Freeman

ARTICLE

How Newspeak Changes Plain Words

MAY 01, 1963 by LAWRENCE FERTIG

Mr. Fertig is the author of the book, Prosperity Through Freedom, and economic columnist for Columbia Features, Inc. This article is from his column of February 24, 1963.

In George Orwell’s famous novel, 1984—a frightening account of life under an ironfisted commu­nist tyranny—the historical rec­ord of the past is periodically re­written by the ruling commissars. They order some events com­pletely expunged from history and others radically altered to suit their propaganda objectives. In addition, the meaning of impor­tant words is fundamentally changed under a system of "New­speak." So people come to believe that "war is peace," "freedom is slavery," "ignorance is strength."

This kind of brainwashing can’t happen here, of course—as long as constitutional guarantees of free speech are enforced and eco­nomic power is not concentrated in Washington. But it is interest­ing to note how the Orwellian technique has been adopted even for our times.

The word which New Frontier officials and economists would like to expunge or completely change is the plain, simple word "deficit." If they are successful, will the words "federal deficit" some day be defined in economic textbooks as "fiscal responsibility—a meth­od of achieving prosperity for everyone"?

In my column last November I pointed out the first significant effort toward this planned objec­tive by Professor Emeritus Alvin II. Hansen of Harvard University, who for more than a generation has urged more federal spending and bigger deficits. In an essay published last year he said: "As a nation we Americans firmly be­lieve in the expanding use of credit by families, businesses, and even state and local governments.

But for some strange reason we refuse to view with the same mu­nificence deficit financing by the government."

Hansen adroitly concealed the vast difference between business borrowing and government defi­cits. Corporations borrow to im­prove productive facilities, to pro­duce more and better goods or services, to operate more efficiently and thus (they hope) to make a profit. The government borrows in large measure in order to increase federal payrolls, to grant more subsidies (like farm subsidies), to give more aid to foreign na­tions, or to make armaments like missiles (essential as the last item may be). Business borrowing en­courages economic growth and fu­ture employment and improves everyone’s standard of living. Gov­ernment deficit-borrowing certain­ly does not have this effect. Busi­ness borrowers are subject to the laws of the market. They must earn a financial return on bor­rowed money to remain credit­worthy. The federal government is under no such restriction. Fi­nally, the federal government can repay the loan by printing money. Business officials would go to jail for that.

After Hansen stated the main theme, others quickly followed. A few weeks ago, Walter Heller, chief of the President’s Council of Economic Advisers, deplored the public’s attitude toward defi­cits and ascribed it to our "basic puritan ethic." Plainly this ethic is old-hat, according to him, and encourages "a failure to under­stand" the importance of govern­ment deficits. Another govern­ment official, Budget Director Kermit Gordon, told a Senate com­mittee in January that "a bal­anced budget would lead to in­creased unemployment, higher taxes, and a general economic de­cline." Coming from a man who is supposed to encourage fiscal re­sponsibility such a statement has frightening implications.

It remained for Yale Professor James Tobin, formerly a member of the President’s Council of Eco­nomic Advisers, to make the bold­est statement and the biggest howler. Recently, in an article in the New Republic advocating big government deficits he said: "If you would like the federal deficit to be smaller, the deficits of busi­ness must be bigger."

By "deficits of business" the professor does not mean business losses, the commonly accepted meaning; he means business bor­rowing for productive purposes—a twisted interpretation and a pure exercise in semantics. Also note that he equates wasteful gov­ernment spending for any pur­poses with business borrowing for the more efficient production of goods and services for the public. He equates spending with invest­ment. He does not allow for the fact that if government spending were cut and government deficits eliminated, the burden on business and on the consumer would be less and the chances for economic growth would be greater.

This attempt to change the meaning of a simple word is be­ing thwarted by the common sense of the American public. They know that a deficit is a deficit is a deficit.

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May 1963

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Unfortunately, educating people about phenomena that are counterintuitive, not-so-easy to remember, and suggest our individual lack of human control (for starters) can seem like an uphill battle in the war of ideas. So we sally forth into a kind of wilderness, an economic fairyland. We are myth busters in a world where people crave myths more than reality. Why do they so readily embrace untruth? Primarily because the immediate costs of doing so are so low and the psychic benefits are so high.
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