Nineteenth-Century American Populism
When one glances at the headlines of newspapers and magazines from across the globe itās hard to avoid the impression that a wave of populism has been sweeping across many of the worldās democracies. From Donald Trump and Boris Johnson to Jair Bolsonaro, so-called Populists have been winning elections, upending established institutions, and challenging the prevailing political norms within their countries. Generally, the term Populist has been applied to politicians of the right who oppose international trade deals and immigration that a previous generation of politicians promoted regardless of party affiliation. Yet, the term Populist has also sometimes been applied to figures associated with the political left such as Bernie Sanders, Yanis Varoufakis, and Pablo Iglesias. Moreover, it has been applied to movements of the right such as the Tea Party as well as movements of the left such as Occupy Wall Street in the United States and the Indignados movement in Spain. It has also been applied to parties of the right such as the UK Independence Party and parties of the left such as Spainās Podemos.
The average person can be forgiven for being confused by the seemingly random way that the term Populist is being used. In order to gain a clearer understanding of its meaning, it may be helpful to take a closer look at populism in terms of its historical origins and the ideological uses to which it has been put. In his book The Populist Explosion: How the Great Recession Transformed American and European Politics, John B. Judis traces the origins of populism to late nineteenth-century America and the Farmersā Alliance movement which spawned the Peopleās Party. According to Judis, the nineteenth-century version of U.S. populism emerged out of the Gilded Age to champion the interests of ordinary people against the interests of elites and it was U.S. populism that inspired other forms of populism which appeared in various European national contexts (Judis, 2016, pp. 22ā23).
The proper place to begin the story of populismās origins, according to the late historian Lawrence Goodwyn, is the brutal exploitation faced by small southern farmers trapped in a crop lien system that charged exorbitant interest rates for goods obtained from furnishing merchants and moved millions of them from debt peonage to landless penury. In eastern Texas, where many farmers migrated from southeastern states for a fresh start after the Civil War, the crop lien system and the dependence on furnishing merchants for credit and supplies at usurious interest rates gave birth to the Farmersā Alliance movement in 1877. It was the Texas Farmers Alliance which pioneered the experiments in cooperation that it exported through a system of Alliance lecturers to other southern states as well as the states of the Midwest, the Great Plains, and the West (Goodwyn, 1978, pp. 20ā22 & pp. 58ā59). It is important to note that the crop lien system in which primarily white small farmers in the South were ensnared and the system of sharecropping in which most African American farmers, who did not own land, were trapped did not play the role in these other regions that it played in the South and this had significant political consequences, which I will explore in the ensuing pages.
Nearly everywhere Alliance lecturers went, according to Goodwyn, they met with an enthusiastic reception from farmers who, even if, as in the upper Midwest, the plains, and the West, they were not suffering under the crop lien system, did face exorbitant interest rates charged by banks to get credit to buy land and necessary farming equipment as well as livestock. As a consequence of these high interest rates, 45 percent of the land in Kansas had come under the ownership of banks by the late 1880s (Judis, 2016, p. 23). The problem of lack of credit and high interest rates was made worse by the gold standard in tandem with a decline in the supply of gold and the stranglehold on the credit system exercised by the eastern banking establishment. In addition, farmers received ever lower prices for their crops from year to year and decade to decade as crop prices fell two-thirds in the Midwest and South from 1870 to 1890 (Judis, 2016, p. 22). They were also forced to pay excessive shipping rates to railroad companies that charged large commercial interests shipping longer distances a lower rate, but in many cases forced small farmers to pay a ātransit rateā equivalent to the cost of shipping to the rail lineās most distant terminal even if the farmer only wished to ship over a portion of the line (Goodwyn, 1978, pp. 69ā70). These practices led the Populists to view the railroads and the banks as malign industries that exploited them and then used the accumulated wealth to corrupt both the federal and state governments.
Though farmers originally sought to escape the economic hardship and injustices that they faced through the Farmerās Alliances and cooperatives they founded, they soon discovered that the Alliance movement, like the Grange, was insufficient to counter the power of the commercial interests they were up against. Charles Macune, the first President of the National Farmers Alliance and Cooperative Union, promoted rapid expansion of the Alliance and he came up with several creative schemes that aimed to solve the essential problem that Alliance farmers believed they were up against, which was lack of capital and credit. The sub-treasury note plan involved land-owning farmers in the Texas Alliance placing their entire individual holdings at the disposal of the Alliance to use as collateral to obtain credit to purchase supplies for all of the farmers (land-owning as well as landless tenant farmers and sharecroppers) who were members of the Alliance. As collateral for putting up their land, the land-owning farmers within the Alliance would receive mortgages on the crops of the landless farmers. All Alliance farmers āwould collectively purchase their supplies for the year through the Texas State Exchange on credit,ā the landowners signing a joint note, and they would market their crops collectively through the exchange and then pay off the joint notes at the end of the year. Macune also proposed the ācreation of a treasury within the exchange to issue its own currencyā which could be used āin payment of up to 90 per cent of the current market value of commodities.ā Farmers would be able to use this currency to purchase their supplies at the cooperative Alliance stores (Goodwyn, 1978, pp. 75 & 81).
Goodwyn explains that the failure of this plan was due primarily to the refusal of banks to provide capital in exchange for the joint notes secured by the land and crops of Alliance members (Goodwyn, 1978, pp. 77ā78). As a result, the problem of lack of access to credit and capital continued to plague the Alliance. To conclusively solve this problem, Macune developed the sub-treasury plan, which would have required the federal government to underwrite the Alliance cooperatives and provide credit for farmersā crops (Goodwyn, 1978, pp. 91ā92). Government-owned warehouses or āsub-treasuriesā would have stored the crops of farmers so that all crops wouldnāt have come on the market at once, depressing prices in an already oversupplied and depressed market. Federal sub-treasury certificates would have in turn been paid to farmers. These sub-treasury certificates would have been government-issued greenbacks, constituting āfull legal tender for all debts, public and private.ā They would have freed the farmers of the Alliance from dependence upon āfurnishing merchants, commercial banks, and chattel mortgage companiesā (Goodwyn, 1978, pp. 91ā92). Practically speaking, Goodwyn makes clear, if they were to escape the systems of dependence they were struggling to free themselves from and make the sub-treasury plan a reality, the farmers of the Alliance movement had no other option but to go into politics.
The massive effort at agrarian self-help, and the opposition it stimulated from furnishing merchants, wholesale houses, cotton buyers, and bankers in the South and from grain elevator companies, railroads, land companies, livestock commission agencies, and bankers in the West, brought home to hundreds of thousands of American farmers new insights into their relationship with the commercial elements of American society. Reduced to its essentials, the cooperative movement recruited the farmers of the Alliance in the period 1887ā91, and the resulting cooperative experience educated enough of them to make independent political action a potential reality.
(Goodwyn, 1978, p. 66)
According to Goodwyn, then, the epiphany which was catalyzed by the defeat of the Texas Alliance sub-treasury note plan led inexorably to the Omaha Platform and the founding of the Peoplesā Party since, as noted, the only way to implement Macuneās sub-treasury plan was to go into politics. Judis adds that the dogmatic laissez-faire views of President Grover Cleveland in response to the depression of 1893 and the refusal of Democrats and Republicans in Congress and in state government to champion Populist demands led the Farmersā Alliances to the conclusion that only a third party could address the problems of economic inequality and concentration of economic power in the hands of monopolies (Judis, 2016, pp. 22ā24). The recognition of the unmistakable domination of both the Republican and Democratic parties by business interests and a rejection of the sectional āpolitics of the bloody shirtā that defined the period was, therefore, essential.
Yet, Goodwyn suggests that it was the radicalization of Alliance lecturers who were repeatedly exposed to stories of personal tragedy and injustice at Alliance meetings that played a pivotal role in building a āmovement culture.ā In essence, the Alliance lecturers who were radicalized by these stories forced the Alliance leadership to be responsive to the needs of the grassroots membership. At the same time, the lecturers provided a way for the Alliance leadership to communicate complex ideas such as the sub-treasury plan to the grassroots and obtain their support. This movement culture, according to Goodwyn, enabled poor small farmers and landless farmers long socialized into habits of deference to local elites to develop a type of self-respect that enabled them to challenge the prerogatives of elites and to connect their newfound self-respect to a sense of collective purpose given life by the Alliance and Populist movements. Populism, then, can in a sense be said to have been a movement founded paradoxically on the promotion of cooperation in the service of fostering enhanced individual autonomy (Goodwyn, 1978, pp. 33 & 45).
This insight makes clear the distinction between populism, which socialists often deride as a petite bourgeois movement, and socialism which, in the nineteenth century at least, generally favored the collective ownership of the means of production, including agriculture. It also clarifies the distinction between populism and liberalism, which has always been more optimistic about the compatibility of capitalism and humanistic ends than populism. Rather than socialism or liberalism, Populists were animated more by the republican ideologies of Aristotle and Jefferson, which emphasized self-reliance and countenanced private ownership of property and some level of unequal economic rewards, but eschewed both empire and high levels of economic inequality in favor of the creation of middle-class, self-sufficient republics that minimized sources of faction.
Similar to liberals, republican theorists have emphasized the importance of the exercise of practical reason by the citizenry to find democratic solutions to collective problems. Yet, they have always been critical of the absence of a significant role for notions of community or intersubjectivity in liberal discourse, as well as what they perceive as the myopia of liberals regarding the corrosive influence of money on representative government. The cultivation and development of the capacities of each individual is also a major theme that republicans have generally shared in common with liberals. Aristotle argued in essence that the development of each individual citizenās virtue and ability contributes to the development of a more prosperous, virtuous, and harmonious society. Republicans, however, have always emphasized that the cultivation of individual potentials must be rooted in greater individual autonomy from conditions of dependence, especially economic dependence, than classical liberals such as Locke acknowledged. It is not surprising, given this perspective, that in developing his reform liberal theory of positive liberty, T.H. Green drew on republican as well as liberal thought, which is especially evident in his arguments against the legitimacy of contracts involving child labor.
Along with the sub-treasury plan, the Populists endorsed nationalization of railroads and banks and nationalization or strict regulation of public communication. They also called for a direct federal income tax and a greenback monetary policy, including āan increase in circulating currency to a level of ānot less than $50 per capitaā ā (Populist Party Platform, 1890). In addition, the Populists called for the abolition of alien land ownership since in much of the country wealthy absentee landholders held considerable tracts of land (Populist Party Platform, 1890). Taken altogether, these policies did not represent socialism, however, as Goodwyn convincingly argues, they did represent a homegrown American economic radicalism.
The movement culture that was associated with populism gave rise to and was sustained by the National Reform Press Association. This organization ...