The Relics of Intervention; C. Carson

Clarence B. Carson THE RELICS OF INTERVENTION: 6. The Relic of an Idea Conclusion MANY interventions which have been embodied in programs that go back at least to the early twentieth cen tury are still with us as relics in 1982. Some even go back to the nineteenth century, to a period not covered by this series. For example, the Inter state Commerce Commission, which was authorized to regulate the rail roads, was set up in the 1880s. To day, it is a relic not only of regula tory zeal but also of a time when the railroads were the dominant mode of land transportation. But the most heady intervention has come in the twentieth century, and some of it going back to the early years of the century is still very much with us. The Federal Reserve system, which antedates World War I, was sup posed to regulate the money supply, Dr. Carson has written and taught extensively, spe cializing in American intellectual history. He is the author of several books and a frequent contributor to The Freemanand other scholarly journals.

542 and it is still busily trying to do that. The graduated income tax, which dates from the same period, is still being used to penalize profit making and other earnings, a habit formed during World War I. A few interventions have been permitted to expire. For example, The Works Progress Administration and the Civilian Conservation Corps, relief programs of the New Deal, were abandoned and have never since been revived. Mostly, though, interventions once undertaken have been continued in one form or another. Some, such as government-subsidized low-income housing, go through various permu tations as enthusiasm for them waxes and wanes. Even crop subsidies and parity programs are still going on. Meanwhile, new interventions, such as environmental protection and ur ban renewal, have had their days when they occupied the center of the CONCLUSION: THE RELIC OF AN IDEA 543 stage. However dramatic the fail ures of intervention, hope seems to spring eternal in the breast of the interventionists that some new twist or turn, some modification of the mechanism of intervention, some new wrinkle, will bring success.

The Basic Idea Ultimately, though, all these par ticular programs of intervention, even all those that survive today as relics, are less important than some thing else. All these relics are but the progeny of another more endur ing and persistent relic. It is, so to speak, the relic of relics. However thoroughly particular programs may be discredited, however great the failure of some government inter vention, however disastrous some government effort, the bent to inter vention continues unabated. Inter vention is like the mythical hydra headed serpent of ancient lore. It had nine heads. Chop off one of its heads, and two would come back in its place., There is one difference, however: what provides the animus for the hydra-like intervention is an idea. The relic that sustains all the other relics of intervention is the idea be·· hind government intervention it self. The idea behind intervention em,· braces the concept of an active role for government in society, and es pecially in the economy. That is, government should play an active role in shaping aociety and in direct ing the economy. While such a con ception was n@t original with re formers of the nineteenth and twentieth centuries, it did depart from the basic fradition for thre of government in America.

Herbert Hooter suggested on sev eral occasions that a good analogy for grasping toe traditional Ameri can conception' was that of an um pire in baseball. Though this anal ogy has some pitfalls that might well be avoided, it ,can be illuminating when used car~fully. The umpire is not supposed to participate in the game. His task is to enforce the rules. He is expected~o be impartial in his rulings and nqt take sides between the teams. It isinot his job to see that the game is clpse. He does not dis tribute or redistribute the players to see that the' teams are even in strength. The l)lmpire is there to set tle disputes which arise, not to alter the course of the game by intruding himself into it.' In that sense, his role is similar to the traditional role of government. But a baseball game is a contrived situation. Its rules are conceived to make a contest of the game. In these things, it is nqt parallel to life, soci ety, or economy. Moreover, the um pire looms much larger in a baseball game than Americans have gener ally conceived! it would be desirable for government to do in their lives.

The umpire is supposed to have all 544 THE FREEMAN September the players .under surveillance dur ing the whole course of the game. Such government surveillance would amount to tyranny. Moreover, in most cases, players have no role ei ther in bringing the umpire into the decision-making role or in arriving at their own settlements without him. The traditional role of govern ment in America is not at all like that. Keepingthe Peace The primary role of government is to maintain the peace. It is activated when there is aggression, when one of the parties to a dispute calls upon it, or when life, liberty, or property are endangered. Except when fraud, violence, or disputes come to its at tention, it remains passive. This is no doubt a somewhat idealized ver sion of even the American tradition, but it is in basic accord with it. By contrast, interventionists are moved by the conception of an active role for government, as I said. They see it as an active participant in the game, as it were, as continuously imposing its version of what ought to be, as reordering society and the economy. This active role for gov ernment is apparent in the follow ing quotations from intervention ists: In 1910, Theodore Roosevelt said: "I believe that in every part of our complicated social fabric there must be either national or state control."

In 1912, Woodrow Wilson said: "But we are coming now to realize ... that the law has to step in and create new conditions under which we may live." General Hugh Johnson, head ofthe National Recovery Administration, declared: "The very heart of the New Deal is the principle of concerted ac tion in industry and agriculture un der government supervision looking to a balanced economy." President Roosevelt announced in 1933 that "We had a bad banking situation. . .. It was the Govern ment's job to straighten out this sit uation and do it as quickly as possi ble." In 1954, Arthur F. Burns, Presi dent Eisenhower's Chairman of the Council of Economic Advisers, stated that "it is no longer a matter of se rious controversy whether the Gov ernment should playa positive role in helping to maintain a high level of economic activity. What we de bate nowadays is not the need for controlling business cycles, but rather the nature of governmental action, its timing and its extent."

These statements affirm the belief in an active role for government, but they do not explain why. Government action is the method; the why of intervention lies deeper. From one angle, thinkers became convinced of the necessity for gov ernment intervention because they lost confidence, or faith, in a natural 1982 CONCLUSION: THE RELIC OF AN IDEA 545 order and in the social order which takes shape when men are free. From. another angle, it is equally correct to say that many thinkers in the nineteenth century came to believe that the traditional order in society is unjust and that there are no nat·· ural laws working to produce order. Although there may be some ambi·· guity in the statement of it, Frank·· lin D. Roosevelt laid hold of the crux of the changed outlook in these two sentences read to the Democratic Convention in 1932: "We must lay hold of the fact that economic laws are not made by nature. They are made by human beings." That is a way of saying, I think, that the only law is positive law, that the only laws are those promulgated by govern-· ment. And, the only order that there can be is an order imposed by gov·· ernment. The point is nailed down.

by the next sentence, in which he declared that "the Federal Govern·· ment will assume bold leader·· ship .... " Laws of HistoricalDevelopment These views were the culmination. of a century-long social and eco·· nomic analysis which preceded them. While it would not be practical to go into this in detail here, the conclu sions toward which this analysis moved need at least to be pointed out. As many intellectuals rejected or abandoned the belief in a system of natural law-natural order they replaced it with a quest for the laws of historical: development. They shifted their attention from the en during order, if you will, to the laws of change and, development. Econo mies, looked ajt in this way, tended to be viewed as particular develop ments, or the results of institutions at some stage i of historical develop ment. At any rate, thinkers began to discern flaws i in particular econo mies. Indeed, ~ome discerned rather large flaws w~ich, if allowed to go on unchanged~ would produce cata strophic results. Karl Marx and Friedrich Engels were at the fore front, of course, of such analysts.

Bourgeois arrangements, as they described them, led to the impover ishment of the proletariat, the con centration ofi wealth, monopoly, periodic depr~ssions, and eventual revolution. Mahy other thinkers who did not share with Marx and Engels this apocalypt~c vision for the future nonetheless described flaws and in justices in th~ working of the pre vailing economic systems. By the end of the ninete~nth century, many thinkers had c~me to the conclusion, from whatever premises, that gov ernment must intervene in econo mies and in s<!>cieties in general in order to make justice prevail. What made !these interpretations plausible, so f~r as they were, were two ideas or iaeals shared by such intellectuals, ideas which were usu546 THE FREEMAN September ally implicit when they were not ex plicit. They were the belief in "so cial" justice and substantive equality. I say "social" justice because other wise the phrase might be taken to mean something different from what it does. From time immemorial, jus tice has had to do with individuals getting their due. It was not called "individual" justice; it was called justice. Undoubtedly, there were senses, too, in which such justice was social, since it involved others quite often and involved means made available in society for attaining it.

But it was not referred to as social justice. "Social" Justice and Substantive Equality "Social" justice is a class-oriented or collectivist concept. It refers to justice for some class, order, or group of people, such as "labor," "the working class," women, low income groups, ethnic minorities, or what have you. Such a concept makes a kind of sense if you start with, say, Marx's Labor Theory of Value. Marx held that all value was imparted to goods by "labor." It followed then, that labor should have the income from the sale of goods, and, if it did not, the system of division of the proceeds was unjust. Of course, Marx's theory of value is nowhere conscientiously applied in an econ omy, nor could it be but for the brief est span of time. I cite it only to illustrate the fact that the idea of "social" has no built-in means of de termining what is just. Justice for individuals is defined in terms of what is just, but justice for groups, if it is to have any meaning, must come from outside the concept.

The supplementary idea to which interventionists on behalf of "social" justice usually appeal is substantive equality. This, too, is basically a class or group concept. That is, it does not mean that each individual receives the same pay, income, and perqui sites, or whatever, as every other in dividual. Rather, it tends to be in terpreted to mean that all those of the same category, the same rank, the same education and experience, who do comparable work, and so on, should be paid the same. This con cept of class or group equality is of ten modified or supplemented by such phrases as the "right to a decent wage" or "living income" for all groups and peoples. For example, notice the language in which Presi dent Roosevelt enunciated his "Eco nomic Bill of Rights" in his annual message to Congress in 1944. He said, in part: In our day these economic truths have become accepted as self-evident ....

Among these are: The right to a useful and remunera tive job in the industries or shops or farms or mines of the nation; The right to earn enough to provide adequate food and clothing and recre ation; 1982 CONCLUSION: TH}I; RELIC OF AN IDEA 547 The right of every farmer to raise and sell his products at a return which will give him and his family a decent liv ing ... ; The right of every family to a decent home; The right to adequate medical care and the opportunity to achieve and enjoy good health .... The class concept is there in his ref erences to farmers, industrial work ers, and business. The ideal of sub stantive equality is muted but present in such phrases as "the right to a decent home." Nor did Roosevelt leave in doubt his belief that to se cure these rights would require gov ernment intervention. He said, "I ask the Congress to explore the means for implementing this economic Bill of Rights-for it is definitely the re sponsibility of the Congress so to do."

The Call for Intervention The idea, then, which undergirds government intervention in the economy and society is this: That government must actively intervene in the economy to balance it and in society to bring justice; that govern ment must continuously intervene else the disorders to which these are prone will reassert themselves; that the purpose for intervention is to provide "social" justice and substan tive equality for classes, orders, and groups of people. While this series has focused on intervention by government in the domestic economy, it has become in creasingly clear since World War II that the penchant for intervention has many other Idimensions. Even the extent of economic intervention was somewhat obscured in the 1930s by the depression framework of so much of the new government activity. So much legislatton was passed as emergency and recovery measures that it was har~ly clear what was to be more or less ipermanent and what temporary. It turned out, however, that about the only things tempo rary were acts ruled unconsti tu tional and the, length of time that the money from particular appropri ations lasted. By and large, then, economic intervention survived the depression and has been expanded over the years. IBut intervention has expanded far beyond the domestic economy.

International Intervention It has become commonplace for the United States ito intervene in var ious countries land conflicts around the world since World War II. The United Nations, located in and sponsored by the United States, was to have been:the supreme instru ment for collectivist intervention. From the beg~nning almost, how ever, UN inteIientionist efforts were usually stymietI by Soviet vetoes. In consequence, 4mericans have usu ally intervened on their own or in concert with such other nations as 548 THE FREEMAN September would join them. Foreign Aid was the device most widely used to ac complish the intervention. It may be objected that American intervention has usually been with the consent, and often by the invi tation or request, of the govern ments of the countries. Granted, but that does not keep it from being in tervention. Indeed, this only made it dual or multiple government inter vention. The home government in tervened in the lives of its own peo ple with the help of the United States. It did so in myriad ways: by planning economic development, by augmenting its military power (and hence potential control over its peo pie), by building public service facil ities, and so on.

The underlying idea for interven tion in other countries was roughly the same as for domestic interven tion. It was to protect the weak from the strong, to redistribute wealth, to plan economies, and to establish, or move in the direction of, interna tional "social" justice and substan tive equality. Until all this has been done, things are conceived as being dangerously out of kilter. The thrust of communism gave added impetus to the intervention, of course. Just as some historians will have it that the New Deal programs circum vented domestic insurrection, per haps even revolution, so it is alleged that the way to prevent communist revolutions is by interventions which support milder and more democratic socialism. But domestic intervention in the United States has gone much be yond the economic intervention of earlier years since World War II. How far it has gone may be illus trated by an announcement on tele vision recently. The announcer said that there is a Public Law which re quires that schools provide physical education for the handicapped who attend them. It is highly doubtful that in his wildest flights of imagi nation Franklin D. Roosevelt would have supposed that the Federal gov ernment had the power to lay down any such rules. After all, the public schools are the creatures ofthe states.

Neither the Constitution itself nor precedent provided any opening for such a Federal intervention. Above all, such intervention was remote from New Deal concerns. This is a way of saying that intervention which was initially advanced as a cure for pressing national problems has now been worked into every nook and cranny of American life. Judicial Activism One of the sources of this exten sion was what has come to be called judicial activism. More broadly, it can be viewed as an extension to the courts of the interventionist idea of government as an active and shap ing force on the American economy and society. This judicial acti vism 1982 CONCLUSION: THE RELIC OF AN IDEA 549 flowered under the leadership of Chief Justice Earl Warren in the 1950s and 1960s. In a series of land mark decisions, ranging from Brown us. Board ofEducation to Gideon us. Wainright to Baker us. Carr the Su preme Court not only broke with precedent after precedent but also carved out an active role for the courts in reshaping America. No de cision illustrates this more clearly than Baker us. Carr (1962).

In Baker us. Carr, and a string of Supreme Court decisions which fol lowed it-Wesberry us. Sanders, Reynolds us. Sims, and Wright us. Rockefeller-the Supreme Court claimed and asserted jurisdiction over states in the matter of appor tionment and the determination of election districts. The principle which the Court elucidated was that each vote of each person should have as near equal weight as that of every other voter. No matter that this rule did not apply to the mode of select ing many of those in the Federal government, it was proclaimed as the operating principle for the states. Since that time, United States Dis trict Courts have occupied them selves with the superintending of state reapportionments so as to as sure equality. That the discretion ary powers of the states have been greatly reduced by these and nu merous other Federal court inter ventions is undeniable. By the mid-1960s, the Tenth Amendment to the Constitution had become virtually a dead letter. The Amendment re~ds, "The powers not delegated to the, United States by the Constitution, nor prohibited by it to the States, are ~eserved to the States respectively, or ~o the people." It was, and is, no long~r clear what powers might not have been delegated to the United States, lif the interpretation of recent courtsibe taken as the mea sure. Indeed, if my reading of the impact of these] decisions is correct, the Tenth Amendment has been ef fectively reveIised. This reversed reading would gp something like this: "The powers hot specifically re served to the S~ates or to the people are hereby del~gated to the United States by the Constitution."

The Great Society At any rate, iby the early 1960s there was no longer any likelihood of court restraint of all sorts of inter ventionist measures which Presi dents might prqpose and Congresses might dispose. 'After all, if Federal courts were vested with such exten sive powers, they were unlikely to deny powers of Congress to exercise those along line$ they approved. One other major eveIilt,or series of events, set the stage for the greatest surge of interventionist programs since the New Deal. That surge came during the presidency jof Lyndon B. John son. What set the stage for this surge 550 THE FREEMAN September of intervention was the assassina tion of President John F. Kennedy in November of 1963. There was no predetermined reaction built into that event itself. But the handling of it by television prepared the way for heady government action. For several days after the assassination, all regular television programs were canceled, and the networks devoted themselves to John F. Kennedy, his assassination, his life, his aims, and so on. He was lionized, made a hero, a symbol, an embodiment of Ameri can youth and ideals. The frustra tion he had experienced in getting his legislative recommendations through Congress became a wrong to be righted, and President J ohn son became an instrument, for a time, to right those wrongs.

This was especially so in Civil Rights legislation. Otherwise, the Kennedy assassination may have provided some of the impetus to Johnson's own War on Poverty and interventionist action which was supposed to lead to the Great Soci ety. The following is not a complete list of the interventionist measures, nor was each of the measures en tirely new, but it will give some idea of the scope of the intervention dur ing the Johnson years. SpecificMeasuresTaken In 1964, measures dealing with the following were passed: InterAmeri can Development Bank, Federal Airport Aid, Farm Program, Pesti cide Controls, International Devel opment Association, Civil Rights Act of 1964, Urban Mass Transit, Crim inal Justice, Truth-in-Securities, Food Stamp, Housing Act, Interest Equalization, Wilderness Areas, Nurse Training, and Library Ser vices. But 1965 was an even better year for intervention. Fresh from a land slide victory over Goldwater and with comfortable margins for the Demo crats in both houses of Congress, Johnson moved onward toward the Great Society with renewed vigor.

Among the programs inaugurated (or newly funded) were Medicare, Aid to Education (first large scale Fed eral aid to elementary and high schools), Higher Education (inau guration of a general scholarship program for college students), De partment of Housing and Urban De velopment created, Voting Rights, Heart, Cancer, Stroke Program, Law Enforcement Assistance, Mental Health Facilities, Vocational Reha bilitation, Arts and Humanities Foundation, Aid to Appalachia, Highway Beauty, Clean Air, Water Pollution Control, High Speed Tran sit, Manpower Training, Regional Development, Aid to Small Busi nesses, Water Desalting, Commu nity Health Services, Juvenile De linquency Control, and so on and on. In the following years, there was Truth-in-Packaging, Teacher's Corps, 1982 CONCLUSION: THE RELIC OF AN IDEA 551 Asian Development Bank, Air Pol lution Control, Urban Fellowships, Safety at Sea Treaty, Fair Housing, Commodity Exchange Rules, U. S.

Grain Standards, International Monetary Reform, Vocational Edu cation, and what have you? If any thing was not authorized, con trolled, subsidized, regulated, intervened in, messed with, studied, had a commission appointed about it, offered assistance, or sustained during these years it was surely an error of the head and not of the heart. been aroused, find what it does falls far short usu(l1ly of the hopes and longings ofthdse who depend on it. Here is an iJh.cidentwhich may il lustrate the point. Several years ago I broke my wrist. During the time when I was w~aring the cast I had occasion to go to the bank to talk to an officer of th.e bank. He was busy when I arrived, so I sat down in a waiting alcove until he was free. The man next to ~e was black, and he undertook to ~ngage me in conver sation, or, mote precisely, to share his complaint~ with me. He noted An Established Habit that my arm i was in a cast and The habit of government inter-pointed out that he had broken a limb vention is now deeply imbedded in (I have forgotten which) at some time our outlook. If a problem is identi-. in the past. I h$.d great difficulty un fied that involves more than two' derstanding what he was saying, people it has become almost second both because hie spoke in spasmodic nature to expect government to do rhythms whic~ my ears refused to something about it. The promises sort into words and because, if my that promoted intervention have suspicions were well founded, he was given rise to great expectations. A nearly drunk. As well as I could make picture of government has been pre-out, his compl~int was that he did sented which would have it to be a not receive as much government or concerned and almost loving orga-other aid as h~ should have to help nization, dispensing "human ser-him get throug~ his difficulties with vices," as the argot has it, and ready a broken limb.: He alleged that the to meet all and sundry needs. It is a reason for this was discrimination seductive notion. But those who be-against Blacksi In order to substan lieve it are doomed to disappoint-tiate this, or so Jsurmised, he wanted ment when they come athwart ac-to know what sort of help I had re tual government. The gap between ceived.

expectations and reality constantly My irritation had got the better of breeds surliness and cynicism, if I me by that tiJl1le, and I asked him, discern aright. Government could not rather sharpl~, I think, what he meet all the expectations that have wanted of me. My voice must have 552 THE FREEMAN September risen above the mandatory hush which prevails in banks at all times, for one of the bank personnel came forward to deal with the man. He asked him his business, told him the bank had nothing for him at that time, and led him away as gently as possible. Although I was in no mood to explain it, it happens that I had neither received, asked for, nor ex pected any government aid to help me through the trials of a broken arm. I have a private hospitalization and surgical policy which paid most of the medical costs. Otherwise, I managed as best I could, failing even to take advantage of the govern ment's Bent Coathanger Program to enable those with fractures to scratch under casts when it itches.

The Disappointing Results One of my reasons for telling this story is its man-bites-dog aspect. Many whites are convinced that Blacks are the prime beneficiaries of government welfare programs. By contrast, here was one black man, at least, apparently convinced that he had been short-changed in his quest for aid because of discrimination against Blacks. All he knew, I sus pect, was that the government was spending a lot of money, providing a lot of aid, and he wasn't getting much of it. He was right, of course, on all counts. So are most of the others, of whatever race or color, who believe much the same. Which brings me to my main point, namely, that government aid is dis appointing and government inter vention is a failure. Government aid must disappoint most who fasten their hopes upon it, because govern ment resources are limited. How ever large the appropriations, the benefits are almost always a disap pointing dribble when they have been distributed to all the recipients. Be yond that, when "social" justice is the animating purpose, help for in dividuals is secondary. It is classes and groups that are supposed to be benefited. Thus, benefits are arbi trarily distributed, and such help as any receive depends upon the cate gory in which they fall.

Above all, though, government intervention is a failure. Govern ments cannot balance economies. They can only disrupt, distort, and unbalance them. They cannot inter vene so as to provide a flexible money supply which will meet all needs. They can only provide a system in which the money supply is alter nately expanded and contracted, causing booms and busts, among other things. Government interven tion cannot provide parity for farm ers' full employment for workers, solvency for shopkeepers, just prices for purchasers, and all the goodies that have been promised over the years. Government has no magic wand that it can wave to cure all the ills of a society. Even if government 1982 CONCLUSION: THE RELIC OF AN IDEA 553 be vested with plenary powers so that it is inevitably tyrannical, it cannot do these things. The IllusionPersists Government intervention isa relic. It is a relic of the heated dreams of nineteenth century intellectuals who professed the notion that they could by taking thought build a just soci ety. It is a relic of an unwarranted belief that government action was the cure for the ills of man. It is a relic of communist and fascist na tional planning. It is a relic of the discredited hopes of collectivists.

Even before interventionists had gained full sway in America the idea was already producing its totalitar ian fruit in Europe. It is a relic of the contradiction that by doing in justice and wrongs to individuals "social" justice can be achieved. It is a relic of a faith in an imposed substantive equality which can never have any more substance than a re flection in water ~ It is a relic today of politicians who know of no other way to get elected than to buy votes 'with our money, xaising once again expectations by tneir promises which they cannot fulfill. Nonetheless, the relics will sur vive, the programjs will continue, and new ones will b~ conceived so long as the idea that gives rise to the in terventions is b¢lieved. So long as people believe ,that governments must intervene to balance the econ omy, to impose: equality, to bring "social" justice, to bring order out of disorder, we wiU continue to have such programs. In the final analysis, so long as so many continue to be lieve that when :there is a problem or difficulty government must do something, intervention will con tinue apace. ® IDEAS ON LIBERTY Morals and the Welfare State IF one is free to have what he has produced and ~arned, it then follows that he also has the moral right to be free to choo~e his work. He should be free to choose his work, that is, so long as he does not violate the moral code in doing so by using in his productive iefforts the property of another person through theft or trespass. OtherWise he is free to work as he will, at what he will, and to change his work;when he will. Nobody has the moral right to force him to work when he does not choose to do so, or to force him to remain idle when he wish~s to work, or to force him to work at a certain job when he wishes to work at some other available job. The belief of the master that his j~dgment is superior to that of the slave or vassal, and that control is "for his own good," is not a moral justification for the idea of the Welfare State.

F.A. HARPER John Jefferson Davis THE LESSONS OF HISTORY "LENINGRADcan be overstocked with cross-country skis ... and yet go several months without soap for washing dishes. I knew a Moscow family that spent a frantic month hunting for a child's potty while ra dios were a glut on the market."! These observations by Hedrick Smith, former Moscow Bureau Chief for the New York Times, highlight the persistent problems of a planned socialist economy. We will be examining here the re specti ve track records of the free market and socialist economic sys tems. Marx believed that history would demonstrate the inherent su periority of socialism. He predicted that capitalism would lead to the Dr. Davis is Associate Professor of Theology at Gor don-Conwell Theological Seminary, South Hamilton, Massachusetts. This article is from the manuscript of a forthcoming book, A Land ot Milk and Honey: Bibli cal Foundations ot the Free Market.