Mr. DeArmond, writer and business consultant on personnel training, is a contributor to numerous periodicals and the author of books such as Executive Thinking and Action and How To Sell and Unsell Ideas. For five years he was Associate Editor of Nation’s Business, under Merle Thorpe’s editorship.
—a positive force for the free market
Any clever person can utter quotable epigrams. The acid test is in the pattern of philosophy that emerges from his words, and its agreement with his actions. Do they add up to anything worth remembering? Is part of the mind product canceled out by other parts?
By this measure, one of the most consistent lives in our time was that of Merle Thorpe, who for 28 years edited Nation’s Business magazine. The 40 years ending with his death late in 1955 witnessed an abortive revolution that shook the world as it had not been shaken in nearly two centuries. Through those tremendous years Thorpe was the consistent voice of embattled free enterprise as probably no other figure of the time. In all that he wrote and spoke—and it was voluminous—critics are challenged to find two sentences that were contradictory. This, of course, was the product of staking out a line of principle and holding to it steadfastly.
In 1916 he was called to Washington from his job as director of the School of Journalism at Kansas University to assume the editorship of a small fringe magazine which it was hoped might be made the spokesman for organized business. The great upheaval was then in the making. Ten years earlier Lloyd George had achieved a New Deal in Great Britain. Seventeen years later the United States followed in almost the same tracks made by the British Fabians and their continental socialist brethren.
When the American New Deal flourished, Thorpe understood, as only a few of his fellow citizens did, that it was no case of political immaculate conception. It had been gestating for a long time. From about 1921 on, he noted the steady, cumulative growth of federal controls and bureaucracy. He was disturbed by the increasing dependence on Washington to solve every problem from drought to childbirth mortality.
Again and again during the twenties he sounded a sharp warning that the people were overlooking the deferred cost in human freedom of this new-found short cut to the Kingdom of Heaven on earth. In 1931 he wrote a remarkably prescient series of four articles for the Saturday Evening Post on “Our Vanishing Economic Freedom.” To one of them the editors appended a subhead—“The High Tide of Paternalism”—that illustrates how little most Americans knew then of the long sweep of that popular tidal wave. In assessing Merle Thorpe’s consistency, his whole philosophy may be anchored to a passage from one of his favorite authors. Lord Macaulay, which he liked to quote:
Our rulers will best promote the improvement of the people by strictly confining themselves to their own legitimate duties; by leaving capital to find its most lucrative course, commodities their fair price, industry and intelligence their natural reward, idleness and folly their natural punishment . . . .
To these principles he adhered with a stern fidelity. He resented the frequent charge that this was laissez faire. “We have not had laissez faire in this country for 50 years,” he said. Vigorously and continually he repelled the view that opposition to socialism was blind opposition to change. To him, change was the very breath of progress.
Change is the immutable law. Eternal adaptability is the price of survival . . . . Yesterday is yesterday. The “good old days” pay no dividend in the present.
But he was firmly opposed to change just for the sake of change. Some truths are immutable and uninfluenced by considerations of pragmatism or expediency or false humanitarianism. “Despotism dressed in the clothes of benevolence is still despotism.”
Always he was alert to the thousand and one devices and guises through which the levelers sought with a deadly design to introduce the new socialist era.
Early in his editorial career, Thorpe began to combat the idea, born of the Populism that flourished in the Midwest of his youth, that bigness is in itself an evil in business. In 1924, a small businessman reader in Oberlin, Ohio, wrote a querulous letter, the substance of which was, “Are you for Big Business or the people?” Thorpe’s answer, printed in his column, “Through the Editor’s Spectacles,” said in part:
What is the dividing line that marks the danger to society [in the size of a business]? At what point does success become sinister? Just west of Oberlin is a farmer named Jones, crippled by paralysis since a baby, who made such good sausage that today he ships it to every country on the globe. Just east of Oberlin a Mr. Davey took such good care of his neighbors’ trees that the nation heard of him and his work and beat a path to his door.
At what point did Mr. Jones leave off being a good citizen to become pernicious? At what point did Mr. Davey become a menace as Big Business?
It is obvious that we must have a meeting of minds on this point before we can answer the question. What is there inherent of virtue in small business that makes that same small business with its same policies, same management, anathema when it develops into Bigness?
If you insist on an answer to your question, “Are you for Big Business or the people?” we shall have to say, “We are for both.” And for Small Business too, the Small Business which sees through shining eyes a higher good and is striving through the small hours of the night to attain it. Don’t take that away from us, please, because that is the opportunity of the individual, and individualism is the heart and soul of America.
Small business, he said in another connection, is “the greatest stumbling block in the path of dictators.” It is so much easier for government to socialize if it can do so substantially by taking over a few huge corporations. But with several million independent enterprises, no such economic coup d’état is possible, except by a process of gradualism.
Having known nothing but hard work and struggle, he saw no reason to pity people who had to overcome obstacles and endure hardships in the attainment of their desires. His boyhood as the son of a small farmer in western Missouri, his job in a small town creamery, the succession of student enterprises that he devised to finance his education in college—all these he regarded as assets, not liabilities in his life.
Federal subsidies, however inviting to vicarious do-gooders, had no appeal to him. Back in 1924 he was pointing out the artificiality in such farm aids as the McNary-Haugen Bill for hoisting agricultural prices above the world level. Along about this time he printed with tacit approval a reader’s view that there were too many farmers for a free competitive economy. Some would by natural laws have to gravitate to other vocations. In every age, owing to mechanical evolution and more productive farming, fewer persons are required to supply food. Landowners should be encouraged to meet the dilemma of unmarketable surpluses by voluntarily withdrawing cropland from cultivation and returning it to grass—a proposal acted upon later, but via federal subsidies that tended toward compulsion and nullified the intent of the program.
Veterans’ bonuses he exposed as one of the worst forms of paternalism, notwithstanding intemperate recriminations from readers who saw no fallacy in placing a price tag on patriotism. Business subsidies and price fixing by decree, whether for the “protection” of sellers or buyers, were to him government spoon-feeding of some citizens at the cost of penalizing others.
From the start he recognized and deplored the unholy alliance between greedy politicians and power-drunk labor leaders. He denounced the NRA for what it quickly proved to be—a shady bargain by which business was to be given a questionable Sherman Act truce in return for agreeing to compulsory unionism. Many of the businessmen who fell for this clever ruse soon saw that they had given away a basic American freedom for the right to “police” their competition, only to have their quid taken away from them by the courts.
Later, when labor chieftains and some of the softer academic minds charged that capital was on a strike to prevent recovery under the New Deal regime, Thorpe answered in a ringing editorial, “Ask the Dollar in Your Pocket.”
You want me to go to work? What is the job? How risky is it? How long do you want me to work? A new enterprise? The public may not accept the product, and then I’d lose my life. I’d want more for that job. What are the conditions of employment?
In addition to his writing and editing, Thorpe delivered hundreds of public speeches and radio addresses to a very large national audience. Over and over he reminded his readers and listeners that you can’t have free enterprise without some speculation Every highly successful business has had to pass through stages when the hopes for new development outweighed the security consideration. A good entrepreneur takes chances. It is the way of life in business under a free enterprise system. Thomas A. Edison and Walter Chrysler were more than speculators, but they were speculators.
In 1927 he attacked vigorously a proposed gesture by the National Chamber of Commerce looking toward recognition of Soviet Russia as a lift for trade. Still consistent in his revulsion toward everything connected with communism, the approach of World War II found him voicing restrained objection to a military alliance with the Kremlin.
With his usual lucidity, Thorpe warned of the deadly parallel between creeping socialism in America and the totalitarian philosophy elsewhere. Therein, he saw, was the danger posed by the Great Depression. Contemplating the antics of a frightened and panicky Congress in 1931, he was moved to write one of his few exclamatory headlines: “Warning! Q u a c k Remedies Ahead!” The chief product of the depression, he said, “is a flood of prescriptions, most of which provide for some form of government action.” What was needed, he argued, was austerity, hard work and patience. After five years of quack political medicine, he could point out in 1938 that the nation had shown no measurable recovery. Then came the stimulus of war in Europe, giving the innovators the chance to claim that their inflationary schemes rather than the coincidence of world war had saved the Sick Man of the West.
After seven years of what he called the “Bloodless Revolution,” he was moved to ask, “What are the sources of a dictator’s power?” and to answer his own question. Five controls, he said, are all that any man on horseback would need to make him the absolute ruler over his fellow man. They are:
1. Control of his savings
2. Control of production
3. Control of his wages
4. Control of his hours of work
5. Control of the prices he must pay
Any discerning reader would see for himself that all these controls already were essentially vested in the Executive Department of the government at Washington. They were to be vastly strengthened during the war years to follow, and then with the return of peace only grudgingly relaxed by entrenched politics.
Although he preached patience, Thorpe himself was by nature not a patient man. He had little time for pedestrian minds mouthing fallacies on things they did not understand. And yet through all those years he conducted the great controversy in a bland and not unkindly way. He never used the broadsword of invective as a Brann or a Mencken did. He was not corrosively skeptical in the manner of Albert Jay Nock, but could kid his adversaries good naturedly.
A well known clergyman once wrote him: “Everywhere that the Christian minister turns he finds his dearest ideals and hopes entangled in the economic life. Do you ask us to keep our hands off? In God’s name, you ask too much!”
In his “Editor’s Specs” column, Thorpe replied: “Business seems to be tainted with a shameful moral leprosy, and yet Dr. B. feels that his ministrations may be resented. No, Doctor, if the laying on of hands will cure business of the many ills ascribed to it, depend on the patient to stand tied.”
Thorpe could never quite excuse what he regarded as the supine way in which capitalism took its flaying lying down. This inexplicable “earsplitting silence” under assault from the left-wing press, politicians, and professors, seemed to him one of the ominous signs of the times.
Businessmen are so battered down by the reiteration of agitators, he wrote, that they confess by their silence and seek to avoid the death sentence by fawning on their detractors. A reader facetiously accused him of plagiarism and to prove it quoted from Voltaire’s words just 200 years before. “The nobleman may strut and cry, Such a man am I! And may look down upon a Trader with sovereign Contempt, whilst the Trader on the other side, by thus often hearing his profession treated so disdainfully, is Fool enough to blush at it.”
But he remained a defender of business even when it wouldn’t defend itself. On one occasion, a member of the intellectual fringe flung at him the charge that business was stupid in continuing to oppose a new order under which greater profits were being realized than ever before. This argument, Thorpe retorted, merely constituted an admission that businessmen could consider principles above profits.
Lest his consistency be catalogued as that of a mere provincial “aginer,” it is important to remember the things that Thorpe stood for affirmatively. In season and out, he preached the virtues of foreign trade with as few restrictions as possible and subject only to his unwillingness to deal with Soviet Russia and its bloody cohorts. As far back as the Harding Administration he was urging a budgetary system for the federal government—a reform realized under President Coolidge. Nation’s Business strongly supported Secretary of Commerce Hoover’s standardization program for industry.
Himself a master salesman, Thorpe believed implicitly in the merits of aggressive selling. Back in 1930 when the business barometer was falling every month and people seemed to take a sadistic pleasure in repeating and magnifying dolorous news, he chided his readers in this fashion: “Is our vaunted American selling only a fair weather phenomenon? Does it cave in, crumple up, and take the count at the first blow? It would seem so.”
He stood as a positive force for the free market and free competition, between businesses, industries, individuals, and in the clash of ideologies and faiths. In his relentless opposition to government restrictions on individualism he may not always have been strategic, but he was invariably consistent with his guiding principles.
To him the current conflict was simply “the age-old struggle between two groups—those who produce wealth and those who waste wealth,” as he once told the Chicago Association of Commerce. This suggests the mordant remark of H. L. Mencken, made about the same time, that “there are now just two classes of men—those who work for their livings and those who vote for them.”
Again, Thorpe surveyed the American scene and saw tragic spectacles: “men forging their own chains, planning the less abundant life, demoting the general welfare, and working to lower the standards of living to those of other politics-ridden countries of the world.”
All forms of government ownership, whether it meant that Uncle Sam was to operate a laundry, or a great chain of TVA power plants, or a model Tugwelltown with cheap rent for a selected few, were socialism and an ultimate drag on progress, said this Jeremiah of the thirties. He chided citizens for abandoning their principles and rushing to Washington to beg for federal aid for local and regional booster projects.
At the time of his retirement he had built up the magazine’s paid circulation from 6,000 to 450,000. More than that, he had made it the most articulate voice of conservatism in the land. It was the reserve built up by Nation’s Business that enabled the National Chamber from 1936-39 to conduct its nationwide campaign on behalf of free enterprise with the slogan, “What Helps Business Helps You!”
For the last ten years of his life Thorpe was Director of Business Development for Cities Service Company and editor of its company magazine, Service.
“Merle Thorpe? A reactionary, a chauvinist from the eighteenth century. Time marched past him!” Such was the verdict of the more dedicated liberals.
But it was a false judgment. With his vigorous pen and his always persuasive tongue he delayed and deflected and modified the collectivist revolution in America. No, he didn’t stop the revolt of the masses but he did much to arouse the nation to its threat.
Talk to a passionate radical and you will find that he is as disappointed as the libertarians with the trend of events today. A black reaction to the New Order has set in, he will tell you. The pendulum has swung to the Right. Far, far too slow, for the followers of Thorpe’s political and economic philosophy, but much too fast for the Marxians. For a while they thought they had it made, that they had won by default. That they were disappointed is due in some degree to the valiant voice of Merle Thorpe. 
The Biggest Monopoly Of All
In all the discussion of “bigness” and “monopoly power” it is surprising that so little has been said about the Federal Government “holding company” headquartered in Washington with activities sprawling into almost every possible field, with a collection of “monopolies” beyond parallel in any private enterprise, with a greed for undertaking new things that would put any private monopolist to shame, and with a power to extort taxes from the people to cover losses and finance expansion. Just one of the major government monopolies, the Agriculture Department with its subsidiary corporations, adds billions upon billions of dollars to the nation’s food bill every year. It is a strange paradox that, while the Government goes about its business of taxing the people to deprive them of cheaper bread and milk, butter and eggs, and meat and potatoes, it hauls into court, time and again, a grocery chain whose achievement has been to reduce the costs of food distribution about as low as they can go.
National City Bank Letter, July 1950