Although regarded as a radical by his detractors on the political right, Ely was in fact opposed to socialism. "I condemn alike," he declared, "that individualism that would allow the state no room for industrial activity, and that socialism which would absorb in the state the functions of the individual." He argued that socialism was not needed, and "the alternative of socialism is our complex socio-economic order, which is based, in the main, upon private property." He warned that the proper "balance between private and public enterprise" is "menaced by socialism, on the one hand, and by plutocracy, on the other."
Ely's critique of socialism made him a political target of the socialists themselves. In his 1910 book, Ten Blind Leaders of the Blind, Arthur Morrow Lewis acknowledged that Ely was a "fair opponent" who had "done much to obtain a hearing for among the unreasonable," but charged he was merely one of those "bourgeois intellectuals" who were "not sufficiently intellectual to grasp the nature of our position."
Ely was a product of the German historical school with an emphasis on evolution to new forms, and never accepted the marginalist revolution that was transforming economic theory in Britain and the U.S. He was strongly influenced by Herbert Spencer and strongly favored competition over monopoly or state ownership, with regulation to "secure its benefits" and "mitigate its evils." What was needed was "to raise its moral and ethical level." However, whereas Herbert Spencer believed that free competition was best served by deregulation and a smaller state, Richard Ely believed that more regulation and a more interventionist state was the policy to follow. Also on social Darwinism, Herbert Spencer believed that the state should not get involved in supporting one ethnic group over another — whereas Richard Ely believed that the state should support white "Nordic" people against people of other races (in line with the opinions of his colleagues at the University of Wisconsin, Edward Alsworth Ross and Charles R. Van Hise).
Ely did support labor unions and opposed child labor, as did many leaders of the Progressive Movement, including such conservatives as Mark Hanna. He was close to the Social Gospel movement, emphasizing that the Gospel of Christ applied to society as a whole and was not merely individualistic; he worked hard to convince churches to advocate on behalf of workers. Ely strongly influenced his friend Walter Rauschenbusch, a leading spokesman for the Social Gospel.
During World War I, Ely was active in the political movement to build popular support for the American war effort, taking part in the activities of the League to Enforce Peace. Ely was the head of the committee of arrangements for a "Win the War Convention" held in Madison from November 8–10, 1918. Richard Ely's political activities during the First World War included his strong campaign to remove Senator La Follette from politics. Although Robert La Follette was generally a Progressive in politics, his lack of support for the war had made him unfit for office, in the opinion of Richard Ely, and so Ely compaigned to both have him removed from the United States Senate and to end his influence in the politics of Wisconsin.
Ely edited Macmillan's Citizen's Library of Economics, Politics, and Sociology and its Social Science Textbook Series, Crowell's Library of Economics and Politics, and was a frequent contributor to periodical literature, both scientific and popular.
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