Bureaucracies, Markets, and the Loss of Municipal Citizenship


“Liberty vanishes whenever the law, in certain cases, allows a man to cease to be a person and to become a thing”

-Cesare Beccaria

 Throughout the modern era, there has been a lingering fear of the mechanization of everyday life through the overuse of instrumental rationality. Because the social sciences intimately weave both outcomes and ethics, this overuse of instrumental rationality carries with it a moral dimension. Despite having somewhat predictable behavior, people are not things. Rather, the very notion of humanity implies a degree of agency, and agency demands an acknowledgment for spontaneous behaviors and active choices. Nevertheless, the growth of both bureaucracies and markets—two common features of the modern era—appears to negate this truism and encourage an inverse to Kant’s maximum to treat people as ends in themselves rather than means toward some bureaucratic or profit-driven goal.

The overuse of instrumental rationality has many sources, but in the United States its historical development begins with dramatic changes in the design of municipal governments. At the turn of the 20th Century, Socialists in the United States had considerable success in municipal elections. Empowered by a constituency of small-scale and heavily mortgaged farmers and newly created industrial laborers, for a brief period, the Socialist Party posed a significant electoral challenge to both Democrats and Republicans in America’s Midwest. Nevertheless, these successes were short-lived. In response to the electoral victories of Socialist candidates, Progressives promoted “reform” governments that made municipalities more both bureaucratic and market orientated.  Under their guidance, the full weight of Taylorism was brought to municipal governments. In the process, local governments became embedded with an ideology predicated on instrumentalist rationality that justified the marginalization participation in public life and redirected the priorities of municipal politics toward ensuring certain monetary ends. In the end, potentially more so than any other factor, these changes in the fundamental design of municipal governments not only reversed the victories of Socialists but encouraged an outlook on local politics that deemphasized the people as active citizens and conceptualized them as passive shareholders who entrusted the operations of local government with managers and bureaucrats.

This history upturns a problematic assumption among advocates of a free market economy. Chiding President Kennedy, Milton Friedman, in Capitalism and Freeman, proclaimed that “the free man will ask neither what his country can do for him nor what he can do for his country. He will ask rather "What can I and my compatriots do through government?" to help us discharge our individual responsibilities, to achieve our several goals and purposes, and above all, to protect our freedom.” (1) The idea that in a free market democracy people merely act “through” government rather than “by” government implies a purely instrumental account of public authority. For Freidman, the government is not supposed to reflect a common good, but is simply another option for achieving the specific ends of individuals. For this reason, Friedman argues, the ideal government for a thriving market is both limited and dispersed. However, the history of reform government shows the opposite. In pursuit of strengthening business interests over socialist politics, municipal governments became more bureaucratic. If anything, markets and bureaucracies have had a historical mutually reinforcing relationship; the survival of the free market system has been dependent on the bureaucratization of public life. 

In many ways, this relationship was anticipated. Max Weber’s remarks on the “iron cage” of the modern economic order implied a shared rationality between markets and bureaucracies. (2) In both cases, social life—and by extension people—is valued only to the extent that it can fulfill certain ends, rather than being seen as an end in and of itself. Murray Bookchin’s criticism of bureaucracies—in that they grow as a sense of citizenship declines, filling social vacuums with “monadic individuals and family units into a strictly administrative structure” (3) — can just as easily apply to markets. Margaret Somers, in her work Genealogies of Citizenship: Markets, Statelessness, and the Right to Have Rights demonstrates that market fundamentalism has resulted in the “contractualization of citizenship” in the United States. In doing so, Americans have reorganized “the relationship between the state and the citizenry, from noncontractual rights and obligations to the principles and practices of quid pro quo market exchange.”  (4) In decrying the loss of citizenship—whether through bureaucratization or market fundamentalism—both Bookchin and Somers draw on contemporary political realities. Yet, as will be shown, the roots of this problem run much deeper. In the United States, the phenomenon of bringing instrumentalist rationality to the public sphere started a century ago with the restructuring of municipal governments.  

Reform vs Machine: A Problematic Dichotomy

Few issues in urban politics have been as enduring as the institutional design of governing bodies. The conventional view is that before the Progressive Era most municipalities were ruled by machine governments that served myopic interests, usually geographically or ethnically based. These machine governments were easily susceptible to corruption. Eventually, these governments became reform regimes that merged ideals on the public good with modern concepts of business management. Reform politics were thought to be “objective,” in the sense that they isolated public officials from parochial interests, advocated for nonpartisan elections, and promoted efficiency in government services. (5) According to Paul Peterson, machine governments “favored ward elections, long ballots, decentralized governing arrangements, and the close connection between government, party, neighborhood, and ethnic association. Reformers preferred citywide elections, short ballots, centralized governing institutions, and the application of universalistic norms in the provision of government services.” (6) In the overwhelming majority of cases, reform governments favored small city councils and managerial systems, where the administration of the city’s activities was performed by a hired city manager, rather than the mayor. Both during the Progressive Era and after the Second World War, America saw an explosion of reform orientated managerial governments. (7) Judged in the terms of popularity alone, reform governments are often assumed to be the ideal means for handling local affairs, at least for small municipalities.  

However, the degree to which reform governments objectively represent the interests of all residents in the city has been contested. Jessica Trounstine has argued that reform governments do not necessarily make local power more transparent. Instead, they substitute one form of institutional bias for another. (8) For example, advocates of reform governments promote citywide, non-partisan, winner-take-all elections in the hopes of severing the tie between public officials and party bosses. However, this often decreases voter awareness of candidates and results in costlier elections. Party bosses are weakened, but wealthy individuals running for office gain electoral advantages. For this reason, the debates between reform and machine governments have not necessarily been debates on transparency and corruption, but on which type of local elites should be in control of the governments. This is a critical point in understanding why certain municipalities changed to reform governments and why, in many cases, these changes were strongly resisted. 

Rice has noted that commission governments—which were part of the reform agenda and acted both as a theoretical and practical precursor to more managerial institutions—were almost unequivocally supported by business elites and bitterly opposed by labor. Often business elites were only able to demobilize labor’s opposition by making major concessions that made the reform process far more varied and complicated than the usual narrative of machine-to-reform proposes. (9) Nevertheless, when labor did prove itself to be a significant threat to the established order—as in the case of Midwest cities in the form of the Socialist Party—the move to managerial governments occurred swiftly, uncompromisingly, and involved players outside of the local political landscape. 

The support among business elites for reform governments was not only because such changes ensured them electoral advantages. The structure of the reform governments often duplicated the organizational styles that were prevalent within the private sector. Replacing large city councils elected through wards with small commissions elected citywide made local governments more closely resemble the structure of corporate boardrooms. Furthermore, the position of city-managers was thought to mimic that of the chief executive officer (CEO) within a firm. There was no expectation that the city manager would be accountable to the people directly any more than a firm’s CEO was thought to be directly accountable to its workers. Instead, the city-manager was accountable to the council who acted as a board, while the citizens themselves were thought to be shareholders of the city. As Stillman has observed, “commercial activities have been one of the vital forces in shaping American society, and the businessman and the corporation have often been instrumental in determining public values… Probably no political or administrative philosophy reflects business and corporate ideals more clearly than the city management movement.” (10) In this regard, the movement for reform governments not only wanted to reconfigure local power to better serve business elites but believed that the values and thinking of business elites—which saw citizens in service of certain fiscal ends—should be embedded into the structure of municipal politics. 

Socialists Against Reform

In 1911, after two decades of organizing, the Socialist Party in Dayton, Ohio reported nearly 500 formal members and the support of approximately 13,000 trade unionists. With this popular support, they successfully elected two of their members to the city council and another three to the assessor's office. Their political strength was undoubtedly on the rise. During the 1912 presidential election, a greater portion of the Dayton electorate voted for the Socialist Party candidate Eugene Debs than the Progressive Party candidate Theodore Roosevelt. (11)  

In 1912, Ohio revised its constitution in order to grant home rule status to local municipalities. This prompted twenty-five cities in the state to consider charter changes. Dayton was one of them. With the design of local government now open, there was a strong push by Progressives to shrink the city council, make all elections citywide, and hire a city manager to perform administrative tasks. One notable champion of this cause was John H. Patterson. Patterson was a local industrialist known for his experiments in “welfare capitalism.” Despite his reputation as an enlightened business owner, Patterson was notoriously anti-union, chiding labor organizations for promoting a “restive spirit” among employees. Under the progressive banner, Patterson promoted reform governments as a means of combining Taylorism with republicanism. According to Paterson, the virtues of managerial and market orientated governments were elevated to the status of a secular religion. In print and lectures, he proudly proclaimed that “A city is a great business enterprise whose stockholders are the people… Our municipal affairs would be placed upon a strict business basis and directed, not by partisans…, but by men who are skilled in business management and social science; who would treat our people’s money as a trust fund, to be expended wisely and economically, without waste and for the benefit of all citizens.” (12) The local Socialist Party was not persuaded by Paterson’s calls for a technocratic utopia. They decried the proposed reform government as a regressive step away from democracy. (13)

In March, 1913, only two months before the city was to vote on its new charter, a massive flood from the Miami River hit Dayton, resulting in a state of emergency. While the local government scrambled to deal with the crisis, Patterson utilized the opportunity to exhibit the generosity of Dayton’s business class. He opened his factory as a relief center and organized a fundraising campaign among the business community to pay for emergency services. These actions won him favor among the local population. When election for the new charter was held on May 20, 1913, the new reform government was approved by a 2-1 margin. Despite increasing their number of votes in proceeding election cycle, the changes prevented the Socialist Party from taking office again. By 1917, the Socialist Party managed to win 43% of the vote, but in citywide, winner-take-all elections, this resulted in no representation. (14)

A similar dispossession of Socialists happened in New Castle, Pennsylvania. In 1911, New Castle voters elected several Socialist Party members to their select board, including the mayor, Walter V. Tyler. Despite the recalcitrance of non-socialist on the select board, often refusing to attend meetings in order to deny a quorum, Tyler and his supporters were able to make meaningful changes to the city. They ended petty graft and managed to get the city’s finances in order, raised wages and reduced hours for city workers, and instituted reforms to curb police brutality. (15)

Despite these successes, the Socialists in New Castle found their ability to maintain their tenure in public office severely limited with the passage of the Clark Act. Passed in 1913, the Clark Act changed all third-class cities in Pennsylvania, which included New Castle, to a commission-style government. This reduced the size of the city councils to five members, replaced wards with citywide elections, created nonpartisan positions, and increased the number of signatures needed to get an initiative on the ballot. Despite the appearance of nonpartisan elections, it was clear that the new commission-style government biased the electoral system toward Republicans. Previously, the electoral achievements of Socialists in New Castle were partially attributed to factionalism within the local Republican Party. The editors of the New Castles News were Republican partisans and condemned ex-Republicans who ran independently in elections for their lack of loyalty. Nevertheless, after the passage of the Clark Act, New Castle News editors had an overnight conversion to nonpartisan ideals, worked with the local Board of Trade to select “men of the highest standard” to run for public office, and were extremely successful in reinstituting Republican rule. (16) As with Dayton, the changes effectively excluded Socialists from office. No Socialists were reelected in 1913. Mayor Tyler’s reform movement was halted, and—due to charter changes—Tyler himself was unable to run for reelection. (17)

The examples of Dayton and New Castle demonstrate that reform governments did not necessarily result in an attack on machines, but rather a turn toward more bureaucratic and market-orientated municipalities. As Bruce M. Stave has noted, “urban structural reforms that Socialists generally opposed, with good reason, include the often successful attempt to institute city manager or commission forms of government. Along with substituting nonpartisan city-wide elections for ward-based elections to city councils and school boards, such diluted areas of socialist strength and grass-roots neighborhood control over municipal politics. Conversely, it enhanced the power of urban elites, who had the resources and expertise to take advantage of the new rationalized structures.” (18)

Reviving Municipal Citizenship

Municipal politics in the United States has had a problematic history. In the United States, the virtues of local sovereignty are praised to such an extent that critical examinations of municipal governments often get lost in the adulations. There is no argument that machine governments hindered greater democratic inclusion, but the assumption that their reform counterparts offered a meaningful an alternative is mistaken. The reality is that more often than not reform governments shifted power rather than dispersing it. 

Advocates of reform governments claimed that they would make politics more efficient by preventing the waste and spoilage associated with machines. Since the private sector constantly strove for higher levels of efficiency to maximize profits, it was only reasonable to bring private sector organizational styles into the public realm. However, this analysis fundamentally misunderstands the nature of machine politics. Machines were not inefficient. They were actually highly efficient is distributing the resources at their disposal. The issue was that the rewards of that distribution were not based on competency but loyalty. Party loyalty acts as the machine’s capital, where if party bosses were willing to invest favoritism toward certain underlings, then that boss would see a return on investments through loyalty. The movement away from machine to reform government did not seek a fundamental dismantling of this capitalistic relationship but instead transferred the terms so that party loyalty was substituted for business loyalty. In doing so, municipal governments became embedded with the values and rationality of the reigning business class. Municipal bureaucracies aided in the creation of localized market societies. This relationship between market and bureaucracy proved to be both self-reinforcing and enduring. The managerial concepts on local governments popularized during the Progressive Era remain a mainstay of America’s political landscape, especially in suburban areas.      

Problematically, the treatment of citizens in a polity as stockholders of a corporation fundamentally undermines the very notion of citizenship. In a free society, the people do not consume their government; they embody it through the exercise of their citizenship. Consumers in a market, unlike citizens in a polity, have no presumption of equality. If anything, consumers in a market are constantly seeking to undermine each other’s equality in order to secure the best deals. Citizenship cannot engage in this anarchy of the market. Doing so undermines the basis of a cohesive community. 

The displacement of Socialists from municipal governments could not have happened without a grander agenda to limit democratic participation and a reimagining of citizens as means toward ensuring business interest rather than ends. Nevertheless, this suggests a corrective to the tendency toward market bureaucratization in local government. The expansion of democracy, above and beyond the local realm, is essential to working against the “iron cage” of the modern economic order. Such an expansion can only come about by embracing a deeper sense of citizenship that challenges not only the inviolability of private property but the very rationality that reduces citizens to nomadic cogs in a bureaucratic engine intended to maximize profits. 

(1) Friedman, Milton, Capitalism and Freedom (Chicago: University of Chicago Press, 1982) 10.

(2) Weber, Max, The Protestant Ethic and the Spirit of Capitalism. ed. Richard Swedberg (New York: W. W. Norton & Company, 2009)  

(3) Bookchin, Murray, Urbanization Without Cities: The Rise and Decline of Citizenship (Montreal: Black Rose Books, 1992), 172.

(4) Somers, Margret R., Genealogies of Citizenship: Markets, Statelessness, and the Right to Have Rights (Cambridge: Cambridge University Press, 2009), 2.

(5) Rice, Bradley, Progressive Cities: The Commission Government Movement in America, 1901-1920 (Austin: University of Texas Press, 1977).

(6) Peterson, Paul E, City Limits (Chicago: The University of Chicago Press, 1981), 7.

(7) Stillman II, Richard J, The Rise of the City Manager: A Public Professional in Local Government (Albuquerque: University of New Mexico Press, 1974).

(8) Trounstine, Jessica, Political Monopolies in American Cities: The Rise and Fall of Bosses and Reformers (Chicago: Chicago University Press, 2008). 

(9) Rice, Bradley, Progressive Cities: The Commission Government Movement in America, 1901-1920.

(10) Stillman II, Richard J, The Rise of the City Manager: A Public Professional in Local Government, 7-8.

(11) Judd, Richard W, Socialist Cities: Municipal Politics and the Grass Roots of American Socialism (Albany: State of University of New Press, 1989).

(12) Quoted from ibid, 8.

(13) Judd, Richard W, Socialist Cities: Municipal Politics and the Grass Roots of American Socialism.

(14) ibid.

(15) ibid.

(16) Quoted from ibid, 156.

(17) ibid.

(18) ed. Stave, Bruce M, Socialism and the Cities (Port Washington: National University Publications, 1975), 7.