“The genuine history of mankind,” as Ludwig von Mises wrote, “is the history of ideas.” In this sense, history is made, although it is not planned, by men and by their ideas. We can see the power of ideas by studying history. Just as water can in time wear away rock, so too may an idea whose time has come erode the rock of public opinion and change the course of history. For instance: the concepts of the eighteenth-century Enlightenment—individual rights, private property, religious freedom, and limited government—sparked an “industrial revolution” and reduced absolute monarchs to figureheads; socialist, Communist, and fascist ideas produced the totalitarian states and the world wars of the twentieth century; political propaganda catering to the fears and hopes of people persuaded the voters in the 1930s to welcome Roosevelt’s New Deal and Hitler’s national socialism; and the widespread belief that government spending and inflation are needed for the economy to prosper has produced today’s “welfare states.”
But ideas, and with them the climate of opinion, are constantly changing. There are signs today that people are beginning to reject some aspects of the “welfare state” and to look outside government for solutions to problems. Time and again, political “ins” are voted out. Cuts in government spending and privatization are now being discussed in the halls of Congress; and private enterprise and entrepreneurship are being studied on college campuses. Do these events portend a widespread ideological shift toward freedom and limited government, with more recognition of individual rights, private property, religious freedom? Only time will tell.
When the Foundation for Economic Education (FEE) was established in 1946, World War II had just ended. Discussion of military matters had, of course, been strictly prohibited during the war, and even criticism of government was considered unpatriotic. The majority of the people in the United States at that time undoubtedly believed that President Franklin Delano Roosevelt had rescued the nation from a serious depression and had been responsible for our victory in a war that destroyed the foreign “devil,” Adolf Hitler. A few organizations founded in opposition to the New Deal survived, but, generally speaking, criticism of government was not in fashion.
Most organizations that want to bring about ideological change try to influence the masses, to change votes and politicians at the next election. But FEE was different. Through Henry Hazlitt, Leonard Read had encountered the Austrian economist Ludwig von Mises, who stressed the importance of ideas and the power of ideology. Thus, FEE looked beyond the next election; it hoped to bring about a more lasting change in people’s ideas and attitudes.
When FEE was founded, most people in this country believed that government planning was necessary to recover from the war, that economic prosperity depended on government spending and inflation, and that government should provide a “safety net” to protect people from the effects of hunger, poverty, and old age. The ideas on which we act come from many sources—family, school, church, workplace, friends, colleagues, and books.
The final spark that ignited Read’s interest in promoting the freedom idea had come from California businessman W. C. Mullendore. However, the freedom philosophy itself has a broad base; it is built on the principles of classical liberalism as developed by thinkers over the ages, and as they are still being developed today by philosophers, scholars, historians, economists, and others who ponder the problem.
Foremost among the thinkers on whose theories and writings FEE has depended is the Austrian-born free market economist Dr. Ludwig von Mises. Mises was one of the first persons Henry Hazlitt introduced to Read when he was making plans to establish the Foundation. Mises already had a well-deserved reputation in economic circles in Europe as a scholar, as an outspoken advocate of capitalism, and also as a critic of government intervention. It is not surprising, therefore, that Read asked Mises to serve as FEE’s economic adviser. Mises was never a regular member of FEE’s staff, but he visited FEE regularly, lectured at seminars, and wrote articles for FEE. One draft of Mises’ magnum opus, Human Action: An Economic Treatise, was typed on FEE’s premises by FEE secretaries. When Yale University Press published it in 1949, FEE distributed copies to college and university libraries throughout the country. Mises’ teachings on economics, market operations, monetary theory, the role of government, the importance of private property, and the dangers of socialism, communism, and interventionism pervade all FEE’s efforts.
Henry Hazlitt was one of the Foundation’s founding trustees. Although he was never on FEE’s staff, his ideas and his writings have been FEE staples from the very beginning. Hazlitt’s powerful little Economics in One Lesson, first published in 1946, has been, and still is, one of the best easy-to-read introductions to economic thinking. It has had wide appeal; Reader’s Digest published two separate chapters before the book was published, and it has been translated into twelve different languages. FEE still sells several thousand copies every year.
Promoting the Freedom Philosophy
Read used to say “You can’t sell freedom like soap.” In trying to promote the freedom philosophy, he refused to try to reach the masses; he rejected the use of flashy advertisements or radio “sound bites”—TV had barely been born in 1946. To change opinions long-range, not simply in time for the next election, to effect a turnabout in thinking, FEE wanted to reach people interested in ideas—intellectuals, teachers, writers, and anyone else who could help to spread the freedom philosophy. FEE began publishing books, pamphlets, and articles; holding seminars; and giving lectures. FEE’s writers, of course, criticized the New Deal/Fair Deal “welfare state” philosophy of the day. But they did more; they also presented the positive free-market alternative.
In FEE’s view, there is good and bad in everyone. Most people recognize the advantages of voluntary cooperation and want to cooperate, to get along and live at peace with others. Thus the market itself, a product of voluntary cooperation, tends to bring out the good, the moral, the best in people. On the other hand, government controls and regulations help some, hurt others, cause conflicts, and thus inevitably tend to bring out the worst in people.
Government should not interfere in the economy; it should not play favorites; it should protect everyone equally against aggression, domestic and foreign. Period. That is all! The New Deal/Fair Deal programs obviously interfered. Moreover, they didn’t accomplish what their proponents intended; price and wage controls led to shortages and agricultural subsidies to surpluses. As Mises stated, government interference with the market not only fails to accomplish the ends aimed at but “makes conditions worse, not better,” even from the point of view of the government and those backing its interference.
FEE explained that the solution for almost any problem was to get government off people’s backs. Free men and women could solve their own problems better than any government planner or bureaucrat. Individuals must assume responsibility for themselves and their families and stop looking to government for help. Only then would they be free to pursue their personal goals in peace. “Anything that’s peaceful” became Read’s mantra.
FEE gradually began to build up a mailing list of persons to whom it sent, free of charge, one-page easy-to-read “Clippings of Note” and small pamphlets. Each commented on some current event. They raised questions. They made people think!
The Foundation also published longer studies, more serious booklets including “Roofs or Ceilings?” by two future Nobel laureates, Milton Friedman and George Stigler, “No Vacancies” by Bertrand de Jouvenel, Fiat Money Inflation in France by Andrew Dickson White, Planned Chaos by Ludwig von Mises, Why Kill the Goose? by Sherman Rogers, Will Dollars Save the World? and Illusions of Point Four by Henry Hazlitt, Industry-Wide Bargaining by Leo Wolman, Liberty: A Path to Its Recovery by F. A. Harper, and The TVA Idea by Dean Russell.
The Foundation’s tracts attacked some of the government’s most “sacred cows.” And they were effective.
The National Association of Real Estate Boards reprinted and distributed to its members nationwide many thousands of copies of “Roofs or Ceilings?”
In February 1949, Reader’s Digest (distribution then 4.5 million in the U.S. alone) reprinted FEE’s “No Vacancies” by Bertrand de Jouvenel.
FEE Investigated and Criticized
Like a burr under a horse’s saddle, FEE’s critiques of government programs festered and irritated some politicians. In the spring of 1950, the House of Representatives set up a Select Committee for Lobbying Activities. Its objective was to investigate “all lobbying activities.” In actual fact, it spent most of its time examining a few “conservative” organizations, including the Foundation. Were they pressuring Congressmen on behalf of their “conservative” agenda? Were they lobbying in the guise of engaging in “educational” activities? Should they be registered as lobbyists? And who was paying for their attacks on public housing? Rent control? Farm price supports? TVA? Foreign aid? Labor unions?
The Committee asked to see the Foundation’s financial records and Mr. Read finally decided to open FEE’s files. Four Committee staffers spent about a week in Irvington going through FEE’s records.
Mr. Read testified before the Committee on FEE’s role as an educational organization:
The Foundation is not, I believe, charged by you with lobbying or with violation of the existing act. Rather, the thought is that activities such as those carried on by the Foundation, while not being regarded as lobbying as that action is commonly construed, may, nonetheless, have as much or more influence on legislation than those actions popularly thought of as lobbying. It has been said that our activities are in the “fringe” zone of lobbying, implying that these “fringes” might be included in any new lobbying act. That, as I understand it, is why your Committee investigated the Foundation, and why I am here.
The organization which I represent is a non-profit research and educational institution. Its sole purpose is a search for truth in economics, political science and related subjects. It is that, and nothing more—an institution for learning. I doubt that any college or university or other institution of learning in this country is more genuinely, and with any more uncompromising honesty, dedicated to the search for truth in these matters than is the Foundation. . . .”
Syndicated columnist Drew Pearson called the Foundation “A mysterious organization, . . . a vigorous lobby aimed at wrecking the European Recovery Program [that] has been flooding the country with propaganda aimed at undermining the Marshall Plan, rent control, aid to education and social security.”
One radio commentator called FEE “one of the biggest and best financed pressure outfits in America. . . . It is the fountainhead for half-truths and distortions, designed to deceive the American public for the benefit of the outfits who are behind this thing.” The next day the same commentator said: “The Foundation for Economic Education is a vicious anti-labor propaganda outfit. It spreads its venom in order to crush organized labor and, if possible, to crush Farm Bureau cooperatives as a secondary objective.”
FEE’s largest donors, according to the CIO News, included “some of the same wealthy individuals and firms who have kicked in to every anti-labor, pro-big business propaganda and lobby outfit in the business of trying to convince the average American that the country is going socialist, if it isn’t there already, and that such aids to mankind as social security, unemployment compensation, the TVA, public housing, rent and other price controls are depriving him of his freedom to go hungry and unsheltered in his own sweet way.”
A labor union spokesman wrote: “the Foundation doesn’t have to scrounge for dollar bills like labor organizations do. . . . The list of big contributors sounds like the `Who’s Who’ of American big business.”
FEE’s President, Leonard Read, was described in Ammunition, a left-wing publication, as “smooth. . . . He wears $250 suits, $30 shoes, $10 cravats (you wear a necktie, he wears cravats), and $15 shirts. . . . The Foundation for Economic Education . . . was set up with plumbing that included a pipeline into the treasury of every really big corporation in America.”
One radio report released by the UAW-CIO Education Department charged that Donaldson Brown, a retired Vice President of General Motors had been “so impressed” with Read that he “set him up in the propaganda business.” The release went on to say that there is “something called the Corrupt Practices Law which forbids corporations to contribute money to political campaigns and there is the Lobby Registration Act which requires lobbies to list the source of all of their contributions over $500. But this foundation operates outside both these laws.”
One Democratic Congressman, Carl Albert of Oklahoma, paid FEE a backhanded compliment. Read was “far more effective,” he said, “than the average buttonhole artist, so-called, around the Capitol.”
The House Select Committee on Lobbying had set out to determine whether or not new legislation was needed to regulate lobbyists. Its hearings did not lead to new legislation. However, only the Democratic members of the Committee would sign its report; the Committee Republicans considered it too biased. It was “designed to help `leftists’ now running for office,” they charged; the Democratic conclusions were “lopsided” and as “intolerant as an article in Pravda.” The Republicans called the majority report a “Socialist white paper. . . . The majority members say all lobbying by business and conservative elements is bad; all lobbying by left-wingers, labor organizations and Fair Deal office holders is good.”
In 1951, Eleanor Roosevelt, widow of Franklin Delano Roosevelt, commented in her syndicated column on F. A. Harper’s “Morals and the Welfare State,” a FEE pamphlet. She was “struck” by the implication that there is some similarity between the “welfare state” and Communism. “[M]uch that appears in this pamphlet,” she wrote, is “dishonest in its thinking. . . . the mere tying together of communism and socialism” was “dishonest. They are two quite different things. . . . We can have opinions as to whether all the things that have been done and euphemistically grouped together under the name of `welfare state’ are wise economic measures. Or we may question the effect on the character of the people when the government assumes certain responsibilities in conjunction with the people. However, that does not make us Communist or Socialist. “We are a free people and what we choose to do should not be labeled something which it is not.”
FEE’s Efforts Continue
The Buchanan hearings interrupted but did not deter FEE from its educational goal. The Foundation went quietly on its way trying to erode the rock of pro-government public opinion with the written and spoken word. Its influence was gradually spreading beyond FEE’s immediate circle through its readers and personal contacts. Yet during these years the media paid little attention.
The early 1950s saw the publication of two of FEE’s long-term “best sellers.” The Mainspring of Human Progress by Henry Grady Weaver, inspired by Rose Wilder Lane’s Discovery of Freedom (1943), had been privately printed. FEE acquired the rights and put out a new edition. Weaver’s thesis is that individuals have prospered throughout history only when they have been free. The book proved popular and has gone through many printings, sold many thousands of copies (several thousands each year just to one firm that uses the book as an aid in teaching their students of fast-reading).
Read “discovered” FEE’s second best seller—The Law by French deputy and journalist Frederic Bastiat (1801-1850)—while still in California. Bastiat had written the book as an attack on the socialist thinking of his day but it was just as pertinent to twentieth-century thinking. Bastiat distinguished “law” from “morality.” Depriving a person of his property for the benefit of another was “plunder,” Bastiat said, and it was wrong no matter who did it. When the government authorized “plunder,” when it taxed some people to protect manufacturers or to give subsidies to farmers, Bastiat said, it was “legal plunder.”
Through Pamphleteers, Read had reprinted in California the somewhat archaic British translation then available of The Law. Read was disappointed at the book’s reception. So after FEE was started, he had the book retranslated from the original French into modern colloquial English. The new translator, Dean Russell, a young journalist, was a World War II veteran who had been a bombardier in the U.S. Air Force. Read’s attention was attracted to Russell by a Saturday Evening Post article Russell had written explaining why he would not take government money under the G.I. Bill to attend graduate school. Russell’s rendition of The Law has sold more than a half million copies and has been translated into Spanish and Polish. As a result of FEE’s promotion, Bastiat has even been “rediscovered” in France.
Read lectured far and wide on behalf of FEE. One of his favorite talks was on “How to Advance Liberty.” The task, he said, was a learning, not a selling, process. Freedom would be won only as individuals, one by one, “did their homework,” acquired enough understanding first to reject socialist teachings, and then to climb the ladder step by step until in time they, themselves, could become spokesmen for the freedom philosophy. This has been FEE’s educational approach throughout the years.
Read used to tell the tale of “Whitey,” a fiery labor union organizer. Whitey had led a violent life, had even had one of his fingers bitten off in a fight. Read’s acquaintance with Whitey began with a vitriolic letter from Whitey attacking something Read had written about unions. Rather than answering in kind, Read replied soberly, calmly, and sent Whitey some books to read. Whitey had hardly expected such gentlemanly treatment. He read the books and asked for more. Read and Whitey continued to correspond for a couple of years. But then for a time no word from Whitey. Finally a letter. Whitey had been in an automobile accident and hospitalized for three months. Then Whitey added: “. . . but, Mr. Read, you should see the interest my three doctors are showing in our philosophy.” Anti-free trade protectionists protested vigorously when, in 1953, FEE published W. M. Curtiss’s The Tariff Idea. Many producers panic at the thought of free trade for fear of lost sales due to cheap foreign imports and lost jobs because of low-cost foreign competitors. Shortly after its publication, J. Howard Pew, CEO of Sun Oil and a FEE trustee, announced that he would have to resign from the Board and stop supporting FEE financially. Generally speaking, he said, he was in favor of the Foundation’s position. But, he said, when the government had pressed for exchange controls, he, as head of his company, had actively fought for tariffs as the lesser evil. Pew did not think he should support tariffs as his company’s CEO and at the same time oppose tariffs as a FEE supporter. His obligations to Sun Oil’s workers and stockholders compelled him, he said, to resign from FEE’s board and to withdraw all financial support. Pew had been contributing to the Foundation from the beginning, had even withstood the Buchanan Committee onslaught, and had become one of FEE’s largest supporters. Read didn’t consider for a moment dropping FEE’s anti-tariff, pro-free trade position; “We’ll miss you, Howard,” he said. Fortunately for FEE, a fellow Board member and close friend of Pew’s persuaded him not to resign and he remained a FEE Trustee and supporter until he died.
The Freeman began publication in New York City in the fall of 1950, as a biweekly pro-free market-sized magazine of opinion. Given the widespread acceptance of the “welfare state” philosophy at that time, free-market oriented journals found it difficult to survive financially; subscriptions and advertising could not cover expenses. After a few years, in the hope of cutting costs, the financial backers of The Freeman decided to move the publication to Irvington. In the summer of 1954, The Freeman was taken over by Irvington Press, a subsidiary of FEE. It was then converted into a monthly with Frank Chodorov as editor. But it still lost money.
For almost ten years, the Foundation had been issuing occasional one-page releases, “Clippings of Note” and “Clichés of Socialism,” also pamphlets and once in a while a book. In 1955, it started Ideas on Liberty, intended to be a quarterly. Only three issues had appeared when the decision was made to combine it with The Freeman.
In January 1956, the first issue of The Freeman: Ideas on Liberty, reduced to Reader’s Digest size, appeared under the aegis of the tax-exempt Foundation. This journal then became FEE’s principal publication outlet. Another format change in 1986 altered its appearance but not the free market principles expounded.
Silently and steadily over the years, a stream of books, pamphlets, lectures, letters, monthly issues of The Freeman, have issued forth from FEE. The Foundation has also reached many individuals personally by means of the spoken word, through lectures and seminars, both in Irvington and on the road.
In 1956, FEE held its first summer seminar in Irvington. FEE’s limited government philosophy was so strange to the ears of the participants, many of them Keynesian and anti-business teachers, that they rejected it out of hand. Dr. F. A. Harper, FEE’s most scholarly staffer on the program that summer, was an advocate of “natural rights.” For him, the right to own property was sacred; it should not be violated, not by anyone, not ever! He wouldn’t steal, he said, not even if he and his family were starving; certainly he didn’t want the government to “steal” on his behalf. Heated discussions followed. At the close of the seminar week, the participants lined us FEE-staffers up at the front of the lecture room. With great ceremony they presented us with a peck of potatoes—to assure that we needn’t starve, not even if we refused to steal or to accept government handouts.
Just as every individual is different and has a definite personality, so do groups have different “personalities,” depending on their individual members. Attending the next FEE seminar that same summer was a young Mexican, Agustn Navarro. To Agustn, FEE was “Mecca,” the source of all truth. His enthusiasm and eagerness were infectious; all were affected and, as a result, the participants at that seminar received FEE’s message most favorably. That was a time when Mexico was hostile, even dangerous, for anyone advancing anti-Communist and pro-market ideas. Yet upon Navarro’s return, he took over the Instituto de Investigaciones Sociales y Económicas and operated it for years, publishing leaflets and pamphlets criticizing socialism and Communism and promoting the free-market philosophy.
What is FEE’s message? For many years, FEE publications have stated that the Foundation’s goal was to promote the philosophy of the free market, limited government, private property. Its message may be boiled down to three easy-to-grasp concepts: individual freedom is good, moral, and productive (see Mainspring); for one person to plunder another’s property is wrong and immoral, just as is government-authorized plunder, or “legal plunder,” as Bastiat called it (see The Law); and individuals working, exchanging, and cooperating voluntarily in a free market increase production and improve economic conditions, while government interferences make matters worse (see Hazlitt’s Economics in One Lesson and the logical explanations in Mises’ works). Over the years, FEE has persuaded many persons to accept these basic concepts. In many cases, these ideas have changed their thinking, goals, and lifestyles.
As has been pointed out, many factors influence the ideas on which a person acts. Everyone we meet, everything we read, see, hear, learn, can affect our ideas. Even when persons have told us directly, as some have, that FEE has changed their lives, that does not mean that FEE was the only influence. Nevertheless, we can point to a few specific cases. A former public school teacher told us that he became disillusioned with the public schools because of what he learned from FEE, left the system and became an entrepreneur. One couple withdrew their daughter from the public school system and enrolled her in a private school because of a personal letter from a member of FEE’s staff. Others have turned to homeschooling. Several teachers have told us that attending a FEE seminar made them more effective, and quite a few have returned for refresher seminars in free-market economics. FEE’s ideas have challenged many, forcing them to rethink their basic philosophy of life. Some have started discussion groups, written books and articles and others have been inspired to go on the lecture circuit.
FEE’s articles have been reprinted many times, in many places. Many have appeared in newspapers as op-eds. Quite a few FEE publications have been translated and distributed abroad. Reader’s Digest has published at least eight articles from The Freeman in their American and international editions where they reached many millions of readers in the United States and overseas.
A number of FEE “alumni” have been influenced, at least in part by FEE, to start their own free-market oriented think-tanks. None has been an actual FEE clone; rather each has aimed at a somewhat different audience, used another approach, or dealt with some special field. Dozens of such free-market institutions, foundations, or think-tanks have sprung up since the Foundation was started. Although FEE may have had nothing directly to do with their founding, if you scratch the persons responsible for their operations, you are bound to find somewhere some connection with FEE.
A Worldwide Shift in Ideology?
Now, fifty years after World War II and the founding of FEE, it is apparent that the climate of opinion in the United States is changing. There is less antagonism toward “big business,” less confidence that welfare state programs are succeeding, and less pressure to grant privileges to labor unions or subsidies to special interest groups than there was when FEE was founded. There is talk now of cutting government budgets, even of trying to restrict spending on such sacred government programs as Social Security, Medicare, and welfare. There is more discussion of free enterprise, entrepreneurship, and privatization. Unfortunately, however, not enough. People are still not confident enough of the advantages of free markets to elect politicians who appreciate the importance of drastically limiting government so as to leave people really free.
If we look back, however, we see a hopeful trend. From the time of the Great Depression, which was wrongly blamed on capitalism, until the 1960s, the advocates of big government met little or no serious opposition. But ideas seem to have changed somewhat. The Foundation may not have been directly responsible for the 1964 nomination of Barry Goldwater as the Republican presidential candidate, for the 1979 election of a conservative Margaret Thatcher in England, for the 1980 election of the emotionally pro-freedom Ronald Reagan, or for the 1989 downfall of Communism in the U.S.S.R. and Eastern Europe. However, it is possible that FEE’s constant pounding away at the freedom philosophy for fifty years, together with the efforts of other advocates of free markets such as Mises and Hazlitt, and those of the many new free-market oriented think tanks, have played, and are playing, a small role in this ideological shift. What role, if any, no one can really know. We can only say that FEE was among the early promoters of the freedom idea in this country after World War II, that FEE has been pegging away at the same thesis ever since, and that ideas have consequences.
1. The more prominent “conservative” organizations established during the early years of the New Deal were The National Economic Council, founded in 1930-1931; the Economists’ National Committee on Monetary Policy, set up in 1933 when the United States went off the gold standard; and the Committee for Constitutional Government, established originally in 1937 as the National Committee to Uphold Constitutional Government to fight Roosevelt’s proposal to pack the U.S. Supreme Court. The America First Committee, started in 1940 in opposition to Roosevelt’s foreign policy, which the Committee’s members held was taking the country into a war that wasn’t our business, had been disbanded promptly after the Japanese attack on Pearl Harbor.
2. Czech, French, German, Italian, Lithuanian, Norwegian, Romanian, Polish, Portuguese, Spanish, and Swedish.
3. The New York Times, October 30, 1950.