A Reviewer's Notebook - 1967/6
JUNE 01, 1967 by JOHN CHAMBERLAIN
New Deals Never End
Raymond Moley, who recruited the original Brains Trust for Franklin D. Roosevelt, broke with his boss in 1936 "without rancor or incident" because he feared the "hobgoblin atmosphere" that had developed in New Deal circles. He had learned much, and changed many of his own opinions, in the course of serving a consummate politician who, as he thought, had come to enjoy power too much for its own sake. Now, after thirty years, he tells the story of his four years with FDR in a fascinating and somewhat ambivalent book called The First New Deal (Harcourt, Brace and World, $12.50).
The implication of the title is that there were many subsequent New Deals, most of them comedowns from the one which, as Moley puts it, "saved capitalism in eight days." The Moley history of the first of the Rooseveltian adventures in quarterbacking is marked with what Professor Frank Freidel describes in a foreword as "respect for the facts and… precision in handling details." Moley himself pays tribute to his assistant, Elliot A. Rosen, who spent five years examining Moley’s own papers and those of "many contemporaries in various depositories." After Rosen had completed his work, Moley spent "nearly three years" on his own written account, doing a good deal of additional research. The result, as he says, is a "story," meaning that it is history as it appears to one who played an intimate part in the unfolding of great events.
Ray Moley’s character is complex, and his long life has been spent in the pursuit of truth. To quote Lytton Strachey, he is "no striped frieze, he is shot silk." He grew up in the Western Reserve area of Ohio in the years following the big depression of the nineties, when the ideas of Henry George were percolating in the minds of Moley’s fellow Ohioans, Mayor Tom Johnson of Cleveland, Brand Whitlock, and Newton D. Baker. As part of the Progressive Movement, Moley shared some of its mixed motives, wishing to combine free enterprise with surveillance and control by the state. No trust-buster, Moley was impressed by the thinking in Charles Van Hise’s Concentration and Control, which argued that large corporations were inevitable and "should be controlled at the national level of government." This put him at odds with Justice Brandeis and Felix Frankfurter, and his departure from the Roosevelt entourage in 1936 came at a time when the Frankfurter influence was in the ascendant. The "second New Deal," which featured the TNEC investigations, the attempt to pack the Supreme Court, and the witty fulminations of Thurman Arnold against monopoly, was certainly not to Moley’s taste.
Moderation in All Things
However, as his reflections on the "first New Deal" make plain, he now thinks that the attempt to "control" business at the "national level" can be as pernicious as Brandeisian trust-busting. Moley still defends the early Rooseveltian measures on the pragmatic ground that something had to be done quickly to revive the confidence of a badly shaken nation. Since the object was achieved, the impact of the so-called "hundred days" that followed Roosevelt’s first inauguration was in his opinion good. The trouble, as he now sees it, is that Roosevelt didn’t know when to relax. Politics led FDR to make a whipping boy out of the "economic royalists" during that 1936 campaign. But there was little need for the superheated rhetoric; Roosevelt had his victory in the bag anyway.
Moley denies that the early New Deal was "homogeneous." The idea was to push action "on many fronts" in order to gain a "psychological effect." Some of the measures were designed for relief, some for recovery, and only one or two, such as the TVA, were for reform. The hope was that a climate would be created "in which natural forces would assert themselves." A passive Administration, says Moley, never would have succeeded.
In short, as Thurman Arnold put it in his cynical Folklore of Capitalism, any action was better than no action. Hoover had failed to comprehend this, and so the country turned on him.
To Whom Credit Is Due
Moley’s book is wholly objective when it comes to distributing the credit for the "first New Deal." The closing and opening of the banks was carried out in accordance with a script written by Herbert Hoover’s own Treasury officials, Secretary Ogden Mills, Undersecretary Arthur Ballantine, and acting Comptroller Francis Gloyd Awalt. It was Awalt who determined which banks were solvent, which were insolvent, and which reflected doubt. If Hoover hadn’t waited on Roosevelt to move in the banking crisis, he might have gotten credit for saving the day, for his own officials had shaped all the tools which Roosevelt and his first Secretary of the Treasury William Woodin promptly put into use.
Moley was a Roosevelt agent and emissary in London at the great international economic conference that flopped so badly. His account of the failure shows Roosevelt at his worst. The American delegation was supposed to work out a compromise on international stabilization that would give something to the "gold" countries yet permit American domestic price levels to rise to a point that would save the nation’s debt structure. But, after letting Secretary of State Cordell Hull and British Prime Minister Ramsay MacDonald labor under the illusion that something might come out of the conference, Roosevelt finally decided to throw the "bombshell" that wrecked the whole affair. Roosevelt, says Moley, was in pursuit of "that old phantom, a commodity dollar." While Moley believed, with Roosevelt, that domestic recovery was the more important issue in 1933, he considers that the President’s rejection of a compromise declaration on international monetary stabilization was "unwise, capricious, and, in form and substance, economic nonsense." Ray Moley was not for the commodity dollar.
Nor, as it turns out, was he for a permanent NRA, or for permanent involvement in central planning for agriculture. In the NRA, Administrator Hugh ("Iron Pants") Johnson fell victim of his own optimism. Moley argues that "Roosevelt might best have terminated NRA" and permitted the "old forces of competition," which "despite their often ugly mien are the lifeblood of progress," to take over. Similarly, the AAA idea of crop limitation was not designed for the ages. It had a short-term practical validity in the depressed years of the early thirties. But modern agricultural practices, with new fertilizers, new insecticides, and new machinery, make voluntary crop limitation a will-o’-the-wisp. For that matter, if there had not been the Dust Bowl conditions in the middle thirties, even temporary crop limitation would probably have failed.
The Parting of the Ways
Moley came to reject Roosevelt because he felt the Democratic Party was changing to become an instrument of class war. "I was a conservative by instinct," says Moley. In his early days as a college teacher he believed that the two political parties should represent sharply different philosophies. But after his Washington experience he decided that a blurring of lines could help keep the nation from being torn apart. Originally he had accepted Charles Beard’s theory that the Constitution had been made by and for a selfish propertied class. But after working with congressmen and with departmental administrators he "rediscovered the Constitution as its makers had designed it." He went back to James Madison, who knew that "ambition must be made to counteract ambition." With war brewing in Europe, Moley thought that Roosevelt’s revival of "internationalism" would "shake our constitutional fabric at home and imperil the liberties of our people." This hasn’t happened as yet, but if the cycle of wars continues the U.S. may yet be bled white. Finally, Ray Moley decided that there must be "freedom" for billions of individual decisions in the marketplace. Roosevelt, he came to realize, just didn’t understand modern industry’s need for a "diffusion of decision-making."
So Moley, who had believed in Van Hise’s Concentration and Control, bowed out of the Roosevelt party. The party, as he says, had left him. But there is more to it than that. The truth is that Ray Moley had really learned something by his experiences. The centralizer had become something of a libertarian. FREEMAN readers should arm themselves by taking note of Ray Moley’s intellectual odyssey.
DEEPER THAN YOU THINK by Leonard E. Read (Irvington-on-Hudson, New York: Foundation for Economic Education, Inc., 1967, 208 pp., $2.00 paper; $3.00 cloth).
Reviewed by Alexander Evanoff, Professor of American Studies, Department of English, Indiana State University.
Most libertarians are political economists. Leonard Read has a third interest — Religious Philosophy. Deeper Than You Think opens with a "Prologue" and closes with an "Epilogue" and both are invocations and pleas to Self-Action, Self-Direction. Between the Epilogue and Prologue is a treatment of macro and micro economics, a formula for happiness, a delightful exposition of economics for boys and girls (as useful for me as for the young); a moving exposition on pride. He treats of the origins of power, the origins of knowledge; the limits of political action; the limitations as well as the possibilities of men (Utopia can never come Now because the perfectibility of Men can never come Now); the source of ideas; altruism, self-interest; poverty and impoverishment of the soul; giving and owning (nothing can be given which is not first of all acquired); and the Myth of Federal Aid. His subject is Freedom, Man, God, Government, Politics, Economics, and Teaching. And he is not abashed by the word God and not ashamed to use it. The impetus and drive of the book is to inspirit and to motivate others to self-discovery; there is no propensity to make carbon copy Leonard Read’s.
Mr. Read’s expositions possess both simplicity and profundity. And each exposition is carried down (or up) to first causes. His treatment of economic problems is lucid and uncompromising: "I honestly believe that TVA and mail delivery, for instance, should be turned over to private ownership and operation, that labor unions should be divested of the right to use coercion in any form, that medicare, compulsory social security, and a host of other socialistic programs should be abolished forthwith."
Deeper Than You Think is an impressive collection of ideas which I assume may often be as mystifying to some libertarians as to the occasional welfare-statist who may accidentally encounter them. Leonard Read’s pronouncement that "regardless of pretentions to the contrary, only now and then can a person be found who does not advocate some coercion for a laudable end" is most discreetly and politely intended to apply to libertarians as well as to the something-for-nothing "liberal." The tendency to coercion, though perhaps weaker among libertarians, is surely not entirely absent, and this tendency Leonard Read links to pride and the Golden Intellectual Calf of one’s own creation. Read is attempting to teach the most difficult of all things to teach: the methods of self-growth, self-development, self-evolvement, and many of the corollaries requisite to that end, e.g.: (1) A free market. (2) The freedom of choice on which all growth depends, and the blessed privilege of blundering from which a paternalistic government would altruistically deprive us. (3) The existence of a Divine Source which we must seek to understand and unite with more fully, and on which all depends.
The author understands and would seek to make understandable that all beliefs and all ideas which one may hold are only a measure of one’s own growth and development. "As the Eye is formed so it sees." And a pint measure will never hold a quart no matter how much one pours into it. And it is as useless a proceeding to berate a pint measure for being a pint measure as it is to glory in one’s own capacity for a greater measure, because all "measures" are, in the nature of things, abysmally limited. To glory in one’s own possession of Absolute Truth and the superiority of one’s own Vision is as if the Finite and Limited were to assume it could encompass the Infinite and the Unlimited. The Incomplete is incapable of Ultimates and Absolutes; it is not itself an Absolute or an Ultimate. All men are Incomplete and on their Way, and all their institutions are impermanent and incomplete scaffoldings toward greater and more perfect achievements. Eternal growth, evolution, and development are posited.
In almost a hundred different changes and variations, Leonard Read affirms: (1) That the truth a man holds is a measure of his development. (2) That one can not insert truths where the requisite development does not exist. (3) That if the requisite development does exist one cannot give anything to anyone which the individual does not already possess in some degree. It would appear that the "truth" need only to be spoken to be believed. If the "truth" is not believed or not accepted, then either such a truth is not a truth or a "truth" not presently intended for the individual or nation to whom it is offered. Everything awaits ripeness. Nothing of value can be enforced.
Leonard Read would probably agree with William Blake that it is impossible to the thought of man to conceive a thing greater than itself; and if a man aspires, he aspires to a more perfect realization of the highest in him, and the highest in him is Divine. William Blake has said that "God becomes as Man is in order that Man may become as God is." Deeper Than You Think is a good book; but extremely difficult to review in a short space.