THE GOVERNMENT AND ECONOMIC LIFE SINCE 1860
Introduction. The activities of government in the economic order are so essential and so numerous that the state must be considered as an economic as well as a political institution. If the state is to perform its economic functions efficiently, its organization and activities must be such as will best enable it to promote the economic development and well-being of the people. This involves at least two things. In a nation that has accepted a democratic type of government as its ideal it means that the people--with only minor and obviously reasonable exceptions-- shall choose their representatives and rulers and thus have the final say in the determination of governmental policy. It also means that the organization and activities of the governmental units must be adapted to the changes in the economic order. This period saw progress made along both these lines of development.
A more democratic control was secured by extension of the franchise to the only large groups of adult citizens theretofore generally denied the right to vote, and other changes gave the voters a more direct control over political action. The problem of adapting the organization of the various governmental units to the changing economic order proved a difficult and complicated matter. As far as this objective was concerned the Federal Constitution remained almost unchanged, though its interpretation by the Supreme Court brought some modifications in its application to specific problems. The state constitutions, especially those of the new states, showed somewhat greater adaptability; this was also true of the governments of the minor political units. For the most part, however, adjustment had to be made as best it could under the general framework and limitations of government established in earlier days. Thus such adjustment as actually took place was chiefly in the form of new legislation on the part of the various political units. This resulted in enormously increased governmental activities, including not only those of a regulatory type but also those assuming the more positive form of public provision for social needs. Thus, from the last quarter of the nineteenth century, there was evident a more marked tendency away from the individualistic, laissez-faire policy so dominant during the preceding years of the century.