What Is Progress?

September 19, 1955

At the adjournment of the last session of Congress, the President at his press conference made some remarks that require more serious examination than they have yet received. It may seem a late date to hark back to something that Mr. Eisenhower said on Aug. 4, but his words on that occasion threw a great deal of light on his philosophy of government, and on the policies we may expect him to follow while he remains in office. He remarked at that time that he had a “little list” of “needed” legislation, of which at least four items were still “absolutely vital to our future. . . . They are school construction for our children, the health program, the highway program, and the water resources.”

Now of course schools and health and highways and water are vital to our future. But this is not exactly what Mr. Eisenhower meant. He meant that it was “absolutely vital” for the Federal government to subsidize local school construction; for the Federal government to reinsure private health insurance; for the Federal government to provide enormous grants for highway construction; etc. It is not only not vital for the Federal government to do these things; it is dangerous politically and economically. The notion that the Federal government must take over such functions goes directly counter to the principles of our Constitution and to our ideals of local self-government.

Other remarks of the President at this conference implied a broader philosophy no less disturbing. Mr. Eisenhower pointed to the “almost unprecedented prosperity” in America today, and implied that this boom must be kept whirling at its present peak, or beyond, with no slackening whatever. “If we are going to keep that kind of thing moving,” he said, “it means that there must forever be action, not only in the economic and industrial field on the part of the individuals in our system of free enterprise, but government as well.” (My italics.) There are two implications in these statements.

The first is that it is the function and duty of the Federal government to keep a boom constantly whipped up to a peak by unceasing government policies of spending, subsidies, and credit inflation. A widely held economic theory today is that it is not the duty and function of the government to balance its budget annually, but rather to “compensate” for the oscillations in the private economy—building a budget surplus, taxing heavily, and contracting credit in boom times, but running a deficit, reducing taxes, and expanding credit in times of depression or unemployment. Even if we grant (I don’t) that this theory is sound from an economic point of view, it should now be obvious to everyone that it is politically unworkable. For the government in power always acts as if it were “fighting a depression.” It never admits that it is in an inflationary boom which it is its duty to dampen down. This is now being proved afresh by the present Administration. It has been proved over and over again here and in Europe, since the end the last world war.

The second implication of the President’s statements is even wider. It is that no matter what level of prosperity or welfare we reach, the government must go on and on—“there must forever be action”—and always in the same direction—i.e., the direction of the New Deal, of the paternalistic welfare state, the direction of more and more government spending for alleged “vital” purposes.

“We must make progress,” summed up Mr. Eisenhower. But what is progress? Is it for the government to spend more this year than last year? To subsidize more and more pressure groups? To have a bigger deficit this year than last? The glaring truth which all these theories overlook is that the government cannot give a dollar to one man unless it takes it from another. It cannot give a nickel to Peter without taking it from Paul—the man who has earned it. And this process must reduce the productive incentives both of Peter and of Paul. It does not meet more needs but fewer. It leaves us not richer, but poorer, than we would otherwise have been.