“It assumes that man is not interested in freedom but only in a full belly.”

A Marxist would probably counter that libertarianism assumes that man is not interested in a full belly, but only in freedom.

“It assumes that man is not interested in freedom but only in a full belly.”

Maslow proposed that the full belly comes first.

It is very gratifying to be able to read this well written and cogent article by Mr. Towner Phelan which expressed a critical viewpoint widely held in the period after WWII by certain individuals (particularly those who considered themselves “conservatives”) opposed to the New Deal/Fair Deal welfare-warfare of Franklin D. Roosevelt and Harry S Truman. However the article suffers from a tragic historiographic flaw at its very core, the mistaken notion of “the New Deal as Red.” Thankfully over many decades a new revisionist scholarship blending the best insights of the New Left and the Old Right in a new interpretative synthesis has arisen which addressed this serious misintrepretation. One of the earliest and most forceful presentations of this new viewpoint was Murray N. Rothbard’s brilliant “Left and Right: The Prospects For Liberty,” published in the Spring 1965 premier issue of Left and Right. Here is the most relevant passage which focuses upon these specific “conservative” distortions:

“We are now in a position to apply our analysis to the American scene. Here we encounter a contrasting myth about recent American history which has been propagated by current conservatives and adopted by most American libertarians. The myth goes approximately as follows: America was, more or less, a haven of laissez-faire until the New Deal; then Roosevelt, influenced by Felix Frankfurter, the Intercollegiate Socialist Society, and other “Fabian” and Communist “conspirators,” engineered a revolution which set America on the path to Socialism, and, further on, beyond the horizon, to Communism. The present-day libertarian who adopts this or a similar view of the American experience, tends to think of himself as an “extreme right-winger”; slightly to the left of him, then, lies the Conservative, to the left of that the middle-of-the road, and then leftward to Socialism and Communism. Hence, the enormous temptation for some libertarians to red-bait; for, since they see America as drifting inexorably leftward to Socialism and therefore to Communism, the great temptation is for them to overlook the intermediary stages and tar all of their opposition with the hated Red brush.

“One would think that the “right-wing libertarian” would quickly be able to see some drastic flaws in this conception. For one thing, the income tax amendment, which he deplores as the beginning of socialism in America, was put through Congress in 1909 by an overwhelming majority of both parties. To look at this event as a sharp leftward move toward socialism would require treating president William Howard Taft, who put through the 16th Amendment, as a Leftist, and surely few would have the temerity to do that. Indeed, the New Deal was not a revolution in any sense; its entire collectivist program was anticipated: proximately by Herbert Hoover during the depression, and, beyond that, by the war-collectivism and central planning that governed America during the First World War. Every element in the New Deal program: central planning, creation of a network of compulsory cartels for industry and agriculture, inflation and credit expansion, artificial raising of wage rates and promotion of unions within the overall monopoly structure, government regulation and ownership, all this had been anticipated and adumbrated during the previous two decades. [13] And this program, with its privileging of various big business interests at the top of the collectivist heap, was in no sense reminiscent of socialism or leftism; there was nothing smacking of the egalitarian or the proletarian here. No, the kinship of this burgeoning collectivism was not at all with Socialism-Communism but with Fascism, or Socialism-of-the-Right, a kinship which many big businessmen of the ‘twenties expressed openly in their yearning for abandonment of a quasi-laissez-faire system for a collectivism which they could control. And, surely, William Howard Taft, Woodrow Wilson, and Herbert Clark Hoover make far more recognizable figures as proto-Fascists than they do as crypto-Communists.

“The essence of the New Deal was seen, far more clearly than in the conservative mythology, by the Leninist movement in the early 1930′s–that is, until the mid-thirties, when the exigencies of Soviet foreign relations caused a sharp shift of the world Communist line to “Popular Front” approval of the New Deal. Thus, in 1934, the British Leninist theoretician R. Palme Dutt published a brief but scathing analysis of the New Deal as “social fascism”–as the reality of Fascism cloaked with a thin veneer of populist demagogy. No conservative opponent has ever delivered a more vigorous or trenchant denunciation of the New Deal. The Roosevelt policy, wrote Dutt, was to “move to a form of dictatorship of a war-type”; the essential policies were to impose a State monopoly capitalism through the NRA, to subsidize business, banking, and agriculture through inflation and the partial expropriation of the mass of the people through lower real wage rates, and to the regulation and exploitation of labor by means of government-fixed wages and compulsory arbitration. When the New Deal, wrote Dutt, is stripped of its “social-reformist ‘progressive’ camouflage,” “the reality of the new Fascist type of system of concentrated state capitalism and industrial servitude remains, ” including an implicit “advance to war.” Dutt effectively concluded with a quote from an editor of the highly respected Current History Magazine: “The new America (the editor had written in mid-1933) will not be capitalist in the old sense, nor will it be Socialist. If at the moment the trend is towards Fascism, it will be an American Fascism, embodying the experience, the traditions and the hopes of a great middle-class nation.” [14]

“Thus, the New Deal was not a qualitative break from the American past; on the contrary, it was merely a quantitative extension of the web of State privilege that had been proposed and acted upon before: in Hoover’s Administration, in the war collectivism of World War I, and in the Progressive Era. The most thorough exposition of the origins of State monopoly capitalism, or what he calls “political capitalism,” in the U.S. is found in the brilliant work of Dr. Gabriel Kolko. In his Triumph of Conservatism, Kolko traces the origins of political capitalism in the “reforms” of the Progressive Era. Orthodox historians have always treated the Progressive period (roughly 1900-1916) as a time when free-market capitalism was becoming increasingly “monopolistic”; in reaction to this reign of monopoly and big business, so the story runs, altruistic intellectuals and far-seeing politicians turned to intervention by the government to reform and regulate these evils. Kolko’s great work demonstrates that the reality was almost precisely the opposite of this myth. Despite the wave of mergers and trusts formed around the turn of the century, Kolko reveals, the forces of competition on the free market rapidly vitiated and dissolved these attempts at stabilizing and perpetuating the economic power of big business interests. It was precisely in reaction to their impending defeat at the hands of the competitive storms of the market that business turned, increasingly after the 1900′s, to the federal government for aid and protection. In short, the intervention by the federal government was designed, not to curb big business monopoly for the sake of the public weal, but to create monopolies that big business (as well as trade associations smaller business) had not been able to establish amidst the competitive gales of the free market. Both Left and Right have been persistently misled by the notion that intervention by the government is ipso facto leftish and anti-business. Hence the mythology of the New-Fair Deal-as-Red that is endemic on the Right. Both the big businessmen, led by the Morgan interests, and Professor Kolko almost uniquely in the academic world, have realized that monopoly privilege can only be created by the State and not as a result of free market operations.”

This entire Rothbard article is available here at Mises.org.

Sherry claims that denizens of this site support the wars of the US government and that central planners like Greenspan and Bernanke support economic freedom.

Neither claim is true.

Towner Phelan’s “New Deal as Red” historical analysis totally neglects looking at the Progressive Era antecedants of the Roosevelt regime.

Historians long recognized that the Progressive Era, 1900 to 1920, was a critical watershed in American political-economic and intellectual history.

It was the gestation period of the modern welfare-warfare state.

So many crucial events and legislative enactments occurred in the period such as the birth of the Federal Reserve, the Harrison Narcotics Act, the Pure Food and Drug Act, the passage of the Sixteenth Amendment and the progressive income tax, the Seventeenth Amendment and the popular election of U. S. senators, the Eighteenth Amendment and Prohibition, and the abandonment of America’s traditional non-interventionist foreign policy, first in the Spanish American War and the Philippine Insurrection, in Latin America and Mexico, and more decisively in the First World War in Europe.

It was a time when a new ideological rationalization of state power was being shaped. The Progressive Era saw the birth of the cult of efficiency, with the new administrative state’s apolitical experts gingerly guiding public-policy instead of the archaic rule of political bosses and their ethnic urban political machines. Or, at least that was what was supposed to happen.

Once upon a time there existed a scholarly consensus concerning the Progressive Era among liberal “court historians” of academia and popular history. These historians such as Arthur Link, George Mowry, and Arthur Schlesinger, Jr., held the uniform and unshakable belief that the “Progressive reforms” enacted during this era were popular efforts by the people against the business interests dominating American political life.

Then in the early 1960s, all Hell broke loose.

The provocative historian tossing the stick of dynamite into the staid liberal consensus was Gabriel Kolko. That incendiary was The Triumph of Conservatism: A Reinterpretation of American History, 1900-1916.

Kolko was soon joined by other New Left colleagues under the tutelage of William Appleman Williams in challenging the reigning “corporate liberal” orthodoxy. Rather than “the people” being behind these “Progressive reforms,” it was the very business interests themselves responsible, in an attempt to cartelize, centralize and control what was impossible due to the dynamics of a competitive and decentralized economy.

One of the first historians and economists to see the importance of Kolko’s revolutionary interpretation was Murray N. Rothbard.

In the academic jargon of a Hegelian dialectical triad, here is what happened:

First there was the reigning liberal orthodoxy (thesis), challenged by the New Left revisionist interpretation (antithesis). Rothbard, using the insights of Austrian free market economics and Libertarian class analysis, built upon the New Left critique and created a new Libertarian historiography (synthesis) that has been carried on scholars such as Roy A. Childs, Joseph R. Stromberg, William Anderson, Thomas Woods, and Robert Higgs.

Rothbard also discovered the “missing link” in this whole story, the role of statist postmillennial evangelical Protestants, born around the time of the Civil War, in fomenting the Progressive Era.

These ideological change agents, many of whom became increasingly secularized, abandoned their religious faith but not their belief in statism.

They were the key to the rise of the welfare–warfare state in America.

The history of the Progressive Era has never been the same since.

http://www.amazon.com/Theological-nbsp-Canon-nbsp-of-nbsp-the-nbsp-Welfare-Warfare-nbsp-State/lm/1YR6KNKXQUTR8/ref=cm_srch_res_rpli_alt_1
The Theological Canon of the Welfare-Warfare State — Amazon.com book list

http://praxeology.net/RC-BRS.htm
Roy A. Childs, “Big Business and the Rise of American Statism.”

http://tmh.floonet.net/articles/strombrg.html
Joseph R. Stromberg, “The Political Economy of Liberal Corporatism.”

http://www.lewrockwell.com/rothbard/rothbard28.html
Murray N. Rothbard, “The Progressive Era and the Family.”

http://mises.org/journals/qjae/pdf/qjae2_3_1.pdf
Murray N. Rothbard, “The Origins of the Federal Reserve.”

http://mises.org/journals/jls/12_2/12_2_1.pdf
Murray N. Rothbard, Origins of the Welfare State in America.”

http://www.lewrockwell.com/rothbard/rothbard156.html
Murray N. Rothbard, “World War I as Fulfillment: Power and the Intellectuals.”

http://mises.org/Controls/Media/MediaPlayer.aspx?Id=2060
Thomas Woods, “The Progressive Era” — Mises Institute Lecture — Audio

Seattle,

I absolutely adore your response to Sherry and I hope she takes you up on further understanding Austrian theory of economics.

I am a neophyte; although I’ve pretty much been libertarian-ish all my life–and I’m over 50–I had not heard of Austrian theory until a couple of years ago, and in fact, pretty much hated anything having to do with econ thanks to a couple of all-Keynesian college classes that literally bored me to tears and made absolutely no logical sense.

For me, it took understanding of the monetary component of economics, and in particular, the effects of inflation, the (dis)function of the central banks and how the political class uses inflation for nefarious means before I could really understand much of what is written and posted here.

I leaned this from a little home-school book, “The Money Mystery” by Richard Maybury, that a friend gave me a couple of years ago. He told me that it would blow my mind. It did, and now, just about all I read is economics, Austrian of course.

The point is, I’m not sure I’d have picked up Human Action or looked around this site without some basis of understanding. Maybe I’m just a simpleton, but I sure would like to see some sort of reading list for “dummies”, IOW, something for the completely uninitiated to this school of thought. And while I’m at it, I have high-school aged children. I’d love to hear reading suggestions to interest and hook them.

Unfortuantely, the “intellectual elite” of this country have been enamoured with Marxism since the 30′s. In fact I have always believed one of the reason Hollywood “fought” so hard for the Allies in WWII was simply because their primary objective in the European theater was to save communism from the fascists. Once VE was achieved the political tone in Hollywood shifted toward a negotiated peace with Japan — which they never viewed as a real threat anyway.

Unfortuantely, the marxists now have the upper hand partly due to the Banksters (and their ilk) robbing the US taxpayer blind with the full assistance and legal authority of Obama/Bernanke/Congress.

A reasonable man can almost conclude that the goal of this corrupt triumvirate *is* to collapse the current system so a new worldwide marxist system can be put in its place. The stupidity of the decisions and actions thus far is so momumental it is difficult to imagine any other alternative.

It will end with the death of individual liberty and intellectual freedom as a shadow descends upon humanity and halts the progress of our civilization.
It always amazes that so many educated and intelligent people feel that increased state power can somehow be managed for the “public good”. Regardless of its name, fascism or marxism, statism crushes individual and all the benefits he/she brings to the world.

Hold on to your hats boys and girls — the next twenty years will be very interesting.

BTW, I don’t know whether liberty or a full stomach is more important to the common man. I suspect as long as he can play his video games and IM his buddy he doesn’t care one way or the other…

Scott wrote,

“I don’t know whether liberty or a full stomach is more important to the common man”

You don’t have to. The economic argument that taking from the rich to give to the poor does not reduce but increases inequality undermines the Left on all counts, social, moral, and political, as well as economic.

Isn’t the standard party line for those who favor laissez faire capitalism that it’s the best economic system because people are free in it to pursue their material self-interest, which, via the magic of the invisible hand, maximizes the well-being of all? Certainly in Ayn Rand’s thought people are driven purely by material self-interest (which she conveniently decides is a moral imperative).

I have to agree with Marx that the “class warfare” does exist. It is very real, and we feel it every day (e.g. recent bailouts; a.k.a. crony Capitalism)…

The real question is what you do about it -how to organize society to minimize its effects…

It is no brainer that the members of a labor-sharing society should be given maximal freedoms to conduct market exchanges facilitated by some exchange token… One does not need voluminous tomes to understand that…

In order for these market exchanges to take place there needs to be a broker guaranteeing their integrity – the conformance of the exchanges to the mutually pre-agreed terms… There goes your “State” or “Government”, my friends – right there…

Som all this noise and empty polemic boils down to a single question: “How to keep the broker honest, and not allow it to be hijacked by certain parties?”

There is no real answer to this, my friends. So argue as much as you wish. You will still be arguing about this 10,000 years from now…

Let me quote the article, “government is an instrument of oppression by which the dominant social class exploits other classes, laws and the courts are used to uphold the interests of the dominant class and to enslave the working class”.

Is this not what the modern state is doing?

EIS,

The “class warfare” is endemic to human nature, and will exist no matter what (especially under Socialism and Communism, which I have witnessed from the front-row seat myself…)

What I am trying to show is that “cronyism” WILL exist no matter how you organize the society (even under so-called “Free” Market system)…

So, all the political philosophies get something right, and most of it wrong, unfortunately, and to denegrate everyone and everything blindly, even Marx, whom I personally do NOT like, is not scholarly, but merely shows the prejudice…

Hope this helps…

There is no class warfare, never has been. Only artificially generated animosity by third parties that stand to benefit from the division of the populace.

“The Marxian doctrine that “economics determines all human life”"

The opening thesis begins with an untrue straw man; as was made clear by Engles 120 years ago;

This would indicate either intellectual dishonesty or willful ignorance of the subject matter, either way is this the best foundation from which to promote Austrian arguments?