Few books have received as much instantaneous acclaim as Harvard historian Jill Lepore’s These Truths: A History of the United States. Her aim is to distill in 932 densely packed pages the history of an entire nation. The title of the book is an explicit echo of Thomas Jefferson’s famous words in the Declaration of Independence. But if Jefferson was a small government thinker, Lepore is not. The book covers many cultural and social issues—as well as constitutional and regulatory matters, on which she takes a strong and uncritical progressive stance that sees government intervention as an essential tool to correct the imbalances of the market.
In developing this idea, Lepore’s book covers multiple topics with stunning rapidity, elegant compression, and apparent erudition. One constant theme traces the interaction between constitutional law and technological development from the Founding period to the present, covering everything from the printing press to the Internet. But even that subject is too extensive to receive a full account, so on this occasion I will confine my attention to a small portion of that topic, covering the years between 1920 and 1945 dealing with the rise of broadcasting by radio and the government’s attempt to regulate the airwaves. This case study offers a contrast between the classical liberal view of limited government with strong property and contract rights that I have long defended, and Lepore’s clear endorsement of the progressive tradition that has in many ways displaced it.
Lepore’s narrative of this period begins with President Warren Harding, who, she writes, “in one of the worst inaugural addresses ever delivered,” argued, in his own words, “for lightened tax burdens, for sound commercial practices, for adequate credit facilities, for sympathetic concern for all agricultural problems, for the omission of unnecessary interference of Government with business, for an end to Government’s experiment in business, for more efficient business in Government, and for more efficient business in Government administration.” Harding’s sympathetic reference of farmers is a bit out of keeping with the rest of his remarks. Indeed, farmers had already been a protected class before 1920, and the situation only got worse when Franklin Roosevelt’s administration implemented the Agricultural Adjustment Acts of the 1930s, which cartelized farming. But for all her indignation, Lepore never explains what is wrong with Harding’s agenda. She merely rejects it out of hand, while mocking Harding’s conviction.
Given her doggedly progressive premises, Lepore may have predicted a calamitous meltdown in the American economy under Harding, but exactly the opposite occurred. Harding appointed an exceptionally strong cabinet that included as three of its principal luminaries Charles Evans Hughes as Secretary of State, Andrew Mellon as Secretary of Treasury, and Herbert Hoover as the ubiquitous Secretary of Commerce, with a portfolio far broader than that position manages today. And how did they perform? Lepore does not mention that Harding coped quickly and effectively with the serious recession of 1921 by refusing to follow Hoover’s advice for aggressive intervention. Instead, Harding initiated powerful recovery by slashing the federal budget in half and reducing taxes across the board. Both Roosevelt and Obama did far worse in advancing recovery with their more interventionist efforts.
To her credit, Lepore notes the successes of Harding’s program: the rise of industrial production by 70 percent, an increase in the gross national product by about 40 percent, and growth in per capita income by close to 30 percent between 1922 and 1928. But, she doesn’t seem to understand why that recovery was robust, especially in comparison with the long, drawn-out Roosevelt recession that lingered on for years when he adopted the opposite policy of extensive cartelization and high taxes through the 1930s.
Lepore is on sound ground when she attacks Harding and Coolidge for their 1920s legislation that isolated the American economy from the rest of the world. The Immigration Act of 1924 responded to nativist arguments by seriously curtailing immigration from Italy and Eastern Europe, subjecting millions to the ravages of the Nazis a generation later. Harding and Coolidge also increased tariffs on imports during this period. What Lepore never quite grasps is that any critique of these actions rests most powerfully on the classical liberal worldview that she rejects. Indeed, Harding and Coolidge exhibited the same intellectual confusion that today animates Donald Trump, who gets high marks for supporting deregulation and tax reductions at home, while simultaneously indulging in unduly restrictive immigration policies and mercantilist trade wars abroad. Analytically, however, the same pro-market policies should control both domestically and abroad. Hoover never got that message—as president, he signed the misguided Smoot-Hawley Tariff Act of 1930 that sharply reduced the volume of international trade to the detriment of both the United States and all of its trading partners, which helped turn what had been a short-term stock market downturn in 1929 into the enduring Great Depression of the 1930s.
Hoover’s fatal miscalculation was not random chance. It stemmed from his progressive tendency to interfere in ordinary market behavior, which had previously manifested itself when he was still Secretary of Commerce under Harding. Lepore lauds Hoover for pushing through the Federal Radio Act of 1927, which instituted a system whereby individuals were required to obtain government licenses before they could broadcast. She describes this reform as “one of the most consequential and underappreciated acts of Progressive reform.” More concretely, she insists Hoover understood that “the ether is a public medium, and its use is for the public benefit.” Accordingly, she chides those who were opposed to the reform as if they did not believe in government regulation at all.
Her account is deeply flawed. Hoover’s critics did believe in government regulation, but only to delineate the boundaries between adjacent radio stations. It was widely understood by 1926 that the intensive use of the airways led to massive signals interference. The radio station that had appropriated some part of the spectrum necessarily blocked or degraded reception on nearby frequencies. Accordingly, it was perfectly reasonable to stop operations on all of the existing stations in order to issue licenses that would reduce that level of interference, so that all voices could be heard. This reform imitates the system of property rights that separates one farmer’s land from a neighbor’s, with the added twist that all broadcasts necessarily propagate over a wide bandwidth, making it impossible to attain zero interference across neighboring bands.
It is one thing to try to get the appropriate level of separation between frequencies. But it is quite another to engage in the Progressive agenda of having the newly created Federal Radio Commission, an administrative agency, determine which frequencies should be given to which broadcaster and for what purpose, as Hoover’s reform required. Stated otherwise, Hoover’s fatal mistake, exposed in 1959 by the economist Ronald Coase in his writings on the Federal Communications Commission, was to think that any system of administrative decision-making could fairly decide which applicant should occupy what frequency. As Coase noted, a far better system is to simply auction off frequencies to the highest bidder for use like any other form of private property. The obvious scarcity of usable broadband was a reason to have an auction, not to suppress it. But this point was lost on the New Dealers. Thus, when the Federal Radio Act was restyled as the Federal Communications Act of 1934, the applicable standard required the FCC to use the criterion of “public interest, convenience and necessity” to decide among the competing applicants, a standard that Lepore neither explains nor defends.
That standard delegated unprincipled discretion to the FCC, but in 1943 Felix Frankfurter, the prominent Harvard Law professor turned Supreme Court Justice, upheld this delegation against constitutional challenge in National Broadcasting Co. v United States, with the tart observation that “the Act does not restrict the Commission merely to supervision of the traffic. It puts upon the Commission the burden of determining the composition of that traffic.” The point is ironic, for a year later, Friedrich Hayek noted in The Road to Serfdom that the success of any highway system depends on setting the rules of the road and then allowing the traffic to go where it chooses.
Frankfurter’s confidence that the FCC could actually come up with sensible allocation rules led to a system of license renewals that was at once costly, politically contentious, and unreliable. Worse, it tended to freeze out small voices who could not afford to acquire a highly costly broadcast frequency. Yet when one enterprising firm, Cosmopolitan Broadcasting Corporation, sought to solve that problem by selling off weekly time slots to a long list of foreign language companies, it was stripped of its license on the ground that FCC law required the agency to make all of those use determinations by itself. That licensing system also resulted in major technological stagnation because no licensee could, as broadcast technologies became more efficient, subdivide its frequencies so as to allow for multiple users. And large portions of the frequency were committed by statute to public uses, without the possibility of selling those frequencies to private buyers to whom they were worth more. But none of these subsequent miscarriages make it into Lepore’s history.
Some of the mistakes that Lepore makes on this topic stem from her audacious effort to compress complex material into a few paragraphs. But her errors go far deeper because of her utter unwillingness to ask whether developments in technology and law might be better explained by an alternative framework that stresses strong systems of property and contract rights which attain a level of adaptability that no cumbersome administrative system can hope to match. Her flawed outlook is not confined to one single chapter on telecommunications law. Instead, it permeates her general discussion of New Deal regulation that has survived in such key areas as transportation, labor, agriculture, housing, and health care. Unfortunately, Lepore fails to depart from her own unshakeable faith in progressive orthodoxy when she deals with the constitutional and economic underpinnings of the modern administrative state.
GET MORE COMMENTARY FROM RICHARD EPSTEIN.
This expert commentary from Richard Epstein dissects the shallow theology behind the new strain of socialism that makes the unfounded claim that capitalism and private markets make us “unfree.” With today’s “New Socialists” calling for universal healthcare, price controls, free college tuition, and a basic universal income, this is an urgent read for any American who cares about preserving liberty for the next generation.
Simply complete the form below and we'll send you The Intellectual Poverty of the New Socialists now.