Lineages of the Compensatory State

Marc Allen Eisner, From Warfare State to Welfare State: World War I, Compensatory State Building, and the Limits of Modern Order (University Park: The Pennsylvania State University Press, 2000). Pp. x, 371. $19.95

In his 1903 essay "War," the eminent sociologist William Graham Sumner proposed to show "just what war has done and has not done for the welfare of mankind." An avid Social Darwinist, Sumner argued that, as an accelerant of the evolutionary process, war not only stimulated human invention but also imposed a certain "rude and imperfect selection" upon vested social and political interests. Nearly a century later, and from another but very different evolutionary perspective, Marc Allen Eisner also treats the relationship between war and political development. Specifically, Eisner contends that the experience of war has decisively shaped the character of the modern American state. In an ambitious synthesis of historical scholarship into the origins of the New Deal order, Eisner argues that the apparently unprecedented expansion of the American state during the Great Depression actually drew on the mobilization model forged during the Great War. What Eisner terms "compensatory state building" emerged out of a threefold collision between the historically-weak American state, the late nineteenth-century rise of corporate capitalism, and the procurement demands of America's brief but traumatic experience between 1916 and 1919.

In Eisner's account, the template for compensatory state building was forged when the American government, confronted after 1916 with the mobilization requirements of total war, expanded its capacity by integrating private-sector interests into state administration rather than commandeering them directly or otherwise nationalizing their resources for the war effort. Thus, such agencies as the War Industries Board (WIB) or the National War Labor Board (NWLB), functioning with uncertain coercive authority under the law, relied instead upon the voluntarism and uneasy cooperation of its corporate and labor members. Indeed, the exemplar of compensatory state-building was Bernard Baruch's WIB, which, through its commodity sections, relied upon the knowledge and expertise of business and trade associations to allocate the production priorities of a wartime economy. For its part, the NWLB's tripartite representation of business, labor, and the public in wage arbitrations expressed the corporatist potential of the compensatory model.

This peculiar amalgam of public and private capacities, symbolized by the "dollar-a-year" administrators seconded from the corporate world (and by Baruch himself), enabled the United States to achieve its war aims at the expense of blurring the boundary between state and civil society. At this boundary, private interests collaborated with public authority only on their terms, and frequently to their profit. Having in effect traded capacity for autonomy, the American state then found itself hamstrung in subduing powerful interests when pursuing the same compensatory strategies to meet the later challenges of economic collapse and global conflict. Ultimately, Eisner contends, the legacy of compensatory state-building lives on in the baneful dynamic of "interest group liberalism," which characterizes contemporary American governance.

If this were merely an account of state-building during the Great War, then Eisner's work would simply repackage the insights of such historians as Robert Cuff or Valerie Conner. Similarly, a generation of Ellis Hawley's students has long debunked the sui generis reputation of the New Deal. The real ingenuity of this book lies instead in its attempt to trace the genealogy of the compensatory experience--as ideas, institutions, and practices--through the political economies of the "associationalist" New Era and the New Deal. In the aftermath of demobilization and "normalcy," Eisner describes how the compensatory experience influenced, in turn, the state's attempts to regulate business, manage labor conflict, help the farmer, and manage the macroeconomy. In these accounts, the central figure is of course Herbert Hoover, who first as commerce secretary and later as President embodied the ethos and energy of associational governance. Across these policy areas, the distinctive accomplishments and limits of associationalism highlight how the compensatory model of...