The Transformation of 1896 and the death of the third party system meant the end of America's great laissez-faire, hard-money libertarian party. The Democratic Party was no longer the party of Jefferson, Jackson, and Cleveland. With no further political embodiment for laissez-faire in existence, and with both parties offering "an echo not a choice," public interest in politics steadily declined. A power vacuum was left in American politics for the new corporate statist ideology of progressivism, which swept both parties (and created a short-lived Progressive Party) in America after 1900.
The Progressive Era of 1900–1918 fastened a welfare-warfare state on America that has set the mold for the rest of the 20th century. Statism arrived after 1900 not because of inflation or deflation, but because a unique set of conditions had destroyed the Democrats as a laissez-faire party and left a power vacuum for the triumph of the new ideology of compulsory cartelization through a partnership of big government, business, unions, technocrats, and intellectuals.
Tuesday, October 11, 2011
This interesting segment from Rothbard's "A History of Money and Banking in the United States" discusses the role of puritanism in 19th century American politics and how the original libertarian tendencies of the Democratic Party of Jefferson had disappeared by the beginning of the 20th century and given place to the populist and corporatist party in the tradition of Jennings Bryan (a prohibitionist and opponent of Darwinism) that is yet alive today: