In the pantheon of American presidents, Calvin Coolidge, or “Silent Cal,” often plays the role of the overlooked extra in the corner of history’s grand narrative. I can attest to this, as my first real exposure to him occurred recently during a visit to a museum whilst travelling in the US. Having spent some time since then reading up on everything Cal-related, I’ve become increasingly convinced that there’s a compelling case to be made that Coolidge’s approach to governance, particularly his economic policies, should be dusted off and revisited, not just for historical curiosity but as a lodestar for free marketeers far and wide.
Before I go any further, let’s set the scene of Coolidge’s era. The 1920s is often remembered for jazz, flappers, and the stock market’s dizzying heights. But beneath the cultural tumult, Coolidge was busy orchestrating what can quite fairly be called a symphony of minimalistic governance. His philosophy was profoundly simple: government should do less, not more.
Whilst this may seem extraordinarily mundane to you, consider that this wasn’t simply cheap talk on the campaign trail designed to get a nod of approval from over-50s. His ideas weren’t born out of laziness or disinterest but from a profound belief in the efficacy of the market’s invisible hand over the visible, often clumsy, hand of government intervention.
Coolidge’s administration slashed taxes like a bootlegger cuts whiskey – to make the good times flow more freely, notably through the Revenue Acts of 1924 and 1926. This wasn’t just about giving the rich a break; it was about stimulating economic activity by leaving more money in the pockets of Americans. By leaving more money in the pockets of Americans, he was essentially saying, ‘Here’s your allowance, now go make some noise at the stock market’.
The result? A crescendo of consumer spending, industrial growth, and a stock market that seemed to reach for the stars.
Coolidge believed in setting the rules of the game and then letting the players play. This isn’t to say there was no regulation, but rather, it was about not over-regulating, about allowing businesses to innovate, expand, and yes, even fail, without the government always having its finger on the scale. Imagine if the conductor only pointed out the tempo and let the musicians interpret it – that was Coolidge’s regulatory approach.
Under Coolidge, the U.S. economy boomed. Unemployment dipped to levels we can only dream of today, and real GDP growth was robust. If the economy were a piece of music, it was hitting all the right notes. But here’s where the narrative often shifts to a sombre tone – the Great Depression. While Coolidge left office before the market crashed, the seeds of economic disaster were arguably sown in the very success of the 1920s, exacerbated by policies that followed his term, particularly those of the Federal Reserve.
This is where the story of Coolidge’s economic policy gets nuanced. The Federal Reserve, relatively new on the scene, played its own tune by the late 1920s. Its policies, intended to stabilise the economy, are often critiqued for contributing to the eventual bust. Coolidge’s hands-off approach might have been a wise nod to market self-correction, but the Fed’s actions, flooding the number of dollars in circulation to stimulate the market’s trajectory in a way they deemed desirable, led to an artificially manufactured drunkenness, leading to a nasty hangover – The Great Depression.
After Coolidge, the economy didn’t just crash; it was like the Charleston dancer tripped over its own feet.
So, what can we learn from Coolidge’s approach? For us free marketers, Coolidge stands as a beacon of how less can indeed be more. His policies suggest a government that sets the stage for prosperity but doesn’t try to direct its every act. Ultimately, it’d be wise to scream and shout about Coolidge as an example for modern policymakers: intervene when necessary, but do so with the lightest touch possible, recognising that markets, like ecosystems, thrive best when allowed to find their own equilibrium.
However, Coolidge’s era also teaches us the importance of balance. The market, left entirely to its own devices, can lead to excesses that even the most laissez-faire of leaders might wish to temper. His presidency illustrates both the potential highs of economic freedom and the risks when the pendulum swings too far. As much as we might not want to admit, money is controlled by the state; we can certainly pinpoint this as the leading cause of boom and bust, but it doesn’t negate the fact that we aren’t likely to return to a free banking system of money anytime soon.
In today’s world, where economic discussions continuously revolve around government intervention versus market freedom (albeit a gross oversimplification), Coolidge’s presidency demonstrates how policymakers need not feed their impulse to ‘do stuff’. Through his cool, light-touch approach to economic governance, he laid the foundations for future leaders to not see laissez-faire as relegating themselves as passive observers but an active curator of an environment where markets can breathe and grow.
In today’s economic debates, Coolidge’s approach might be seen to be as quaint as a Model T, but hey, those cars could move when they wanted to. Perhaps it’s time we give Silent Cal a louder voice in the conversation about governance and economics. His story isn’t just about what was done, but importantly, what wasn’t – a lesson in governance through restraint, a philosophy that might just resonate with those who still believe in the power of individual enterprise and the wisdom of markets, provided they’re given room to dance.
