, tended to speak of “liberal corporatism” or “corporate liberalism.” Pursuing this system’s origins, historians ventured back into the 19th century, and Kolko’s early work reflected that journey, so let us begin with his second, more focused study, Railroads and Regulation (1965).

The locomotive of history

In Kolko’s view, all historically existing capitalist systems have relied on the state. Once state-promoted railroads had become the biggest 19th-century investment sector, their subsequent difficulties necessarily called forth further aid from a political system eager to help. Given their origins, American railroads essentially rested on gross over- or malinvestment, a situation made worse by the land speculation they encouraged, as well as watered stock and endless promotional scams. Alas, just enough sharp fellows had scrambled into railroading to create a degree of competition that might ruin or certainly inconvenience the owners once they actually had to transport something and make money on their massive fixed capital. Following regulatory proposals through Congress (and elsewhere) between 1877 and 1916, Kolko concluded that railroads dominated overall and got most of what they wanted. This was the birth of self-conscious political capitalism. (Meanwhile, one could add, the railroad industry had done much harm, economically and socially, by fostering “economies” on a new and artificial scale [“national markets”]; and, as economist Michael Perelman writes, the railroad industry’s seeming immunity to market forces confused economists, who developed new — and not necessarily better — economic theories.)

Political capitalism: Free market and strong state

Railroads had spurred the rise of corporations in other key industries, and the new political capitalism necessarily spread to other sectors. Kolko’s Triumph of Conservatism (1963) takes a grand tour of the late-19th- and early-20th-century American economy, its general trends and exceptions to them, covering steel, oil, automobiles, agricultural machinery, telephone services, copper, insurance, meatpacking, and banking. Broadly speaking, America’s rapidly industrializing economy still displayed much decentralization and considerable (and unwelcome) competition. Now, key businessmen consciously sought political solutions to preserve or improve their positions. (This mattered far more than their subjective or theoretical views, including arbitrarily deployed free-market verbiage.) Above all, they wanted the stability and rationalization that only law and the state could give them.

For Kolko, a conservative consensus shaped the “reforms” of the Progressive Era. Politicians generally put business first. Industry wanted (and got) a veto over regulatory agencies. The outcome, Kolko wrote, was political capitalism: “the functional unity of major political and business leaders,” doing business (as of 1963) as the Establishment, an “interlocking social, economic, and political elite.” This was not entirely new. American economic organization during World War I fulfilled the Progressive program of the eastern elites, and later Herbert Hoover and Franklin Roosevelt worked within the war model.

In Kolko’s view the best European social theorists shed little light on the specifically American experience. Marx’s “purely economic” categories proved unsuited for dealing with American developments. For Kolko, from 1887 on, new U.S. political bureaucracies aimed at shielding the profits of established businesses from both unwanted competition and unpredictable political developments.

Wealth and power further pursued

In his Main Currents in Modern American History (1976), Kolko presented an overall vision of American history and pursued political capitalism well into the 20th century. Here he stated his disagreements with Williams and the Wisconsin school on the relative importance of the Open Door for American exports. Kolko stressed instead American capital’s need (all through the 20th century) for imported raw materials for their industrial processes, a connection that sheds needed light on persistent American interest (and intervention) in rather secondary overseas markets such as Southeast Asia. (Oil of course speaks for itself.) Kolko thus brought subsidized exports together with American control of overseas resources (raw materials) in a more powerful notion of what the Open Door entailed for American planners from at least 1941 onward.

I would add that since 1789 American federal courts and bureaucracies have tended to see the promotion of private business and economic growth as their main job. (See the critiques of this policy that John Taylor of Caroline wrote between 1814 and 1822.) By the late 19th century, key economic and political actors began to see themselves as a central planning board for the American capitalist system as a whole, a project that the New Deal raised to a new level. Broadly speaking, business was happy enough with these new services, and most Americans complied with the ever-changing new order, perhaps because the federal apparatus had already shown its power to crush whole sections of the American people from 1861 forward — whether separatists, labor unions, or dissenters from World War I. (See below.)

Interestingly, Kolko laments the defeat of the southern and western populism of the 1880s and ’90s, which he calls “the most truly libertarian social force” of its time. The movement’s eclipse was assured when close to a million American populists departed for the farming provinces of Canada (an emigration that American historians mostly ignore). Where labor history is concerned, Kolko sketched the history of an ethnically divided working class, immigrant and native, sold out (as it were) by business-oriented union leaders. He comments,

Violence was used in America more than in any other country that bothered preserving the façade of democracy, but what was clear from this, apart from the fact that the threat to constituted order evoked a response all out of proportion to the real danger, was the readiness to employ yet far more if it were required.

Unlike populism, eastern progressivism was all about sustaining the going order through political capitalism. Referring to World War I, Kolko writes, “The national government had built a vast administrative structure which businesses had defined and guided from its inception, and they might yet do so once again.” Later, New Deal banking legislation reflected the same purpose: “Using political means, big banking could now impose its norms in a national banking structure….”

In chapters 7 (“The Accumulation of Power”) and 8 (“Politics and the Foundations of Power”) ofMain Currents, Kolko zeroes in on the workings of the American political and economic structure. Given the selection of key state officials (especially for foreign policy) from the ranks of big business, big banks, and top law firms, policy is inevitably subservient to the interests of commerce broadly conceived. Even those recruited from other strata receive training in this received outlook. The resulting leadership class exhibits a collective myopia, only made worse by the serial crises that this class manages to produce. Given the higher policymakers’ shared (and fixed) worldview and class ties, conformity, promotion, and fear of losing influence are all that counts. In recent times almost no one has resigned from office over a matter of principle.

The elite proceeds with complete contempt for the wishes of the governed: “‘Freedom’ thereby becomes a posture the powerful tolerate among the powerless, and those in power make certain they will remain ineffectual.” At the same time, consensus “becomes an ideological phrase which wholly obscures the real basis of authority in United States society since the Civil War — law and the threat of repression.”

Kolko paints a gloomy picture of a banal, empty culture with no real community at any level. The early, unconditional, and violent victory of the American elite, along with its inability ever to feel really secure, has led to unhappy results: “Having fulfilled their desire to break the possibility of opposition, they also destroyed, as well, social cohesion and community.” Further, in American political life, “charlatanism, infantilism, cynicism, apathy, and gangsterism have all merged in ever-changing ways with the regulatory functions of the political mechanism and its responsibility to perform essential and predictable tasks.” Deliberate exclusion of the people from any effective participation in political life — or even their own lives — caps the whole edifice.

Inside the American whale

Two recent critics, Robert L. Bradley Jr. and Roger Donway, fault Kolko for not approving of any phase of American capitalism, laissez-faire or corporatist. This is a fair point: He does not approve. But if Kolko stands convicted of not being a libertarian, it is not clear how this invalidates his historical work. History is not theory, and back-and-forth leaps between facts and theory (ideology) may not avail. And the little matter of “laissez-faire” needs another look: A fairly minimal state was quite strong enough in England to clear peasants off the land and (later) to remove sundry traditional rights that blocked rapid industrialization. In the United States, governments undertook similar projects of bourgeois social engineering chiefly in aid of already wealthy or (sometimes) rising interests.

As Kolko knows, big business is not ideologically naïve; its embrace of the state is rational and interest-driven. Like Hobbes and Locke, big business knows that the kind of market society it desires absolutely requires a strong state. The trick is to have such a state while publicly demanding the opposite. Accordingly, big business subsidizes free-market ideas (which retain some mass appeal) and enrolls petty-bourgeois (small-business) elements as defenders of the corporate sector. The authoritarian populist style of Thatcher and Reagan, combining a strengthened state with much free-market rhetoric, showed that this formula sometimes works. It is surely an exercise in futility for anti-imperialists, decentralist conservatives, agrarians, libertarians, etc., to serve such causes.

But to return directly to Kolko, it seems fair to say that his accounts of progressive reform down into the early Cold War have held up rather well. Perhaps Elizabeth Sanders is right to say that big business, while dominant, did not completely control the progressive reform process. Yet Nancy Cohen’s work on the remoter origins of the new federal bureaucratic state allied with corporations reinforces Kolko’s main conclusions.

Running all through Kolko’s important and informative historical work is a consistent critique of (and contempt for) the activities and claims of America’s ruling elite. (They have earned it.) His turn toward the history of wars, American or otherwise, led him to focus on the autonomous power of states, and therewith to an even higher level of criticism.

Part 2: Kolko Abroad

Gabriel Kolko’s historical writing hinges on the interrelations of economic, political, and ideological power in American history. His later work increasingly focused on those phenomena in relation to war, peace, and empire. As his project went forward, Kolko increasingly departed from that Marxist framework in which state power becomes so utterly subordinate as to be historically negligible. The result has been a more realistic, but no less radical, critique.

In The Roots of American Foreign Policy (1969, especially chapters 7 and 8), Kolko connected the domestic and foreign aspects of American political capitalism in terms of class, state and private institutions, economic goals, and supporting ideology. We find here very useful reflections on the forces and ideas underlying “vaunting and fear” and “perpetual war for perpetual peace” (timeworn Old Right phrases) as inevitable companions of American foreign activities. (We can only sample some key points here.)

Class. With similar class origins and the same education, the “very top foreign policy decision-makers were … intimately connected with dominant business circles in their law firms.” The result has been a “dual relationship — one which uses the political structure to advance the domestic and global economic interests of American [political] capitalists,” one that “has characterized Washington leaders for the better part of this century.”

Ends and means. U.S. policymakers use the dependence of raw-material-producing nations as leverage for gaining access to their markets and resources. Strangely enough, for all the American rhetoric about free enterprise, America “is the world’s leading state trader, even though it has consistently attacked this principle when other industrial nations used it to advance their own neocolonial export positions.”

Ideology. Having described the U.S. political economy elsewhere (see part 1 in last month’s issue), Kolko notes that “neo-Hamiltonian” ideas serve as “a justification for the political capitalism that was the most critical outcome of American liberal reform” in its domestic and overseas dimensions. Interestingly, the relatively nonideological American military had failed (as of 1969) to rally around this Hamiltonian ideology of “the positive and predatory state.” The career of Robert McNamara as a corporate-liberal, technocratic secretary of defense “showed how fully the Military Establishment was merely the instrument of warfare liberalism in the Fair Deal-Great Society period.”

World War II

American Non-Diplomacy, 1943– 1945. Kolko’s Politics of War (1968) set out many broad themes that would dominate his later work. U.S. policymakers in 1943–45 found themselves faced with three overriding issues: (1) the global, revolutionary Left; (2) the Soviet Union as a great power and suspected source of all revolutions; and (3) Britain as enemy and rival, mainly because of its sterling bloc and imperial trade preference.

In important respects the real drama began in Italy, where Anglo-American occupation policies set precedents for later occupations: precedents the Soviet Union might exploit as its headlong pursuit of retreating German armies left Soviet forces in possession of Eastern Europe. To keep Italy away from the sterling bloc, Americans elbowed Britain aside, but U.S. and British forces jointly suppressed Italian political activity, disarmed the Resistance, and kept fascist administrators in place, as needed. Britain was promoting France — soon to be liberated — as a phony Great Power subordinate to a projected, British-dominated Western European economic bloc.

Ironically, the French Communist Party, feared by all, had become a patriotic, nationalist bulwark of order. Kolko reasons that if the Soviets (as reputed) controlled the French CP, then Soviet intentions were quite moderate. In Belgium the British repressed the Left. Here was another precedent for the rule cujus regio, ejus economia — whose region, his economy (my phrase). Anglo-American rivalry and their shared suspicion of Soviet intentions affected policies toward every nation about to be occupied by any of the three powers.

Despite Western expectations, the Soviets followed a pragmatic, country-by-country strategy as their armies came westward. In contrast, Kolko writes, “By the end of 1944 both the United States and Great Britain had intervened in the internal affairs of every major Western European nation in order to contain the Left and proscribe each other’s influence, systematically restricting Soviet influence as much as possible while Russia fought the European land war in the theater of central importance.” Underneath mounds of verbiage, then, a de facto division of Europe was in the cards from mid-1943, well before anyone ever yelled “Cold War!” The Soviets, willing enough “to leave the Greeks and Yugoslavs to their own fate,” could not afford such luxuries in Poland or Romania.

As of 1944, American strategic planning was shifting from the German to the Soviet menace, but policymakers postponed almost all diplomatic issues, biding their time until U.S. predominance could settle them in America’s favor. American peace plans, from 1941 forward, consisted of: (1) economic goals “inherited almost completely from the world view of Woodrow Wilson”; and (2) improvisation to meet crises and enforce those goals. Goals were “highly explicit in the economic field,” and American reconstruction of the world economy was “by far the most extensively discussed peace aim.”

Open doors and raw materials. Throughout Politics of War Kolko stresses the centrality of Secretary of State Cordell Hull’s conception of free trade as American officials’ chief war aim, aside from bare victory. This “free trade” was of course the famous Open Door policy, which was considered to be a global panacea, and which entailed a very large role for American state power as its motor of progress. As Kolko puts it,

For an international free trade doctrine, the Hullian program, which in principle received the approbation of most business organizations and firms interested in the subject, seemed to rely much more strongly on the Federal government’s active and continuous intervention than Adam Smith’s invisible hand, but nearly a century of pragmatic business-government relations had determined the precedent.

As I noted in part 1, Kolko adds American planners’ felt need for access to overseas resources and key raw materials to the William Appleman Williams school’s emphasis on the Open Door policy for American exports of goods and capital. This broadening of the applied Open Door reflected American policymakers’ own internal expansion of their operational ideology. A “right” to raw-materials access is a perfect counterpart to a “right” to overseas markets, and from at least May 1944, U.S. policymakers treated American access to raw materials as a self-evident implication “of the Open Door, which originally only meant equality with the most-favored foreign nation rather than [with a target country’s] domestic interests.”

The Open Door (or equal opportunity everywhere) for American corporate business was the key to U.S. world policy and something to which the United States would readily sacrifice its professed interest in overseas democracy. If American economic goals had been met, Kolko speculates, the United States could easily have tolerated total Soviet control of Eastern Europe, with that region back in its old, semicolonial economic role and the Russians as middlemen. “Rhetoric aside, expedient references to the Open Door … functionally meant American economic predominance, often monopoly control, over many of the critical raw materials on which modern industrial power is based.” There was little that was truly new in the full use of state power to shape this “free market.” With intermediaries like the Saudi oligarchs and the Iranian state on the payroll, America “saw underdeveloped areas primarily as a problem of raw-materials supplies, and that misery and stagnation would be the basis of such an American-led world was of no consequence in American planning for peace.”

Conduct of the war. Britain and the United States had long planned what became the terror bombing of World War II. In the Far East the Americans hoped to use both Russia and the atom bomb against Japan. In Kolko’s view (Politics of War), “The war had so brutalized the American leaders that burning vast numbers of civilians no longer posed a real predicament by the spring of 1945.” In the end, a “mechanistic attitude” prevailed. For U.S. leaders there was never any moral dilemma about using the new gadget. Elsewhere Kolko writes that, whatever the other side’s systematic inhumanity, “the Allies consistently transgressed traditional legal and ethical standards concerning civilians and war crimes,” and in Korea (1950–1952) the United States departed even farther from those rules.

Global planning and open doors. The United Nations grew up in the shadow of “the reality that America’s brand of internationalism was truly a plan for its own hegemony in the postwar world” (Main Currents of American History). U.S. plans for world monetary reform entailed accelerated trade and turnover, and massive overseas (private and state) lending as a floor under U.S. exports. American policymakers fielded their choicest “anticolonial” rhetoric as leverage in the quest for raw materials. Expected American control over the UN would make colonial economic resources available to all mankind, but mostly to American corporations. More practically, Washington used the leverage supplied by Lend-Lease and other means to open up the British trade bloc and to deprive Britain of its export markets in Latin America and, in time, its Middle Eastern and Iranian oil fields.

Anatomy of a War

The outcome of all this American effort was the classic Cold War system that “contained” defeated enemies (Germany and Japan) and certain victors (Russia and Britain) under the guise of containing communism. This broad story continues in Kolko’s Limits of Power, coauthored with his wife, Joyce Kolko (1972), but here we shall rush ahead into Vietnam, as treated in Kolko’s Anatomy of a War (1994 [1985]). In great detail Kolko sketches out the “vast orgy of violence [that] was the product … of the capital intensive premises of U.S. reliance on firepower. Officers fought the only war possible and the Vietnamese people paid a monumental price not because of individual caprices but because the United State’s entire military system performed exactly as it was intended to” (emphasis added).

Kolko thoroughly discusses the ideology and practice of “the Revolution” (the party in Hanoi and allied forces in South Vietnam) and tensions between them. In North and South alike, those resisting the Saigon government and American forces showed remarkable adaptability in military and economic affairs that belied the top-down Leninist party model.

War, economy, and state

Kolko’s Century of War (1994) is a broad study of the impact of modern wars on society and politics. One important conclusion Kolko draws is that “it was not the wisdom of Leninist revolutionaries, much less the glacially paced manifestation of Marxist axioms regarding the economy, but rather the folly of old orders that was the origin of the Left’s greatest political and ideological successes in the twentieth century.” Twentieth-century wars were the clearest expression of this universal ruling-class folly. (As for the war-bred Left, Soviet pragmatic conservatism and the power lust of left-wing leaders in various countries aborted its radical social and nationalist goals.)

World War I was a technology-driven train wreck that irreparably scarred European civilization and marginalized officer classes everywhere, sidelining their feudal-heroic values and replacing them with technocrats allied with heavy industry. If “stupidity in high places has been the bane of modern history,” Americans leaders — ever surprised, idiotically optimistic — earn special mention.

War, capital, and the state

Kolko’s tour of mankind’s bellicose folly leads him to conclude that conservative, Weberian, and Marxist theories of bureaucracy “gravely distort much of mankind’s past experiences” and leave researchers unable “to fathom the consummately self-destructive irresponsibility of leaders playing with the lives of their subjects and gambling on the very future of their social and political orders.” He sees some kind of radical, humanist exit as needed, but gives only hints in the works surveyed here. Kolko’s historical thought might seem to rest on methodological cynicism and justified anger. It is perhaps better to see it as the product of stark realism and considerable intellectual courage.

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The Anatomy of Escape
Organization Theory