Few social scientists and historians would see anything puzzling in what Nicholas Parrillo calls the salary revolution in America. Officers at every level of American government were once motivated by a profit motive, compensated by fees and bounties. But by the early twentieth century fixed salaries were the prevalent form of public compensation. The standard scholarly explanation of that transformation is that it was a consequence, along with merit appointment and civil-service protection, of the bureaucratization of government administration.
Our conventional understanding of that process employs Max Weber's model of bureaucracy. He wrote, officials “are remunerated by fixed salaries in money” while “the salary scale is primarily graded according to rank in the [organizational] hierarchy” (The Theory of Social and Economic Organization [Free Press, 1964], 333–34). Exemplifying how we employ Weber's ideal type in a way that incorporates salarization, Theda Skocpol writes, only after electoral democratization and industrialization did “governments in the United States make much headway in the bureaucratization and professionalism of . . . administrative functions” (Protecting Soldiers and Mothers [Harvard University Press, 1995], 44).
Parrillo overturns that conventional explanation, beginning with an exhaustive examination of American public compensation's changes. Surveying his findings, Parrillo explains the bureaucrat ideal type is “not an adequate way to understand the triumph of salaries in American government” (359). As opposed to seeing the salary revolution as part of the bundle of organizational changes subsumed under the idea of bureaucracy circa 1900, Parrillo identifies several political forces that produced the salary revolution independently of, and earlier than, administrative bureaucratization.
He identifies, and throughout the book traces, three forces emergent in nineteenth-century America that ended fees and bounties in the public service. First, traditional forms of compensation violated American values of equality. Officials compensated through fees, “facilitative payments,” had incentives to offer unequal treatment of persons, either for higher payments or to attract more clients. Similarly, an officer compensated through bounties, rewards for coercive actions upon persons, had incentive to perform overly aggressive enforcement. Second, unequal treatment of persons stimulated interest-group opposition to fee- and bounty- compensated officers and their actions. For example, as fee-compensated courts processed naturalization requests in the late nineteenth century, the requirements for naturalization loosened in practice as court officials competed to attract more fee-paying applicants. In reaction, anti-immigration interests promoted a tightened naturalization process. A third cause for the salary revolution was governments' search for increased legitimacy. Expanding governmental functions and the rise of national mass political parties transformed the relationship of governments with citizens from one primarily of localism to what Parrillo terms “alien imposition.” Governmental officers were increasingly outsiders rather than locals, and the uses of public authority lost the ameliorating qualities of local elites governing their own neighbors. Increasingly, government's officers and policies could be seen as alien and illegitimate. Thus legislators were increasingly concerned with making official actions rule bound and predictable, encouraging voluntary compliance rather than compulsion.
Against the Profit Motive contains a wealth of information about specific roles and compensation models and would be valuable if only for that accomplishment. To again use the case of immigration. During the nineteenth century, naturalization requirements were low, and naturalization could be gained by a qualified immigrant upon application to any state or federal court with payment of a modest fee. The fee compensated courts' officers, and the more applications received, the greater would be the compensation. Courts thus had incentives to compete for clients, each seeking to attract more fee-paying applicants. In this way, Parrillo observes, public officials became “semi-independent vendors” of public services, all driven by the profit motive to attract more business and income (11). This dynamic's result was increasing liberality of implementation for naturalization policy. As Parrillo then shows, the pressure for ending fee compensation in this arena arose from interest-group rivalry, causing “a salary reform that alienated officials from their ‘customers’ and rendered them more responsive to other interests” (127).
But it was not only interest group politics that stifled fee compensation. Parrillo's explanation is multicausal. Simultaneous with interest-group pressure to tighten naturalization there was also the stark fact that naturalization for easy sale violated republican values of citizenship, demeaned the ideals of public service, violated the expectation of equal treatment of all persons, and tarnished the legitimacy of federal naturalization policy. As with most of the cases Parrillo examines, the transformation of fees to salaries was overdetermined. And, as he repeatedly stresses, those factors were unconnected to the bureaucratization of government administration.
Bounties also occupied an important place in schemes of official compensation, and like fee compensation, bounties contained their own incentive for energetic service. Bounties incentivized punitive actions. Parrillo examines several cases of offices with bounty compensation, such as the rewards to customs collectors for detecting imported goods in violations of tariff laws. However, the most interesting of his cases, because it seems so far afield, is Parrillo's discussion of bounty rewards in US naval policy. From the time of independence the United States relied upon commerce-raiding privateers in naval warfare, and they, as well as the crews of US naval vessels, were rewarded with bounty payments for enemy ships captured or sunk.
In fact, bounty payments were present in all the world's navies, but the end of the practice in the United States, Parrillo argues, was distinctive to particular forces in the American context. America's republican culture was hostile to established military force, whether it be a large, standing army or major naval fleets. In that light, American naval doctrine focused on commerce raiding by volunteer merchantmen rather than a large, established fleet, and bounties were the natural incentive system for that strategy. But the logic of naval bounties changed after the Spanish-American War and the sudden emergence of an American empire with its need for a deep-sea navy. As the United States built a navy with global reach, it confronted traditional fears of an institutionalized military. It was largely in reaction to such fears, Parrillo argues, that Congress legislated in 1899 against any form of naval bounties, becoming the first major country to do so. If a mighty, institutionalized navy is necessary, then its behavior should be constrained by ending personal motives for the employment of violence.
This review can only touch upon the range and subtlety of Professor Parrillo's empirical research and theoretical explanations. This is an important book that makes an original contribution to our understanding of the formation and power of the American state. It belongs on the bookshelf of every scholar of American political development and public administration.
