A Funny Thing Happened On The Way To Socialism

Back in 1978, William E. Simon, a Wall Streeter who became Secretary of the Treasury in the Nixon and Ford administrations, wrote a powerful book defending the cause of freedom, A Time for Truth. What led to the book was his first-hand experience in government as Treasury Secretary and his often combative dealings with Congress. It created in him a profound sense of alarm about "the cancerous growth of government and its steady devouring of our citizens´ productive energy." He saw "the early warning symptoms of a disease that threatens the very life of our body politic. And if we continue to move down this same path, the disease will be irreversible, and our liberty will be lost." The disease, of course, was socialism, generally peddled by liberals under the less repulsive name of "social democracy."

"Freedom," he wrote, "is strangely ephemeral. It is something like breathing; one only becomes acutely aware of its importance when one is choking. … When men are left free by the state to engage in productive action, guided by self-interest above all, they do create the most efficient and powerful production system that is possible to their society. And the greatest misfortune in America today is that most people do not understand this."

As a practical capitalist, Simon offered practical ideas and means to change this situation. He wrote: "If we are to fight the ‘New Despotism´ effectively and respect the very individual liberty for which we are fighting, we can only do it by building up the influence of the counterintelligentsia, whose views, if known, would command a respectful hearing in the marketplace of ideas."

Simon was aware to what great extent the egalitarians of the left were dependent on the great foundations for their financial support. The Ford, Rockefeller, and Carnegie foundations poured millions into leftist causes every year, whereas the counterintelligentsia represented "an impoverished underground." Thus, Simon argued, the first order of business was for wealthy conservatives to create foundations to support the work of the pro-capitalist freedom fighters. He wrote:

And so, there came into being a small number of new foundations dedicated to supporting the cause of freedom exactly as Simon expected them to do. In fact, Simon became head of the John N. Olin Foundation, which has supported any number of pro-freedom organizations, their writers and programs.

But has enough been done to stop and reverse the liberal drive toward socialism? Back in 1978 Simon complained about a federal government that was spending a billion dollars a day. That would have amounted to a federal budget of only $365 billion a year. That´s peanuts today. We now have a federal budget of over 2 trillion dollars. This is how you write 2 trillion dollars: $2,000,000,000,000. That´s about $170 billion per month. That´s about $56 billion per day. In other words, our federal government now spends in ten days what it spent for the entire year of 1978. Of course, our economy has grown since then. But has it grown 56 times from what it was in 1978? The federal government has grown 56 times since 1978.

But something happened on the way to socialism. The personal computer and the Internet were born. The home school movement was born. There has been something of a religious revival emphasizing dependence on G-d, not government. And more and more pro-freedom think tanks have come into existence. In addition, Eastern Europe has been freed from communist domination, and the Soviet Union with its red star and hammer and sickle has become Russia, freed of totalitarianism, with a new flag, a religious revival, and who knows what else.

Yet, in America, government continues to grow like topsy. In other words, politicians are the last people who will restore freedom to this country. It will be done by the citizens themselves. The lifeblood of politicians in Washington is money to spend on government programs. In 1950, federal spending was $42.5 billion. Ten years later, in 1960, it had doubled to $92.1 billion. In 1970, it had doubled again to $195.6 billion. In 1980, it had tripled to $590.9 billion. In 1990, it was up to $1.2 trillion. And in 1999 it was up to $1.7 trillion. In only nine years, it had increased by half a trillion dollars.

Do we have more government than we need? Has the burden of government simply become too heavy for the average American to bear? My answer to both questions is yes. But to the Democrats it´s obviously no. They are criticizing President Bush for giving taxpayers back the surplus money that the government didn´t need. The Democrats had wanted to use that surplus to create new programs. To them, the government is not large enough. Yet, the reason why American families now need two or more bread winners in order to maintain their standard of living is because the burden of government has become the monkey on their backs.

Meanwhile, the only stand the Republicans have taken is a defensive one. There is not a single proposal by the Bush administration to cut the size of federal government by getting rid of unneeded federal programs or departments. The idea of limited government promulgated by the founding fathers has been replaced by the idea of unlimited government, which is the aim of social democrats the world over. To them, the more government, the better.

Naturally, our government schools teach American children how dependent they are on government programs. The dumbing down process makes sure that the children will never be able to understand the federal budget or what a trillion dollars is. They get very little history. The other day I watched a PBS program on the problems of new young teachers in public schools. It showed one male teacher in a class of 14-year-olds teaching social studies. The topic was "Feudalism in Medieval Japan." What possible interest could these inner city kids have in feudalism in medieval Japan? Did they know anything about American history? The program didn´t say.

When these kids leave the government schools they will confront economic reality. Some of them will go on to college with the help of large loans, which they will have to begin paying back after graduation. Many of them will become conservatives when they also begin to pay taxes. The last ten years have provided most Americans with a course in free-market economics. The breathtaking growth of the high-tech industries and the phenomenal growth of the stock market have taught Americans that wealth is not created by government but by private free enterprise. And just about everyone has wanted to get into the act.

But nothing can dampen the faith in free-market capitalism more quickly than a downturn in the economy. The cry for government measures to get things moving becomes almost universal. Of course, true entrepreneurs keep doing what they do best: invent, innovate, scrape up capital, take risks, move ahead. And inventors keep inventing. That´s the secret behind America´s leadership in economic development and growth. Not the politician, but the inventor — the inventor, who makes small improvements in large processes and creates new products. Their patents keep the patent office forever busy. There is no other country on earth with so many inventors and entrepreneurs.

Once an invention is made, money must be raised to manufacture and market it. That´s where venture capitalists come into the picture. When a public offering of stock is needed to raise sufficient capital, that´s when Wall Street comes in. And that´s how new wealth is created. Instead of being taught about feudalism in medieval Japan, those students should have been studying the life of Thomas Edison, so that they could understand how America works.

William E. Simon died in June 2000 at the age of 72. He spent 20 years at the Olin Foundation supporting those who supported freedom. If there is still a sense of optimism about the promise of freedom in America´s future, we owe much of it to Simon´s wisdom and dedication.

We now have a federal budget of over 2 trillion dollars. This is how you write 2 trillion dollars: $2,000,000,000,000. That's about $170 billion per month. That's about $56 billion per day.

$56 billion a day?!!! Let's put a comma somewhere in there and make it $5.6 billion a day.

So, some progress has been made.

Some, but not enough. Another problem is the way the money is being spent. During the 50s, the vast majority of the federal governments expenditures when to national defense, under the Constitutional power to raise and support Armies, and a Navy. Another good size chuck went to the interstate (and other) highway systems, under the foregoing power, the power to establish post Roads and also the power to regulate, that is to make work properly, interstate commerce.

How much of today's budget goes to purposes set aside in the Constitution as federal government responsibilites or powers? Not nearly so much, mostly it goes to transfer payments of various sorts. Meanwhile we are starving our military and our highway infrastructure.

With the Soviet Union gone, even with Red China ascendent, we can probably lower real military expenditures per capita somewhat below the level of the 1950s, and thus have an overall lower burden on the economy. But we cannot continue to spend federal tax money on things not the federal governments concern.

Let's put a comma somewhere in there and make it $5.6 billion a day.

Correct, however that's still 5.6 times what the federales were spending in 1978. Are we making 5.6 times as much as we were in 1978? In know I'm not, and that doesn't even allow for salary progression due to promotions, increased ability, increased work quality output, and so forth, rather than just inflation. Sure as heck people at the same level as I was in 1978 are not making 5.6 times what I was making then, assuming they have a job that is.

Russia, freed of totalitarianism, with a new flag, a religious revival, and who knows what else

One heck of a mafia, composed of many of the ex communists, especially members of the former organs of state security. Other ex communists run the government. Some of them are may not be so "ex" as they appear. Others probably are. Corruption is, if anything, more widespread than during the Red's heyday.

Yet, the reason why American families now need two or more bread winners in order to maintain their standard of living is because the burden of government has become the monkey on their backs.

That is their own fault. That is what they want. They have voted in politicians that perpetuate this system upon them and they won't vote them out until they get tired of the burden.

That point has not yet arrived.

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