A Century of Reform

BRIAN: If you’re just joining us, this is BackStory, and we’re talking about how past generations of Americans thought about corruption over the years.

PETER: One way that we try to keep our government officials from making deals or taking bribes is to pay them good salaries and offer them job security. But for many decades, government offices were actually for profit, meaning that government employees weren’t on salary, but rather were paid in bonuses and fees based on how well they did their jobs.

BRIAN: This lasted for a long time, through much of the 19th century, in fact. But at the very same time, Americans’ ideas about government work were gradually shifting, culminating finally in the salary system we take for granted today. Legal scholar Nicholas Parrillo has written about this little remembered chapter of history, and explained to me that there were actually two types of pay for government service.

NICHOLAS PARRILLO: On the one hand, you had some government officers who were paid on a profit-seeking basis to do things that people didn’t want, OK? So the prosecutors receiving a fee for every conviction they won would be an example of that. So would tax collectors getting a percentage on all the evasions they discovered, or on all the forfeitures they imposed on people.

BRIAN: So that was kind of like a bounty.

NICHOLAS PARRILLO: Exactly. You could think of these officers as, in a sense, bounty hunters. And basically the more unpopular the law they were being asked to enforce, the higher the fee would be. So you might get, say, a $10 fee for prosecuting a misdemeanor, a $20 fee for prosecuting an ordinary felony, but if you brought a prosecution and won it under the prohibition laws or the anti-gambling laws, you might get a fee of $50 or $100 or something like that.

And I mean, I think this is interesting because, although we today think of profit-seeking in government as sounding generally kind of corrupt, these kinds of incentives were actually an effort to counter corruption. They were an incentive to get the officer to follow the law and enforce the law to the hilt, to the letter.

BRIAN: So the corruption entailed was simply doing what was easiest, and not doing what might get you run out of town.

NICHOLAS PARRILLO: Right, right, right. Exactly. And by giving people a monetary incentive to enforce the law to the hilt and to the letter, that was anti-corruption. That was an early foray into efforts at good government. And then on the other hand, the other half of the dichotomy would be government officers who were paid on a profit-seeking basis for providing services to people who wanted those services.

The government land officers who had to make decisions about whether settlers had fulfilled the requirements to get a homestead would be paid a fee when they granted the homestead. Another example would be the officers who decided immigrants’ applications to become citizens. And the idea was that these officers are providing a kind of private service that helps private people out. And a way of inducing them to provide good service and serve their customers is to pay them a fee, and maybe even negotiate a fee.

BRIAN: But if I went to the DMV and paid the person behind the desk my $17, and that person put the money in their pocket, I would call that fraud.

NICHOLAS PARRILLO: Yeah, or corruption.

BRIAN: Yeah.

NICHOLAS PARRILLO: For that not to be corrupt, you have to have a quite different conception of government office than we have now. You can’t really view officers as creatures of a legislature or of a centralized government the way we view them today. You have to view them as sort of quasi independent vendors, you know, whose obligation is to just kind of reach workable arrangements with the people who need their services. It’s not about providing kind of uniform service to everybody.

BRIAN: So they’re almost like mediators today.

NICHOLAS PARRILLO: Yeah. Yeah. Yeah. But something new happens with how people think about government offices by the early 19th century. They start to think, well, actually these offices– they aren’t businesses, they’re creations of the government. They have no existence apart from the elected lawmakers who supposedly create them. And therefore, officers should only be able to take a fee for their service if the legislature actually establishes the fee in an act that it passes as a law.

I mean, there’s a hilarious incident in which the federal government land officers wrote to their bosses and said, look, the settlers applying for homesteads would like us to help them fill out their forms. And we’re really good at helping people fill out their forms. We deal with these forms all day. Can we take a fee for helping these people fill out their forms? The settlers want to pay us this fee because, you know, they think they’re going to have to pay more if they go to some private attorney, or if they don’t get any help, they might do it wrong, you know, or something like that.

BRIAN: Yeah, no, they’re the original H&R Block.

NICHOLAS PARRILLO: Exactly. And the bosses write back and they say, Congress has not authorized you to take a fee for helping people to fill out their forms. You can only take the fees on the list. It would be nice if you helped people fill out their forms, but Congress has not authorized it, it’s not in the law, you cannot take anything.

You know, I mean, the aspiration was for these fees for service to continue to imbue the government with customer service. But once you have the legislature saying, look, we want to control this, we want to kind of confirm our own supremacy, they’ve got to regulate everything. And that’s really hard to do in a way that continues to be customer serving.

BRIAN: Is that how we get salaries? Does Congress throw up their hands and say, oh my god, what a mess we’ve gotten ourselves into.

NICHOLAS PARRILLO: Yeah, I think that’s ultimately one of the major reasons. It became a sort of logistically impossible regulatory task. And of course, government officers would often not listen to their bosses. They wouldn’t listen to the legislature. They’d continue to strike deals on an individualized basis.

But now, after this ideological change involving all this stuff about legislative supremacy, that comes to be labeled as corrupt. So when you observe what contemporaries in history call big increases in corruption, often you’re not actually observing a change in behavior, you’re observing the same behavior, but people are looking at it differently, with a different and new set of expectations.

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BRIAN: Nicholas Parrillo is a law professor at Yale. He’s the author of Against the Profit Motive– the Salary Revolution in American Government.

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It’s time for another short break. When we get back, how a little profiteering during the Civil War led Americans to see the spectre of corruption around every corner.

PETER: You’re listening to BackStory. We’ll be back in a moment.

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