Don't Thank LBJ and FDR for the Welfare State—Thank Henry Clay, Daniel Webster, and Abraham Lincoln

Over the past decades, the notion that the federal government is the guarantor of the welfare state has come under increasing criticism.   For most, the idea that the federal government should take a proactive role in providing not only for the security, but also for the well-being, of its citizens, comes from the New Deal of Franklin Delano Roosevelt and the Great Society of Lyndon Johnson.  But is this really the case?  If we look at the arguments of the Whig Party during the 1830s and 1840s, there are astonishing similarities between the rhetoric employed by the Whigs and the policies later adopted by Roosevelt and Johnson. 

Daniel Webster was one of the two most prominent members of the Whig Party, alongside Henry Clay, during its brief life.  At a public dinner given in his honor in New York City, Webster explained the role he was in favor of for the federal government.

But all these local advantages, and all this enlightened state policy, could never have made your city what it now is, without the aid and protection of a general government, extending over all the States, and establishing for all a common and uniform system of commercial regulation.  Without national character, without public credit, without systematic finance, without uniformity of commercial laws, all other advantages possessed by this city would have decayed and perished, like unripe fruit.

Webster believed that it is not only a proper role for the federal government to be involved in the economy, but it is in fact a necessary prerequisite for increased prosperity.  Webster’s argument is clearly a precursor for later arguments in favor of increased federal government action based on the Commerce Clause of the U.S. Constitution.

Continuing on, Webster spoke of the economic duty the federal government has to integrate the economies of newly admitted states with the rest of the Union.

Those States are not, like New York, directly connected with maritime commerce.  They are entirely agricultural, and need markets for consumption; and they need, too, access to those markets.  It is the duty of the government to bring the interests of these new States into the Union, and incorporate them closely in the family compact.

The other major Whig figure was Henry Clay.  Clay’s views were similar to those of Webster, but one important difference was his proposed “American system,” which advocated for greater federal involvement in the economy, specifically in paying for internal improvements.  In a speech at Frederick, Maryland, he elaborated on his “American system” as benefiting the nation as a whole.

Our American system, which was at once both to destroy foreign commerce, and to dry up the sources of the public income, has disappointed all the predictions of its foes, and assures us of the speedy arrival of the day when our national independence will be consummated.  The manufactures of our country have now struck such deep and strong root, that the hand of violence itself can scarcely tear up and destroy them.  Their twin – sister, internal improvements, has not been neglected.  Large and liberal appropriations, in every part of the union, have been made to that beneficent object.

The justification Clay gave for not federal government involvement in the economy was that the federal government existed to create the conditions for prosperity.  Without this intervention, both the economy, and the nation as a whole, would suffer.

In contrast to Democratic Party tendencies towards laissez-faire economic policies, Clay clearly believed that substantial benefits would accrue to all citizens and all sectors of the economy, if the federal government were involved.  Not only was this good policy as far as Clay was concerned, it was for him a distinctly American way of governing.  The U.S. was a democracy, and so in contrast to the monarchies of Europe, the citizens of the U.S. had every reason to expect their government to take action to improve their lives.

We must have for America, an American policy—our people are entitled to the protection and benefits of the Government under which they live.  The policy of Europe is not suited to our people; the doctrines of free trade preached, but never practiced, by other nations, may do for demagogues to talk about, but their effects are to break down our manufactures, paralyze the industry of the people, and drain our country of the precious metals.

Both Clay and Webster believed in a more active federal government than did their Democratic opponents.  While the immediate beneficiaries of their policies were undoubtedly intended to be the manufacturing and commercial sectors, both Clay and Webster clearly believed that this was the route to greater economic prosperity for all Americans.

Of a different sort is the following quote from Abraham Lincoln, which brings us closer to the social welfare aspects of New Deal thought.  Unlike Clay and Webster, Lincoln included the economic status of individuals, not just the overall good of society, in his analysis of the role of government.

The legitimate object of government, is to do for a community of people, whatever they need to have done, but can not do, at all, or can not, so well do, for themselves—in their separate, and individual capacities.

In all that the people can individually do as well for themselves, government ought not to interfere.

The desirable things which the individuals of a people can not do, or can not well do, for themselves, fall into two classes:  those which have relation to wrongs, and those which have not.  Each of these branch off into an infinite variety of subdivisions.

The first—that in relation to wrongs—embraces all crimes, misdemeanors, and non-performance of contracts.  The other embraces all which, in its nature, and without wrong, requires combined action, as public roads and highways, public schools, charities, pauperism, orphanage, estates of the deceased, and the machinery of government itself.

From this it appears that if all men were just, there would still be some, though not so much, need of government.

Notice the division between “wrongs,” all of which fit easily into classical laissez-faire or current-day libertarian thought, and those things which require “combined action.”  The second category goes beyond roads and schools, which for the most part are no longer controversial (except of course in libertarian circles), to include “charities, pauperism, orphanage,” and “estates of the deceased.”  Here is a focus beyond the general good we saw with Clay and Webster to focus on individuals as well.  The good of individuals, specifically their economic well-being, was for Lincoln, a legitimate object of government action.

What ever happened to THAT Republican Party, anyway?