Economic Myths and Public Opinion
Friedman, Milton
The Alternative: An American Spectator • January 1976 • Volume 9, Number 4 Milton Friedman Economic Myths and Public Opinion • (This article has been adapted from a William Arthur Maddox...
...But what happened...
...And yet—or should I say because—in every aspect of private charitable eleemosynary activity, it was a boom period...
...It was factually false that, the Great Depression aside, any significant number of people had become charges of the state because they had failed to provide for their own old age...
...His man was Montaigne, a fellow who withdrew from the world only to view it more clearly, and then only after an extended participation in war, lust, politics, passion, and the rest of that long gauntlet of experiences that makes life interesting, dangerous, and fathomable...
...Let us suppose that instead of government mandating that those be on every car, government had imposed a tax of $1,000 on every new car and had used the proceeds to buy those attachments...
...He called it the Phi)sopher's Disease...
...We are able to live as well as we do because of their achievements and their accomplishments, because of what happened during that period of the nineteenth century...
...The elementary truth is that the Great Depression was produced by government mismanagement...
...I have been making this statement for many years so I am delighted to inform you that a recent study by the Brookings Institution, which can hardly be regarded as biased on my side, has documented the charge in great detail...
...Did people come to this country to be ground under the heels of merciless capitalists...
...Yet that was the argument that was used to sell Social Security...
...The Free Lunch Myth This leads me to my next myth—the myth that government can spend money at nobody's expense...
...It was the rugged individualism that induced the developments in industry, in trade, that offered opportunities for people...
...But they went down because the great fertile areas of the Middle West were being opened up and brought into production...
...A corporate executive may sign the check, but where does he get the money...
...Imposed social norms among men, like toilet training among infants,represent a limited infringement on the individual freedom to "do one's own thing" in order to prevent a greater evil or bigger mess from piling up...
...In the first place, it has nothing to do with social and it has nothing to do with security...
...Purist conservatives and purist libertarians alike are all too likely to smother their ideals with a lethal ardor...
...They came here from the most deprived groups in the old world, from Czechoslovakia, from Germany, from Italy...
...I am reminded of what happened recently when I was at the summit conference that President Ford called in Washington...
...But anything good that happens—who do you suppose produced that...
...But under Social Security, subsidies to people are called benefits...
...Much more fundamentally, the young men from poorer families, the people who are going to be poor in our society, go to work and start paying Social Security taxes at the age of 16 or 17...
...The newspaper story was "Now that Washington has passed a mass transit bill we'll be able to have that bus system" because the money will come from Washington...
...In the great state of California which has one of the most extensive public higher education systems in the country, over 50% of the students at the institutions of higher education come from the top 25% of the families by income...
...It failed to perform this function...
...I was in Florida not long ago, just the week after Congress had passed a mass transit bill providing for billions of dollars to be spent in local communities on mass transit...
...Did they come to this country to make their own conditions worse...
...It was an era in which, except for the Civil War, spending by the federal government never exceeded about 3% of the national income, a sum which is derisory by today's standards when federal government spending is approaching 30% of the national income...
...The Alternative: An American Spectator January 1976 7 presented as if it was typical...
...At the same time, it was a very traumatic episode...
...By contrast with the situation today, however, they were allowed to go broke and fail...
...There is a bestial side of the human character that rises with equal virulence to the summons of Left or Right, Priest or Philosophe...
...In the process of going from 10% to well over 40 % , the myth developed that these expansions in programs occurred in response to an overwhelming public demand, that the government has had to step in because the failure of private markets produced a grass roots demand that government do these things...
...But in the recession, panic, depression, whatever you want to call it, of 1837, many of these government enterprises went broke...
...It was not produced by the failure of private enterprise, it was produced by the failure of government to perform a function which had been widely assigned to it...
...It might be good to have such devices on cars, or it might be bad, but that isn't the question...
...What people mean by inflation is not the rise in their own wages but the rise in the prices other people are charging them...
...What about the other charges...
...But if I get it from other taxpayers, ordinarily I would call it a subsidy...
...There is no program which is so perverse in its distributional effects...
...To give a very simple example: Anybody who buys a new automobile is required to spend something like $500 to $1,000 on items that he would not voluntarily choose, the safety and anti-pollution devices...
...As an economist, I was simply appalled by the level of ignorance of economic matters that was displayed in those history books, by the extent to which the historians were willing to take the cries and the claims of reformers and political agitators for reality...
...Aram Bakshian, Jr...
...I would go a bit further: it will sometimes be twisted beyond recognition or actually crushed to death...
...So, I believe that the generally accepted historical picture of the nineteenth century is an extraordinary myth...
...Take any other program you name and you will find a similar distributional effect...
...In 1914 we had a supposedly great reform...
...I don't blame lem...
...But onetheless, I have a great deal more ympathy for that program than for al-lost any other, because it's about le only one that really contributes people in lower income classes rather than to the people who pay the taxes...
...The reason we had the Great Depression was because government failed in that task...
...We all know that from the 1930s onward there has been an enormous expansion in the scope of government...
...On a very different aspect of this experience, was it a period of heartless monopoly capitalism...
...On the other side of the picture, it is a well-known demographic fact that richer people live longer than poorer people, and so they will receive Social Security "benefits" for more years...
...It was an era of rugged unrestrained individualism...
...Indeed, the absurd interlock system whereby you can't start your car unless you have first mastered the mechanics of the gremlins that the manufacturers built into your seatbelts, led to such a national outrage that Congress repealed it...
...There was a story in the local Florida paper about a proposal to expand bus service, which had been put up to the local voters three years in a row in the form of approval of a bond issue...
...Now, if we were all purely cognitive creatures—if we thought out or could be conditioned (an unlibertarian concept) to think out our problems without acting on the impulses of anger, greed, jealousy, love, whimsy, or even an arbitrary preference for beefsteak over soymeal, this would all make perfect sense...
...It was this experience that in the nineteenth century really set the United States on the road to laissez-faire...
...The pohe Alternative: An American Spectator January 1976 9...
...It was the period of the Carnegie Libraries and their spread through the philanthropy of Andrew Carnegie...
...According to its charter and its objective, the Federal Reserve System was supposed to step in and enable banks to meet demands of their customers by buying bonds on the open market or by providing currency through discounting assets of its member banks...
...But we must compare their level of living not to ours but to the level of living they left in Europe...
...But if between age 65 and 72 he should work, and gets his income from labor, then not only doesn't he get any benefits if he earns more than a modest amount, but he also has to pay additional taxes on the wages he earns...
...We are all in favor of helping the poor provided you and I are defined as the poor...
...But business corporations can't pay any taxes...
...It has demonstrated beyond a shadow of doubt that on the average the effect of Social Security is to redistribute income from lower income groups to middle income groups...
...Until then the depression had been a more or less garden variety recession...
...And, even as Miss Efron kicked the stuffing out of the Tory mentality, she exposed a charming but vulnerable Libertarian Achilles' heel...
...You have everybody yelling and screaming that we ought to have new, bigger, and more generous government programs...
...We would then include that money as part of government spending and it would raise the 40% figure...
...I say "reform" but I would like to put that in quotes because experience shows that not all reforms are improvements...
...Private enterprise has no press agent...
...The poor old sticks are blindered by heir own one-dimensional paper truths," luncombe would chuckle over his randy, "even when they believe they're he freest of spirits...
...What was the actual course of events...
...We stand on their shoulders...
...The list is very short...
...Whatabout the charge that the agricultural community was being ground down, that it was being exploited by the Wall Street bankers...
...Almost every single expansion of governmental activity has had to be sold to the populace at large by misleading advertising that Madison Avenue would blush at...
...Three years in a row it had been turned down...
...8 The Alternative: An American Spectator January 1976 eople who pay taxes, and that's one of le worst programs we have, namely diect welfare...
...It was the period of the founding of the Society for Prevention of Cruelty to Animals, and the spread of foreign missions...
...If it weren't so tragic, it would be amusing to read the annual reports of the Federal Reserve System from its inception...
...It's a payroll tax on wages up to a maximum, the reverse of what is regarded as a graduated tax...
...But we do not...
...A man who has a million dollars income a year from securities will receive his full Social Security benefit after age 65...
...The "unfettered mind" is attached to a fettered being and, if not a soul, at least a series of noncognitive drives and feelings...
...The result was a great outpouring of production which produced a decline in the prices of farm products at the same time that it produced a very rapid rise in the incomes of farmers and induced many people to enter farming...
...Five percent come from the bottom 25...
...People who are going to be in the upper classes or upper middle classes go to college and graduate school...
...I happen to think it's a terrible program, but maybe it's a good thing, maybe I'm wrong on that...
...6 The Alternative: An American Spectator January 1976 established supposedly to prevent what were called banking panics...
...It was Never in history has the ordinary man had as large an increase in his standard of living as in America when unrestrained individualism was most rugged...
...Where are we going to raise the money...
...The Demand for Services Myth Let me come to a third myth: the myth of a demand for government services...
...The Alternative: An American Spectator • January 1976 • Volume 9, Number 4 Milton Friedman Economic Myths and Public Opinion • (This article has been adapted from a William Arthur Maddox Memorial Lecture at Rockford College, given by Mr...
...You will have learned that that was the reason for interest in the greenback political movement, the reason for the development of the Populist sentiment in the Middle West and the South,the reason for that magnificent speech by William Jennings Bryan in 1896 when he asked whether mankind shall be crucified on a cross of gold...
...In other words, the poor fellow at the bottom has been suckered into paying taxes for more years in order to provide better-off people with benefits for more years, and that's what's known as a program of helping the poor at the expense of the rich...
...Call it the darker side of human nature, original sin, or anything else you prefer...
...We have been moving in a direction in which we have an increasingly limited control over our own lives and that movement has been nourished by a series of arguments which, quite simply, are untrue...
...Once again, however, this is a myth...
...That's the myth, and there is hardly any myth, I believe, that is more deeply imbedded in people's attitudes...
...There were many people at the time who were urging on the Federal Reserve System a policy which would have prevented this outcome, including people at the Federal Reserve Bank in New York, within the system...
...I hasten to add that the venerable Ben At the same disdain for hidebound Conervatives who worship an abstract kind f "freedom of our fathers," hopelessly ntangled in a web of ritual hocuspocusand stale rhetoric...
...In the same way, the fact that year after year hundreds of thousands of people left the countries of Europe to come to this country and to make their home here was dramatic evidence that they were coming here to improve their lot and not to worsen it...
...So the only way he can pay money to the government is by imposing a burden on somebody...
...From an economic point of view there is no difference between these two procedures...
...In our Constitution government is given the power to coin money and determine the value thereof...
...And they found it not despite rugged individualism but because of rugged individualism...
...Today, the comparable figure is about 40% of national income, and even that greatly understates government expenditures in a true economic sense, the control over expenditures by government...
...The excesses of Free Thinkers in power—during the Terror in France and the twentieth-century revolution in Mexico, to cite only two examples —were remarkably similar to those of the Inquisition, even, in some cases, down to the torture and burning of victims...
...It includes postal savings, it includes Prohibition...
...The period of unrestrained rugged individualism was a period when the modern type of nonprofit community hospital was first established and developed...
...Every year of recession or depression the Federal Reserve annual report reads, "Despite the best efforts of the Federal Reserve System, events beyond our control...
...If you gave someone a check it would be stamped on the back, "payable only through the clearing house...
...Any student of democracy would say that that was pretty clear evidence that it wasn't something which the populace desired...
...The answer is no...
...This situation did not develop, interestingly enough, out of any philosophical belief in laissez-faire...
...This morning I'm going to deliver a sermon, and my theme comes from Josh Billings, the famous American humorist of the nineteenth century who said, "the trouble with people ain't ignorance, it's what they know that ain't so...
...Aside from the protection of property, though, she urges us to jettison the works...
...Of course, our condition is far better than theirs...
...when ou boil down all the Libertarian fustian bout abolishing moral, ethical, and traitional restraints—all of the socio-reliious dogma of the past—what it comes 3 is the most dogmatic (and self-contraictory) absolute of all: 'Thou shalt ave no Commandments.' Why, Ayn .and and her acolytes might just as well ave graven their words on tablets of tone...
...The only trouble with these beliefs is that they are completely wrong...
...In an absolute sense their level of living was low...
...Maybe government cannot spend money at nobody's expense, but after all, we all know that government spends money to benefit the poor at the expense of the rich...
...I don't know how many of you remember that wonderful description of government by the French economist Frederic Bastiat who said that government is that fiction whereby everybody believes that he can live at the expense -of everybody else...
...Government cannot spend money at nobody's expense, which in turn leads me to my final myth...
...While the nineteenth century was a period of rugged unrestrained individualism, almost every other feature of the myth is false...
...There is no more dramatic way in which people can vote than with their feet...
...If you and I are fools enough to lake it to their advantage to subsist on 'elfare rather than work, they would be )olish not to take advantage of it...
...In admirably stating the case against repressive Conservatism she revealed an almost sentimental Libertarian faith in what she called the "unfettered mind...
...Without going into forbid detail, there were two key sympams: an insanely tenacious clinging to ne-phase answers to multi-phased quesions ("a philosophic mania for skeleton eys," Ben called it), and an inherent inbility or unwillingness to recognize the oncrete consequences that would follow teral application of abstract ideals...
...There was no income tax, no deductibility of contributions, so what people spent on charity came out of their pocket and not, as now, largely out of taxes they would otherwise pay...
...This is a myth that could not be farther from the truth...
...You will find it hard to add very many to that list...
...Far more effective evidence, I believe, than any statistics on per capita real income which show that real income went up decade after decade at a rate of about 2, 21/2, 3% per year...
...I happen to think not...
...It was an era with the closest approximation to pure economic laissez-faire in American history...
...Certainly, the prices of farm products did go down...
...I'm not for the moment talking about that...
...It developed much more simply...
...That's Myth Number One, a myth which has done enormous harm, in my opinion, by leading people not to recognize the true sources of the strength of this country and the true origins of our greatness...
...Since time immemorial, government has been granted the function, wisely or not, of controlling the monetary system...
...Consider the case I mentioned earlier—Social Security...
...Again, maybe Social Security is a good thing...
...It went broke, the public at large got worried about the stability of banks, there were runs on banks, and this led to what was called the banking panic in which the banks of the country suspended the convertibility of their deposits into currency...
...The elementary fact is that almost all government programs are either a complete waste and help nobody, or they benefit the middle and upper middle classes at the expense of both the very poor and the very rich...
...Not a bit, it was a manufactured crusade which produced laws, the results of which most people don't like...
...It's an utter misnomer, it's a program whereby you impose a very bad tax in order to provide very inequitable benefits...
...There is only one element of that myth that is correct...
...Of course, the truth of the matter is that the money makes a round trip between Florida and Washington and there is a discount taken off for cash as it passes through Washington...
...Wall Street was set against the working man...
...There was no objection to doing this...
...Every government agency will inform you that anything bad that happens is the result of forces outside its control...
...The reason for the Great Depression myth is very simple...
...After about two or three months, confidence was restored in the banks, the suspension of convertibility was ended and there were almost no bank failures...
...were infected [and] we corrupt by touching things that in themselves are fair and good...
...Friedman in December 1974, and printed in Rockford College's Widening Horizons...
...Laissez-faire economists objected then as they object now to such tariffs, but in any case the level of the tariff was mild compared to the duties that were imposed later on...
...But since what one man sells another man buys, that's hardly a feasible situation...
...I propose to discuss five myths about American society which are very widely accepted, which have a great deal of influence on public attitudes and public opinions, and yet which in my opinion are wholly false...
...Quite the contrary, it was the period of the greatest private eleemosynary activity in the history of the United States...
...The same gentleman once put he lie to Plato in a single sentence...
...And the answer is that it's well over 40% if we include these mandated expenditures...
...Ever since, I have had rouble taking The Republic quite as seriusly as perhaps I should...
...The great scandal of our times, in my opinion, is government expenditure on higher schooling...
...What was really involved in that story was that somehow the local people do not pay out the money coming down from Washington, somebody else does...
...For an analysis of the weaknesses of the Traditionalist Conservative case, at least at its most extreme, I heartily recommend her "Libertarian Challenge" which appeared in the October 1975 issue of this publication...
...I was very amused by the parade of special interests who came up to the platform, and one after another said, "It is absolutely essential that we cut the government budget to beat inflation...
...One-third of all the banks in the United States were permitted to fail...
...But the failure of the Bank of the United States set off runs on banks...
...It was sold to the public under false pretenses and has since been expanded under similar false pretenses year after year by people who are in the business of selling government programs to the country...
...Now tell me, is an involuntary payment a contribution...
...Nader ran a crusade a few years ago that cars were unsafe and that we ought to have an all-wise government agency step in and protect ourselves from ourselves, require us to fasten the seat belts, require us to have safety devices on the car, etc...
...Even in 1932 and 1933 you have such statements in the Federal Reserve Board's annual report...
...The immediate occasion was the banking panic of 1907, when the Knickerbocker Trust Company went broke, like the Franklin National Bank, except that unlike the Franklin National Bank, tax money was not used to bail it out...
...It was an era in which there was, for most of it, no ICC, no FCC, no SEC, and you pick out any other three letters of the alphabet and it wasn't there either...
...In the 1830s, state governments throughout the country proceeded to engage in what we would call socialist enterprises...
...You will have learned from the standard history book that the farmers in the Middle West were being ground between the millstone of falling prices for the products they sold and higher prices for the products they purchased...
...The first myth that I want to talk about is what you might call the robber baron myth...
...The business of organized society—the only reason why man, from the beginning, has always tolerated the imposition of some degree of societal control, has been based on the common sense, consensus recognition of this fundamental problem...
...If you buy an insurance policy or a retirement annuity or a pension, and you ultimately get your pension, well that's a benefit, you paid for it...
...This was a country of hope and of promise for immigrants and their children, and as many as a million immigrants a year came in 190607-08...
...Unlike the federal government, he doesn't have a printing press in his basement...
...That was a period when we had completely unrestricted immigration, when anybody could come to these shores and the motto on the Statue of Liberty had some real meaning...
...If agriculture was in a bad state and being exploited, you would expect the price of farm land to go down, but the price of farm land went up rapidly...
...In 1929, just prior to the Great Depression, total government expenditures at all levels, federal, state, and local, were about 10% of the national income...
...Spock, Edith Efron, or anyone else may sensibly argue about the degree of imposed control justified in either case—but the need for some degree of imposed control is self- evident...
...As a connoisseur of governmental intervention, I have tried to accumulate over the course of years the number of occasions on which a governmental intervention has been eliminated...
...Tax business...
...The facts are, first of all, that the tax which finances Social Security is the most regressive tax in our tax system...
...They built canals, they set up commercial banks and extensive banking systems, they financed railroads, they put up industries...
...It was the biggest bank that had ever failed in the United States up to that time...
...And, looking around us, it certainly shows no sign of abating today...
...Everybody would like to see the price of the things he sells go up, and the price of things he buys go down...
...It was a period when about the only interference with what people could do, aside from the taxes that were being imposed to finance a small armed force, courts, legislatures, and the like, consisted of a protective tariff on imports...
...That surely was not a case where there was a grass root demand...
...The question is what is the fraction of the national output whose use and allocation is determined through the political mechanism rather than through the decisions of individuals deciding separately how they want to spend their own money...
...When I want to be demagogic, I say that's a system under which the people in Watts send the children from Beverly Hills to college...
...Let me give you another simple example...
...Government does...
...Let me give a very much simpler and more recent example, which I have already referred to—the safety and antipollution provisions for automobiles...
...Buncombe had an odd but plausible exlanation for it all...
...For every one hundred dollars of currency or deposits that people owned in 1929, there were 67 dollars available in 1933...
...That we needed to have a greenback movement and a Populist movement and a William Jennings Bryan...
...On the contrary, it allowed the runs to develop and banks to fail, until finally in March 1933 there was an absolutely unprecedented catastrophe in which all banks of the United States were closed for a week, including the Federal Reserve Banks which had been set up to prevent such anoutcome but instead ended up by producing by far the worst and the most disastrous panic in American economic history...
...they don't start paying Social Security taxes until age 24, 25, or 26...
...The situation of the Great Depression when people became charges of the state because of the state's mismanagement of the money was The elementary truth is that the Great Depression was produced, not by the failure of private enterprise, but by government mismanagement...
...The people who were in the Greenback and the Populist movement were saying, "we want to do still better," but the historians tended to take their exaggerated objections for reality...
...This potential for cruelty, for intolerance (whether of belief or disbelief) and for violence seems, on the basis of human experience, to lie within every society and every individual...
...But the tax that you and your employer pay under Social Security is labeled a contribution...
...We find the same inconsistency today when people talk about inflation...
...Every year which is a year of prosperity and of good times, the Federal Reserve report says, "Thanks to the wise and farsighted policy of the Federal Reserve, the United States had a good year...
...In response to the panic of 1907 there was a Congressional investigation, and the Federal Reserve System went into operation in 1914 to prevent any such development in the future...
...Again, was there a grass roots demand for government to step in on that area...
...It includes the repeal of the provision for compulsory interlock...
...I must say, it seems to me disgraceful for so many people to denigrate the experience of their parents, when that experience has made it possible for them to live in a free society at their present high level...
...therefore, it does not...
...In this particular case the great "reform" was the establishment of the Federal Reserve System, the establishment of a central banking system...
...From 1929 to 1933 the quantity of money in the United States fell by one-third...
...The populace has had to be brought kicking and screaming to approve them...
...The fact that East Germany had to build a wall to keep people from going from East Germany to West Germany is dramatic evidence in which country the conditions of life were better...
...I will tell you how to cut the government budget: spend more on me...
...They came here with empty hands...
...All of this is documented in great detail in that book I mentioned earlier, A Monetary History of the United States...
...Far from being a period in which the poor were being ground under the heels of the rich, exploited unmercifully and the like, there is probably no period in human history in this or any other country in which the ordinary simple man had as large an increase in his standard of living as in the period between the Civil War and the First World War, the period when unrestrained individualism was most rugged...
...Spock has nothing further to contribute to this discussion, Miss Efron does...
...it has always been there...
...It's either from his stockholders or from his customers or from his employees...
...That proposition would itself be the subject matter for a longer talk than I have so far given, so I only want to illustrate it with a few examples to show you that it is not entirely a demagogic statement but has some backing...
...I don't believe people realize how extraordinary an episode that is...
...I'm here concerned with the myth...
...So much for economic development...
...That was done in order to prevent banks from failing...
...The myth was spread by the reformers, the muckrakers of the early twentieth century, by the intellectuals who contributed to the drastic change that has occurred in our attitude toward the market on one hand and government on the other, which has in turn produced such a drastic change in the character of our society in the past forty or fifty years...
...At any rate, the important point is that far from being evidence of a defect in the private enterprise system, the Great Depression is evidence of the deficiency of governmental arrangements to manage the economy...
...And that was the case in the nineteenth century...
...From 1929 to 1933, far from preventing bank failures and bank collapse, the Federal Reserve System actually produced them...
...I could go on and on along this line, but I conclude by urging you to be a little bit more skeptical of some of these myths that are going around, to be skeptical of the myth of the robber baron, the myth of the Great Depression, the myth that there is an underlying demand for government services, the myth that government can spend money at nobody's expense, and the myth that government has benefited the poor at the expense of the rich...
...Once again, the evidence against that is very simple and very clear...
...Much more fundamentally, the program was sold to the American people under essentially false pretenses, on the ground that the ordinary people were so shiftless, so little concerned with their own future that unless they were compelled by government to contribute to a fund and paid a pension afterwards, they would all become charges of the state...
...Take away all religious, traditional, and social "fetters" on our minds, according to Miss Efron's optimistic brand of Libertarianism, and all will be well, or at least better...
...It's a bad program not beause it gives money to the poor but beause it produces poor people, because it ncourages people to be on welfare in-read of being on wages...
...Output was growing rapidly, the cost of producing farm crops was going down thanks to great technological innovation in the form of reapers and other agricultural machinery, and the cost of transportation was falling...
...It was the period when so many colleges were founded throughout the country...
...In the first place, if agriculture was being especially exploited, you would expect the number of people on farms to go down, but the number of people on farms rose by leaps and bounds during the period...
...They turned out to be inefficient in the same sense in which all government enterprises have been inefficient from that day to this...
...Banks continued to operate but you could not walk into a bank, give it a check, and have it give you currency—at that time gold or greenbacks or national bank notes...
...There is only one program I know which probably gives more money to people in lower income classes than to the Unless they help nobody, most government programs benefit the middle and upper middle classes at the expense of both the very poor and the very rich...
...In 1930 on December 11, the Bank of the United States failed...
...We may so seize on virtue, that if we embrace it with an over-greedy and violent desire, it may become vicious...
...this was a great era of government enterprise...
...Years ago I wrote a book with a collaborator on the monetary history of the United States, and in the course of writing it I read agreat many of the general histories of the nineteenth century...
...That is a widespread myth, that somehow or other it is possible to spend money with nobody paying for it...
...Did Social Security reflect a grass roots demand for services...
...Anyone who has ever had the least Jimpse of the malice, pettiness, and ca;als roiling in the average university phi)sophy department should thank God hat there never has been, and probably Lever shall be, such a thing as a nation of .hilosophers...
...The Myth of the Great Depression The second myth is the Great Depression myth, the myth that that decade-long catastrophe—at the worst of which, in 1932 and 1933, 25% of the labor force was unemployed—reflected the failure of private enterprise...
...Wherever you name it, it was the poor and the miserable who flocked here and they found here a home and the opportunity to improve their lot...
...Everybody, of course, always wants to improve his lot...
...It is a myth which is promoted because, of course, everybody wants to do things for good purposes...
...The Philosopher's Disease • I believe it was the late Ben Buncombe, hat worldly-wise old British journalist, vho once remarked that the only place ,ne is likely to find the Philosopher's tone is in the gallbladder of a bilious 'edant...
...By 1914 roughly' a third of the population of the United States was foreign-born or the immediate descendants of foreign-born...
...although she attaches a codicile to this mental Emancipation Proclamation: to wit, legal protection of most accumulated capital gains...
...In your courses in history—ordinary political history, to a lesser extent even in courses on economic history—you will have learned that the nineteenth century in the United States was an era of rugged, unrestrained individualism in which heartless monopoly capitalists exploited the poor unmercifully, ground the helpless under their heels, and profited at the expense of the rest of the community...
...The benefits are related hardly at all to the amount of taxes anybody has paid and in any event are to a large extent inequitable...
...While Dr...
...Take the Libertarins_ think about it for a moment...
...Somehow people believe that the Great Depression occurred because private enterprise could not organize society properly, that it was necessary for government to step in in order to save society, that the New Deal and all that followed was a necessary corrective to the mistakes and disasters produced by the deficiencies of private enterprise and unbridled competition...
...That's a program that is widely regarded as helping the poor at the expense of the middle and upper income classes...
...This was easily preventable and I can say that not merely from hindsight...
...The evidence of this is to be found in the statistics that economists have constructed of what was happening to national income, but it is documented in a much more dramatic way by the numbers of people who came to the United States during that The Alternative: An American Spectator January 1976 5 period...
...Let me give you the greatest sacred cow of them all, Social Security...
...There remain the weaknesses of Doctrinaire Libertarianism...
...With Montaigne, Buncombe warned that it is "as if our sense of feeling...
...That meant it could be deposited to his account at another bank but it would not be honored for currency unless he were a regular customer at the bank who had been accustomed to getting currency for payroll purposes...
...In the Orwellian language that is used to sell Social Security, what you and I would call taxes are called contributions...
...The rich got richer and the poor got poorer...
Vol. 9 • January 1976 • No. 4
