Early 20th Century Socialism

Another answer to capitalism, came in several attempts at actual political action by U.S. socialists. In 1876, the Socialist Labor Party was founded by Daniel De Leon and in 1901 the Socialist Party of America started, led by Eugene V. Debs. Then came World War I, which wreaked havoc on the new parties of the Left.

The second Socialist International effectively collapsed over whether to support the war. Reformist-minded socialists argued that participating in government meant accepting majority rule, even when it came to war. The more radical revolutionaries argued that approving of the war meant pitting workers against each other and were opposed to the internationalist idea of socialism, within which class trumped nationality.

Somewhere in the middle of this maelstrom, was Russian socialism, beat back ferociously in an attempted revolution in 1905, after which much of the leadership ―  including one Vladimir Illyich Lenin ― went into exile. Lenin proposed an interpretation of Marx that diverged with all but the most radical socialists. It forever cleaved a divide between Leninists (commonly called Communists, after the name they gave their party) and all other socialists.

Lenin believed that armed revolt was the only path to socialism, led by a vanguard of professional revolutionists who would seize government, then govern in name of the working class ― or to use the 19th-century term favored by Marx, the proletariat. “Proletarian” was how Romans referred to citizens too poor to pay taxes who instead contributed their children ― “prole,” in Latin ― as soldiers who went into the Roman Legions.

To muddy the waters as to the standing of his faction within Russian socialism, Lenin played a word game. Lenin’s faction was a numerical minority (“menshevo,” in Russian), which split off from more gradualist and moderate Russian socialists chastised by the 1905 debacle. Yet, in order to lead and speak for all Russian socialists, Lenin told the story in reverse arguing that the majority (“bolshevo”) had stuck with him. Thus his followers called themselves Bolsheviks.

The collapse of the International and the rise of Lenin's Russian splinter group of socialists would have a momentous effect on the ideas that would shape what Walter Lippmann would call “the American Century.”

Progressivism

In the same way a tamed Labor Day celebration of unions stole the thunder of socialist May Day, a political movement arose in the United States to attempt to prevent revolutionary change by offering mild reforms.

Marx and early socialists were concerned with Europe, not the United States and their ideas were mostly imported through immigration from Central Europe and Italy, at a time when industrialization was demanding an ever greater number of workers for new and expanding factories. Up to the 1890s, when the American Frontier was effectively declared closed, the existence of what to some were vast "vacant" lands (not how Indians or Mexicans viewed them), had been a kind of social and economic safety valve. If you didn’t like being on the bottom of the pecking order, you just went West.

Once the Frontiers closed or became crowded, however, the urgent problems of capitalism began to take on urgency. Because capitalism encouraged speculative investment, the entire economic system was chained to a recurring cycle of booms and busts that left millions of workers out of work. This happened again and again and again, every 5 to 15 years. The Great Depression of the 1930s was the deepest and longest bust, but it was by far not the only one. The cycle has continued happening through the Great Recession of 2007-2009.

One answer, from well-meaning but essentially capitalist quarters, were the reformist "Progressives." In the presidential election of 1912 all three major candidates — Teddy Roosevelt for the "Bull Moose" Progressive Party (a split from the Republicans), Republican William Howard Taft and Democrat Woodrow Wilson — claimed to be "progressive" at one point or another.

U.S. Progressivism of the 1880s to the 1920s was a decidedly centrist, reformist effort to ameliorate the ill effects of capitalism, regulating it rather than getting rid of it; its principal and last policy achievements in the USA were the Federal Reserve, the Food and Drug Administration (which ended the actual "snake oil" salesmen) and the federal income tax. Less effective was anti-trust legislation, which did not stop corporations' unfettered growth in power.