The Fading Dream of American Individualism (Part 1 of 3)

If you want to know why capitalism and individual rights declined in America, look no further than one of our more intellectual Presidents from the early twentieth century, Herbert Hoover.

Schools teach that President Herbert Hoover’s capitalism and laissez-faire Republicanism are what created the Great Depression. Hoover, we’re told, was against government intervention in the economy. As a result, the economy collapsed because of ‘speculation’ (it was actually the Federal Reserve that did it). We are then told that his successor Franklin D. Roosevelt saved us, even though the Depression didn’t end until World War II, and only then because government was desperate to loosen controls on private industry for the sake of victory.

In reality, Hoover did not believe in anything even close to laissez-faire capitalism. And he proved that, during his presidency, and like Franklin D. Roosevelt after him, he was a proponent of higher taxes, restrictive tariffs and increased government intervention in the economy. His book reveals that he was an advocate of what he called ‘individualism’ — but it wasn’t the individualism of Jefferson, Adam Smith, or anyone else who asserted that the best government was the government that intervened the least.

In his book American Individualism, published before his presidency of 1929-33, Hoover wrote: ‘Individualism cannot be maintained as the foundation of a society if it looks to only legalistic justice based upon contracts, property, and political equality. Such legalistic safeguards are not enough.’

He goes on: ‘In our individualism we have long since abandoned the laissez-faire of the 18th Century — the notion that it is ‘every man for himself and the devil take the hindmost.’ We abandoned that when we adopted the ideal of equality of opportunity; the fair chance of Abraham Lincoln. We have confirmed its abandonment in terms of legislation, of social and economic justice — in part because we have learned that it is the hindmost who throws the bricks at our social edifice ‘. ‘

When he talks of the ‘hindmost’ throwing bricks at our ‘social edifice,’ one cannot help but think of today’s supposedly idealistic Occupy Wall Street protestors, quite literally urinating and defecating on the idea of a constitutional republic that embraces economic liberty as a key component of individual rights and political freedom.

Is Big Government Necessary?

Perhaps Hoover meant to suggest what I heard a liberal once argue when making a case against laissez-faire capitalism: ‘We can’t do away with the welfare state. The poor and the less well-off would riot and destroy civilization.’

I find this attitude ironic, given that as our economy continues to decline — despite nearly a century of government involvement in that economy, up through and including Obama’s near nationalization of our economy — that fear about economic unrest is actually growing, not lessening.

You would think that if Hoover and my liberal conversation opponent were right, that decades of Social Security, Medicare, Fannie Mae, Freddie Mac, EPA, FDA, FCC and all manner of government regulation would have not only made American society more prosperous, but more stable, as well. Nobody can make such a claim today.

Perhaps, back in the 1920s, Hoover could be excused for thinking that government regulation had done less harm than good. But in 2012, government regulation, management, subsidization and even outright control of previously private functions of the economy are the absolute norm. Under the aggressiveness of Obama and the do-nothing Republicans in Congress, that trend has exponentially increased in just the last several years. The government spends trillions of dollars beyond what the private economy produces, creating the largest debt in human history. Yet even today, government still gets most of the credit for everything that goes right, and private enterprise gets all of the blame for anything that goes wrong.

Herbert Hoover was no different from today’s liberals and socialists who claim that government is the solution, not the problem. Hoover, unlike today’s liberals and socialists, tried to make apologies for capitalism and individualism. For example, he wrote, ‘We have, in fact, a special social system of our own [in America] ‘ It abhors autocracy and does not argue with it, but fights it. It is not capitalism, or socialism, or syndicalism, nor a cross breed of them.’

Government Does Not ‘Stabilize’ the Economy

Actually, a dysfunctional crossbreeding of systems is precisely what we have in 2012, and precisely what was underway in America even as long ago as the 1920s. We still have for-profit corporations in America, but they’re heavily regulated, taxed and manipulated by the government to serve political purposes as much as personal, business and customer-oriented purposes.

Obama, unlike even most Democratic presidents before him, makes no secret of his desire to determine which companies are winners and losers, based upon their conformity to his own political and ideological goals. ‘Green’ automobile companies who support environmentalism are ‘in’; the rest are out. Companies that support his plan for socialized medicine are ‘in,’ and are given exemptions from the law. Others are out. Companies that give money only to Republicans are guilty of oppressive speech, subject to campaign finance rules, while companies that are decisively pro-Obama are ‘service-oriented’ and good for the culture. Trillions of dollars of government subsidies to banks and automobile companies have not been used to ‘stabilize’ the economy so much as to ensure that Obama has a grip on deciding the policies of these companies. Obama calls these subsidies ‘successful,’ not because the economy is any better off than it was (it’s not), but because it gives him more power and influence to make these companies do what he wants them to do.

This approach to economics is referred to in textbooks not as capitalism, but as fascism.

Hoover would have approved of Barack Obama’s presidency, at least in principle. The statements of his own book would have required it. Hoover’s vision for American capitalism was that it not be capitalism — but still be called capitalism, only not laissez-faire. His vision for American morality was individualism — individualism that really isn’t individualism, although we must still call it that.

You Cannot Have Capitalism Without Self-Interest

Hoover claims: ‘But no civilization could be built or can endure solely upon the groundwork of unrestrained and unintelligent self-interest.’

But let’s look a little closer: If self-interest is to be restrained, then who is to restrain it? Government officials, of course. But government officials have interests too. Career bureaucrats have an interest in maintaining their jobs, expanding their power and ensuring that their agencies continue to exist. If they don’t regulate, then they’re going to disappear as agencies. If laws have not been broken, then they must dig deeper to find laws that have been broken. It’s in their interest to preserve their power. The same is even more self-evidently true of the career politicians who inhabit and corrupt our Congress on a daily basis.

Corruption in political office existed during Herbert Hoover’s time. He was a Republican, not a New Deal Democrat or a Woodrow Wilson Progressive Democrat. He could have gone along with a small government philosophy, as his fellow Republican and predecessor in office, Calvin Coolidge, did. Yet this is not what he promoted in his book. You can’t blame it on the Depression, either, because the Great Depression was not yet underway when he wrote the book. Was Hoover not intelligent enough to see that government has an interest, as well? Could he not grasp, living (and writing this book) during the economically robust period of the 1920s, that business must persuade its customers to do business, while government enjoys the force of a gun? Isn’t it reasonable to suggest that the ‘self-interest’ of the government official with the gun is far more dangerous than the self-interest of the businessman, even the billionaire businessman, seeking to encourage you to voluntarily buy his product?

Billionaires can lose their fortunes. They can lose their businesses. They have, many times. Billionaires like Donald Trump have lost it all, then gained it back, lost it again, and gained it back yet again. When was the last time you heard of an armed and self-empowered politician losing his power? It only happens through bloody revolution, usually impossible and sometimes not worth it. As for democracy, we have already seen that you can repeatedly switch the parties but the policies remain the same.

Throughout his book, Hoover makes chilling references to ‘the unrestrained control of property’ or the ‘consolidation’ of capital by business owners. He equates ‘class government’ and laissez-faire capitalism as one and the same. He evades the distinction between government, which enjoys the use of force, and private business, which does not.

Back in the 1990s, I argued with another foolish liberal about Microsoft. I told him that the government had no right to prosecute Microsoft unless it was guilty of fraud or the initiation of force. He argued back, ‘Well Microsoft is guilty of force.’ I asked how. He said, ‘Now that Windows is on the market, everyone has come to depend on it. If Microsoft has total control over Windows, then it’s forcing people to pay its price and bend to their ways. That’s not right and the government must step in!’

I counter-argued that Microsoft had created this product, and it was theirs to regulate and price as they saw fit. I reminded him that Microsoft must ultimately please customers and face competition. This argument did not matter, however, because fools like him and his ilk do not consider something valuable to ever be private property. Private property is fine, as private property, if it’s only valuable to you. But if it’s valuable to millions of people, then it essentially becomes something like a public utility; most definitely under the surveillance of the government. This is how we ended up with socialized medicine. Everybody wants and needs medical care. Therefore, we’re told, it’s public property, and the government has a right to take it over.

Continued in tomorrow’s column


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