We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

Samizdata quote of the day

In the United States, as elsewhere, groups plotted to better themselves without consideration for others or the nation as a whole. They were encouraged by an aggregation of incongruous theories called the New Deal, which put the nation $40,000,000into debt and in some departments degenerated into a money-oiled machine for keeping politicians in power. Chiselling public funds, once the prerogative of politicians, became the aim of millions. The formula that citizens must not starve in a land of plenty became for many a means of living off the government rather than by the sweat of the brow.

– Upton Close (Josef Washington Hall): “1930-40: Decade of Deceit”

10 comments to Samizdata quote of the day

  • JohnB

    It seems to me that the various “progressive” economic policies, while masquerading as policies to bring benefit and well-being to the common folk, or those that don’t want to work too hard (wink, wink) are actually all about channelling wealth from the masses to the elites.

    That is, these policies are actually about reinforcing the financial/political aristocracy and ultimately the impoverishment of the ‘common man’.

  • Paul Marks

    John that is often argued – and by some very intelligent people.

    In monetary policy is may be true – after all if government wanted to just print money and hand it out to “the masses” it could. I would NOT support such a policy – but government could do that.

    The fact that (now just as much as in the 1930s – and 1920s, do not forget the antics of Ben Strong of the New York Federal Reseve, the antics that created the great boom-bust in the first place) they choose to introduce the “monetary stimulus” via the BANKING SYSTEM speaks volumes.

    Doing that way is to enfich elites – it was when Richard Cantillion (the partner of John Law in “legal” crime) explained the process in the 1700 (i.e. who even after the boom-bust has panned out some people are left richer than they otherwise would have been and some people are left poorer than they otherwise would have been – and GUESS WHO in each case).

    However, for FISCAL policy I do NOT think your case is valid.

    When Franklin Roosevelt pushed up taxes and spent the money on welfare and “public works” I do not think the idea in his mind (or the mind of anyone else) was “this will enrich elites”.

    The fiscal policy (although utterly wrong headed) was also sincere – they were trying to do what they said they were trying to do.

    “But they were crooks”.

    That would still not prove the policy was for the benefit of an elite (just that they were stealing some money on the side).

    And they were NOT all croooks.

    The WPA was run by crooks (although that did not stop MOST of the money being spent on exactly what they said it was spent on), but the PWA was run by an honest man.

    From an economic point of view this makes little difference – but history should be got right.

    It is also a bit disturbing that when the left (the media, the academics, and so on) say they want a big public works projects they always say they want a return to the “WPA” (not the PWA).

    So you want the corrupt agency back?

    Also another historical point should be kept in mind.

    Franklin Roosevelt may have been the first President to use the term “New Deal” (although the term was invented by a hardcore collectivist who worked for the Administration – the person who later wrote a book on “System X”). But the policies were actually started by HERBERT HOOVER.

    Herbert “The Forgotten Progressive” Hoover increased taxes (not just taxes on imports, which even establishment economists denounce, but also INCOME TAXES ON THE RICH) and created many of the programs for which the New Dealers later became famous.

    The New Dealers just renamed the agencies and expanded their budgets.

    Roosevelt denounced Hoover as a socialist in the 1932 election, and promised to cut taxes and balance the budget (i.e. roll back government spending).

    But then he……

    “But it worked”.

    No it did not – the Hoover-Roosevelt regime made the bust of 1929 the first credit bubble bust that lasted for ten years.

    “But it worked in World War II”.

    Partly a misunderstanding based on treating war time statistics as if they were real (see Robert Higgs on this).

    However, there is an elment of truth in the fictional story of the World War II “recovery” – unemployment did fall.

    Partly by conscription, and partly by other DISGUISED WAGE CUTTING.

    Not just conscription – but in the civilian sector.

    Wages were controlled (in various ways), but prices (REAL prices – so called “black market” prices) dramatically increased.

    So real wage rates were massively hit during World War II (looking a real, so called “black market”, prices).

    And unemployment was defeated.

    Just as the Nazis had defeated it in the 1930s – prices up, real wages rates not up.

    Not exactly what Keynesians (at least in public) suggest as a way of defeating unemployment.

    Herbert Hoover had been desperate to PREVENT real wages falling in the face of the 1929 crash (he believed in the “demand” ideology). – Hoover managed to prevent wage rates falling in the face of the crash (the first President to act in this way). Unemployment want UP to 25% – and the elite just assumed that Hoover had been too “reactionary” (not too “Progressive”).

    Keynesians do talk about the “money illusion” (i.e. the idea that if people see their money wages rising they do not mind that their real wages are falling) – but, in real life, people are not so stupid.

    There are two altertatives to a free market (the sort of free market action that produced the temporary wage cuts in the face of 1921 crash).

    The first is to have a rigged labour market with government backed union power and so on – i.e. the mass unemployment of the 1930s.

    Or one can have government controlled wages (either openly – or by the back door).

    Like Nazi Germany in the 1930s or the United States during World War II.

    “But Keynes would not have supported this”.

    Would he not?

    Read the introduction of the German edition of Keynes’ “General Theory”.

    Keynes seems to be quite comfortable with totalitarian state control.

    For more on Keynes (the person and the “economist”) see Hunter-Lewis “Where Keynes Went Wrong”.

  • JohnB

    Yes, wartime labour approaches slave labour in economic terms.

    Yes, I am sure Keynes was an elitist who had no problem with extreme control where, as he might see it, it was needed.

    Keynesians do talk about the “money illusion” (i.e. the idea that if people see their money wages rising they do not mind that their real wages are falling) – but, in real life, people are not so stupid.

    I fear people ARE that stupid when they are led to believe their interests are served by being stupid.

    Taxes were increased on the rich – yes – the middle rich. The mega rich don’t worry tooo much about taxes as they work in a different league?

    I agree that Roosevelt was unlikely to think: ‘this will enrich the elites’. It would have been a bit more subtle than that.
    Similarly I doubt he exactly thought the Japanese must bomb Pearl Harbour so we can get stuck into the destruction of the old empires. But somewhere it lurked.

    The New Deal did steal most of the gold in private hands in the US.

  • Paul Marks

    No John.

    Some of the richest men in America paid a higher percentage of the income in the 1930s than in the 1920s.

    Nor was Japan an old Empire – it grow up from 1895, and had an aggressive NEW ideology (in many ways just a copy of Italian Fascism – but far more militant).

    Conflict with the new Empire of Japan was inevitable – regardless of who the President was.

    And it certainly was not for the benefit of a rich elite in the United States.

    The real interesting thing about the war with the Japanese Empire was that President Roosevelt did NOT concentrate upon it.

    Japan had attacked the United States, Germany had not.

    Yet Roosevelt concentrated American miltary resources on fighting Germany (leaving the forces in the Pacific with just a show string budget).

    Another President might have decided to concentrate on Japan – making Germany a lesser priority.

    There IS a political angle there.

    The New Dealers (or many of them anyway) were pro Soviet.

    Japan was not fighting Soviet Russia – Germany was.

    So, to the New Dealers, the fight against Germany was more important.

  • JohnB

    Harry Elmer Barnes(Link):

    But it was also agreed that Roosevelt would give a harsh warning to the Japanese ambassador in Washington, Admiral Nomura, which would stiffen the chauvinist groups in Tokyo. Accordingly, after Roosevelt returned from Newfoundland, he summoned Nomura on August 17 and gave him what Secretary Stimson and Army and Navy officials correctly described as virtually an ultimatum to Japan.

    Despite this, Japan veritably crawled on its diplomatic belly from the end of August 1941, until after the middle of November of that year in an attempt to reach some workable understanding with the United States. The effort met with cold and hostile rebuffs. The rejection of the earnest pleas of Prime Minister Konoye for a meeting with Roosevelt is well known. Not so well known is the fact that the United States had rejected two previous proposals of the Japanese to meet with high American officials at some designated spot, the last previous one being in 1939, at the crucial moment when Germany was seeking to force Japan into a military alliance.

    . . . instead of immediately sending General Short a warning message by scrambler telephone, which would have reached Short safely in a matter of minutes, he not only failed to do so, but even declined Stark’s offer of the use of the speedy naval transmitter . .

    . . .Just why Marshall and Stark failed to warn Short and Kimmel has never been satisfactorily explained. Marshall has said that he failed to telephone a warning message for fear that the Japanese might intercept it and embarrass the State Department. If they had intercepted such a message the only immediate conceivable result would have been that the Japanese might have called off the attack, since it could not then have been a surprise, or that our forces would have been better prepared to resist the onslaught.

    By “the old empires”, I was also meaning the ones in Europe.

  • Paul Marks

    John I apologise for my mistake about “old Empires”.

    However, you are making the mistake a lot of people make – assuming there was stable civilian government in Japan in 1941.

    There really was not – and had not been for years. Civilian ministers were often cut to pieces (and I mean “cut to pieces” literally).

    There were various different miliary factions – all of which were expansionist.

    And what the Japanese F.O. said did not really matter – not at all.

    The main faction opposed to war with the West was the so called “Northern” faction (they favoured expansion at the expense of the Soviet Union).

    However, the Northern faction had been discredited by their poor performance when the Soviets launched a cross border attack into Manchuria in August 1939 (yes AUGUST – i.e. before the German attack on Poland in September).

    The Northern faction just had nothing that could stand up to the massed tanks of the Red Army on the plains of Asia.

    This was shown (with terrible effect) when the Soviets next attacked – August 1945, they crushed the Japanese army as if it hardly existed (it was more like live firing practice than a series of battles). The Japanese could only die – they could not even slow the Red Army down.

    Hence the Japanese surrendered en mass (Banzi charges, waving swords, having proved ineffective against T34s). More generally Japanese tactics assume a static or slow moving enemy – an enemy that was moving at very high speed (and was made up of people who were at least as blood thirsty as they were) was something the Japanese simply could not cope with.

    The Japanese may have been terrifying to civilized people(such as the British forces they faced in 1941-2), but the Soviets were not terrified (raping nurses and mutilating the wounded were what they did to – so they were not shocked by such tactics).

    In the Red Army if you did not fight (to the death) your own side would kill you (if you were lucky) so the Japanese did not present the same “shock” that they did to the British and so on.

    As for the New Dealers…

    OF COURSE some of them wanted to provoke war with Japan (to find a way to come openly into World War II – in order to help the Soviets).

    But war would have come anyway.

    Japan was an expansionist military regime.

    War was bound to come – sooner or later.

  • Paul Marks

    By the way, I still think the Japanese “Northern Faction” was correct.

    An all out attack on the Soviet Union (not the Western powers) was the correct move in 1941 – in spite of everyting I say above.

    This was because the war with the Germans was very tight – without the million man Siberian Army it is doubtful whether the Soviets could have won.

    Had the Japanese managed to “pin” these fores (by launching a total, if suicidal, attack upon them) the Germans might well have destroyed the Soviet Union.

    The Germans did not have the manpower to control the Soviet Union east of the Ural mountains.

    So the vast resources of Siberia would have fallen to the Japanese.

  • Paul Marks

    Was General Marshall a traitor?

    Unproven – either way.

    But most of his civilian advisers certainly were traitors.

    See “Blacklisted By History: The untold story of Senator Joe McCarthy and his fight against America’s enemies” by M. Stanton Evans.

    Most of the civilian advisers to Marshall (on Asian matters) were agents of influence for the NKVD.

    Of course the Soviets had a network of agents in Japan also – and in China.

    The aim of Soviet policy was first to get Japan and China to fight, and then to turn the Japanese against the (outraged) West. Americans (and others) were actually fighting the Japanese in China in the 1930s (for example the Wild Tigers pilots). The situation between the United States and Japan in the 1930s is like that between the North and South in the 1850s – officially peace, but “Bleeding Kansas” is going on (even without Lincoln there would have been war – because they were ALREADY KILLING EACH OTHER).

    There could be no deals with the people responsible for such things as the “Rape of Nanking” and the Soviets knew it. The Japanese in top hats and tails (the F.O.) were simply not relevant – so it did not matter (to anyone) what they said.

    The militarist factions in Japan (whilst screaming their anTI Communism) played into Soviet hands – and may well have been manipulated by them.

  • Eurymachus

    Paul, this all touches on something I have often wondered about the diplomatic policy of America during the war, especially under Roosevelt.

    Their policy has always seemed to me to be ridiculously weak, even craven towards the Soviet Union. It has always puzzled me to what US policy was guided by naivety, ideological sympathy, pure treason (doubtless in some personal cases at least) or other factors. Perhaps as a stick with which to beat Churchill, who took a significantly harder line. Or was it merely an understanding of the military realities of the war, where the Soviets held something like a 4-1 advantage over the Western Allies.

  • Alisa


    When Franklin Roosevelt pushed up taxes and spent the money on welfare and “public works” I do not think the idea in his mind (or the mind of anyone else) was “this will enrich elites”.

    The fiscal policy (although utterly wrong headed) was also sincere – they were trying to do what they said they were trying to do.

    I do not know specifically about FDR, but a plausible case could be made that these policies were not truly intended for the benefit of the masses either – rather, they were intended to make those masses dependent on those policies. In other words, they were created to buy votes. On the other hands, these two possibilities are not mutually exclusive.