In Herbert Croly’s analysis:

[T]he political corruption, the unwise economic organization, and the legal support afforded to certain economic privileges are all under existing conditions due to the malevolent social influence of individual and incorporated American wealth; and it is equally true that these abuses, and the excessive “money power” with which they are associated, have originated in the peculiar freedom which the American tradition and organization have granted to the individual. Up to a certain point that freedom has been and still is beneficial. Beyond that point it is not merely harmful; it is by way of being fatal … The experience of the last generation plainly shows that the American economic and social system cannot be allowed to take care of itself, and that the automatic harmony of the individual and the public interest, which is the essence of the Jeffersonian democratic creed, has proved to be an illusion.

Like the British Social Imperialists, but very unlike most social reformers of today, Croly’s work was also profoundly nationalist, dedicated to the American national interest and to instilling in the American state and population—and especially the new immigrants and their children—a new sense of national purpose:

The consequences, then, of converting our American national destiny into a national purpose are beginning to be revolutionary. When the Promise of American life is conceived as a national ideal, whose fulfilment is a matter of artful and laborious work, the effect thereof is substantially to identify the national purpose with the social problem.

And while Croly’s grander hopes were not fulfilled, the successful integration of the immigrants (in part through a vastly expanded state education system which the Progressives had championed) helped create the national consensus which a generation later supported the New Deal and the “trust-busting” measures of Theodore Roosevelt and Woodrow Wilson, which greatly reduced monopolization.

Croly’s work formed the basis for Theodore Roosevelt’s “New Nationalism”: the programme of the short-lived Progressive Party with which Roosevelt attempted to regain the presidency in 1912, set out in a famous speech of 1910 in Osawatomie, Kansas. His advocacy of social and political reform was underpinned by an ardent and convincing personal commitment to nationalism.

Roosevelt’s platform included points which are of great relevance today, including attacks on the power of special interests and monopolies, and a demand that business executives should be held personally responsible for the crimes of their corporations. Roosevelt called for the restoration of what he called the “square deal”: the principle that in America, hard, honest work was adequately rewarded, that every hardworking American had the opportunity to get ahead, and that the equality of the vote should not be subverted by the rich:

The man who wrongly holds that every human right is secondary to his profit must now give way to the advocate of human welfare, who rightly maintains that every man holds his property subject to the general right of the community to regulate its use to whatever degree the public welfare may require it.

COMMON TO both the Social Imperialists in Britain and the New Nationalists in the United States was a recognition that capitalism left to itself is incapable of regulating and limiting itself. This is hardly a lesson that should need teaching after the experience of the past two hundred years. Were it not for state intervention, seven-year-old children would still be working in coal mines. Or, alternatively, a communist revolution would have destroyed capitalism and ushered in a different set of horrors. The task then as it is now is not to overthrow capitalism (whatever many of the capitalists themselves may profess to believe), but to save capitalism from itself. The coronavirus is only a particularly sudden and savage reminder of this truth; certainly, there is no chance at all that undirected laissez-faire capitalism will save us from its economic consequences.

The nation state has to play a central role in regulating the economy, based on the wider interests of the state, the people, and the democratic political order. Unregulated financial speculation inevitably leads to crashes like those of 1929 and 2008 and the renewed structural weaknesses that are being revealed by the pandemic. Even more importantly, without state and social controls, the capitalist search for increased profit tends to inevitably result in the immiseration of large parts of the population, the destruction of the environment, and the disintegration of society. Wise capitalists see this themselves, though it seems they must relearn the lesson over and over again.

The first objective of states pursuing reforms, including the policies needed to limit climate change, is to raise the money to pay for action. Globalization, deregulation, and the power of the global overclass mean that even very powerful states once again face an ancient challenge in this regard. If the United States and other states try to deal with the coronavirus economic crisis simply by borrowing and printing money, our economic systems will be left disastrously weakened.

In the words of Patrick J. Greary, “the West was faced with the paradox of immensely wealthy individuals and an extremely poor treasury.” The United States and European Union in the first quarter of the twenty-first century? No, the Western Roman Empire in the last quarter of the fourth century. The great senatorial landowners had used their power largely to emancipate themselves from paying taxes, thereby passing the burden on to the mass of the population. So crushing did this burden become that it has been suggested that, by the fifth century, many Roman citizens in the West actually preferred to be conquered by the barbarians. The early modern state was shaped through the struggle with such “overmighty subjects”—who never went away and are now back with a vengeance, though in a new form.

The weakness of some modern states like Pakistan is intrinsically related to their inability to raise taxes from the population in general and the elites in particular. This creates a vicious circle in which the state is unable to pay for services to the population (except for the army, of course), which means that the population sees no point in paying taxes and does not believe that the state has any real right to ask for them, leading to further mass tax evasion. The inability to raise taxes from the rich, therefore, strikes at the very heart of the legitimacy of the state and the moral contract between the state and its people. The results of this lack of revenue for health services in Pakistan and elsewhere is now going to be revealed in a dreadful way.

Another essential role of the state is in building strategic (but not immediately profitable) infrastructure, which a capitalism focused on short-term profit is incapable of creating. This begins with transportation infrastructure. In the United States, and still more in Europe and Asia, the state played a critical role in building railways, either for directly military purposes (as with the British railways in India) or to create industrial economies capable of supporting modern militaries and sustaining economic competition with rivals. Thus, in the twenty years before 1914, spending on railways came second only to spending on the military in the state budgets of the German Empire.

 In the United States from the 1930s to the 1970s, both the role of the state in helping to create infrastructure and drive technological innovation was almost universally acknowledged, as was the link to national security. Eisenhower’s Federal-Aid Highway Act of 1956 was publicly intended to create “A National System of Interstate and Defense Highways.” This built on its predecessor, the Federal-Aid Highway Act of 1944—not coincidentally, passed during World War II. Under the Act of 1956, 90 percent of the cost of the interstate highway system was paid by the Federal government out of taxes.

Indeed, the role of the state (at both federal and state level) in building and maintaining transport infrastructure has come to be generally accepted. The problem is that it can no longer raise enough money to pay for this—as is only too miserably apparent from journeys through the country. The complete inability of the United States to compete with China and Europe in building high speed rail lines is not only a massive obstacle to effective action against climate change. It is also deeply economically inefficient; as anyone who travels from the Bay Area to Los Angeles by plane and automobile can testify. As Senator Elizabeth Warren and others have mentioned (but not yet with nearly enough resonance, alas), one aspect of a Green New Deal is the urgent need to strengthen U.S. technology and infrastructure in order to compete with China. This at least ought to be a national goal that could unite all Americans, as it did during the space race with the Soviet Union.

A striking example of a national infrastructure program with intrinsic links to national security is the Israeli approach to water, which virtually embodies the principle of “national efficiency.” Water shortages will be a critical issue for much of humanity even before the effects of climate change really kick in. Israel has led the world in this field, through pioneering achievements in drip irrigation, self-powered desalination plants using reverse-osmosis, and wastewater recycling. As a result, Israel has been spared the effects of the droughts that have plagued the Middle East over the past generation; pride in “making the desert bloom” is a key part of Israeli national identity.