The Flight From Freedom 17: From Ideology to Mythology II; C. Carson

Let us examine first the myth that the rich were getting richer Dr. Carson is Professor of American History at Grove City College, Pennsylvania. Among his earlier writings in THE FREEMAN were his series on The Fateful Turn and The American Tradition, both of which are now available as books. 24 and the poor poorer in the latter part of the nineteenth century. However the myth arose, it was given a dramatic and effective for mulation by Henry George. The idea is captured in the juxtaposi tion of words in the title of his most famous book, Progress and Poverty. The central thesis is pre sented in the following words: And, unpleasant as it may be to admit it, it is at last becoming evi dent that the enormous increase in productive power which has marked the present century and is still going on with accelerating ratio, has no tendency to extirpate poverty or to lighten the burdens of those com pelled to toil. It simply widens the gulf between Dives and Lazarus, and makes the struggle for existence more intense. The march of inven tion has clothed mankind with powers of which a century ago the boldest imagination could not have dreamed.

But in factories where labor-saving 1966 FROM IDEOLOGY TO MYTHOLOGY - II 25 machinery has reached its most won derful development, little •children are at work; wherever the new forces are anything like fully utilized, large classes are maintained by charity or live on the verge of recourse to it; amid the greatest accumulations of wealth, men die of starvation, and puny infants suckle dry breasts ; while everywhere the greed. of gain, the worship of wealth, shows the force of the fear of want. The prom ised land flies before us like the mir age. 1 Postulating the Problem Without Regard for Fads These assertions can be phrased so as to make them into a problem, and it was as a problem that George, along with many other nineteenth century economists and would-be economists, treated them. They constitute a nice "problem" indeed! How can increasing pro ductivity result in more and more poverty, or grea tel" poverty? The problem can be dramatized by in troducing some statistics, though George could not have been famil iar with these. American farmers produced approximately 100,000, 000 bushels of wheat in 1850; this had risen to 600,000,000 by 1900.

They produced 4,590,000 bales of cotton in 1850, and 20,226,000 in 1900. Corn production increased 1 Henry George, Progress and Poverty (New York: Schalkenbach Foundation, 1955), p. 8. from 590,000,000 bushels in 1850 to 2,662,000,000 in 1900. This rep resented a considerable increase in productivity per acre generally, too, for land in cultivation had less than tripled. 2 The value of the an nual product of manufacturing in creased from approximately $2 bil lion in 1860 to $13 billion in 1900.3 This represented great increases in consumer goods. In 1859, men's clothing manufacturers turned out a product worth $73,219,765 ; in 1899, they made a product worth $276,861,607. The worth of the fac tory produce for women's clothing was 20 times as great in 1899 as it was in 1859. In 1849, flour and grist mill products were valued at approximately $136 million; in 1899, this had increased to about $560 million 4 • These figures repre sent increases in goods, rather than inflation. In fact, prices de clined generally during the period under consideration. One writer notes that if wholesale prices be in dicated by the figure 100 for 1860, they had fallen to 95.7 in 1890, and would decrease somewhat more during the next decade. 5 2 Henry B. Parkes, The United States of America: A History (New York: Al fred A. Knopf, 1953), p. 435.

3 Ibid., p. 395. 4 Walter W. Jennings, A History of Economic Progress in the United States (New York: Thomas Y. Crowell, 1926), pp.430-33. 5 Ibid., pp. 483-84.

26 THE FREEMAN Feb'fuary I t is difficult to see how this greater production and increasing productivity could result in in creasing poverty. Of course, popu lation might have increased faster than production (shades of Mal thus!) , though such resulting pov erty could hardly have been attrib uted to the productivity. But it did not. The population of the United States was 23,191,000 in 1850; by 1900 it was 75,994,000. Population had a little more than tripled; pro duction of staple agricultural prod ucts had quadrupled, quintupled, and sextupled, while the production of many manufactured products had increased in a much higher ratio than that. Again, these goods might have been shipped out of the country in return for foreign gold, thus shorting Americans of the goods they produced (though surely foreigners would have had a great bounty of goods). But the value of exports only trebled between 1866 and 1900, having fallen drastically during the Civil War.

Improving the Situation There is no need, however, to wrestle with phantoms. The poor were not getting poorer generally in America. Such evidence as is available presents quite a different picture. Private production income (all income except that from government sources) increased from about $4 billion in 1859 to $28 bil lion in 1914, and grew especially fast from 1869 to 1899. Per capita income, in terms of actual money, rose from $134 in 1859 to $185 in 1899. "Considering dollars of con stant purchasing power, the in crease was from $285 to $488 in the period betwen 1859 and 1914."6 It can be objected that no one receives the income per capita, that this is only an average, and that the increase might have only made the rich richer. This does not appear to have been the case. One historian estima tes that the proportion of the income of Americans derived from wages and salaries rose rela tive to that from rent, interest, and so forth. 7 At any rate, "the index of money hourly wages for men in all industries practically doubled be tween 1860 and 1890.... Since the index of commodity prices fell rapidly [that is, commodity prices fell, not the index] after 1865, the purchasing power of wages, 'real wages,' often attained a spectacu lar improvement."s Samuel Gomp ers, head of the American Federa tion of Labor and one who should have known about such matters, 6 Gilbert C. Fite and Jim E. Reese, An Economic History of the United States (Boston: Houghton Mifflin, 1959), pp.

304-05. 7 Edward C. Kirkland, Industry Comes of Age (New York: Holt, Rinehart and Winston, 1961), p. 402. 8 Ibid.

1966 FROM IDEOLOGY TO MYTHOLOGY - II 27 was asked this question in 1900: "You would not agree to the state ment sometimes made that the con ditions of the working men are growing worse and worse?" His answer, "Oh, that is perfectly ab surd."9 Where did this absurdity spring ftom? Some may suppose that it was drawn from earlier develop ment, drawn, for example, from the "early stages of the Industrial Rev olution" in England. This period has long been the whipping boy of reviewers of the horrors of indus trialization. Horrors there may have been, but they could hardly have been the product of indus trialization generally. A competent and thorough eco nomic historian, T. S. Ashton, has lately exorcised this demon from the pantheon of historical myth ology. He says, "An historian has written of 'the disasters of the in dustrial revolution.' If by this he means that the years 1760-1830 \vere darkened by wars and made cheerless by dearth, no objection can be made to the phrase. But if he means that the technical and economic changes were themselves the source of calamity, the opinion is surely perverse." He points out that there were a great many more people to be fed and clothed at the time. Ireland did not solve this problem and consequently lost 9 Quoted in ibid.

much of her population. If England had followed the agricultural pat tern of Ireland, he thinks that a like fate would have befallen her. Instead, "she was delivered, not by her rulers, but by those who, seek ing no doubt their own narrow ends, had the wit and resource to devise new instruments of produc tion and new methods of adminis tering industry."lo The Labor Theory of Value The roots of the p,rogress-and poverty notion do not lie in what happened (though the myth was no doubt assisted by interpretations of what happened) ; they lie rather in ideology. The seeds of the myth were planted, so far as I know, by David Ricardo, with an assist from, Thomas Malthus. They were deeply embedded in economics for most of the nineteenth century. ,Ricardo held that the price of labor must ever and again fall to a level that will maintain workers at a bare subsistence of livelihood. He ar rived at this conclusion by a gro tesque bit of ideological hocus pocus. According to what is now called classical economics, to which Ricardo subscribed and contrib uted, commodities have a natural price (or value and a market 10 T. S. Ashton, The Industrial Revo lution, 1760-1830 (New York: Oxford University Press, A Galaxy Book, 1964), pp. 110-11.

28 THE FRE'EMAN February price. The natural price is deter mined by the costs of production. The market price is determined by supply and demand. Under condi tions of free competition, the mar ket price will tend always toward the natural price. Ricardo proceeded to apply this theory to the price of labor; that is, he ideologized by applying an ab straction about one phenomenon to an analogous one, ignoring the dif ferences. The cost of production applied to labor came out as the cost of maintaining life. "The nat ural price of labor is that price which is necessary to enable the laborers, one with another, to sub sist and to perpetuate their race, without either increase or diminu tion."ll The market price of labor will fluctuate, he held, due to the operation of supply and demand. When wages rise above their nat ural level, he thought, population will increase because more life can be maintained. That is, the supply of labor will increase, thus driving the market price of labor down to the natural price, or even below it, for a time. In short, the price of labor will tend toward the subsis tence level. Malthus maintained, of course, that population increase would inevitably outdistance any 11 David Ricardo, "Principles of Polit ical Economy," The Age of Reason, Louis L. Snyder, ed. (Princeton: D. Van Nostrand, 1955), pp. 153-54.

increases in production. Thus was the "dismal science" loaded down with its freight of notions about contin ued and widespread poverty. Later thinkers did not generally accept the demographic theories of the classicists. Moreover, there was a sloughing off of the philosophic dualism, of which natural price and market price were an extension, perhaps unwarranted. What was accepted by revolutionists and re formers was the existence of pov erty. But as thinkers began to think in terms solely of a temporal con text in which society was the pre eminent reality, some of them be gan to attribute this poverty to the social system. Exploitation According '0 Marx We are now back to the original problem: How can increasing pro ductivity result in continuing pov erty? The problem was, of course, ideological, not actual, but ideo logues abounded in the nineteenth century.12 It is not logical, if the demographic theory is not ac cepted, that the great increase of goods made available by the use of machines should result in the main tenance of the status quo, or worse, in the material well-being of peo ple. Surely, the goods had to be 12 It should be noted that an explana tion of the demand for labor was even tually forthcoming that did not entail the dismal conclusions of Ricardo. It was the marginal utility theory.

1966 FROM IDEOLOGY TO MYTHOLOGY - II 29 consumed for there to bea market, and this should improve the situa tion, not make it worse. Something must be fundamentally wrong with the system. There must be hoard ing, waste, unjust distribution, and so on. Marx concocted the theory that it was the consequence of the ex ploitation of the workers by the bourgeoisie. So great was the ex ploitation, and so essential was pro duction to capitalism, that capital ists must have periodic wars in or der to dispose of or destroy the goods that they produced. Henry George thought that the problem arose fundamentally from land "monopoly," and that the private expropriation of the unearned in cremen t on land led to poverty. Thorstein Veblen thought that some considerable part of the bounty made available by produc tivity was dissipated in conspicu ous consumption by the wealthy. At any rate, men wove ideologies, en visioned cataclysms, and conceived of programs of reconstruction to right the wrongs that were sup posed to be in the system.

These ideological constructs alone probably would not have been sufficient to attract many people in to reform or revolution. Nor would it be fair to the intellectuals in volved to suggest that they were simply led astray by ideology. There was poverty, hardship, suffering, and malnutrition. In the latter part of the nineteenth cen tury many children did work in factories. There were times of un employment in industries; mone tary wages did sometimes decline; debtors were hard hit by deflation. Some farmers did lose their farms; tenant farming was on the in crease in many areas. Poverty has not disappeared in the twentieth century, nor is it likely that it ever will completely. Of course, this does not stem from increased pro ductivity, nor from the system that makes it possible. The Muckrakers But the existence of poverty made it possible to embed the ideo logical preconceptions in mythol ogy, that is, to describe poverty and implicitly attribute it to the system. This has, of course, been done. Muckrakers did it to great effect in the early twentieth cen tury, but this has been done over the years, and is still being done.

Instances of poverty and hardship have been told in lurid detail: pinch-faced children going off to work in factories, fathers with hungry families unemployed, men the victim of technological unem ployment, the unsavory character of life in the slums. Some of the titles of books suggest the charac .. ter of the indictment: Jacob Riis, How the Other Hall Lives (1890) ; 30 THE FREEMAN February Robert Hunter, Poverty (1905); John Spargo, The Bitter Cry of tlhe Children; and Edwin Markham, Children in Bondage.l 3 One exam ple from the stories told in such books should suffice. The one below is from an account of life in the slums in the latter part of the nine teenth century: Enough of them everywhere. Sup pose we look into one? No. - Cherry Street. Be a little careful please! The hall is dark and you might stumble over the children pitching pennies back there. Not that it would hurt them; kicks and cuffs are their daily diet. They have little else. Here where the hall turns and dives into utter darkness is a step, and another, an other. A flight of stairs. You can feel your way, if you cannot see it. Close?

Yes! What would you have? All the fresh air that ever enters these stairs comes from the hall-door that is for ever slamming, and from the win dows of dark bedrooms that in turn receive from the stairs their sole supply of the elements God meant to be free, but man deals out with such niggardly hand. That was a woman filling her pail by the hydrant you just bumped against. The sinks are in the hallway, that all the ten ants may have access - and all be poisoned alike by their summer stenches .... Here is a door. Listen! That short hacking cough, that tiny, 13 See Louis Filler, Crusaders for American Liberalism (Yellow Springs, Ohio: Antioch Press, 1950), pp. 268-~tl. helpless wail - what do they mean? They mean that the soiled bow of white you saw on the door downstairs will have another story to tell - Oh! a sadly familiar story - before the day is at an end. The child is dying with measles. With half a chance it might have lived; but it had none.

That dark bedroom killed it.l 4 Government Intervention The origins of these conditions were, of course, "the system." Riis said, "We know now that there is no way out; that the 'system' that was the evil offspring of public neg' lect and pri vate greed has come to stay, a storm-centre forever of our civilization."15 That is, tenements are a fixture; the only hope lay in amelioration. Among the things that Riis suggested might be done was that the "state may have to bring down the rents that cause the crowding, by assuming the right to regulate them as it regulates the fares on the elevated roads."16 The circle is completed with these sug gestions: from ideology to myth ology to reform. These stories of conditions are usually told in such a way as to suggest that only by government intervention can the situation be righted. If the wages of the poor are held down to the 14 Jacob A. Riis, How the Other Half Lives (New York: Sagamore Press, 1957), pp. 33-34.

15 Ibid., p. 2. 16 Ibid., p. 217.

1966 FROM IDEOLOGY TO MYTHOLOGY - II 31 subsistence level continually, there would be no way for them to get out of the slums and tenements. Once government intervention got under way on a large scale, the character of the myth began to change. N ow articles, stories, monographs, and textbooks began to present bright pictures of life in America. Happy children now play in uncluttered parks; families live in low-rent housing; farmers use bright new equipment; and work ers are joyously bargaining collec tively. The following are from cap tions under upbeat pictures and drawings in a recent textbook. They ascribe this fine state of things to government: Senior citizens like these in Sun City, Arizona, are helped by their federal social security payments to live comfortably after retirement and to enjoy a variety of pleasure-time activities. Federal grants of money assist cities in replacing slums with satis factory low-rental dwelling units.

Reciprocal trade agreements with other countries aid in bringing loaded cargo ships to our ports. Workmen have gained many bene fits and services since the day in 1900 [captio'n to an unhappy sketch] when this luncheon counter exposed to dust and contamination, was used to pro vide a hot meal in the center of a Inachine shop. Wheeler Dam, with its eight out door generators, is one of many dams built by TVA to assist in flood con trol and provide cheap hydroelectric power for industries and residents in the Tennessee Valley. With TVA's help, Tennessee farm ers have learned the importance of fertilizing their soil [something that was once believed to have been taught to the early settlers in America by Indians]. With low-cost fertilizers produced by TVA plants, the soil has been built up and now yields profit able crops.17 There is still poverty, of course, according to the prevailing ethos, but it, too, has changed in charac ter. It is "hard core" poverty, a va riety which may be expected to yield ground before political min istrations, but only after an ex tended war upon it.

The poverty myth is only one of a large num,ber of myths that make up the mythology. Space does not permit going into others in such detail. However, it is important to provide another example or so to demonstrate the process of myth ologizing more adequately. Competitive IIWarlare" One of the most pernicious of myths is the one that equates com petition with war. The following may serve as a generic assertion of the myth: "Competition is of the nature of warfare; in warfare the 17 Lawrence V. Roth, et. al., Living in Today's World (River Forest, Illinois: Laidlaw, 1964, 2nd edition), pp. 267-76.

32 THE FREEMAN February victory is with the strongest .... "18 The roots of this myth are trace able to a variety of ideological for mulations: to the Malthusian con cept of the pressure of population on the means of subsistence, to the Marxian notion of the class strug gle, to the Darwinian idea of the struggle for survival and survival of the fittest, among others. The description of the rise of the bourgeoisie by Marx and Engels encapsulated this notion of com petition-as-war in the revolution ary framework of their historicist eschatology; that is, they thrust it into the historical stream so that it could be mythologized as history. They said, "The bourgeoisie finds itself involved in a constant battle. At first with the aristocracy; later on, with those portions of the bour geoisie itself, whose interests have become antagonistic to the prog ress of industry; at all times with the bourgeoisie of foreign coun tries."19 The next step, of course, was to find an actual instance of such con flict. J. P. Morgan and associates and Jim Fisk supplied the instance which became the classic example 18 Washington Gladden, Applied Chris tianity (Boston: Houghton Mifflin, 1886), pp. 31-32. His particular reference was to the "conflict" between capital and labor.

19 Karl Marx and Frederick Engels, The Communist Manifesto in Eugen Weber, ed., The Western T'radition (Boston: Heath, 1959), p. 611. in books on American history. It occurred in connection with the contest over control of the Albany & Susquehanna Railroad. The fol lowing is a summary of the battle that ensued: The combat took ever new and fan tastic turns. Feeling ran high. To end the deadlock, the Ramsey-Morgan party finally despatched a force of armed men, estimated by the press to be between 150 and 450 in num ber.... At the same time, an equally formidable. mixed body of Erie's Bowery toughs and sheriff's deputies departed for battle from Binghamton behind their own engine. Outside of a long tunnel, fifteen miles beyond Binghamton, the enemy locomotives, whistling and tooting their bells wildly, breathing fire and fury, met in head-on collision .... The warriors of both armies had all jumped off as the two steam char iots collided, and yelling defiance had fallen upon each other with clubs, spades, axes and firearms. But the Ramsey-Morgan thugs were the better armed, and the Erie soldiers soon had the worst of it. Retreating as fast as they could, tearing up tracks and destroying trestles, they went back toward Binghamton, where they barricaded themselves anew and called regiments of the National Guard to their rescue. 20 Such an occurrence is no more a 20 Matthew Josephson, The Robbe1' Barons (New York: Harcourt, Brace, 1934), p. 139.

1966 FROM IDEOLOGY TO MYTHOLOGY-II 33 natural consequence of business competition than is rape. of rela tions between the sexes, and prob ably less common, but it provided excellent propaganda for those under the sway of ideology. Writers with good imaginations could, and did, take facts, surmises, and interpretations about the be havior of businessmen and weave them into a picture of jungle life, red in tooth and claw. Henry De marest Lloyd, perhaps the earliest of· the muckrakers, writing in the latter part of the nineteenth cen tury, declared: "We are still, part, as Emerson says, in the quadruped state. Our industry is a· fight of every man for himself. The prize we give the fittest is monopoly of the necessaries of life, and we leave these winners of the powers of life and death to wield them over us by the same 'self-interest' with which they took them from US."21 Matthew Josephson probably did the most thorough job of mytholo gizing competition-as-w~r in The Robber Barons. In this ~ook, busi nessmen were likened td medieval barons, and the story is told in a framework and with the terminol ogy drawn from medieval warfare.

Note the martial language used to describe the actions of western railroad builders in the following: 21 Henry D. Lloyd, Wealth against Commonwealth, Charles C. Baldwin, ed. (Washington: National Home Library Foundation, 1936), p. 330. Power such as they had foreseen but dimly came to the hands of the empire-builders. . . . By seizing one valley, or the passageway to it, they brought an adjacent one into their effective control, as the medieval barons had done of old.... Their net work of branch lines was spread throughout the Pacific Slope, through the payment of proper ransoms by the communities which required such outlets as a matter of life and death. But more ingenious, the new barons who held the only overland route to the Pacific connected these lines with water-front facilities, which they, upon a large scale, wrested from the coast cities by the threat of extinc tion. 22 Similar terminology was used to describe the behavior of the oil men: Tomorrow all the population of the Oil Regions ... might rise against the South Improvement Company ring in a grotesque uproar .... But Rockefeller and his comrades had stolen a long march on their oppon ents,. their tactics shaped themselves already as those of the giant indus trialists of the future conquering the pigmies. Entrenched at the 'nar rows' of the mighty river of petro leum they could no more be dislodged than those other barons who had formerly planted their strong castles along the banks of the Rhine could be dislodged by unarmed peasants and burghers. 23 22 Josephson, Ope cit., p. 88. Italics mine.

23 Ibid., p. 120. Italics mine.

&4 THE FREEMAN February This myth went into the warp and woof of history as many Amer icans were to understand it. Here is an example of it in a recent text book. Rockefeller flourished in an era of completely free enterprise. So-called piratical practices were employed by 'corsairs of finance,' and business ethics were distressingly low. Rocke feller, operating 'just to the wind ward of the law,' pursued a policy of rule or ruin .... The Standard Oil Company was undeniably heartless, but its rivals were no less so in this age of dog-eat dog competition. A kind of social economic Darwinism seemingly pre vailed in the jungle world of big busi ness, where, in certain areas, only the fittest survived .... :!4 The myth of competition-as-war has served over the years as the major propellant of government in tervention, from antitrust legisla tion to fair trade laws to inspection acts to a great variety of other reg ulatory measures. It has even served as the basis of the interpre tation of the coming of wars among nations as a result of trade com petition. In short, the myth serves to promote reform.

24 Thomas A. Bailey, The American Pageant (Boston: D. C. Heath, 1961, 2nd edition), p. 532. For a soberer evalua tion of these men and events, see John Chamberlain, The Enterprising Ameri cans (New York: Harper & Row, 1961 63), ch. 8. IIPrivileges ll to Business One other myth will be examined with some little care. The examina tion of this myth is particularly instructive as to exaggerations and distortions involved in the making and purveying of myths. This myth has to do with the privileged posi tion of business vis a vis govern ment, with how businessmen were supposed to have been the benefi ciaries of government largess, with how a plutocracy used government for its own ends, particularly in the late years of the nineteenth and the early years of the twentieth centuries. According to Vernon Louis Parrington, America was spread out upon a table like a great barbecue: Congress had rich gifts to bestow - in lands, tariffs, subsidies, favors of all sorts; and when influential citizens made their wishes known to the reigning statesmen the sympa thetic politicians were quick to turn the government into the fairy god mother the voters wanted it to be.25 Lincoln Steffens proclaimed that businessmen corrupted govern ment: Another such conceit of our ego tism is that which deplores our poli tics and lauds our business. This is the wail of the typical American citizen.

Now, the typical American citizen is the business man. The typical busi ness man is a bad citizen; he is busy. ~5 Parrington, Ope cit., p. 23.