Traditional liberalism regards government as a necessary evil. It fears government and seeks to impose restraints upon its power. As Woodrow Wilson expressed it, “The history of liberty is the history of limitations of governmental power, not the increase of it.” Today’s neo-lib-erals believe in increasing the authority of the state at the expense of individual liberty. Communists look upon the centralization of all power in the state as a necessary prelude to the police state which is their goal. But, many neo-liberals abhor the police state. They merely want to dogood and improve the lot of mankind. But they want the government to have unlimited power to do good. They look upon the citizen with suspicion and upon the government with approval. They seek to build a government of unlimited powers to control and regiment the individual for the good of society, to prevent the strong from taking advantage of the weak, to offset inequalities in incomes and wealth, and to play the historic role of Robin Hood who robbed the rich and distributed some of the proceeds to the poor. Neo-liberals unwittingly are playing the communist game. They mean well but they fail to recognize the harsh truth of Lord Acton’s dictum: “All power tends to corrupt, and absolute power corrupts absolutely” If we follow them we shall end as slaves of an authoritarian state. That is not the goal of neo-liberals but it is nevertheless the destination toward which they are headed.

—Towner Phelan, October 1948

THE FOUNDATION FOR ECONOMIC EDUCATION, INC.
IRVINGTON-ON-HUDSON, NEW YORK 10533

It is of vital importance that the American people understand the nature of our epic struggle with the Soviet Union. It is likely to continue for generations. Its scope is world-wide. It is not lim­ited to foreign affairs but includes our domestic institutions. Our ob­jectives are twofold: first, to pro­tect our national independence —our freedom from Soviet con­quest; second and scarcely less im­portant, to preserve the institutions of a free society. We shall not win that struggle if we be­come a totalitarian country even though we preserve our national independence.

The announced objective of the Soviet Union is world conquest. It has never been renounced but has been constantly reiterated.

Lenin outlined that objective clearly:

"As long as capitalism and so­cialism exist, we cannot live in peace: in the end, one or the other will triumph — a funeral dirge will be sung either over the Soviet Republic or over world capitalism."¹ Khrushchev put Lenin’s funeral dirge in slightly different lan­guage when, at a reception in Moscow, he told Western diplo­mats, "We shall bury you."

Lenin wrote: "Force alone can settle the great problems of polit­ical liberty and class struggle, and it is our business to prepare and organize this force."²

"The revolutionary dictatorship of the proletariat is power won and maintained by violence of the proletariat against the bour­geoisie, power that is unrestricted by any laws."³

"Until the final issue is decided, the state of awful war will con­tinue."⁴

Khrushchev in his report of the Central Committee Twentieth Con­gress of the Communist party of the Soviet Union, February 14, 1956, said:

"Today our party… is confi­dently leading the country along the path pointed out by the great Lenin.”⁵

"Revolutionary theory is not a collection of petrified dogmas and formulas, but a militant guide to action in transforming the world, in building communism."⁶

Lenin explains why the smiles of the "Summit Conference" and talk of "peaceful coexistence" have been followed by the savagery of Hungary and the unrelenting struggle of the Soviet Union to take over the Middle East. He ex­plains why the present Soviet tac­tics will in due time again be fol­lowed by a revival of the "popular front" tactics again to befuddle and entrap our gullible liberals. Lenin’s explanation is expressed in these words:

"Without concessions we shall not be able to carry out our pro­gramme — concessions do not mean peace with capitalism but war on a new plane."⁷

Our struggle to prevent world conquest by the Soviet Union is not limited to the fields of diplo­macy and war. It is fought on every level — it penetrates every institution of our society. A dec­ade ago the Harvard economist, Sumner H. Slichter, wrote this about the United States:

"Its institutions are under at­tack. In fact the attack against them is the best organized and most carefully planned that has ever been launched against eco­nomic and political arrangements. It has its purpose of destroying these institutions and replacing them with very different ones."

The Target and the Attack

The target for the organized at­tacks against our institutions is individual liberty — the immediate point of attack is directed against private property. This is true because the most effective way to destroy liberty is to do away with private property. Without private property every man would be a slave of the State. He would be a slave because he would depend upon the State for his livelihood. In 1950 Senator Paul H. Douglas, who is no conservative, wrote:

"Men will not be free . . . [if the same group that controls jobs will control the government."⁹ He suggested that the then British Labor Government would "use their power to crush…their polit­ical opponents" if the Labor Gov­ernment were to take over all British industry instead of the 20 per cent then nationalized."

Capitalism is, by definition, pri­vate ownership and control of business. Its only alternative is State ownership and control of business. Under State ownership "one set of men" would control both "jobs" and "government." Senator Douglas says that, if this happens, "men will not be free." If all power is concentrated in the State, it is of no importance, in the long run, whether that State represents communism, fascism, British socialism, or Welfare Stat­ism carried to its logical conclu­sion, or any other "ism." The men who control such a State may start with the best intentions — but they will end as bloody tyrants. It is impossible to reject capitalism except in favor of its only alterna­tive, the omnipotent State, under which man cannot be free and his dignity will not be respected.

We quote from a statement of Jasper E. Crane to the National Council of Presbyterian Men:

“Liberty is the individual per­son’s control of himself, his free­dom of choice, his responsibility for his own actions…. Human rights include the ownership of property and the responsibility to manage it faithfully. This involves the private possession and man­agement of tools, sometimes known as ‘capitalism.’ The denial of the right of ownership is the precise condition of bondage."¹¹

Private Property Threatened

Private property is the only effective safeguard to individual liberty. The persistent and well-organized attacks upon private property and hence upon individ­ual liberty are both domestic and world-wide. In the main they are carried on, at least in the United States, by noncommunists. They have wide-spread support in aca­demic and church circles. For ex­ample, in 1948 the World Council of Churches meeting at Amster­dam adopted a report which said:

"The Christian Churches should reject the ideologies of both com­munism and laissez-faire capital­ism."

This naive and unrealistic view equates Soviet slave labor camps and the brutal suppression of the Hungarian revolt with the right to own property which is the foun­dation of democracy and freedom. In rejecting capitalism it rejects the only kind of organization of society within which man can be free and his dignity respected — that is, a society in which the ownership and control of the in­struments of production are in private hands.

In the United States the spear­head of the attack on private prop­erty is directed against privately owned electric power companies. The immediate objective of those who oppose the human right to own property is to create a gov­ernmental monopoly of the genera­tion and distribution of electric power. Public power advocates are looking to the future and are bending every effort to have atomic power remain a 100 per cent government monopoly.

Regulation and Control

The ultimate objectives of the self-styled "liberals" go far be­yond the socialization of the power and atomic energy industries. The goal is the eventual socialization of all large-scale industry.

A free society rests upon volun­tary action — a totalitarian society upon direction of individual ac­tivity by the State. The efforts of those who call themselves liberals are unremittingly directed toward restricting the area of voluntary choice and voluntary action by the individual and increasing the area of governmentally directed ac­tivity. This can be accomplished either by government ownership and operation of business enterprise or by government regulation and control.

The Federal Power Commis­sion’s regulation of the price of natural gas at the wellhead is the opening wedge in an attempt to make the oil industry into a regulated public utility. If the price of gas is regulated at the wellhead, then it would be equally logical to regulate the price of coal at the mine. It would be equally logi­cal to regulate the price of oil. Gas, coal, and oil are all used for home heating and for the genera­tion of electric power. Heretofore, regulation has been limited to common carriers and to public utilities. Until the government reached out to regulate the price of gas at the wellhead, regulation had not been extended to cover the commodities that the carriers transport or the fuels public utility companies distribute or use to generate power.

Only during wartime has the public been willing to accept gov­ernment rent, wage, and price controls. But liberal economists have consistently advocated large-scale government spending, deficit financing, and government created easy money — all of which gen­erate inflation. Then they wish to attempt to control the conse­quences of planned inflation by permanent price and rent controls. When one of the first acts of the first Eisenhower Administration was to abolish rent and price con­trols, liberals filled the air with dire predictions that unrestrained inflation would follow. Instead, we had a period of relative price sta­bility and unparalleled prosperity. The abolition of rent and price controls was accompanied by a les­sening of inflationary pressure due to Eisenhower’s multibillion dollar cut in the budget proposed by Truman.

Inflationary Pressures

Unfortunately, the budget is again so large as to generate in­flationary pressures notwithstand­ing the fact that it is balanced. And the so-called "tight money" policies of the Federal Reserve authorities have not, as is popu­larly believed, cut the volume of credit outstanding — they have merely slowed down the rate of increase.

Formidable political and special interest pressures are building up to add fuel to the inflationary fires. Their purpose is to keep our inflationary boom going on an ever increasing volume of credit. In a word, it is to promote infla­tion, which in turn may lead to the imposition of direct price, wage, and rent controls and the loss of individual liberty. There is also the danger that inflationary booms will sooner or later bring on a crash and a depression. They always have done so in the past. The admitted inflationists in­cluding many legislators, the "lib­erals" who are constantly clamor­ing for bigger government spend­ing programs, the public power lobby, the school lobby, the home-building industry which wants subsidized low interest mortgage credit, and the old-fashioned log­rolling political pork barrel are among the formidable forces ex­erted to promote further inflation and its ultimate consequences of direct controls — loss of liberty and a depression.

In the rest of the world "na­tionalization" of industry and na­tural resources, coupled with the rejection of basic principles, are undermining the right of private ownership of property upon which individual liberty depends. In the so-called undeveloped countries na­tionalization is a thinly veiled dis­guise for outright expropriation — that is, seizure without any com­pensation, or only a token pay­ment, to the former owners.

Intervention Abroad

The doctrine is growing in for­eign countries — particularly in undeveloped countries — that it is the duty of the United States and other advanced countries to supply investment capital on a continuing basis through outright government grants or loans that could not stand the scrutiny of ordinary standards of investment prudence — in a word, loans that are never intended to be repaid.

Whether or not such intergov­ernmental gifts promote interna­tional friendship and peace is a highly debatable question. But those who debate the question should know that any govern­mental foreign aid program tends to undermine the right to own private property. The government that gives a gift must first have taken private property from its own taxpayers. This is likewise true of any other government expenditure. Therefore, it is evident that the question of foreign aid is merely one segment of a broader question, namely: What limits should be placed on the amount of governmental expenditures and on the purposes for which such expenditures should be made?

The basic principles involved are easy to express — their exact ap­plication to a particular situation is far more difficult to determine. The basic principle is that governmental expenditures, and there­fore governmental functions, should be strictly limited and the total "tax take" from our citizens should be the minimum amount necessary to carry on proper and necessary governmental functions. Obviously, aiding indigent nations is not a proper governmental func­tion.

Furthermore, in the case of for­eign aid, seldom, if ever, has the recipient government used such a gift to develop or defend private ownership of property within its borders. All too often the aid goes to countries which expropriate private property, as did Egypt with the Suez Canal and Mexico with the properties of foreign oil companies. It is of the utmost im­portance to recognize that liberty and freedom can exist only when the means of production are in private hands. Otherwise, all men would be slaves of the omnipotent State.      

Footnotes

¹Lenin, V. I., Selected Works. Moscow: Corporative Publishing Society, 1935, Vol. VIII. p. 297. (Note: This and many other quotations from communist sources taken from Struggle on a New Plane by J. Edgar Hoover, Director of the F.B.I.)

²Ibid., Vol. III, p. 54.

³Ibid., Vol. VII, p. 123.

⁴Ibid., Vol. IX, p. 242.

⁵Soviet News, London, England, p. 79.

⁶Ibid., p. 89.

⁷Lenin. op. cit., Vol. VIII, p. 298.

⁸Slichter, Sumner H. The American Economy. New York : Alfred A. Knopf, Inc., 1948. p. 4.

⁹Freedom and the Diffusion of Power" in Proceedings of the Academy of Politi­cal Science , May 1950. p. 125.

¹ºIbid., p. 124.

¹¹"Christianity vs. Totalitarianism" in Faith and Freedom, May, 1950. p. 6.

***

Ideas On Liberty 

Each Man’s Duty

The defects of every government and constitution both as to principle and form must be as open to discussion as the defects of a law, and it is the duty which every man owes to society to point them out.

Thomas Paine, The Rights of Man

Perhaps the most fundamental difference between traditional liberals and twentieth century liberals is their attitude toward man. The traditional liberal thinks in terms of man as an individual. The twentieth century liberal thinks of man as a member of a group. The traditional liberal agrees with John Stuart Mill that “the sole end for which mankind are warranted, individually or collectively, to interfere with the liberty of action of any of their members is self protection.”

The twentieth century liberal thinks that society should interfere with the liberty of the individual whenever it serves the interests of the groups to which the individuals belong. Thus the closed shop and the union shop deny employment to the individual who is not a union member or who refuses to join a union. This infringement upon the liberty of the individual workman is justified upon the grounds that it makes the union strong—that it benefits the group to which the individual workman belongs or which he should be forced to join. The same reasoning is used to justify infringements upon the liberty of individual farmers. For example, in 1955 Joseph Blattner, a poultry raiser of Norristown, Pennsylvania, was fined because he raised more wheat than the government decreed. Blattner raises his own wheat to feed his six thousand chickens and raises no wheat to sell. His freedom to raise wheat on his own land to feed his own chickens was denied on the theory that crop controls are good for farmers generally.

The twentieth century liberal is always eager to limit the liberty of the individual for the real or fancied benefit of the groups to which he belongs. The emphasis upon the importance of the group is strikingly illustrated in the trend of modern education. Our twentieth century liberal educators take the view that the subject matter taught in our schools is of minor importance—that the real purpose of education is to teach children to cooperate. In other words, the purpose of education is not learning, but is to teach children to become cooperative members of groups. The traditional liberal thinks in terms of man as an individual. The twentieth century liberal thinks of man as a member of a group.

The new liberals faced a dilemma. How could they justify the infringements upon individual liberty which they advocated and still call themselves liberals? How could they still call themselves liberals if liberalism was identified with individual freedom? The answer was to redefine freedom and make it mean its opposite. They found the answer they sought in the philosophy of Hegel and Marx. Hegel taught that when man follows his own base desires, he is not free. He taught that man is subordinate to a higher force or purpose, and that he becomes free only as he serves this higher purpose and makes his desires conform to it. Hegel conceived this higher purpose as the State and taught that man is only free as he serves the State. Karl Marx based his philosophy very largely on that of Hegel. Marxian communism teaches that man is enslaved by capitalism and that man will become free only when private capitalism is abolished. It teaches that the “legal liberty” of Western democracies is merely “formal liberty” without substance.

When Hegel’s view that man is only free when he serves the State was applied to Hitler’s Germany, twentieth century liberals indignantly rejected Hegel’s definition of freedom. But, they implicitly accept his definition when it is applied to the benevolent Welfare State. Furthermore, they accept without reservation the Marxian theory that “liberty under the law” is a hoax and a deception, that it is merely “formal liberty,” and that it lacks real substance. For example, the late Professor John Dewey of Columbia University, who was the leading philosopher of twentieth century liberalism, adopted the Marxian definition of liberty. He said:

The majority who call themselves liberals today are committed to the principle that organized society must use its powers to establish the conditions under which the mass of individuals can possess actual as distinct from merely legal liberty.

The key words of Dewey’s statement are “organized society must use its powers.” If it must use its powers, it must use them in the only way the State can act through compulsion. The State makes laws and enforces them. The penalties for disobedience are fines, imprisonment, and death. The soldier’s bayonet, the policeman’s club, the jailer’s keys, the hangman’s noose—these are the methods by which organized society uses its powers.

Dewey promulgates a charter for broad-scale government control of social and economic life backed by the full coercive powers of the State. That is diametrically opposed to the traditional liberalism of John Locke and John Stuart Mill.

In broad historic perspective, twentieth century liberalism is merely a part of what may properly be termed the Counter Revolution against liberalism. The Liberal Revolution covered about 300 years and represented the revolt of man against authority. The Counter Revolution of Reaction is a world-attempt to turn the clock back. Its purpose is to subordinate man to the State, to reassert authority, and to suppress liberty. Communism, fascism, British socialism, and our own social Welfare State are but different aspects of this Counter Revolution.

The principle of authority is as basic to the Welfare State as it is to the totalitarian regime of Soviet Russia and as it was to Hitler’s Germany. That is why the great threat to our liberties comes not from the communists, but from the liberals. The communists are few and have little influence the Welfare State liberals are many and dominate our society.

Nearly any “liberal” politician in the United States could run on this platform:

” . . . the development of rural electrification”; “financial and other support for agricultural cooperation and for all forms of collective production in the rural districts (cooperative societies, communes, etc.)”; “every encouragement to be given to consumers’ cooperatives”; “the centralization of banking; all nationalized big banks to be subordinated to the central State bank”; “reduction of the working day to seven hours”; “social insurance in all forms (sickness, old age, accident, unemployment, etc.) at State expense”; “comprehensive measures of hygiene; the organization of free medical service”; “the establishment of state organs on the management of industry with provision for the close participation of the trade unions in this work of management.”

The above quotation is not taken from either the Democratic or Republican platform. It was not published as the program of Americans for Democratic Action. It is taken from the Program of the Communist International adopted by the Sixth World Congress, September 1, 1928, at Moscow.