D2.Civ.6.9-12: Critiquing the Ties Among Government, Civil Society and Markets

Overview

Lesson Procedure

70-85 minutes of class time across 5 phases.

1. Warm-Up5-10 minutes
2. Direct Instruction15-20 minutes
3. Guided Practice15 minutes
4. Independent Practice20 minutes
5. Closure15-20 minutes

1. Warm-Up5-10 minutes

   Warm-Up Prompt

   "A billionaire gives $50 million to build a new public library. Write one reason a community might welcome the gift and one reason someone might be uneasy about it. Then do the same for a city that pays for the library with taxes instead."

   Collect reasons on two lists. Students usually raise speed and generosity on one side, and influence, accountability and fairness on the other. Name the three sectors: government (public bodies that make and enforce laws and collect taxes), civil society (the voluntary associations people form outside government and business, such as charities, congregations, clubs and advocacy groups) and markets (the exchanges among businesses, workers and buyers). D2.Civ.6.9-12 asks students to critique the relationships among them: to weigh, with evidence, what each tie does well and badly. Show Diagram 1.

2. Direct Instruction15-20 minutes

   Part 1: What a critique is. Show Diagram 2. A critique describes a relationship, asks who gains and who loses, tests claims against evidence, states the strongest version of the other side ("steelmanning") and only then judges. It is different from an attack: a fair critique can end by defending a relationship. Then work these four examples, one for each kind of tie in Diagram 1.

   • Government and markets: a licensing rule

     Invented example: a city requires every food truck to buy a $1,500 yearly license and to park at least 200 feet from any restaurant. Critique the rule.

     Result: Strength: the license fee pays for health inspections that protect buyers. Weakness: the distance rule protects existing restaurants from competition rather than protecting the public, and a $1,500 fee is a larger burden for a one-truck business than for a chain. Test: ask who asked for the distance rule. If restaurant owners lobbied for it, the rule may serve a market interest in the name of public health. Judgment: keep the inspections, and require the city to show a safety reason for the distance rule.

   • Civil society shaping markets and government: the National Consumers League

     Founded in 1899, the National Consumers League urged shoppers to buy goods made under fair working conditions and pressed states for laws limiting women's working hours. In Muller v. Oregon (1908) the Supreme Court upheld such a law after a brief prepared with the League's research. Critique the League's methods.

     Result: Strength: a voluntary group used both buyers' choices and the courts, and gathered evidence that officials then relied on. Weakness: laws written to "protect" women only were later criticized for keeping women out of some jobs and for treating them as less capable than men. Judgment: civil society can move markets and government at once, but its success does not settle whether the rule it wins is fair to everyone it covers.

   • Markets funding civil society: the Carnegie libraries

     From the 1880s to 1919, Andrew Carnegie paid for the buildings of more than 1,600 public libraries in the United States. Towns usually had to provide the land and promise to spend about a tenth of the gift each year, from taxes, to run the library. Critique the arrangement.

     Result: Strength: private wealth built public institutions quickly, and the upkeep pledge made towns invest their own money and kept the libraries going. Weakness: a donor, not voters, decided which towns got buildings and on what terms, and some towns turned down the money on principle. Judgment: the arrangement linked all three sectors, with private money, public taxes and local library boards, which made it stronger than a gift alone.

   • Government supporting civil society: the charitable deduction

     Since 1917, federal income tax law has let people deduct gifts to charities. Critique this tie between government and civil society.

     Result: Strength: the deduction encourages giving, so many charities can do work the government might otherwise pay for. Weakness: the tax savings are larger for people in higher tax brackets, so wealthier donors get a bigger public subsidy for the causes they choose, and the government must decide which groups count as charities. Judgment: the tie strengthens civil society, but citizens may reasonably debate who should steer the subsidy.

   Part 2: The Gilded Age debate. Between the Civil War and World War I, railroads, oil, steel and banking grew into enormous corporations, and Americans argued about how far government should go in controlling them. Students will read four voices from that debate: a federal law (Source 1), a Yale professor (Source 2), a former president (Source 3) and one of the richest industrialists of the age (Source 4). None of them speaks for a party of today, and each has defenders and critics among historians and economists.

3. Guided Practice15 minutes

   The law itself. Read Source 1 with the class. Glossary: "restraint of trade" (an agreement or action that limits competition), "trust" (in 1890, an arrangement in which the owners of competing companies handed control to one board of trustees), "misdemeanor" (a less serious crime than a felony), "proceedings in equity" (lawsuits asking a court to order someone to stop an action).

   1An act to protect trade and commerce against unlawful restraints and monopolies.

   2Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

   3Sec. 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is hereby declared to be illegal. Every person who shall make any such contract or engage in any such combination or conspiracy, shall be deemed guilty of a misdemeanor, and, on conviction thereof, shall be punished by fine not exceeding five thousand dollars, or by imprisonment not exceeding one year, or by both said punishments, at the discretion of the court.

   4Sec. 2. Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor, [...]

   [...]

   5Sec. 4. The several circuit courts of the United States are hereby invested with jurisdiction to prevent and restrain violations of this act; and it shall be the duty of the several district attorneys of the United States, in their respective districts, under the direction of the Attorney-General, to institute proceedings in equity to prevent and restrain such violations. [...]

   [...]

   6Sec. 7. Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any circuit court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover three fold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee.

   7Sec. 8. That the word "person," or "persons," wherever used in this act shall be deemed to include corporations and associations existing under or authorized by the laws of either the United States, the laws of any of the Territories, the laws of any State, or the laws of any foreign country.

   1. Penalties. Prompt: what is the largest punishment section 1 allows for one violation? Teacher note: a fine "not exceeding five thousand dollars," imprisonment "not exceeding one year," or both (paragraph 3). Ask whether a $5,000 fine would worry a trust worth tens of millions of dollars.
   2. Who enforces. Prompt: which officials does section 4 charge with bringing cases? Teacher note: "the several district attorneys of the United States [...] under the direction of the Attorney-General" (paragraph 5). Enforcement depends on the executive branch's choices, which varies from one administration to the next.
   3. Who counts as a person. Prompt: why does section 8 matter? Teacher note: it makes "corporations and associations" persons under the act (paragraph 7), so a company, and not only its owners, can break and be punished under the law.
   4. Critique. Pairs apply Diagram 2 to the act's relationship between government and markets: one strength, one weakness, one piece of evidence each. Share two pairs' answers before moving on.
4. Independent Practice20 minutes

   Three voices. Assign each student Source 2, 3 or 4 to read closely and the other two to skim, then run Activity 1, the seminar. Glossary for Source 2: "chartered corporations" (companies created by a charter from a legislature), "plutocrats" (people who rule because of wealth), "declamation" (loud speechmaking). Source 3: "special interests" (groups seeking advantages for themselves from government), "suffrage" (the right to vote), "publicity" (here, public disclosure). Source 4: "administration of wealth" (how wealth is managed and spent), "surplus revenues" (income beyond what a family needs), "trustee" (a person who manages property for the benefit of others).

   1For now I come to the particular point which I desire to bring forward against all the denunciations and complainings about the power of chartered corporations and aggregated capital. If charters have been given which confer undue powers, who gave them? Our legislators did. Who elected these legislators. We did. If we are a free, self-governing people, we must understand that it costs vigilance and exertion to be self-governing. [...] If we are a free, self-governing people, we can blame nobody but ourselves for our misfortunes. No one will come to help us out of them. It will do no good to heap law upon law, or to try by constitutional provisions simply to abstain from the use of powers which we find we always abuse. How can we get bad legislators to pass a law which shall hinder bad legislators from passing a bad law? [...] The plutocrats are simply trying to do what the generals, nobles, and priests have done in the past--get the power of the State into their hands, so as to bend the rights of others to their own advantage; [...] The plan of electing men to represent us who systematically surrender public to private interests, and then trying to cure the mischief by newspaper and platform declamation against capital and corporations, is an entire failure.

   2The new foes must be met, as the old ones were met--by institutions and guarantees. [...] The judiciary has given the most satisfactory evidence that it is competent to the new duty which devolves upon it. [...] The chief need seems to be more power of voluntary combination and co-operation among those who are aggrieved. Such co-operation is a constant necessity under free self-government; and when, in any community, men lose the power of voluntary co-operation in furtherance or defense of their own interests, they deserve to suffer, with no other remedy than newspaper denunciations and platform declamations. [...] On the side of political machinery there is no ground for hope, but only for fear. On the side of constitutional guarantees and the independent action of self-governing freemen there is every ground for hope.

   1Now, this means that our government, national and state, must be freed from the sinister influence or control of special interests. Exactly as the special interests of cotton and slavery threatened our political integrity before the Civil War, so now the great special business interests too often control and corrupt the men and methods of government for their own profit. We must drive the special interests out of politics. [...] For every special interest is entitled to justice, but not one is entitled to a vote in Congress, to a voice on the bench, or to representation in any public office. The Constitution guarantees protection to property, and we must make that promise good. But it does not give the right of suffrage to any corporation.

   2The true friend of property, the true conservative, is he who insists that property shall be the servant and not the master of the commonwealth; who insists that the creature of man's making shall be the servant and not the master of the man who made it. The citizens of the United States must effectively control the mighty commercial forces which they have themselves called into being.

   3There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task, but it can be done.

   4We must have complete and effective publicity of corporate affairs, so that the people may know beyond peradventure whether the corporations obey the law and whether their management entitles them to the confidence of the public. It is necessary that laws should be passed to prohibit the use of corporate funds directly or indirectly for political purposes; it is still more necessary that such laws should be thoroughly enforced. [...]

   [...]

   5Combinations in industry are the result of an imperative economic law which cannot be repealed by political legislation. The effort at prohibiting all combination has substantially failed. The way out lies, not in attempting to prevent such combinations, but in completely controlling them in the interest of the public welfare. [...]

   1The problem of our age is the proper administration of wealth, so that the ties of brotherhood may still bind together the rich and poor in harmonious relationship. [...]

   [...]

   2The price which society pays for the law of competition, like the price it pays for cheap comforts and luxuries, is also great; but the advantages of this law are also greater still, for it is to this law that we owe our wonderful material development, which brings improved conditions in its train. [...] We accept and welcome, therefore, as conditions to which we must accommodate ourselves, great inequality of environment, the concentration of business, industrial and commercial, in the hands of a few, and the law of competition between these, as being not only beneficial, but essential for the future progress of the race. [...]

   [...]

   3The growing disposition to tax more and more heavily large estates left at death is a cheering indication of the growth of a salutary change in public opinion. [...] Of all forms of taxation, this seems the wisest. Men who continue hoarding great sums all their lives, the proper use of which for public ends would work good to the community, should be made to feel that the community, in the form of the state, cannot thus be deprived of its proper share. [...]

   [...]

   4This, then, is held to be the duty of the man of Wealth: First, to set an example of modest, unostentatious living, shunning display or extravagance; to provide moderately for the legitimate wants of those dependent upon him; and after doing so to consider all surplus revenues which come to him simply as trust funds, which he is called upon to administer, and strictly bound as a matter of duty to administer in the manner which, in his judgment, is best calculated to produce the most beneficial results for the community—the man of wealth thus becoming the mere agent and trustee for his poorer brethren, bringing to their service his superior wisdom, experience, and ability to administer, doing for them better than they would or could do for themselves.

   [...]

   5Individualism will continue, but the millionaire will be but a trustee for the poor; intrusted for a season with a great part of the increased wealth of the community, but administering it for the community far better than it could or would have done for itself. [...]

5. Closure15-20 minutes

   Back to the present. Introduce Source 5, an invented scenario for Activity 2 and the homework. Students read it and mark each organization as government, civil society or market.

   1Invented scenario, written for this page. Riverton is a fictional city of 85,000 people. Northfield Logistics, a large online retailer, wants to build a warehouse on empty land near the highway. The company says it will hire 600 workers at an average of $19 an hour. It asks the city council for a property-tax abatement (a reduction in the taxes it would owe) worth $4.5 million over 10 years, and says it will build in another state if the council says no.

   2Groups take sides. The Riverton Chamber of Commerce, a business association, supports the deal. A group of downtown shop owners worries that more online sales will hurt their stores. The local food bank and two neighborhood associations form a coalition and ask for a community benefits agreement: a signed promise that the company will hire Riverton residents first and give $200,000 a year to a job-training program at the community college. A labor union asks the company to stay neutral if its workers vote on whether to join a union. Residents near the site worry about truck traffic on streets that pass two elementary schools.

   3The council meets in public, and 140 people sign up to speak. Council members point out that the empty land now produces almost no property tax, and that the school district, which receives part of the property taxes collected in Riverton, would get less from the new warehouse during the abatement years than it would without the abatement.

   Exit ticket: Which writer from Sources 2-4 would you most want on the Riverton council, and what would that writer say about the abatement? One quotation required.

   Teacher note on the sources: Sources 1-4 are quoted exactly as published. Carnegie writes of "the survival of the fittest" and "the progress of the race," phrases from the social Darwinism of his day, which applied a misreading of evolution to rich and poor; a paragraph left out here contrasts "civilized man" with the Sioux in terms that are condescending. Sumner and Carnegie are sometimes grouped together, but their texts disagree on important points. Roosevelt's speech was part of a political campaign. Keep the discussion on the relationships the writers describe; the lesson does not ask students to adopt any writer's view or a position on current policy.

Differentiation Strategies

Assessment Guidance

1. Question 1 of 20 · Multiple Choice

   What does section 1 of the Sherman Act (Source 1, paragraph 3) declare illegal?

   AAny business that grows much larger than all of its rivals BAgreements or conspiracies that restrain interstate trade CEvery corporation chartered by any state legislature DSelling goods for less than a rival's price

2. Question 2 of 20 · Multiple Choice

   Which business conduct does section 2 (Source 1, paragraph 4) most directly target?

   AAgreeing with a competitor on a common price BRefusing to hire workers from another state CTrying to monopolize part of interstate trade DPaying a reasonable attorney's fee in a lawsuit

3. Question 3 of 20 · Multiple Choice

   Section 7 (Source 1, paragraph 6) lets an injured person sue and "recover three fold the damages." What does this add to the relationship between government and markets?

   AIt ends the government's role in enforcing the act BIt allows only corporations to bring lawsuits CIt limits damages to the fine in section 1 DIt lets private parties enforce the act in court

4. Question 4 of 20 · Multiple Choice

   In Source 2, paragraph 1, how does Sumner answer complaints about "chartered corporations and aggregated capital"?

   AHe says the corporations seized their power by force BHe blames legislators and the voters who chose them CHe says foreign governments are mainly to blame DHe says the courts created the corporations themselves

5. Question 5 of 20 · Multiple Choice

   Sumner asks, "How can we get bad legislators to pass a law which shall hinder bad legislators from passing a bad law?" What is he questioning?

   AWhether corporations should be allowed to exist at all BWhether ordinary citizens should vote at all CWhether the courts have the power to review laws DWhether more laws can fix a problem lawmakers caused

6. Question 6 of 20 · Multiple Choice

   According to Source 2, paragraph 2, where does Sumner see "the chief need"?

   AMore voluntary co-operation among the aggrieved BA new federal agency to regulate big business CA constitutional amendment that bans all trusts DHigher taxes on the largest fortunes

7. Question 7 of 20 · Multiple Choice

   On which point do Sumner (Source 2) and Roosevelt (Source 3) agree?

   AConcentrated wealth can capture government BThe courts should take over railroad regulation CWealthy people should give away their fortunes DCorporations should be broken into small firms

8. Question 8 of 20 · Multiple Choice

   What does Roosevelt mean when he says property should be "the servant and not the master of the commonwealth" (Source 3, paragraph 2)?

   APrivate property should be abolished entirely by law BHousehold servants should own the property they work on CWealth must serve the public, under the people's control DThe commonwealth should sell off its public land

9. Question 9 of 20 · Multiple Choice

   Which remedy for corporate influence in politics does Roosevelt propose in Source 3, paragraph 4?

   ALetting corporations cast votes in elections BEnding all federal regulation of interstate business CBanning corporate funds in politics, and enforcing it DLeaving the whole problem to private charities and churches

10. Question 10 of 20 · Multiple Choice

    Roosevelt says "The effort at prohibiting all combination has substantially failed" (Source 3, paragraph 5). Which source is that sentence most directly a critique of?

    ASource 1, the Sherman Antitrust Act BSource 2, Sumner's essay on social classes CSource 4, Carnegie's essay on wealth DSource 5, the invented Riverton scenario

11. Question 11 of 20 · Multiple Choice

    How does Carnegie view "the law of competition" in Source 4, paragraph 2?

    AAs a cruel system that government should replace BAs costly, but worth the cost for progress CAs a rule that applies only to small businesses DAs something the Sherman Act had already ended

12. Question 12 of 20 · Multiple Choice

    What does Carnegie say about heavy taxes on large estates left at death (Source 4, paragraph 3)?

    AThey punish success and ought to be repealed at once BThey are acceptable only in Britain CThey should replace all charitable giving DA cheering sign, and the wisest form of taxation

13. Question 13 of 20 · Multiple Choice

    In Source 4, what role does Carnegie give the wealthy man in relation to the community?

    AA trustee managing surplus wealth for the community BAn official who should run for public office CAn owner who may spend his fortune however he likes DA worker who should share his wages with the poor

14. Question 14 of 20 · Multiple Choice

    In Source 5, the abatement is worth $4.5 million over 10 years and the company promises 600 jobs. Over the full 10 years, what is the abatement per promised job?

    A$750 B$7,500 C$75,000 D$2.7 billion

15. Question 15 of 20 · Short Answer

    Critique the relationship between government and markets that Sumner describes in Source 2. Give one strength and one weakness of his remedy.

    Show model answer

16. Question 16 of 20 · Short Answer

    Roosevelt and Carnegie both wanted to check the power of great fortunes. Compare the sectors each relies on, using Sources 3 and 4.

    Show model answer

17. Question 17 of 20 · Short Answer

    Using Source 3, explain Roosevelt's criticism of the approach in Source 1. Then give the strongest reply a defender of the Sherman Act could make.

    Show model answer

18. Question 18 of 20 · Short Answer

    Identify three relationships among government, civil society and markets in Source 5, one for each pair of sectors.

    Show model answer

19. Question 19 of 20 · Short Answer

    Critique the community benefits agreement in Source 5 as a tie between civil society and markets. Give the strongest case for it and the strongest case against it.

    Show model answer

20. Question 20 of 20 · Short Answer

    Which relationship among governments, civil societies and markets did the writers in Sources 2-4 worry about most? Were they right to worry? Support your answer with two sources.

    Show model answer

These standards connect to D2.Civ.6.9-12: prerequisites to review first, parallel standards at the same level, and next steps that build on it.

Standard text: National Council for the Social Studies (NCSS), The College, Career, and Civic Life (C3) Framework for Social Studies State Standards: Guidance for Enhancing the Rigor of K-12 Civics, Economics, Geography, and History (Silver Spring, MD: NCSS, 2013). NCSS was not involved in the production of this lesson and does not endorse it.