What's Going on Here? R. Bradford

A long-playing album from his epic poem, Herita~e, describing the American story, is available from the Foundation for Economic Education. What's GoingOn Here? RALPH BRADFORD money, credit, banks, wages, profit, capital investment. That, in brief, was our classic economics, and we thought it was pretty important. But if your son is studying eco nomics, you will soon discover that this was micro economics - min uscule, elementary, parochial. Im portant? Yes, in somewhat the same sense that the alphabet is, or the ten digits - something to begin with. But it is really just a kindergarten exercise. Students must move on to the macro, the really big stuff. This gets us into the "public sector," a term that I first began to hear in European meetings twenty years ago, as. a result of their rapid shift into socialism. It is now, of course, much used by our own economists and others who are interested in the vast ex penditures of nations, the flow of international trade, tariffs and tariff unions, balance of payments, debt and debt management, and 647 648 THE FREEMAN November the economic consequences of po litical action on the grand scale.

Implicit in all this is the idea of a world economy artificially stim ulated by "public sector" spending, and directed by a self-chosen elite rather than by the untrammeled operations of the free market. Due recognition is accorded to the "private sector" - individual and corporate enterprise - but more often than not your professional economist is now a devoted Keynes ian who is all in favor of the big government necessary to a centrally managed economy, with heavy emphasis on the big spend, the big debt, and the never-pay-it philosophy. Most of them seem blissfully unaware that Keynes himself had backed off some dis tance from his original ideas be fore he died. These are some of the things you will probably find out in that talk with your collegiate son. And more than likely you will find that he is pretty much in agreement with what he has been taught. I base these conclusions on my ex perience in visiting colleges dur ing the past few years as occa sional lecturer and discussion leader. These visits were mainly in five eastern and southern states.

From such a sampling I cannot pretend to say what is going on in all colleges; but since certain atti tudes were so similar as to be almost identical in the ones I did visit, it seems reasonable to as sume that they may occur in many, if not most,colleges. Setting the Stage First. of all, your son in all like lihood is being encouraged to ac cept the present state of things as normal and permanent - state interventionism, an economy "managed" through tax juggling and/ or public spending, deficit fi nancing as a permanent fiscal pol icy, a huge national debt that need never be paid off or even reduced so long as it bears a certain rela tionship to the gross national product - and so on. As a sort of background for all this, he is heing told that in 1933 this country was on the brink of a bloody revolution which was averted only by the radical pro grams of the New Deal. Particu larly emphasized is what is termed the agrarian revolt in which, it is alleged, farmers - especially in the Midwest - were on the verge of an armed uprising. The historic peg on which such nonsense is hung is this: Under the stimulus of high prices for wheat and corn during the first world war, thousands of farmers had overextended their land holdings. Land values were artificially inflated up to five, six, even seven hundred dollars an acre. You do not need to be an 1967 WHAT'S GOING ON HERE? 649 economist to know that in normal times corn and wheat crops would scarcely. pay the interest, let alone retire the principal, on land at such prices.

It was also true, of course, that the same motivation which prompt ed farmers to buy more land led them to expend more money in its development and use - contouring where necessary, tile drainage, up to-date farm machinery, fertilizer, and so on. Thus, the better and more adventurous farmers suf fered all the more severely, when the world-wide depression of the late twenties came, with its tum bling prices of farm commodities, along with all others. Millions of farmers could not meet either interest or principal, and there were many foreclosures. This was bad - for the unfortu nate individuals involved, and for the economy. Some who lost their land became angry and bitter. There were occasional threats of violence. In one dramatic case, a farmer mob at Le Mars, Iowa, seized a. judge in his own court room, carried him out, abused him, put a rope around his neck, and threatened to lynch him unless he would agree not to sign any more orders for foreclosures. 1 Shock ing? Yes - but this isolated case 1 See James Truslow Adams, The March of Democracy, volume for 1933-41, p.11.

of mob action was a very far cry from the bloody .agrarian revolt which certain leftists would now have us believe was so narrowly averted. But students are still hearing distorted echoes of it. They are still led to believe - not by all teachers, certainly, but by some that if we had. not had the radical New Deal intervention, the whole country would have experienced a blood bath. All of which, inci dentally, is a wicked canard upon the American people,. whose de portment during that troubled period was one, of heroic restraint and courageous patience - so much so that Franklin Roosevelt him self (on the testimony of one of his far left lieutenants) often commented admiringly on the for titude of the people· under the stress of sharp adversity. This perversion of history is part of the left-wing legendry that your son is hearing. He is also being influenced to believe, by attitude if not by direct state ment, that businessmen generally are unimaginative, hopelessly re actionary, and without social con science or vision. Corporations, he is told (or at any rate so he be lieves, as surveys much wider than mine reveal), make too much prof it, are unfair to their employees, and offer very little attraction or incentive to ambitious young men.

650 THE FREEMAN November Getting Their Attention Now, because my talks are from the conservative viewpoint, I try to shock the students .into atten tion with initial statements of a rather "extreme" nature - such as assuring them they have no "right" to an education. It usually works. They clearly want to see what other absurdities this trog lodyte will utter. But it also serves to identify the conservative stu dents. There are always a few, maybe as many as ten or fifteen per cent. In private talks these students confess to a feeling of frustration. They believe in a free society and a free economy, but they are often immersed in a classroom atmosphere of state in terventionism and compulsion. To speak of free enterprise there is to invite ridicule. As a result, they are delighted beyond measure when somebody visits the campus who speaks forthrightly the for bidden language of conservatism, expressing the things they believe to be true and want to hear, but seldom do, except in terms of crit icism or derision.

Can a Man Be Both Cap'italist and Christian? Constant classroom denigration of business entrepreneurs has its inevitable effect. Here's an exam pIe of the way it works : At a de nominational college in a southern state, I met with a class in eco nomics. After a short talk, I led into a discussion period, with the teacher participating. Questions and comments soon swung to cap italism, its nature, faults, and virtues. Presently, a personable young man, who turned out to be a senior, remarked with some heat, that a man could not be a cap italist and a Christian. He said the terms were mutually exclu sive. Only one person in the class disagreed with him - another stu dent, not the teacher. I switched to something else for awhile, .then came back to the young man. Under the pretext of finding out whether his economic status had influenced his opinion of capitalists, I asked whether his father was a professional man.

No, he was in business. Further questions developed that the father owned a lumberyard and planing mill. It also came out that he was a stockholder and director in a bank. Anything else? Well . . . oh yes, he owned a business block on Main Street, and he was principal owner in a couple of ·apartment buildings. At that point I administered what I thought would be a. crush er. "Tell me," I said, "is your father a Christian?" It never fazed him. "Yes in deed," he said, rather proudly, "my Dad is quite active in our 1967 WHAT'S GOING ON HERE? 651 church. He's a very good Chris tian." That young man, a senior about to graduate, was majoring in eco nomics - and it simply had never occurred to him· that his father was a capitalist! In that same college, the teacher of a class in history said he gath ered from something I had said earlier that I did not favor Federal aid to education. I told him that was correct, and was about to ex plain why, when he stopped me. "I just can't understand," he said sadly, "how a person of your evi dent good will can be against edu c'ation!"

What kind of doctrine do you think he would be teaching your son? Two Against None At a northern college I had been asked (I do not yet know why) to include a talk on The American Business System. It was by no means an uncritical panegyric. My outline went like this: What is business? How did it start? Its foundation in trade. A quick re view of ancient economies. Growth of the free market concept in America. The "buccaneering" pe riod. The corporate concept. Moti vation of business today. In the course of the talk I men tioned two books and told the stu dents to read them if they wanted to hear all that is bad about busi ness. I also mentioned one other to read if they wanted to hear a re cital of its good points. I thought I was leaning over backwards to be fair: Two books against busi ness, one book for it. But the pro fessor in charge of the class wasn't pleased at all. He was quite satis fied with the two anti books; but he was very unhappy about the one I had cited as pro-business. He said it was by an untrustworthy author who was formerly a liberal but was now notably reactionary.

In other words, this teacher of economics didn't reany want his students to read anything favor able to business enterprise. What sort of economics do you suppose he would be teaching your son? A Queer Standard I recall the head of an economics department in a northern college. In a social hour following my for mal talk he got me to one side and asked if I didn't get a lot of protest and criticism from college officials because of what he called my ultra conservative lectures. Now the sig nifiance of that lies in the content of my lecture. Let me summariz·e it briefly: It discussed present opportuni ties and responsibilities of citizen ship. It advocated self-reliance rather than dependence upon the 652 THE FREEMAN November state, and it favored solvency rather than. technical bankruptcy as a national fiscal policy. It ad vocated minimum government of limited powers and defined respon sibilities. In the field of foreign affairs, it examined some results of our aid program and pointed out that much of it had been wasteful and fruitless; and it was sharply critical of a policy under which billions forcibly taken from Ameri can taxpayers were squandered on nations that have openly declared themselves to be our enemies. And it advocated a gradual liquidation of our freedom-strangling national debt and the restoration of the value of our money, so that those who work and save will not be wiped out through inflation.

I hope the reader will forgive this rather lengthy resume of a, not-too-important lecture. Its sig nificance is that this was the sub stance of a talk that W 1 a8 chara,cter ized as "ult1"aconservative" by the head of a college economi,c'sdepart ment. What do you suppose he is teach ing his students? No Facts, Please! Later I was invited to partici pate in a symposium at a mid South college. Long oriented to one of the big religious denominations, this college is also heavily endowed by one of the South's industrial fortunes. There were to be three speakers - two educators and one representative of business. The two other speakers were a professor of theology from an eastern col lege and a history professor from the Midwest. We were to discuss American capitalism. When I got there, I found that the history professor was a Marx ist - not by my definition, but by his own. The theologian was not a Marxist - at least not admit tedly; but he was a. left-winger, a member of ADA, and a perfect fellow traveler for the self-pro claimed disciple of Marxism. In the several lecture and discussion pe riods, he did not once disagree with the Marxist, and the two of them had a ball tearing poor old American capitalism to pieces.

As an example of typical Marxist cynicism, the history professor at tempted to layout ground rules for the discussion. He said it would be unfair to drag Russia or China or Cuba or any other communist country into the discussion. We should look at Marx in his purity as an economic and social philoso pher, and not becloud the issue by citing any unfortunate aberrations or abuses that may have occurred in these communist countries. Be lieve it or not, that was his serious proposal - and it was seconded by the theologian! The college moder ator of the series (a senior) was 1967 WHAT'S GOING ON HERE? 653 also quite willing to accept it. Needless to say, I was a stumbling block. I insisted that Das Kapital was a book and that The Commu nist Mani,!esto was a document nothing more. The only way to judge the ideas they proposed was to examine results in the countries that had tried them. To do other wise would be the· equivaJ~nt of setting up an inquiry on juvenile delinquency and gang warfare but with the proviso that the re searchers must never go near Harlem, or the seamy side of Cen tral Park - or the slums of any other great city. The matter was not formally disposed of, but I can record that I did not abide by the professor's rules!

There is no point here in trying to summarize their talks or mine. I am inclined to believe that I held my own in the fruitless contest but I hasten to state that I do not mean by that to say that I car ried the day with the students. They heard me with courtesy, and I could spot a few conservatives among them; but it was quite apparent that most of them were much more sympathetic to the radical Marxist doctrines than to the conservative ones I repre sented. Each morning the three speak ers were asked to meet for coffee in one of the lounges, there to be available to any students who cared to drop in for questions, or just to visit. Not many came, but those who did were plainly the campus leftists. The faculty ad viser on student affairs was there, and he see.med quite pleased to re port that there were two leftist student organizations on the cam pus. (Of course, he called them "pro~reggive.") On the' other hand, he told with visible satis faction about how successful he had been in thwarting the efforts of a well-known conservative stu dent organization to get started there.

Radical left-wing students? Wonderful! Conservative stu dents? Down with them! Keep in mind that he was a member of the faculty. What do you suppose he would be teaching your son? "We Owe It to Ourselves" In a southern college I made my more or less standard assembly talk in which, among other things, I advocated solvency as a national fiscal policy. In a subsequent dis cussion period I was taken sharply to task by the head of the eco.. nomics department. He said, in brief, that all talk of a balanced budget, and all concern about the size of the debt, was harmful nonsense. He then advanced what I have learned to recognize as a standard liberal cliche about our debt. It 654 THE FREEMAN November goes like this: Our debt is only around $300 billion (that. was three years ago). But our gross national product is annually more than twice that amount. So it is silly to worry about a debt that is less than half what we produce each year. This sounds plausible until it is analyzed. Who creates that vast GNP? Obviously, it is all of us ~ the American people.

So what portion of that GNP be longs to the government? None, of course; it belongs to those who create it. But what portion of it is set aside to payoff the debt? The answer is, no part of it. Oh,some of it is. taken in taxes - but not enough even to pay current oper ating expenses, else we wouldn't have the yearly deficit. Not one penny of that GNP is hypothe cated as collateral for the debt. The government has no title to it; and the only way it could be fairly cited as security for the debt would be for the government to seize enough of it each year, over and above taxes for current ex penses, to payoff the debt in a stated period. At that point the professor changed the subject - or rather, he broadened his claim. He said it was estimated that the total wealth of our country is between 2lh and 3 trillion dollars. Using the top figure, that is 3 thousand billion. On that basis, our assets in wealth would have a ratio of about ten to one in relation to our debt. So again - why worry? All the alarmist talk about the menace of· the mounting debt, he insisted, is mischievous nonsense. He added with some heat that in his opinion I was doing the country a dis service by preaching such out moded economics to impression able students.

My reply to that was to the effect that I was on that campus for two days, whereas he had the students at his mercy for nearly a year. If in that time the economic poison he was injecting could not overcome my two-day in noculation of economic sanity, then perhaps I had overestimated his powers, and maybe he wasn't as dangerous as I had thought he was! A cheap theatrical rejoinder? Maybe. But recall, please, that I was being pushed around. Any way, the students loved it - even the "liberals." But the professor was not amused. Possibly that was because his argument about the ratio of assets to liabilities of ten to one wouldn't stand analysis. For example: What are those three thousand billions of assets? Well, they are the land, the mines, the railroads, the steamship lines, the airplane lines, the manufacturing plants, the timber, the hotels and motels, the office buildings, the gold, 1967 WHAT'S GOING ON HERE? 655 silver, oil, gas, uranium, the f arms, the homes - in short, the accumulated wealth of all sorts.

Very good, but who owns all this wealth? Aside from actual gov ernment property, it is owned by the people - either as individual proprietors or as stockholders in corporate enterprise. How can you set that wealth up as collateral for the debt when the government has no title to it? The only way it could mean anything in relation to the debt would be for the gov ernment to seize enough of it to retire the debt. To all this the professor simply would. not agree. He insisted that the total wealth, regardless of its legal ownership, was a sufficient guarantee that the debt was safe, and he was not at all impressed by the evidence of continuing infla tion. In fact, when I made the point that inflation injured or wiped out the small saver, such as a holder of government bonds, his reply was, "Let them invest their money in corporate stocks and realize on capital gains." When I asked him how many small inves tors he thought were experienced enough to deal in equities, he sim ply shrugged. That was not his affair.

What do you think he would be teaching your son? Now I am sure there are some colleges - maybe many - that do not fit the pattern I have been out lining. Indeed, I am acquainted with some teachers who are mak ing a courageous effort to present a balanced picture to their stu dents. I encountered a young his tory teacher in one northern col lege who made me welcome and who confessed that he was having a pretty rough time living with the "liberal" majority of the faculty. I also met, in the Dean of one college, a devoted scholar in the best conservative tradition, who. seemed quite happy to have me preach a little "heresy" on his campus. But these were excep tions. Based on the ones I met and whose classes I attended, the aver age teacher of college economics, or government, or sociology, or modern history, makes little or no effort at objective presentation of his subject, but hews pretty close to the "liberal" party line.

Check with your son who is in college. Is this the way he is being taught? Is this the way you want him to be taught? ~ The Bettmann Archive Homemade, self-operated, and really free EDWARD Y. BREESE 656 IN RETROSPECT, it's a good thing they didn't wait for a· government grant of funds or a massive pro gram of made work or industrial subsidy. Those things didn't exist in 1659. If they had, Thomas Macy and his friends certainly wouldn't have been eligible by the standards of that time. If our ancestors had thought and acted as so many people do today, Mr. Macy and his friends would have had a high priority claim to relief and subsidy bene fits for the underprivileged and potentially unfree. Just think. They were a reli gious minority (Quaker) highly unpopular among their fellow New Englanders. They had been ac tively persecuted and forced to leave their homes. Individually, none was prominent, important, or wealthy. They had nei ther learned nor inherited skills that would be of use in their new en vironment.