Socialist Economics: 1950-2020

                                           

William F. Buckley, Jr.

Income inequality is going to be one of the top issues in the 2020 Presidential campaign.  For many, income inequality is a new issue that has taken root because of the seemingly increasing gap between the rich and poor in the past few years. However, the issue goes back in time to an earlier period in American history. The origins of the issue have more to do with ideology than with any current economic statistics.

 William F. Buckley Jr., the famed Conservative commentator, first came to nation’s attention with the publication of God and Man at Yale back in 1951. The book, a review of Buckley's years at Yale was subtitled, “The Superstitions of ‘Academic Freedom’”. 

Buckley must have had an outstanding college career before graduating in 1950. For example, one year he held the prestigious position of editor of the Yale Daily News.  He  loved his Alma Mater but found some disturbing trends. 

Here I would just like to concentrate on his lengthy chapter devoted to the teaching of economics at Yale, a chapter primarily analyzing the textbooks chosen for the basic introductory course that was taken by a large number of students. All four of the textbooks believed that the biggest problem facing America in 1950 was “income inequality”. That’s right! Income Inequality or, as he titled it, THE UNFAIR DISTRIBUTION OF INCOME. Why was income inequality such a big issue back in 1950?

I believe the answer can be found in the background of the economists who had written the textbooks. If Buckley was about 25 in 1950, then I would guess the authors of the textbooks were born before the First World War and grew up in the era marked by the subsequent Communist Revolution in Russia and the worldwide Great Depression of the 1930s. Paul Samuelson, for example, was born in 1915 and his textbook, Economics, an Introductory Analysis, was first published in 1948 and soon became one of the best-selling textbooks of all time. Samuelson’s book was one of the four reviewed by Buckley.

Samuelson and the others all believed that the experiment begun in Russia in 1917 was the wave of the future, and that the Great Depression in American had shown the inadequacies of the traditional system of free or private enterprise in dealing with modern economic issues.

In the chapter on economics Buckley cited a comparison between the Soviet and American systems from one of these textbooks. The italics are Buckley’s.

compare “ the situation in our economy with that in a socialist economy, such as the Russian or Czechoslovakian. In the Russian economy the decision to produce, let us say 20 million tons of pig iron, is made by the Central Planning board, which presumably takes into account the needs and resources of the Russian economy before it comes to a decision. The same board determines how many automobiles to produce, how many pairs of socks to manufacture, and how many acres to put into wheat. In our economy, no such institution exists. No one group or person determines how much steel to produce, how many tractors to make, or how much land to plant in cotton…. In a socialist economy, important questions of output, price, employment, and so on are planned collectively. In a capitalistic economy, these decisions are made separately by individual firms…. How does the business firm determine how much it will produce? The answer to this question is to be found in the fact that the business firm in this country is privately owned…. The determination of how much to produce, or of the price to be charged for the product, is made with one interest in mind—that of the owner. The owner’s interest is to secure as large a profit as possible. [Pp. 65-66]

Just as today, it was believed that the profit motive that was the root of all evil. In the words of one text, “the state, being free from the profit motive and having the power of compulsion, is able to make its revenue fit its expenditures (within limits) rather than the reverse.” [p. 67] Of course, profit motive brings up the image of the greedy businessman as often portrayed in popular movies of the 1930s or in the figure of Mr. Monopoly from the very popular board game.

Samuelson’s text disclaimed the image but still used it.

In this connection, it is important to understand just what a monopolist is. He is not indeed,“…a fat, greedy man with a big moustache and cigar who goes around violating the law. If he were, we could put him in jail. He is anyone important enough to affect the prices of the things that he sells and buys. To some degree that means almost every businessman”… [75]

In 1950 all four textbook authors were convinced that the experiment going on in Russia was the wave of the future and that the private enterprises system was a thing of the past that had been forever discredited by the Great Depression. The textbooks, and the professors who chose them, were all advocates of central planning, a large central government, extremely high progressive income tax rates, and confiscatory inheritance tax rates. 

Writing in 1950 I don’t suppose that the young Buckley or the textbook authors could have foreseen the great economic boom that would take place in the USA in the next few decades, a boom that not only raised millions out of poverty, but also created the wealthiest country in the history of the world. Neither could they imagine that during the same period the Soviet economy would finally be exposed as a rotten failure. At the same time as we were beginning to learn about Stalin’s brutal oppression, we were learning of people lining up at Russian markets for hours to buy inferior or even non-existent necessities. 

The Soviet Union had eliminated income inequality by making everyone poor. Years later, we would learn that they had actually created a new aristocracy of Communist party members and their friends who lorded it over their subjects. As in most socialist countries members of the ruling party made up only about 10% of the population. So much for central planning and the elimination of the profit motive.

In one of history’s ironies Paul Samuelson made a fortune with his economics textbook, In true capitalist fashion he contrived to bring out a new edition every couple of years so that students could not buy older used texts. No central board or agency prevented him or his publisher from printing and selling as many copies as the market would bear. He lived a long life and received practically every award a scholar could get. In 1996, he was awarded the National Medal of Science by President Bill Clinton, another Yale graduate who now makes millions by giving speeches to fat cats all over the world while he, his wife, and "democratic socialists" or so-called progressives complain of income inequality.

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Democratic Aristocrats

Democratic Nobility

I could not bear to watch the Democratic party debates for more than a few minutes. It was a truly embarrassing spectacle for all involved. Nevertheless, I did come away with one impression. Although our Constitution does not allow “titles of nobility”, the candidates were all aristocrats of varying degrees of nobility. 

For example, when President Obama uttered his now famous line, “If you like your medical plan, you can keep it,” it was true as far as most of these candidates were concerned. Members of Congress were supposed to enroll in Obamacare, but they apparently found a way to stay in their old Federal “Cadillac” plan. They profess to be concerned about health care for the people, but they took care of themselves first.

Moreover, news reports indicate that leading candidates Joe Biden, Kamala Harris, Elizabeth Warren, and even Socialist Bernie Sanders are millionaires. Biden has just reported that he and his wife had income of over $14 Million since leaving office after the 2016 election. They also used an S-corporation to minimize taxes.

Where is Shakespeare when we need him? It would take someone like him to tell about Kamala, Duchess of California, Elizabeth, Duchess of Massachusetts, Kristen, Duchess of New York, or Amy, Duchess of Minnesota. Their seats in the Senate are so safe that they might as well be considered hereditary. 

What about the men? Bernie Sanders, the aged Duke of Vermont, who will apparently hold his position for life, has somehow managed to become a millionaire despite his avowed Socialist and income re-distribution principles. His wife was President of the College of Burlington in Vermont where she pulled down a salary of about $150000 a year with generous retirement and severance benefits. How did her compensation compare with the pittance that colleges routinely pay to adjunct professors? 

Cory Booker, Duke of New Jersey, despite his privilege upbringing still portrays himself as an aggrieved black man. He is also a sacrosanct politician since any criticism of him or his ideas would be immediately portrayed as racist.

Even the lesser nobility have thrown their hats into the ring. There is Bill de Blasio, Earl of New York City, as well as Pete Buttigieg, the young Earl of South Bend, Indiana. Earl de Blasio presides over a city of great income inequality where homelessness goes hand in hand with astronomical housing costs. Buttigieg is well-loved in a South Bend suffering from urban blight, and where students at Notre Dame  are strongly advised not to go off campus.

Finally, Joe Biden, the Prince of Wilmington, is a truly Shakespearean character. For years, like Britain’s Prince Charles, he has waited to ascend to the Crown. He might have thought that once he became vice-President under King Barack Obama, his time had finally come. However, Queen Hillary, the wife of former King William, exerted her “divine right” and claimed the Democratic nomination in 2016. Little did she suspect, like Lady Macbeth, that an unforeseen opponent heading a mob of “deplorables” would storm the castle and seize the throne.

Now Prince Joe resembles Julius Caesar. The first debate showed that noble conspirators are planning his political assassination. 

Perhaps the candidates should brush up their Shakespeare.

Tomorrow, and tomorrow, and tomorrow,

Creeps in this petty pace from day to day,

To the last syllable of recorded time;

And all our yesterdays have lighted fools

The way to dusty death. Out, out, brief candle!

Life's but a walking shadow, a poor player,

That struts and frets his hour upon the stage,

And then is heard no more. It is a tale

Told by an idiot, full of sound and fury,

Signifying nothing.

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Independence Day 2019

                                         

Many, many years ago I completed my doctoral dissertation on an eighteenth century English politician and general who was very active in the British Parliament at the time of the American Revolution. In fact, he had been one of the major figures to consistently oppose the attempts to punish and coerce the American colonies into submission. As a general he believed that a war on the vast land mass of North America was impractical. As a politician he believed that the Americans were defending the traditional rights of Englishmen. ***

My studies and research led me to conclude that the Americans did indeed believe that they were defending the traditional rights of their forebears in England. More than anything else, The Declaration of Independence is testimony to that belief. Below I reproduce my annual post on that famous and still important document.

B

First American Flag

Every July 4 we celebrate Independence Day, the anniversary of the promulgation of our famed Declaration of Independence on July 4, 1776. Most of us have heard the famous opening lines of the document, 

We hold these truths to be self evident, that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty, and the pursuit of happiness.

However, few have ever read the entire Declaration and even fewer have any understanding of the nature of the actual grievances that led the colonists to sever their ties with England and seek independence. Most readers don’t get past the following words.

But when a long train of abuses and usurpations, pursuing invariably the same object, evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.

King George III of England was one of the nicest, most benevolent rulers that England ever had, but the Declaration portrayed him as a tyrannical despot. However, the real conflict between England and her American colonies was not between Monarchy and Democracy but between the rights of the British people represented as they were by their own Parliament, and the rights of the American colonists represented as they were by their own colonial assemblies. In this conflict no one was a greater supporter of the rights and authority of the British Parliament than the King.

For the most part the Declaration of Independence does not complain about violations of individual human rights but concentrates on what it claims has been a systematic attempt on the part of the government in England to violate the rights and privileges of colonial representative assemblies. 

The founding fathers believed these assemblies that represented the leading citizens and property owners in the various colonies were the sole bulwark against monarchical tyranny on the one hand, and democratic anarchy on the other. They claimed that the King and his colonial governors have repeatedly refused to put into operation laws passed by these assemblies.

•He has refused his assent to laws, the most wholesome and necessary for the public good. 

•He has forbidden his governors to pass laws of immediate and pressing importance, unless suspended in their operations till his assent should be obtained; 

•He has refused to pass other laws for the accommodation of large districts of people, unless those people would relinquish the right of representation in the legislature,… 

•He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their public records for the sole purpose of fatiguing them into compliance with his measures.

In some cases the English government has even gone so far as to dissolve some of these representative assemblies and leave particular colonies without any form of self-government. The legal system, military defense, and tax collection have been taken out of the hands of the colonial representatives. Here are some examples:

•He has obstructed the administration of justice, by refusing his assent to laws for establishing judiciary powers 

•He has made the judges dependent on his will alone, for the tenure of their offices, and the amount and payment of their salaries. 

•He has erected a multitude of new offices, and sent hither swarms of officers to harass our people, and eat out their substance. 

•He has kept among us, in times of peace, standing armies, without the consent of our legislatures.

• He has affected to render the military independent of and superior to the civil power.

In the end the Declaration claimed that it came down to a contest between their own local representative assemblies and a faraway legislature that did not represent them. Because they had come to deny the authority of the British Parliament, they never used the word Parliament in the document. 

There are elements in the Declaration that might seem offensive to modern ears. Jefferson and others in America opposed the efforts of a reforming British government to permit religious toleration of the large Catholic population in newly conquered Canada. For them Catholicism went hand in hand with despotism. The Declaration also complained about attempts on the part of the British government to prevent colonization of Indian territory. Indeed, it claimed that England was encouraging the native tribes.

Nevertheless, the leaders assembled in Congress insisted on their rights as Englishmen to govern themselves. They wanted government to be as close to home as possible. They would make their own laws, vote their own taxes when necessary, and be responsible for their own legal and military systems. They did not want to be governed by a faraway government that had little concern for their interests or welfare.

It was true that the founders were men of property and status. Washington, Jefferson, Adams, Madison, and Franklin were not common men. Democracy would come later. For the present they wanted to protect their right to self-government. The British government had declared itself “invested with power to legislate for us in all cases whatsoever.” To resist, they were prepared to risk all that they held dear.

•“And for the support of this declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our lives, our fortunes, and our sacred honor.”

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*** The politician was General Henry Seymour Conway. Not only was he one of the handful of members of Parliament to oppose the Stamp Act, the original attempt to tax the colonies in 1763, but also, he was the one whose motion in Parliament in 1782 brought an end to the American war. In my old age I have copied my dissertation and related posts online on a site entitled Henry Seymour Conway, 1740-1795.

Film Noir Favorites

In the past few years I have become a big fan of a certain kind of American film from the 1940s and 50s. They are primarily black and white, dark crime dramas that French film makers and critics called film-noir after they rediscovered American films after the liberation of France in 1945. The term film-noir refers not only to the dark themes of these movies but also to the nighttime settings and the often startling contrasts between light and dark, black and white. 

Originally, these films were low budget productions usually designed to be seen as the second feature on traditional Hollywood double bills. Nevertheless, today many are regarded as ground-breaking classics. They featured great directors, actors, writers, and film craftsmen and craftswomen. To fill the insatiable demand for movies in America, Hollywood even imported great talents from abroad. In my opinion, film-noir represents a short-lived American film renaissance that came to an end with the advent of television and technicolor. 

Below find brief descriptions of nine of these films that I have viewed this year. Not only are they gripping, extremely well-told stories with masterful directing and acting, but also they bring me back to the days of my childhood. In the background I can see a world that is no more: the dark dingy streets, the small apartments, the cars, the old telephones, and the incessant cigarette smoking and drinking. 

 

Peggy Cummins in Gun Crazy

Gun Crazy.  Peggy Cummins and John Dall star in this 1950 story of two star-crossed lovers who meet in a carnival shooting contest and immediately go together like guns and ammunition. The two become bank robbers on the run who roar into movie history in a bench-mark film noir thriller.                             

Call Northside 777. James Stewart stars in this 1948 film as a newspaperman who reluctantly investigates the case of a convict who has already spent ten years in prison for the murder of a policeman. Richard Conte and some superb character actors also appear in this very naturalistic film that was based on a true story. 

Strangers on a Train. Alfred Hitchcock produced this 1951 psychological thriller starring Farley Granger and Robert Walker. Two strangers meet on a train: one a charming psychopath who hates his father, and the other a young tennis player trying to get out of a bad marriage. The rest is pure Hitchcock. 

Whirlpool. Gene Tierney stars in this 1949 story of a woman secretly suffering from kleptomania who turns to a hypnotist to cure her condition. Soon afterwards she is found at the scene of a murder with no memory of how she got there and no way to prove her innocence. Richard Conte and Jose Ferrer co-star. 

Scarlet Street. In this 1945 film Edward G. Robinson plays a lonely middle-aged man locked in a horrible marriage who accidentally becomes involved with a beautiful young woman. When her sleazy boyfriend prods her to get money out of the man, things go from bad to worse. Directed by Fritz Lang, the film co-stars Joan Bennett and Dan Duryea                                          

The Woman in the Window. Edward G. Robinson stars in this 1944 film as a middle-aged professor who engages in an innocent flirtation with a chance acquaintance (Joan Bennett) and inadvertently commits a shocking murder. Things quickly go from bad to worse as they try to cover up the crime. Directed by Fritz Lang. 

The Big Sleep.  Humphrey Bogart and Lauren Bacall star in this 1946 adaptation of Raymond Chandler’s famed crime novel. Bogart plays legendary private eye Philip Marlowe on the trail of killers, pornographers, gamblers, and a bevy of beautiful young women. Directed by Howard Hawks.

They Live by Night. Farley Granger and Cathy O’Donnell star in this classic 1949 film of young lovers mixed up with a gang of criminals. This film is regarded by many as the forerunner to Bonnie and Clyde. Directed by Nicholas Ray.

I Confess. Montgomery Clift stars in this 1953 Alfred Hitchcock thriller as a priest who hears a killer’s confession but then is accused of the murder himself.  Unable to speak out because of the seal of the confessional, police and public opinion turn against him especially when it turns out there was a woman (Anne Baxter) in his past. Filmed onsite in Quebec.

Montgomery Clift in I Confess

Note; Most of these films can be viewed on Netflix or Youtube. I prefer to use DVDs because they often include excellent commentaries, background information, and subtitles for people like myself who are hearing impaired. ###