OUR GREATEST ISSUE

A Dartmouth Economist Defines It As Pseudo-Liberalism, "A Wretched Counterfeit in the Form of State Paternalism"

ISSUE ... a presentation of alternatives between which to choose or decide.Webster's New International Dictionary.

DARTMOUTH SENIORS occasionally ask me, perhaps because I am a teacher in the social sciences, "What is 'the great issue'?" On the understanding that they mean the greatest public issue before Americans in general and college students in particular, I believe a reasonable answer is this: Our greatest issue is pseudo-liberalism. It is false liberalism, fake, liberalism, phony liberalism, illiberalism masquerading as liberalism, the pretended pursuit of liberal ends by means which lead in the opposite direction. In other words, are we to have liberalism or are we to have a wretched counterfeit in the form of state paternalism? If it is to be the latter, we may as well start writing the obituary of liberalism, another experiment which failed. Yet that is precisely what a large and especially articulate group of selfstyled "liberals" is working might and main to wheedle or even force us to accept. In the group are government officials, administrators of various kinds, and academicians, particularly social scientists, near-social-scientists, would-be social scientists, and "cause" preachers making noises more or less like social scientists.

Toward these persons, as persons, I bear no ill will. I suppose they mean well. I sympathize with the esthetic impulse which prompts them to give us something more lovely than the facts of life. Appar- ently they are devoted to the proposition that beauty is truth, truth beauty, and that this is all we know on earth or need to know. Nevertheless, something more is needed to qualify them as authorities on the attainment of human welfare and the interpretation of America. No doubt the stork legend is artistically preferable to the truth about babies, but it is hardly to be recommended as an approach to regulating the supply. It is toward the paternalist, as such, that I am hostile, because I am convinced that he, rather than the avowed Red who knows what he is up to, is the most dangerous foe of personal freedom. Later I shall consider his identifying marks: how you may detect his step as he approaches you, walking in beauty, and thus get set to receive him. But first let us identify the proposed victim.

AMERICAN LIBERALISM

FOR the purpose of seeing clearly what sort of assassination the cult of state paternalism contemplates, the best background is the nature of American liberalism. Mr. Archibald MacLeish, who seems to exemplify Talleyrand's theory that the purpose of language is to conceal thought, has given hours to this subject.* I beg of you this paragraph and the next. To begin with, liberalism is essentially an attempt to solve the greatest of all "minority" problems: the plight of the individual person in a world organized or disorganized by human institutions. Here, as Unamuno has pointed out, a great deal of metaphysical nonsense can be avoided by facing the simple fact that you are you and nobody else, and that you want to be yourself as fully as possible. "Society" is an excellent thing for certain purposes, but it is also a conspiracy against the real you. Liberalism tries to retain its useful results while minimizing its infringement on you. The primary postulate of liberalism is freedom of the individual for selfdevelopment and self-expression. Hence any attempt by "authorities" to restrict this freedom unnecessarily, by "controlling" the individual in either his internal adjustments or his external relations, is to be resisted. A liberal society is not an "organism" in which the parts are to be controlled in the interest of the whole. Since its fundamental interest inheres in the parts, the individual persons, its objective is not "control" at all, in the literal sense, but voluntary agreement.

American liberalism is of course mainly a heritage from England. In terms of our over-departmentalized social sciences, its chief elements are the "politics" of democracy and the "economics" of the free market. (A free market does not mean "laissez faire." It means a market in which no one person or firm, or a combination acting as one, can control the price by regulating the quantity sold.) More broadly, it is a difficult combination of majority rule and individual rights. From its essential nature and origin follow these propositions: I. Independence. The people cannot exercise real self-government unless they think independently. They must not permit their conceptions of public issues to be determined by departments or agencies of the state. 2. Individualism. Majority rule must leave the individual as free as possible from the feeling of official coercion. 3. Compromise. If voluntary agreement is to prevail over "social control," the art of compromise is essential, and to it, in turn, a spirit of tolerance is necessary. No person or group must insist on an exclusive interpretation of what is "right" or "best for the people." 4. Diffusion. Since, as Lord Acton put it, "power tends to corrupt and absolute power corrupts absolutely," power must be diffused. It must not be concentrated geographically, or in the hands of any one branch of government, such as the executive. 5. Conservation and Progress. We cannot make progress, enlarge personal freedom, except by conserving what we have and building on it. Liberalism is necessarily conservative in its selection of means. It is undermined by attempts to substitute rapid structural changes for natural growth, since such changes require the people to surrender so much power to the government that they cannot control the government, that is, govern themselves. 6. Economy. Liberalism cannot survive without a reasonably sound free economy, or one having what the people regard as reasonable rights of private property, reasonable efficiency, and reasonable stability.

THE PSEUDO-LIBERAL, OR PATERNALISTIF this is liberalism, as I believe it is, advocates of state paternalism—for which "the welfare state" is another term —are not liberals. Before we turn, however, to the assassination which they propose, let us consider briefly certain marks by which they may be identified. Not infallibly, of course, but well enough to serve the ends of preparedness.

First, some of the more general signs which are helpful in telling us to watch out. As a husband, the paternalist is under the social control of a vigorous wife. Possibly it is this which inspires him to impose more of the same on the public. As a neighbor, he believes in having children do as they jolly well please, at least if his are huskier than yours. Though adults are so immature that they must be sociallycontrolled, children are not to be "inhibited." As a member of the local community, he is a tireless espouser, notably before groups of women, of raising more and more revenue for expenditure on "the underprivileged," particularly if the revenue is supposed to come from state rather than local taxes. Here, as also on the national scene, he employs the "piecemeal" technique of Hitler, presenting his program in dramatized bits, so that the expansion of expenses, burgeoning of government, and contraction of individual freedom will not be noticed till too late.

Next, the paternalist as an academician. Whatever his field, he not only aches vocally for "social justice" but is very intolerant of anything save the "welfare state" as a means to it. If you happen to believe that a distention of governmental power is not the liberal answer to private abuses of power, he calls you a "reactionary," a "Manchesterite," and things like that. In history, he hails all Deals—Square, New, and Fair, not to mention Raw. One aspect of Dealing which he prefers to overlook is the fact that the Dealer takes something which is not his and redistributes it among a larger number of voters.

In psychology and sociology, he maximizes environment and minimizes heredity. Though he does not deny the inheritance of physical characteristics, yet, bysome strange reasoning, he arrives at the conclusion that heredity has comparatively little to do with differences in personal ability. Accordingly, "we," the social controllers, must set up the appropriate environment, viz., the welfare state, for the blossoming of social justice.

In international relations, he dwells so much on pacts, covenants, charters, and like formalities as to give the impression of abstract, disembodied "relations" stalking about the place. A student can complete a "major" in the field without once being required to make any careful study of the real things which are related—the nations and the nationalisms themselves. All natural enough to the paternalist: he is too hypnotized by the forms of social control to understand the content of human relations.

In political science ("government" carries a stronger suggestion of social control), he typically advocates more centralization of power, not only in the Federal Government but also in the executive branch of this government. For how else, he reasons, can you get a sufficient "rain of laws" to penetrate the parched soil of social injustice? Do not the ends justify the means? Thus, should not the inadequacy of civil rights in the South be remedied by means of Federal laws, using as their sanction the threat to withhold Federal aid from states which harbor the belief that quieter methods are more conducive to progress? It logically follows that the Federal government must collect and expend larger and larger fractions of the national income to support more and bigger agencies for social control.

In economics, the paternalist proclaims himself a "Keynesian." If hard pushed, he will even admit that he is the only chap in the vicinity who really understands Keynes. It does not matter greatly whether this is so. What does count is his suspecting, and correctly, that in practice what he calls "Keynesianism" will lead to irreversible inflation, and this, in turn, to bigger and likewise irreversible doses of state paternalism.

THE ATTACK ON THE ECONOMY

NOWHERE is American liberalism more kicked around, stood upside down, and turned inside out than in the field of economics. Nor should this prove surprising. The economy is a strategic sector at which to launch the assault on individual freedom. If freedom of the market can be destroyed, the political side of liberalism will collapse. The two go hand in hand. Moreover, our economy is peculiarly vulnerable to attack. It will have enough trouble to stand without the persistent efforts of bogus liberals to push it over by misrepresenting its character. The paternalist either fails to understand or chooses to ignore an economic fact which is completely vital to liberalism. That is, as a principle of economic organization, any available alternative to the free market necessarily involves a tremendous loss of individual freedom. Apart from anarchism, which is obviously unworkable, the only real alternatives are authoritative systems in the form of communism, fascism, or democratic socialism. The first two of these require no discussion here. For democratic socialism, of which the "welfare state" is one variety, only two possible outcomes are probable enough to be worth talking about. First, if it remained democratic, it would become a colossal racket. With practically all wealth being government wealth, and practically all income government income, government officials would have approximately five times as much as now with which to promote their causes, especially the cause of keeping themselves in power. Second, and largely because of its having become the first, it would cease to be democratic.

The paternalist employs other tricks to misrepresent our economy. For one, he exaggerates the importance of private monopoly, bad though some monopolies are. For a second, he overlooks the foremost father of monopolies, the government itself. For a third, he assumes that the evil of monopolies would be reduced by having one huge monopoly, the government. For a fourth, he argues that the very existence of government is incompatible with a free market, since government in its very nature must "control" business. Perhaps I may clear up this confusion by relating a story which a Harvard man told me about refereeing in the Yale Bowl. Dartmouth had the ball on Yale's five-yard line, with four downs to go. With each plunge, the ref got "nervouser and nervouser." After the fourth crack at the Blue line, when the Green had covered the distance with only a foot or so to spare, he pounced on the ball, picked it up, and bellowed avidly: "You didn't make it—it's OUR BALL!" In a freemarket economy, apart from a few "natural" monopolies, or public utilities, the part of the government is to prescribe and enforce the rules of the game, not to take part in the game as either a player or an unfair referee.

Five things serve to make our economy vulnerable, and most of them are rendered decidedly worse by the practices of paternalism. First, there is the natural tendency of men to seek power for themselves and resist its pursuit by others. In the economic field, this leads to both monopoly and group antagonisms. Second, there is private monopoly, which, in so far as it exists, rules out freedom of the market. Third, there is economic inequality, which, although a logical result of a free economy, is aggravated by monopoly and certain features of private property. Fourth, there is great instability, or the recurrence of booms and depressions. Fifth, modern technology brings divergent nationalisms into closer contact, thus contributing to wars which are destructive to both wealth and liberal institutions. Now of course paternalism pretends to alleviate all these infirmities. Let us compare its logical and actual results with its pretensions.

In practice, paternalists promote group antagonisms. Men who get ahead in business—and this is done chiefly by producing what people want and doing so efficiently—are represented as being "economic royalists" who ought to be soaked for the benefit of "forgotten men." Now two questions about these supposedly underprivileged persons. First, who are they? To judge by the practical test of identifying the people whom the paternalists most obviously favor and court, they are organized rather than unorganized laborers. They are predominantly the more skilled laborers, generally members of the A. F. of L. and the C. I. 0., who already have more than the general average of personal income. This kind of "social justice" is worse than a device for the equal division of unequal earnings. It is intrinsically an expedient for getting paternalists into power and keeping them there. Second, the methods of helping these Haves? Typical is a method proclaimed by a Federal official and Great Issues lecturer, Mr. Leon Keyserling. If a depression starts, and prices begin to fall, don't permit any decrease of money wage rates. All of which amounts to ignoring elementary arithmetic. For wages are not only income to laborers but also costs to employers. Sooner or later, employers will discharge enough laborers to make the rest worth what they cost. And of course they will begin by reducing the wages and employment of the unorganized workers, the less skilled and poorer ones. This is some more of your paternalist's "social justice."

As for monopoly and similar restrictions on freedom of the market, the worst offender by all odds is the Federal government itself. The tariff alone has probably done more economic damage inside and outside America than all our industrial monopolies combined. Further, government has been the foremost abettor of internal monopoly. It has used import duties, quarantine regulations, currency manipulation, and the like, to keep firms out of the market. It has shut out substitute products by such means as the outrageous tax on colored margarine. It has condoned monopoly by neglecting to enforce its own anti-trust laws. Also it has restricted output directly. Its farm program, for example, has followed the absurd procedure of first making productive power idle and then looking around afterwards to see if something else might be done with it. Or, failing to prevent production, it has resorted to destroying the product. It has legislated monopoly into existence by its favoritism to large firms, associations of firms, and labor organizations. Nor is it trying to control monopoly by balancing the power of opposing monopolies. If it were, it would guarantee manufacturers "parity" prices with farm products. If it were, employers could demand wage reductions, then get the government to "recommend" a settlement somewhere between existing wages and what the employers demanded. But no: "it's OUR BALL!"

Yet the paternalist proposes to cure the evils of monopoly by making the government a far bigger monopolist than it already is. And the chief argument for this course is that monopoly is "inevitable," and must therefore be public rather than private. First the state creates monopolies, and next it monopolizes its monopolistic creatures in the interest of welfare: that is the way a "welfare state" operates. If half the energy now devoted by the state to promoting monopolies and then trying to control them were given instead to freeing the market and keeping it free, the output of welfare and liberalism would be far larger.

As for instability, the most important curable factors are two, and it is government rather than private enterprise which is chiefly responsible for both. First, and above all, government has shirked its primary duty to provide a monetary system under which a free-market economy can operate without disastrous fluctuations. If there ever was a "natural monopoly" which should be operated by government, the control of the money supply is it. Yet government has left the manufacture and destruction of money to competitive banking. The second curable factor is sticky individual prices, which go back largely to monopoly. Except for trust prices and labor-organizations prices, the failure of government to regulate the money supply would not be nearly so damaging. In short, government guarantees instability by giving us competition where there should be monopoly and monopoly where there should be competition. Then, when depression comes, phony "liberalism," or state paternalism alias "the welfare state," asserts that private enterprise has demonstrated its incompetence, ergo there must be still more state enterprise on a permanent basis.

Finally, it should be obvious that international friction is increased in so far as national governments take over functions formerly discharged by privrte initiative. Any of our actions, such as "dumping" in the export market, which are disliked abroad, automatically become much more offensive if they are converted from private into governmental actions, since they are then the official deeds of a "nation" and are correspondingly insulting to the nationalistic pride of foreigners.

DON'T CALL IT "LIBERALISM"

THERE MAY BE something to be said for the candid espousal of communism or fascism by persons who really believe that liberalism is washed up, and say so, and state their reasons. What no liberal should take lying down, however, is the brazen posing of state paternalism as the one and only "liberalism." If one honestly believes in socialism, let him say so, and call it that, and explain why. Budon't call it "liberalism." Stop hiding behind language. Contrast these two straightforward statements on the general subject:

Ernest M. Hopkins: "As far as I am concerned the totalitarian state is anathema, whether it is Fascist, or Communist, or some novel brand under the pseudonym of the 'welfare state.' "

Winston Churchill: "Of the difference between socialism and communism I said a good many years ago that a strong dose either of socialism or communism would kill Britannia stone dead, and at the inquest the only question for the jury would be: Did she fall or was she pushed?"

To which, so far as pseudo-liberals in the social sciences are concerned, might be added this response of an old-time Southerner to an underhanded attack by his worst enemy: "Sir—l, being a gentleman, must not say what I think of you. My stenographer, being a lady, must not listen to it. But you, being neither, will readily understand what I mean."

PROFESSOR KNIGHT, WHO HAS TAUGHT "ECCY" AT DARTMOUTH SINCE 1924

DIRECTORS OF GOETHE BICENTENNIAL CELEBRATION: The two-day program held at Dartmouth, November 18-19, as New Hampshire's part in the world-wide observance of the 200 th anniversary of Goethe's birth was in charge of (I to r, above) Prof. Frederick W. Sternfeld, Mrs. Charles R. Bagley, Prof. Stephan J. Schlossmacher, and Prof. Frank G. Ryder, chairman of the state commitlee. Included in the Dartmouth program were a lecture on Goethe by Prof. W. L. McGraff of McGill, a talk on the musical sources of Goethe's poetry presented by Professor Sternfeld with musical illustrations by Prof. Paul R. Zeller, a soprano song recital by Norma Farber of Boston, a Hanover Inn banquet, presentation of Goethe's "Clavigo" by the German Club, and an exhibition of Goethe material in Baker Library. The two-day program, open to the public, was attended by persons from many sections of New Hampshire.

PROFESSOR OF ECONOMICS

*The saying goes that Mr. MacLeish, a cultural darling of F. D. R., has been charged with being a poet, indicted, tried, and found not guilty. One writer has cited the following example of his manner of relating words and meaning: "Who is the voyager on these coasts? Who is the traveler in these waters Expects the future as a shore; foresees Like Indies to the west the ending—he The rumor of the surf intends." The citer then remarks: "A man who writes poetry like that inevitably becomes a New Dealer, if not worse." As a speaker in our Great Issues course, this poet has had some unkind remarks for "professors." In return, although a mere economist would not be a competent judge of his poetry, I think I know something about his credentials as a social scientist.