The Foundations of the Modern State

Gautham Rao

This post is part of an online symposium discussing Nicholas Parrillo, Against the Profit Motive: The Salary Revolution in American Government, 1780-1940 (Yale University Press 2013).

For most historians of law, the history of administration in the United States is normatively significant to explain how we have arrived at our current doctrinal moment.   This history begins with the creation of the Interstate Commerce Commission (1887), develops through the rise of the Federal Trade Commission (1914), burgeons during the New Deal and its ‘alphabet soup’ of new regulatory agencies, rationalizes under the Administrative Procedure Act (1946), and peaks with modern case law such as the Chevron decision (1984). 

Political scientists and policy historians have also lavished a great deal of attention on the history of administration in the twentieth-century United States.  A vocal minority, however, have coalesced around a more foundational inquiry: how did the modern state become a viable, functional, and—most importantly—legitimate entity?  A diverse group of scholars from law schools and political science and history departments, including Daniel Carpenter, Richard John, William Novak, Elisabeth Clemens, Stephen Skowronek, Richard Bensel, Bruce Ackerman, and William Nelson, offer a great many answers to this question. 

Amazingly, though, neither the historians probing backward in time, nor the administrative lawyers racing to the present, spilled much of any ink on the basic problem of officeholders’ compensation.  After all, the formidable leviathan that came into existence through the great decisions filling casebooks, and through the epochal historical processes documented in scholarly monographs, was formidable only because of the people who constituted it.  The state reached into people’s lives only because the state’s employees physically did so.  The state, in other words, was not self-executing, but, rather, contingent upon the execution of its employees.  The state is human.  And in the western world, those people in the employ of the state have received compensation for their services.  How did these compensation systems work?  What does their organization and function tell us about the historical eras in which they were conceived?  How did they change over time?  What do they teach us about our own organization of statist labor?  These are grand questions of obvious importance that receive detailed, dazzling answers in Parrillo’s remarkable book.

I won’t rehearse Parrillo’s argument here (but recommend Reihan Salam’s brief and laudatory summary in the National Review).  Instead, I want to highlight a few observations about the book that stem from my own confrontation with several topics at the heart of Parrillo’s book.  Since 2005, first as a doctoral student at the University of Chicago, and then as an assistant professor of history at Rutgers-Newark/NJIT and now American University, I have been writing a history of federal customs administration from the founding of the United States to the Jackson era (the book is now under contract with the University of Chicago Press).  My argument is that capitalism gave the early state legitimacy until the War of 1812, when capitalism appeared to have captured and corrupted the state.  To disentangle the state from the clutches of the marketplace, jurists, politicians and administrators began to centralize administrative law.  The interplay with Parrillo’s book is obvious: we are both fascinated by the basic questions of (1) how Americans literally built the foundations of the modern state, and (2) how Americans managed the twin revolutions of the state and the marketplace in the nineteenth-century. 

Writing about how governmental systems came to be and came to function requires an eye for detail, and Parrillo is an empiricist of great skill.  There are almost 200 pages of notes, chock full of hundreds (probably more, actually) of primary sources drawn from hearings, cases, manuscript documents, agency papers, and others.  He has culled data from hundreds (probably more, actually) of monographs and law review articles about administration.  As a piece of research, Against the Profit Motive is an astounding accomplishment.  I should know, because I have tried to make sense a good number of the sources Parrillo has mastered, but with less success, for I have been unable to impose the order and analytical clarity that leaps from the pages of this book.  I often ask my students to question why a novel scholarly claim is novel.  That is, why have scores of scholars ignored this topic, or missed this particular approach?  The answers usually have to do with prevailing scholarly winds or historians’ preoccupation with explaining how Ronald Reagan won the blue-collar vote.  In Parrillo’s case, the answer is far simpler: it was too hard.  To do the kind of research Parrillo has done, and to pull it together in the elegant argument he has weaved, requires exceptional patience, focus, and organization, to say nothing of wit and intelligence. 

I have long had a sense that Parrillo’s research would reap enormous scholarly rewards.  I first heard of Parrillo from mutual acquaintances at Yale Law School who reported of a determined man, surrounded at all times by stacks of volumes of the Statutes at Large, holed up in the Goldman Law Library.  Parrillo also preceded me by a year as a Samuel I. Golieb Fellow of Legal History at New York University School of Law, where early drafts of chapters of Against the Profit Motive received high praise from a notoriously tough crowd (it has been called ‘legal history bootcamp’).  Above all, Parrillo was praised for aggregating and making comprehensible a mass of complex information.  When my turns came before the Legal History Colloquium, I found seminarians remarkably well-schooled in early federal administrative procedure.  (It was at this moment that I also became eternally grateful to Parrillo because, in writing the history of compensation systems for customs officials, Parrillo exonerated me from the burden of figuring out a horribly messy story that had confounded me for years.) 

But Parrillo is not all hedgehog, for my favorite part of this book is its clever twist on the essential functionalist premise of the legal history of administration.  Indeed, rather than asking how capitalism made necessary regulation, Parrillo seems to ponder how capitalism changed the nature and character of the state.  He is a bit coy on this point, but if I read him right, he is suggesting the beginnings of our current intellectual paradox in demanding that government be run ‘like a business’ but without profiting ‘like a business.’  I only wish he would have sharpened this sentiment that runs throughout the book, into a more decisive argument, for then he would have succeeded in teaching valuable lessons, not only to area specialists like me, and to the many legal historians and legal scholars who will read this book, but to the public at large—and especially my neighbors on Capital Hill. 

Gautham Rao is an Assistant Professor of History at American University.  He can be reached at grao@american.edu.