A Note on Terminologyy

Without attempting to explore the wilderness of seman tics, I shall attempt to define three of the terms that I shall be using frequently. An accurate word to describe the trend toward a socialist state is "interventionism." This word has the blessing of lexicographers and is widely used in British economic and political writing. In American political discussion it has two disadvantages. It is a long word with a somewhat technical xv A Note on Terminology overtone. And it has been commonly used to describe a form of foreign policy. I shall, however, feel free to use it in its proper sense from time to time. A better, shorter word to describe state intervention is "statism." Recent use of the term, mainly by opponents of the trend, has anticipated the lexicographers. The most re cent edition of the New College Standard Dictionary has caught up with this meaning. It has, in fact, somewhat over stated it. Statism, it says, is "A theory of government which holds that the returns from group or individual enterprise are vested in the state, as in communism." The same diction ary lists as obsolete an older definition, "statecraft."

The most recent Webster's New Collegiate Dictionary provides a more· workable definition. Statism is defined as the "Concentration of all economic controls and economic planning in the hands of a highly centralized state govern ment." I shall use the word in a sense somewhat short of that defi nition to describe a policy or philosophy that advocates a progressive trend of intervention by government in' eco nomic, social, and personal life. Those who favor such in tervention will deny that state socialism is the ultimate goal of such a trend. I cannot agree with that denial. I shall use the word "socialism" to describe a form of soci ety in which the main instruments of production, credit, and distribution are owned or fully controlled by the state. It is unnecessary to include in this definition the customary state ment, largely a product of socialistic dialectic, that such in struments of production and distribution shall be "demo cratically" controlled. The use of the word "democratic" has been so mauled and distorted by socialists and Communists alike that such a qualification has no relevance to the main point, which is government ownership and control.

There are, of course, many varieties of socialism, some of which are now embedded in governmental and economic xvi A Note on Terminology system~. There is the Communistic socialism of Soviet Rus sia, which is an adaptation of Marxian theory to fit condi tions in Russia and the ever-changing caprice of Russia's masters. There is the mild socialism of Scandinavia, in which state intervention lives side by side with nongovernmental cooperatives and a fairly large residue of capitalism. British Labor socialism, also an adaptation of Marxism, when de fined by its exponents, may be taken to mean a partial na tionalization of the private economy, coupled with vast tax-supported welfare activities and much state planning of elements hitherto free in the economy. Stripped of all soph istry and frills, however, British socialism seeks complete state ownership and control of economic life to a degree limited only by compromise within the party itself and by the dictates of political expediency.

xvii Contents PART ONE: PRINCIPLES AND PEOPLE I. Principles We Live by Principles Live in Institutions Principles by Inheritance CONSTITUTIONAL GOVERNMENT THE REIGN OF LAW THE CONSENT OF THE GOVERNED PERSONAL RIGHTS 3 3 4 4 5 7 8 CONTROLLED AND BALANCED POWER 10 INDESTRUCTIBLE STATES 12 Principles by Custom and Experience 13' THE ENDLESS GROWTH OF PRINCIPLE 13 THE PRESIDENCY AS THE EMBLEM AND AGENT OF NATIONAL UNITY 14 THE PARTY SYSTEM 15 THE INDEPENDENCE OF THE JUDICIARY 16 THE INDISSOLUBLE UNION 17 WORLD RESPONSIBILITY 18 A CLASSLESS SOCIETY 19 Principles an~ Institutions as Safeguards 20 Principles Are an Entailed Inheritance 22 xix Contents II. Economic Liberty, Limited by Law 24 An Undetermined Principle 24 The Decline and Fall of British Liberalism 26 The Origins of Government Intervention 27 Accepted Types of Government Action 29 Limits and Conditions of Government Intervention 30 III. Our Middle Interests and Their Stakes in Liberty We Have Interests without Classes 35 The Marxian Middle Class 37 The American Middle Interests 38 Income Groups 40 Who Owns What? 42 Some of the Material Stakes in Our Society 48 The Farmers and the Middle Interests 51 Wage Earners and the Middle Interests 52 The Vanishing Rich 56 Some Material Conclusions 60 Who's Who in the Middle Interests 62 The Middle Interests in American History 63 "The Forgotten Man" 65 The Nonmaterial Middle Interests 66 The Middle Interests and National Security 70 xx Contents PART TWO: TOWARD THE POINT Q,F NO RETURN IV. Origins, Theories, and Motives of Statism 73 Sources of American Statism 73 THE PERVERSION OF THE PROGRESSIVE MOVEMENT 73 WESTERN SEEDS OF SOCIALISM 75 THE MARXIAN INVASION 76 Growth and Manifestations of Statism 77 THE REVOLUTION IN EDUCATION 77 THE PERVERSION OF THE NEW DEAL 79 POLITICAL ACTION GROUPS 81 AMONG THE BUREAUCRATS 81 STATISM IN THE STATES 83 RIFTS IN THE CONSTITUTION 84 THE CAPTURE OF THE DEMOCRATIC. PARTY 86 MACHINE POLITICS ON THE FEDERAL LtVEL 87 Statist Economics 88 POLITICS DISCOVERS THE NEW ECONOMICS 88 THE NEWER ECONOMICS OF THE TRUMAN ERA 90 THE CULT OF PLANNING 92 THE MARXIAN PROGRAM 93 The Seductive Appeal of State Welfare 94 xxi v. Statist Policies Contents 100 Socialism by Installments 100 The Welfare State Absorbs the Welfare Community 102 RETREAT TO THE PAST 102 THE PENSION MUDDLE 104 GOVERNMENT MEDICINE 106 The Federal Invasion of the States 109 ROBBING PETER 109 TO PAY PAUL III VALLEYS OF AUTOCRACY 113 CIVIL RIGHTS BY FEDERAL ACTION 115 Government Intervention in the Free Market 118 THE FARMER ON THE DOLE 118 , THE FEDERAL GOVERNMENT IN BUSINESS 120 THE GOVERNMENT AS A BANKER 124 FEDERAL GOVERNMENT IN THE ELECTRIC UTILITY BUSINESS 126 EXERCISES IN BOOKKEEPING 131 GOVERNMENT AID TO COOPERATIVES 136 Intervention by Regulation 139 ADMINISTRATIVE ABSOLUTISM 139 FEDERAL CONTROL OVER INDUSTRIAL RELATIONS 142 ANTITRUST CONFUSION 143 THE ATTACK ON BIGNESS 145 Expropriation 147 TAXATION AS AN AGENT OF POWER 147 xxii Contents DEFICIT FINANCING THE BLIGHT OF INFLATION VI. The Reckoning 157 The Material Costs 157 WELFARE, UNLIMITED 157 HOW MUCH SOCIALISM CAN WE AFFORD? 159 PROBABLE COSTS 161 THE ILLUSION OF REDISTRIBUTION 165 THE DEATH OF RISK 167 The Nonmaterial Costs 169 PLANNING FOR THINGS· ENDS IN PLANNING FOR MEN 169 THE MORAL CLIMATE OF STATISM 172 THE TWILIGHT OF LIBERTY 173 PART THREE: A ROAD AWAY FROM SOCIALISM VII. Progress with Liberty 183 Socialism Is Not Inepitable 183 The Twofold Challenge of Statism 186 General Principles 188 THE ESSENTIALS OF INDIVIDUAL LIFE 188 WANT AND NEED 188 THE DESIRABLE AND THE POSSIBLE 189 THE ECONOMIC OBJECTIVES OF A DYNAMIC SOCIETY 189 xxiii Contents MEASURABLE AND TOLERABLE GOVERNMENT INTERVENTION 190 Rational and Workable Personal Aid 191 THE PRINCIPLES 191 OLD-AGE SECURITY 193 COOPERATIVE, NOT GOVERNMENT MEDICINE 195 Indispensable and Indestructible States 199 THE PRINCIPLE 199 THE STATES, OUT OF BONDAGE AND OFF THE DOLE 201 INTERSTATE CONTROL OF NATURAL RESOURCES 204 CIVIL RIGHTS THROUGH REGIONAL ACTION 208

Toward a Free Market 209 STABILITY FOR AGRICULTURE 209 PRINCIPLES 209 ELEMENTS OF A PROGRAM 211 CREDIT WHEN AND WHERE CREDIT IS PROPER AND NECESSARY 2 13 PUBLIC POLICY AND PRIVATE RISK CAPITAL 214 PRIVATE UTILITIES UNDER PUBLIC REGULATION 216 FAIR COMPETITION WITH COOPERATIVES 217 Regulation without Regimentation 219 RESPONSIBILITY IN ADMINISTRATIVE COMMISSIONS 219 JUSTICE IN INDUSTRIAL RELATIONS 220 PRINCIPLES 220 FAIR PROTECTION OF FAIR COMPETITION 224 GOVERNMENT BY BELIEVERS 227 xxiv Contents Sound Finance and Liberty TAXATION FOR REVENUE, NOT REFORM SAVING· OUR SAVINGS PUBLIC ECONOMY PART FOUR: LIBERTY THROUGH POLITICAL ACTION VUI. The Myth of a Two-Party System 237 The Two-Party Ideal 237 Parties are Born with a Purpose 240 Parties Live to Govern and Enjoy 241 The South Has No Party System 243 Southern Republicanism) a Hungry Dream 245 Northern Democrats) Homeless or in Captivity 246 The Infirmities ot the Republican Party 248 The Federal Machine Takes Over 250 Proposals for Coaliti01!' 253 The Meaning of the Coalition in Congress 256 IX. Leadership, Actual and Potential 258 A Personal Note 258 The Essential) Decisive) Elective O·ffices 260 The Indispensable Citizen 261 xxv Contents In the Field of Public Opinion 263 THE PRESS AND RELATED ORGANS OF OPINION 263 CONSERVATIVE AGENCIES FOR RESEARCH, EDUCATION} AND PROPAGANDA 265 Potential Personal Leadership 266 SOURCES OF LEADERSHIP 266 MILLIONS OF POLITICALLY IMPOTENT SALESMEN 270 ADVERTISING MEN AND WOMEN 273 THE BUSINESSMAN'S CHOICE 274 THE LAWYER'S ROLE 278 AWAKENED DOCTORS 278 UNDERRATED WOMEN 279 TEACHERS AND EDUCATORS 280 WAGE EARNERS 281 FARM LEADERS 282 OTHER SOURCES OF LEADERSHIP 282 x. Organizing for Freedom 284 The Arduous Ways of Politics 284 The Moral Responsibility of Free M6n 286 Citizen Action Must Be Militant 287 The Vote Is the Payoff 287 Personal Contact Is Indispensable 289 Citizen Action for} Not of) a Party 290 Understanding the Politician 291 What Level for Citizen Action? 293 xxvi Contents What Objective? 294 Some Blueprints 295 INDEPENDENT ORGANIZED POLITICAL ACTION 295 PRELIMINARY ORGANIZATION 295 EXPERT MANAGEMENT 296 FINANCES 297 CONTRIBUTIONS TO THE PARTY 299 GETTING GOOD CANDIDATES 299 ENLISTING AND TRAINING POLITICAL WORKERS 300 PUBLICITY AND ADVERTISING 302 BETWEEN ELECTIONS 303 ACTION WITHIN THE PARTY FRAMEWORK 304 GET-OUT-THE-VOTE CAMPAIGNS 307 T he Lessons 310 The Ultimate Need 31--1 Local Action Is Needed Now 312 PART FIVE: THE BLESSINGS OF LIBERTY XI. The Promi,se of the Future The Incomparable Achievement 317 Incontestable Causes 322 The Promise of the Future 32 9 Liberty and Progress) One' and Indivisible 333 True Liberty Is Positive and Constructive 334 ApPENDIX 337 INDEX xxvii follows page 339 PART ONE PRINCIPLES AND PEOPLE CHAPTER I PrinciplesWe Live By~ Principles Live in Institutions "Individualities may form communities, but it is institutions alone that can create a nation." This was a comment by Ben jamin Disraeli a century ago when he was'beginning the task of building the Conservative Party, a party that. still lives· a lusty, constructive life. The institutions to which· Disraeli referred were the Crown, the House of Commons, the Lords Temporal. and Spiritual, and· the Empire. Behind each ;of these institutions were ageless principles. These, institutions cemented the loyalty of. the people-loyalty to the principles of unity symbolized by the Crown, popular rule in the Com mons, distinction in the Lords· Temporal, morality and reli gionin the Church, and world influence in the Empire ..