All Commentary
Saturday, August 1, 1964

The Public Demands (?)


“The public demands more gov­ernment spending, more programs, and more services…” is widely advanced as the reason for rising taxes, swelling bureaucracy, and the accretion of political power in Washington. “We must educate the public to demand less…” is said to be the remedy.

Did the public demand the Peace Corps? Or, a bit later, the establishment of an International Secretariat of the Peace Corps?

In what follows the aim is to show the incorrectness of the widely held notion that “public demands” initiate new govern­ment programs and new govern­ment activities. Indeed, it would be more accurate to say that the general public never makes any new demand on the public purse—with possibly one exception: only under extreme provocation or when the economic position of the public is abruptly and mate­rially worsened as in a major disaster or depression.

Where, then, does the demand for more government spending come from? But first, what evi­dence do we have that these de­mands do not originate with the general public?

Possibly there is no need to ar­gue the statement that the Peace Corps did not originate with the American public. The same is true of its International Secretariat. Possibly not one person in 10,000 even knows of the latter. The Peace Corps first sought such a Secretariat and staff in fiscal 1963. Congress refused to authorize funds for this purpose, but the State Department contributed $40,000 toward the support of the Secretary General and his staff. Even though Congress increased the appropriation of the Peace Corps itself by 60 per cent for fiscal 1964, it clearly stipulated that none of the money should be used for the International Peace Corps Secretariat. Obviously the American public hadn’t the fog­giest notion of what was going on. But in spite of the definite con­gressional disapproval the Peace Corps obtained the Secretariat which it wanted. 

Congressman Clarence D. Long (for many years professor of eco­nomics at the Johns Hopkins Uni­versity), a new recruit among the national legislators, described the innumerable small personal chores he did for his constituents and then said:

All these efforts have won me a reputation as a hard-working con­gressman, who helps people…. I have discovered—or think I have—that most voters are not greatly in­terested in national legislation. They have problems and needs of their own, and if you help them with these, they allow you great freedom in voting on national legislation. Put it another way, a solid base of popu­larity with the ordinary voter gives a congressman sanctuary from pres­sure groups who want things inimi­cal to the national interest. As a consequence, I can vote solidly for civil rights in a basically Southern state with a white constituency drawn increasingly from the deep South.

If Congressman Long has diag­nosed his own situation correctly and his small-chore image for a few constituents is effective, we have here further evidence of the narrow base of the decision-mak­ers.

The Demand for Social Security

Referring to a 13-member Ad­visory Council on Social Security, Robert M. Ball, Social Security Commissioner and Chairman of the Council, stated in February, 1964:

This Council’s work can set the pattern of our whole social security program for many years to come.

Meantime the “public” will sit on the sidelines. The average con­gressman may receive a small trickle of letters during Commit­tee Hearings, but little else. The proposals of an earlier advisory council established in 1934 pro­vided the basis for the original social security program adopted by Congress in 1935. Outside of the members of that council and some hired help (most of whom learned as they went) there were virtually no experts in the country on this subject. There was not a member in either the House or the Senate who had any clear ideas about social security or what it was to accomplish. Coverage, methods of financing, conditions of eligibility, types of programs—and a host of other matters—were set down by a handful of people. Its constitutional as well as its actuarial basis was obscure and unknown. Again, “public de­mands” were not the initiating forces.

About 50 to 55 years ago when state workmen’s compensation laws were first proposed, Samuel Gompers, who had headed the American Federation of Labor since 1886 (except for one year), opposed compulsory workmen’s compensation laws. The AFL did not favor general old-age and sur­vivors’ insurance or unemploy­ment compensation until the econ­omy was in deep depression in the 1930′s and ideas for these pro­grams were by then widely dis­cussed.

Even though a major issue in the 1960 presidential campaign was our slow economic growth, in 1961 Congress amended the old-age and survivors’ insurance stat­ute to permit the retirement of males at age 62, after the newly-elected President advanced the idea. A careful investigation among the leaders of both the House Ways and Means Commit­tee and the Senate Finance Com­mittee did not reveal even a scin­tilla of evidence of public pressure for this age reduction.

Agriculture, Education, and Others

Ezra Taft Benson, Secretary of Agriculture for 8 years in the 1950′s, wrote a 627-page book, Cross Fire (1962), describing in intimate detail the innumerable legislative battles, appropriation tussles, and the diverse tugs and pulls in Washington, but somehow he neglected in the book the “pub­lic demands” from the farmers themselves. The following ques­tion, therefore, was put to Mr. Benson: “Were you largely free from demands and pressures from the farmers themselves for this or that program or handout or whatever, or was your failure to develop this matter an oversight on your part as you wrote the manuscript for the book?”

Mr. Benson replied, “I had evi­dence that an overwhelming ma­jority of farmers favored pro­grams that would provide them with greater freedom and less gov­ernment regulation and control….I had little pressure from farm­ers for legislation involving attempts on production control and price fixing.”

In a bitter address before the American Council on Education in October, 1961, on federal subsidies to education, the Secretary of the Health, Education, and Welfare Department, in great disgust cast aside his manuscript and lectured and scolded his audience for not coming to the rescue of educa­tional subsidies via the U. S. Treasury. He said, “Mail urging the Congress to do something for education was infinitesimal. There was a great void, a great silence.” (The Washington Post, October 6, 1961.)

In a speech to a western audi­ence, Chief Justice Earl Warren said:

There may have been times in our history when the federal govern­ment became too deeply involved in matters that were the proper prerog­atives of the states but in my opin­ion this has generally happened only when the states themselves have failed to meet the needs of the peo­ple. 

Fortunately the Chief Justice included the phrase “in my opin­ion.” But he went on to say:

When the state governments fail to satisfy the needs of the people, the people appeal to the federal govern­ment.

Do they? In deciding a case that comes before them, it is cus­tomary for judges to examine the evidence. If Justice Warren had examined the evidence, it is doubt­ful that he would have found any substantial cases where “the peo­ple” appealed to the federal gov­ernment.

George F. Kennan, in his book, American Diplomacy—1900-1950, had this to say:

But I also suspect that what pur­ports to be public opinion in most countries that consider themselves to have popular government is often not really the consensus of the feel­ings of the mass of the people at all but rather the expression of the in­terests of special highly vocal mi­norities—politicians, commentators, and publicity-seekers of all sorts; people who live by their ability to draw attention to themselves and die, like fish out of water, if they are compelled to remain silent.

Mr. Kennan spent many years in Washington and ought to know what he’s talking about. In an address, Canada and Its Giant Neighbor, Professor Jacob Viner of Princeton University (emeritus) said:

The American movement toward more liberal commercial policy which started in 1933 was at no time the response to an upsurge of American popular sentiment.

Professor Viner, Canadian-born, has been a lifelong student of eco­nomics and economic problems; anyone familiar with his great contributions to economic knowl­edge and understanding knows that he does not dash off such statements without careful thought.

Other scholars, politicians, jour­nalists, and government officials could be quoted at length in a similar vein. Many additional epi­sodes and statements could be re­cited, absolving the “general public” from the common charge made against them. But the fore­going should be enough to estab­lish the point.

Once the public has its dipper in the government trough, of course, it may fight to keep it there. It may even itch for more and support spokesmen to inter­cede for it and develop rationali­zations to support or enlarge ex­isting programs, largesse, and handouts. Vested interests both in government and outside may soon build up. But most citizens have too much self-respect to merit the glib label, “The public demands…” when it comes to the mount­ing government tax-take, swelling bureaucracy, and burgeoning in­terference by government with private affairs. This brings us to our second question: From where do the ideas and pressures origi­nate?

The Source of Pressures and Ideas

The ideas for entirely new gov­ernment activities generally come from the intellectuals, a point dis­cussed later. The idea for exten­sions of existing government pro­grams or variants of such public activities generally come primarily from government itself. The President advances a legislative program. Each year Congressional Committee Hearings are held on new bills introduced and on appro­priations for the ensuing fiscal year. This provides an abundance of opportunity to promote new ideas and reinforce and expand the old.

Hearings frequently start off with “government” witnesses. These set the tone and flavor. They capture the headlines and receive extensive news coverage, plus newspaper, radio, arid TV edi­torial commendation.

Little effort is required to in­duce a Cabinet officer or a key member of the House or Senate to step out of his normal role and serve as “an informed witness” on the opening day of a Hearing. Undersecretaries and Assistant Secretaries as well as bureau and commission chiefs abound in Washington. Even if they are pri­marily political wheel horses, they are generally well briefed and trained in the art of creating “impact.”

Any key “grass roots” benefi­ciaries of proposed legislation or of appropriations may be alerted concurrently and activated. They then are provided with ammuni­tion, arguments, counter argu­ments, and a rationale. Forums or interviews may be arranged. “Public demand” may seem gen­uine and spontaneous. But the other 99.999+ per cent of the voters are indifferent, unaware, and inert.

By this time efforts to roll back existing programs or block vari­ants and expansions of them are mostly a waste of time; the polit­ical mind-set has been created. Even experienced lobbyists en­counter a stone wall.

Government offices are loaded with publicity men and public re­lations officers; they all have well-oiled mimeograph machines. They know how to cultivate news-hungry reporters. Considering this vast set-up it seems a little naive to imagine that an expan­sion in a government program or a new variant of it, would require any “public demand” at all!

Throughout the year, further­more, in many government bu­reaus key men or perhaps nearly everyone of any consequence is constantly urged to maintain an alert for new programs, new ideas, larger appropriations. These are systematically assembled and assessed for the next round of Hearings. In fact many laws now have automatic or built-in expan­sionary devices in the form of a “research division” with appro­priate staff to discover ways and means of extending the govern­ment service to more people and in larger doses. Some departments have a Cabinet official under the name of Assistant Secretary for Planning or some less obvious title.

Civil Service Employees and Legislators Have Much in Common

The interaction of legislators and government bureau people for close to 52 weeks in the year cre­ates a formidable pro-government bias. It has no offsetting counter­part in the nongovernment sector.

Whether legislators or depart­ment and bureau employees are the more potent in expanding gov­ernment is not easily determined. Because of their long experience and “knowing their way around Washington” it is probable that the civil service employees are the real engineers of our swelling gov­ernment.

Legislators and these employees have many common interests. The more government grows the more exalted their positions and per­haps the higher their financial and other rewards. They consti­tute a syndrome in which the partners thrive in symbiotic together­ness.

At times, of course, a legislator may regard the annual recommen­dations of the President and the Bureau of the Budget as wholly inadequate for his personal pur­poses. He introduces his own ideas, bills, and amendments. Some of these may be very earthy, matters of bread and butter to him. Thus in 1963 a congressman phoned the office of the Post­master General saying that in seven minutes he was going to a Congressional Committee meeting to vote on a piece of legislation which the President regarded as “must” legislation and if he wasn’t promised a new post office in his home town, he would vote “no” at the meeting.

This was by no means an iso­lated case. But obviously there is no way of knowing how much such “initiative” is rampant in Wash­ington decision-making, but prob­ably more than is good for the taxpayer. In any case, it should be obvious that the mass voters play little or no role in the routine ex­pansion of government activities or variants of them. Nor do the masses originate new programs.

The Role of the Intellectual

Ideas for entirely new and in­novative government activities generally come from researchers, professors, writers—intellectuals.

John Maynard Keynes, the most influential economist of our gen­eration, put it this way:

The ideas of economists and polit­ical philosophers both when they are right arid when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who be­lieve themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authority, who hear voices in the air, are dis­tilling their frenzy from some aca­demic scribbler of a few years back.

But these idea innovators are not confined to economists and political philosophers. They may include playwrights, drama critics, and critics of all kinds, as well as movie writers, novelists, poets, and a host of others. They include professors in the social sciences as well as in literature, astronomy, and physics—to name a few. In addition they may in­clude clergymen, professional lec­turers, TV and radio commenta­tors, syndicated columnists, re­porters, psychoanalysts, com­posers, painters, sculptors, and others.

William Schlamm, in a much neglected book, The Second War of Independence (Dutton, 1940), put it this way:

In addition to being the problem child of modern civilization, the in­tellectual has also become one of its outstanding challengers, for it is simply untrue that the disintegra­tion of democracy is the result of merely economic dislocations. It is simply untrue that Nazism, Bolshe­vism, and Fascism are the predes­tined reply to the appeal of hungry, unemployed, indebted farmers and underpaid toilers. Contrary to the general consensus of opinion, all brands of totalitarianism, and espe­cially Bolshevism, are not social ex­pressions of economically distressed underdogs, but rather diseases prev­alent among rather well-fed intel­lectuals. A serious statistical checkup would certainly disclose that on the editorial staffs of metropolitan news­papers, among college teachers, among the stars of stage and screen, among successful writers, and among students whose generous monthly allowance is regularly re­mitted by well-to-do parents, there is relatively fifty times more totali­tarian lunacy than among the poverty-stricken Okies, the needle-workers, or unemployed miners.

While this was written during the great depression, prior to World War II, and may seem a bit dated, the law of idea origina­tion which it expresses is still valid. Schlamm elaborated his ideas in such clear and striking language that it is worth while to note what else he has to say:

Within every society, be it ever so democratic, there is a relatively small group of intellectuals who give that society its tone and character. What 1,000 professors, writers, bishops think, write, preach, is handed on by 300,000 teachers, jour­nalists, and ministers to the other Americans and forms the conscious­ness of the entire nation. Just cut these thousand key intellectuals out of the national body politic and the nation will, within a few years, have a completely changed complexion. The circulation of an author’s book is unimportant, for its effectiveness depends not on the number but on the social importance of its readers. The book which has made an im­pression on 3,000 teachers and 2,000 journalists alters the essence of our national being more appreciably and enduringly than a novel which is read by 2,000,000 housewives. Ninety-nine and nine-tenths per cent of the American people have never held a work by John Dewey in their hands, but all Americans have, in some degree, been educated by him, simply because the thoughts of this great pedagogue have activized the transmission belts of our educational apparatus. In defending themselves, the opponents of Mr. Archibald MacLeish could scarcely have found a more superficial argument than to point to the relatively small circula­tion of his works. Though its mass may be relatively insignificant, the catalytic agent will basically alter the larger chemical process.

The late President John F. Kennedy surrounded himself with a number of so-called idea men who had no administrative or other day-to-day responsibilities. The War on Poverty and the Ap­palachia circuit are all “old hat” in most details but seem like new attacks on ancient evils. They also are well designed to cover the fail­ures of earlier approaches.

Very few citizens are aware of how economic and social ideas originate, or how they work their way into the stream of conscious­ness and gain acceptance, because they are not themselves students or persistent readers. Eric Hoffer in his book, The True Believer, outlines carefully the role of the intellectuals in incubating ideas and programs. Their persistent criticism of society and “plans” to meet actual and alleged problems and of keeping the pot boiling are set in perspective by Hoffer, a self-educated, migratory long­shoreman.

Professor Kenneth Boulding of the University of Michigan has stated that “the breakdown of capitalism in Europe can be traced rather directly to the inability of the organized capitalists to win the respect of the intellectuals.” These intellectuals, either not being able to understand the reali­ties of the world around them or because of their innate tendency to undermine and criticize, built and fashioned in their mind’s eye a new world of their own which they could understand. This was a planned world in which the plan­ners were to be people like them­selves and in which the masses, including the capitalists, however educated and cultured, would have to find their place as ordered for them.

Among the intellectual activists the need for something new, some­thing different, and particularly something novel, is an ever-pres­ent seduction. Anyone of us upon meeting an acquaintance may say, “What’s new?” Boredom is a key factor in motivating the intellec­tual. Given a little imagination and a desire for personal recogni­tion — this all can soon evolve into a new government program, and in extreme cases the overthrow of government. But this need not be the end result.

Intellectuals a Special Breed

In spite of what has been said about the intellectuals, they should be highly prized and duly re­warded. They are nature’s or God’s gift to humanity. Even though they often are under-miners and destroyers they may be builders, preservers, and con­structive innovators. When we think of the damage done by Karl Marx and his kind, we should also weigh in the good done by Herbert Spencer, Edmund Burke, and Adam Smith—to name only a few. The intellectuals may come from any group or sector of society.

Innovators may do damage when they lose touch with the past, the origin of society, the na­ture of man and of social and economic institutions. Bring the intellectuals into your world of real problems, ask them for solu­tions and reward them for their effort—then you may convert them from underminers to con­structive idea men. They may help to improve human institutions and deepen the foundations of a society based upon the individual. They need not be statists, ever on the hustings for bigger govern­ment. In fact, the articulate pro­ponents of the free society are growing in numbers and influence.

Intellectuals are a special breed. Not everyone knows how to put his potential creativity to effec­tive use. This calls for special talent and a sensitivity not always evident in the run-of-the-mill manager. But without a strong in­tellectual foundation, without a solid reason for being and a firm determination of where to go from here, including a mystique—any organization or society is likely to falter.

It is difficult, if not impossible, to discover any significant exam­ple in any time in history any­where on this planet of a society that has been marked by a large measure of political freedom that has not also at the same time operated under an economic sys­tem which was characterized by an essentially free market. There is good reason to believe that freedom and the free market are closely linked.

Perhaps this is the most impor­tant lesson which students of hu­man freedom need to grasp. Grasping this great truth, the in­tellectuals now see virtues in “the chaos of the free market.” Few of them look to the state for total solutions.

 Candle Power

There is not enough darkness in the whole world to blot out the light from one wee candle. — Inscription on a tombstone, John O’Groats, Scotland 


  • Dr. Schmidt taught economics in universities for nearly twenty years and from 1943 to 1963 served as director of economic re­search of the Chamber of Commerce of the United States. He now is an economic con­sultant, writer, and lecturer.