All Commentary
Thursday, August 1, 1974

What Are You Worried About?

Mr. Bradford is well known as a writer, speaker, and business organization consultant. He now lives in Ocala, Florida.

“I can’t understand people like you,” the man said. He was a person of middle years, who spoke pleasantly and courteously, but a bit accusingly. “What upsets you so? What are you worried about?”

I had just addressed a University Club audience, followed by a question and answer session. My subject had been “Our Lives and Goods,” (see The Freeman, February, 1974) and upon that theme I had tried to construct an argument for limited government, the free market, and the unabridged right of a man to the “goods” he has created. Apparently it was my summation of the denials and dangers of supergovernmentalism that had aroused my inquisitor.

“Look,” he said, with a kind of patient exasperation in his voice, “we are living in the greatest age of all human history. The achievements of science are fantastic in scope and consequence. We have put men on the moon, and we are already starting to explore Venus and Mars by means of unmanned probes. As for invention, well, you have only to utter the word ‘computer’ to summarize its achievements.”

He paused for breath and I broke in. “But what,” I said, “has all this to do with your question?”

“I’ll get to that in a minute,” he answered. “Indeed, what I am saying is all really a part of my question. I remind you that we live amid comforts and luxuries that were undreamed of a few generations ago, even by the very rich. We have extended education to every social and economic level. Our standards of living are high. Our government has ameliorated the condition of the poor. We have established a system of old age pensions. All this, of course, has cost money, yet we are not hard up. If you say taxes are high, or that the cost of living has gone up, I reply so have wages and salaries.”

I had been waiting for him to run down, and at last he did — not, apparently, for lack of argument in his forensic arsenal, but because he wanted to get back to the question he had first propounded.

“Faced with all this,” he said, “I simply can’t understand your attitude. Amid all this dazzling evidence of progress, prosperity and general well being, what in the world is it that upsets you so? What are you worried about?”

Freedom in Jeopardy

Well… it was a stumper — not that its content was new or formidable, but because of its timing. Other people were waiting, and I was already late for a subsequent appointment. What quick answer could I make to such a question? What would you have said — assuming that you did not secretly half agree with him? I could only attempt a kind of symbolic response.

“I’m worried,” I told him, “because the loaf of bread for which four years ago I paid 26 cents, and which now costs 52, may soon be priced at a dollar or more. And I am also concerned that some day soon I may be required to secure permission from a Washington bureau before I can travel here to address this organization.”

I was trying thus on the one hand to convey the threat of ruinous inflation and on the other to indicate the menacing nuisance of Big Brotherism, both of which are the result of a naive reliance upon the supposed omniscience (and the actual power) of government as a social agency. I was remembering the steady erosion of the American dollar in my lifetime — the pair of shoes I used to buy for $8 which now cost $60 — with the result that I no longer wear that brand; the shirt that once cost me $2 for which I must now pay $10.50; the steak dinner I used to get for $1.50 which now sets me back at least $7.50 — on the rare occasions when I am steak-hungry enough to think I can afford it. More realistically, I often recall the thick and juicy hamburger, with all the trimmings, that was once available at Dinty Moore’s place for 15 cents and compare it nostalgically with its anemic present-day counterpart for 95 cents!

But if my erstwhile questioner were here now he would no doubt remonstrate thus: “Your income is higher. All wages and salaries have gone up proportionately.’ And I would in turn ask him: “But what of the millions of people who are on fixed incomes — retirees, pensioners? How have they fared in all this? To be sure, social security payments have gone up somewhat, and are being increased again this year — at the expense of us all; but what of the man who worked and saved and made what he thought was prudent provision for his less productive years? In terms of what it will buy, his carefully accumulated capital has shrunk by nearly a third in the past few years, and by nearly two-thirds in the past thirty.”

Inflation in France

In his introduction to Andrew D. White’s essay on Fiat Money Inflation in France, Henry Hazlitt points out that under inflation the real purchasing power of savings is constantly eroded, that all savers are cheated, that thrift is discouraged, and that the source of investment is dried up. Thus inflation not only robs the frugal citizen by destroying the value of his money, it also injures the economy by diminishing the flow of investment capital.

In passing we may observe that the financial condition which obtained in the France of 1790 was the classical pre-condition for a deliberately-induced inflation; namely, a long-continued period of debt accumulation by reason of governmental spending in excess of revenue (known today by the deceptive euphemism “deficit financing”) and allowing the debt simply to go unpaid. Eventually a time came (as it always does) when to prolong this unbalanced condition could lead only to general economic collapse; and it was then that the General Assembly came up with the decision to “cure” the situation by the issuance of four hundred million lives (the equivalent of about 395 million francs) in paper notes called assignats. They looked good, because they were to be “secured” by a mortgage on the vast church properties that had recently been seized by the state. Moreover, they bore interest at 3 per cent. They were launched with great fanfare and received with general acclaim. And of course there was an immediate response in the economy. Some payment was made on the public debt; pressure on the treasury was relieved; credit was revived; trade increased. The rosy predictions of those who had favored and sponsored the assignats seemed to be on the way to fulfillment.

But it took only seven years for the beautiful bubble to burst! The tragedy of the assignats has been well and frequently told, and it is not my purpose to dwell on it here except for these brief moments while I hold it up as a horrible example. The story can be summarized quickly. In the first place, political human nature being what it is, a single issue was not enough. If one dose of that magic medicine worked such wonders, let’s have some more of the stuff! We must get out additional and bigger issues of that healing paper! So the original issue of 395 million francs was soon doubled, trebled, quadrupled, by subsequent issues. Before long the assignats themselves were retired and superseded by other bills known as mandats — which soon proved to be equally valueless. In only seven years (by 1797) twenty five hundred million mandats had followed 45 thousand million assignats down the economic drain!

In terms of the American dollar, the collapse of this paper air castle meant that a bushel of flour which cost only 40 cents in 1790 cost 45 dollars five years later. Other drastic changes during that five year period were these: a pound of sugar — from 18 cents to $12.50; a pair of shoes — from one dollar to forty dollars; a head of cabbage — from 8 cents to five dollars — and so on.

Did wages and salaries also go up, as my inquiring friend asserted? Undoubtedly — but that much? And anyway, what of the frugal Frenchman who had been carefully “putting something by for a rainy day?” He, of course, and thousands like him, were completely wiped out. And so were a lot of people farther up the economic scale. This is illustrated by the preserved record of a well-to-do manufacturer who had retired from business in 1790 with the equivalent of 317,000 francs, and only six years later found that his property was worth only 14,000 francs. The present-day American counterpart of that experience would be for a man to have saved up $63,400, only to find that in six years’ time its value had shrunk to $2,880.

“Not Worth a Continental”

But we don’t have to reach so far back for such examples — no so far away. Paper bills issued during our own Revolution were known as Continentals; and what became of them is still memorialized in the phrase, “Not worth Continental.” More recently, many elderly Germans remember what happened to the Weimar Republic mark of the early nineteen twenties, when it took a million mark to buy a loaf of bread — or maybe two million by three o’clock the same afternoon. Still closer to our times, the French franc, which had long been five to the dollar, shrank after World War II until it was over 300 to the dollar; and during the same period the Italian lire dwindled until it was peddled by bell hops at 600 or more to the dollar. Do you suppose French and Italian wages ever caught up with that much inflation?

And what of Argentina? It is a rich and beautiful country, very similar to our own in climate and natural resources. My first visit; here was in 1947. The peso was dill strong at four to the dollar went back in 1951; and in that time, after only four more years of Peronism, the peso had shrunk to twenty to the dollar. And of course it continued to plummet until by 1968 it was well-nigh worthless at 350 to the dollar. All his, of course, practically wiped out the savings of the Argentine middle class.

But “this can’t happen in the United States.” Who says it can’t? The same kind of people who said it couldn’t happen in the France of 1790 or the Germany of 1920 or the Argentina of the nineteen forties — people who, like my inquiring friend, calmly disregard he lessons of history and believe we can continue, year after year, or urge or to allow the Federal government to spend more than is realized through taxation, and still avoid the disaster of crippling, if not ruinous, inflation. The deadly process is a little slower and less dramatic with us, but it is underway nevertheless. It is already happening!

And that is what I am worried about. But it is not all.

Big Brother

I also fear the implications of Big Brotherism. This I expressed earlier, in the idea that I might presently be required to secure a travel permit in order to go someplace to fill a speaking engagement. I do not think such a requirement is imminent. Certainly I can now proceed unmolested about my lawful occasions. But it is by no means fantastic to speculate upon such a possibility—such a probability, one might say, if the steady march toward complete governmentalism is not halted.

Ours is an increasingly government-oriented society; and the tendency in any such society is ever toward more central regulation, not only of economic operations but of individual affairs. Already some leaders of what might be called the Post-Keynesian clique are openly speculating upon how much a citizen should be allowed to save, and how much should be taken away from him for public works and other “social benefits.” Such speculation presupposes a governmental elite of sufficient wisdom to set aside the workings of the free market, and of enough power to force great masses of people to accept a wholly arbitrary and quite fallible direction of their lives.

But this is America! We have no dictators or revolutionary tribunals to push us around. We do as we please within the law. We are not victimized by the State. We are the State. Well… that being the case, I sometimes wonder why it is that I can’t buy a new car unless it is equipped with a seat-belt device that won’t let the car be started until the belt is properly buckled up. Understand, I have no quarrel with seat belts; I am concerned with Big Brother-ism. We have complete freedom, except, of course, that I am forbidden to own or use gold coins. Nobody can take my property away from me, except that a planned inflation has deprived me of something like half of my life savings. I can engage in any occupation or business I like, except that I am forbidden to set up in the lucrative enterprise of delivering letters, because that is a government monopoly.

Small things? Or straws in the wind? What do you think?

We are not here dealing with mere fear-born fancies. Conditions of excessive direction and of outright repression exist in many parts of the world, alas, and not merely under communism. I well remember the complaints I heard in Copenhagen some years ago about government interference in a very down-to-earth matter. Like Amsterdam and some other European cities, the Danish metropolis is a place where seemingly the whole population moves on bicycles. Yet at that time the individual could not purchase that everyday necessity without first obtaining a permit from a designated bureau of the government. And in Sweden, with its vaunted “Middle Way,” I found great resentment and some distress because, since housing was a state monopoly, young people wishing to get married often had to wait months before they could even apply for an apartment, and sometimes several years before they actually got it. Some Swedish moralists even attributed the great increase of premarital sex partnerships to this bureaucratic housing restriction.

Expected Under Communism

In the communist world one expects this sort of thing — regulation and regimentation not only of behavior patterns that affect the economy, such as the purchase of bicycles or the renting of apartments, but of social attitudes and even of mental exercises. Yugoslavia, freer than most communist regimes from this kind of tyranny nevertheless sees the former trusted lieutenant of Josip Broz serving a long prison sentence because he dared disagree — in writing! — with parts of “Tito’s” program. And of course the persecution of literary dissenters in communist Russia is not limited to the dramatic expulsion of a Solzhenitzyn, but has long been practiced, and in much crueler form. As for China, what could be more drearily awful than to see millions of young people flaunting a little red book and mouthing the not-so-original “thoughts” of Mao? Well, yes, one thing could be worse — to reflect upon what happens, once a “cultural revolution” is unleashed, to anyone who does not wave the little red book!

The worst of such terrorization is not so much in the degradation of intellect with respect to ideology and dogma, as in its general effect upon the attitude and behavior of average people. Once, while Peron was at the top of his power in Argentina, I was in Lima, Peru to attend a hemispheric business conference. There was still a pretense of complete freedom of opinion and expression in Buenos Aires; yet in Lima I saw a prominent Argentine businessman support a resolution which struck at the very heart of progress through freedom of enterprise under representative government. It was opposed by the U.S. delegation, and by nearly all the Latin American representatives. Moreover, it was totally out of keeping with what we all knew of that man’s philosophy. Yet he stoutly defended it; and when he was privately reproached about it, he pointed out that the Argentine delegation was dominated by several representatives of the Peron regime, and said quite frankly that he didn’t dare oppose them if he hoped to continue in business when he got home.

An Argentine Experience

An even more subtle demonstration of intimidation was offered on another occasion in a Buenos Aires hotel where my wife and I had spent some days. Enroute down on the ship, and while there, we had enjoyed pleasant contacts with a Methodist Bishop and his wife from Oklahoma. Ready for departure, we were all chatting in the hotel lobby. An American ministerial friend of the Bishop’s, who lived in Buenos Aires, was there to bid him goodbye. He asked me if we were going on the same plane with the Bishop to the west coast, and I, thinking to make a cute reply with a scriptural flavor, said: “Oh no; I’m playing Joshua to the Bishop’s Moses, and will first go down into Patagonia to spy out the land.” A harmless wisecrack — but, believe it or not, at the phrase “spy out the land” the clergyman was visibly startled and looked around apprehensively, to see if anyone else had heard me! Such is the conditioning of repression. Such is the involuntary response to ruthless Big Brotherism.

I should record in passing that this sort of fear tended to diminish as one got farther away from Buenos Aires, where it all centered in the Casa Rosada. In Baraloche, for example, far west and high up among the Andean ridges, I had a long talk one day with a local businessman who told me quite openly that he belonged to the opposition, and said that his attitude was well known. However, although he hated Peron, he insisted that conditions of repression had been exaggerated abroad, and that police-state methods were actually no worse under Peron than they had been in earlier years under one of the so-called “constitutional” Presidents. As to that, I was not impressed, because I recalled that the great old newspaper La Prensa had been ruthlessly seized, silenced, and converted into a Peronista Party organ. (A present-day parallel would be for Richard Nixon to take over by force the New York Times and compel it to become the Pravda of the Administration.) But whether by Peron, or by whomever, the fact was that the people of Argentina had been periodically subjected to police-state methods of intimidation, and I was a witness to some of the oblique results.

A Frightening Trend

Far away and long ago? Yes. But the spirit of central direction of repression, of you-do-it-our-way-or-else, is by no means dead in the world. It lives ghoulishly in Russia at the present moment, as it does also in China and Yugoslavia; and it thrives elsewhere too — in Albania, in Czechoslovakia, Bulgaria, Romania, Hungary and in several of the “emerging” countries of Africa, where adventurous dictators have seized power. Sometimes it is evidenced by acts of raw violence; sometimes it reveals itself in the capricious administrative laws promulgated by irresponsible bureaucrats. But the effect is always the same: at best intimidation, at worst, terrorism and abuse; at best irritating bureaucratic interference, at worst banishment, imprisonment — or death.

Inflation that eats and cheats, and robs; Big Brotherism that nags and torments and kills. That’s what I’m worried about. Are you? Well… if you are, you can do something about it. At least you can make a beginning; for a Rome was not built in a day, the destructive effects resulting from several decades of superstatism can not be neutralized overnight. It will be a long and difficult process, the more so, perhaps, because it must start, and continue, with some uncompromising self-analysis. Every concerned person must ask himself whether he really understands the forces at work, and whether he himself is in any degree responsible for them.

But first of all, don’t panic! Mine is not a heedless and irresponsible voice crying “Fire!” in a crowded theatre. So walk, don’t run — not to the nearest exit (for no exit from this country leads to any place better or half so good) but to some quiet corner fit for contemplation, there to consider a little of history, a bit of elementary economics, and a small analysis of human nature.

Enroute to that corner, take heart. The theatre is not about to burn down; neither is the country in flames. Our America is durable, enormously endowed by nature, fabulously rich — the home of a resilient and resourceful society. We have done much to weaken it, but it has survived our most destructive efforts, and the end is not yet.

Consider first our history, encapsulated for brevity. After the period of adventurous exploration, our part of the Western Hemisphere was settled by people who were eager for wider opportunity and greater freedom than they or their fathers had known in the older world. When at last our new nation was established, it was based on a passionate belief in that same freedom as a necessary condition for human happiness and progress. Inherent in that belief was the spirit of initiative and self-reliance as to personal status and welfare, and a strong philosophy of minimal government as to political institutions. This was epitomized in Jefferson‘s famous formula: The best governed are the least governed.

Erosion of Freedom

As the decades went by, this concept was gradually diluted by the intervention of an imaginary self-interest. That is where “human nature” entered the equation. Ideally men want freedom of action (within recognized and formulated rules called laws). Ideally they want a government that protects them from aggressors, provides a situation of security and stability… and then lets them alone. But they also want favors, advantages, special privileges, and always “something for nothing.” Thus the citizen who wants the government to provide “security” for his old age; thus the farmer who wants the state to subsidize his crops; the businessman who wants the treasury to underwrite his developments or guarantee his investments; the labor leader who seeks the advantage of a special status under the law; the local booster who wants Washington to spend nine zillion dollars for this, that, or the other installation of doubtful necessity or merit. In short, thus an importunate army of people who almost without exception are wont to excoriate the government for its alleged or actual extravagances, but who demand loudly that it meet their special “needs” — and who see no inconsistency in their ambivalent attitudes.

These diverse interests and countless others inevitably breed politicians who thrive by catering to the various groups or “blocks” identified with such demands; and the end result is a burgeoning administrative bureaucracy which soon adds not only its heavy cost but its self-perpetuating energy to the general thrust toward debt accumulation and concentrated power. All this is done, often without conscious guile, in the name of motives so noble and humanitarian that to oppose or question them is to be branded as unprogressive, unrealistic, lacking in social vision, and generally undesirable. It was Pascal, I believe, who said: “Evil is never done so thoroughly and so well as when it is done with a good conscience.”

It is to be understood, of course, that we are not here concerned about the basic protective functions of government. Obviously an organized society must have laws and sufficient governmental machinery to enforce them. Obviously also, a growing nation will require new laws now and then, and modifications of old ones to meet changing conditions. It would be hopelessly doctrinaire to expect a nation of over 200 million people to need only the laws and require only the governmental machinery that sufficed for its primitive or agrarian period. Even the “thou shalt nots” necessary for the ordinary protection of life and property must be increased to cope with the proliferation of criminality born of institutionalized cupidity.

Nor is this a plea for the unbridled exercise of whimsical personal “freedom” such as now seems to titillate the fancy of certain types of younger social “philosophers.” Quite the contrary, one of the primary functions of government is to prevent such indulgence by a few from diminishing the freedom or invading the rights of others. Man, unfortunately, (or perhaps we should say fortunately), has never been free from the consequences of his own greed; and government, even under the least amount of Big Brotherism, must exercise certain restraints in the interest of justice for all. A society that operates under law must have the governmental machinery necessary to enforce the law and administer those functions entrusted to it, or enjoined upon it, by the basic law or constitution under which that government exists.

A Question of Solvency

So much for a glance at history and human nature. What of solvency and its part in the affairs of men and governments?

Hardly anyone will dispute the value of personal solvency. The man or family that constantly lives beyond his or its means is soon in trouble. Quite apart from the matter of reputation and standing in the community, credit for such people begins to get tight and soon is not to be had at all, which is both a commercial inconvenience and ultimately a social handicap. Nearly everybody, whatever his political beliefs or economic philosophy, recognizes solvency — that is, the ability to live within one’s income, pay one’s debts, and save something for emergencies — as the minimal condition for a satisfactory fiscal experience. To adopt the old Micawber formula of spending a little less than is earned is still the goal of most people in their private lives.

But many, alas, do not apply that same simple principle to governmental finance. Even businessmen who are careful to keep their operations solvent, often see nothing amiss in having their government go deeper in debt year after year, with a resultant and cumulative cheapening of the currency. Moreover, some who profess to study and teach economics as an academic discipline have gone over to the big-spend-and-never-pay-it back philosophy; and the attitude of such economists reached what for me was a climax of absurdity when, in justifying one of the many grossly unbalanced Federal budgets of recent years, they said in effect that it was okay, because it was a full-employment budget, based on what employment would have been that year if only it had been up to where it ought to have been!

And so more billions were heaped onto the staggering debt of over 400 billions, and the already overburdened taxpayers will again be penalized, more paper will be issued, the currency will be further diluted, and….

But at this point faint, distant voices seem to break into my musings:

What nonsense you are talking, Messieur! These assignats are as good as gold!… Hey, what are you, Mister — some kinda anti-American or something? Why man, these Continentals are perfectly sound money… Liber Gott! How you talk silliness! Do you believe our good Herr Ebert would let these marks become worthless?… But Senor, our peso is as good as the silver for which our country was named. More! — It is as good as gold!

Why Gold?

As good as gold! Why that hopeful refrain? Gold was demonetized in this country some 40 years ago, yet in everyday speech it is still cited as the standard of excellence. That is because across many centuries of human experience that yellow metal has been a symbol of value and stability. Perhaps it is not possible at this advanced stage of inflation to persuade people to stop relying on periodic doses of unsupported paper money. That is part of the look to Washington syndrome. But it is equally impossible for a concerned person to stop trying!

In their hearts and out of their own life experience, people know, they really do know, that there is no substitute for value, given and received, in human exchanges. Yet over and over again mankind, of different races and languages, all over the world, have sought economic ease and a societal paradise in high-sounding governmental programs aimed at improving the conditions and quality of life. And time after time such programs have failed because, however hopefully they may have been started, they become based ultimately upon the principle of governmental insolvency. And that leads inevitably to the abandonment of sound money and finally to ruinous inflation.

What can you do? What can I do? We can first of all consider whether we ourselves have been responsible citizens or importunate mendicants. We can stop looking to Washington for the solution of every problem. We can cease saying “there ought to be a law” and begin thinking “there must be a basic principle — let’s find it.” We can realize that the good life is not to be achieved through Federal bankruptcy. We can know, and keep saying, that safety for all is grounded in solvency for all.

We can study the history of human progress to learn how and why the voluntary market mechanism better serves the ends of society than the methods espoused by the devotees of coercive Big Brotherism. We can learn from the lessons of history that the most fundamental of all market principles and practices is to let the market be free — to let those who exchange goods and services (and that, one way or another, is nearly all of us) choose and use as money the most trustworthy marketable item available. This, over the long course of civilization, happens to have been one of the precious metals, usually gold or silver. That, of course, is because the supply of these metals is such that no man or group of men can arbitrarily increase or decrease it to an extent that will materially injure or inconvenience others. The point here is that a government, no less than an individual, must have some trustworthy, non-fluctuating, non-flappable, medium of exchange.

That greed and rapacity exist and must be curbed; that there is crime that must be detected and punished; that society should be protected from its enemies, whether within or without — all this goes without saying, since that is the end and aim of government. Hence organization, hence police, hence the military; and hence a certain amount of bureaucracy, and expense… and taxes!

Such things are the price we pay to avoid barbarism and escape anarchy. But the price, in such terms, should be kept at the minimum required for the government to do its job. As for us, we can know and constantly proclaim that the bright and cherished ideal of a better society and a richer life for all will not be served in the long run by having more government, but less.

Here in this America we still have the best hope of Earth. It is far from perfect, but it shines and glows beside its nearest rivals on the world stage. It has been, and is, the scene of vast achievement, growth, invention and social progress. But it begins soon its third century of national life —and it has already long outlived many nations that were great and powerful when it was born. How we live our lives may determine its fate. Will it continue as a world exemplar, with solvency and freedom as its base, or will it become a kind of terrestrial White Dwarf —a collapsed star in the galaxy of nations? 

  • Mr. Bradford was a noted poet, writer, speaker and business organization consultant.