CHAPTER IV DOES OVER-EXPANSION OF GOVERNMENT SUBVERT THE “X” FACTOR?[*]

While different terms were used, the subversive aspects of unrequired government were well understood and simply recorded nearly thirty centuries ago. The following is taken from the eighth chapter of The First Book of Samuel:

And Samuel told all the words of the Lord unto the people that asked of him a king. And he said,

“This will be the manner of the king that shall reign over you: he will take your sons, and appoint them for himself, for his chariots, and to be his horsemen; and some shall run before his chariots.

“And he will appoint him captains over thousands, and captains over fifties; and will set them to ear his ground, and to reap his harvest, and to make his instruments of war, and instruments of his chariots.

“And he will take your daughters to be confectioners, and to be cooks, and to be bakers.

“And he will take your fields, and your vineyards, and your oliveyards, even the best of them, and give them to his servants.

“And he will take the tenth of your seed, and of your vineyards, and give to his officers, and to his servants.

“And he will take your menservants, and your maidservants, and your goodliest young men, and your asses, and put them to his work.

“He will take the tenth of your sheep; and ye shall be his servants. And ye shall cry out in that day because of your king which ye shall have chosen you; and the Lord will not hear you in that day.”

In 1890, all units of government, federal, state and local, took only 5 cents of each income dollar. By 1929 they were taking 16 cents of each income dollar. Political agents in 1936 spent 40 cents of each income dollar![1]

It is conceded that government has a legitimate claim to growth with the increases of population and wealth. An industry or a farm adds overhead as its business increases, but business management never permits a disproportionate ratio of overhead to production. If it does it fails. Governments, however, have not only permitted but encouraged an overhead out of all proportion to necessities.

The national income was many times larger in 1936 than in 1890. Why should not government overhead be maintained, somewhat in that ratio?[2] Why should governments today be taking much more than 5 cents for each income dollar? Why 40 cents? Why this 800% increase in political overhead?[3]

A previous statement implied as an absurdity the example of any business letting an item of overhead increase 800% when the business warranted no necessity for such increase. It was demonstrated that any such practice would force that business to close its doors and to place its workers among the ranks of the unemployed.

Yet, every business in America has and is participating to a marked extent in this type of an absurdity. Every business has increased its item of political overhead more than 800%! Government employees are on the payrolls of every business on an 800% greater scale than 1890!

Demonstration has been made of the way unemployment is created by an individual business permitting excessive costs. When the cost of government is excessive the effect is precisely of the same kind. It creates unemployment to the extent that government is excessive. It differs in its results only in that instead of bankrupting one or a few businesses, it filters its effects through all the units of production and distribution, partially harming them all. The aggregate unemployment resulting from excessive cost of government is the same as the aggregate unemployment resulting from a comparable excessive cost of a comparably sized business. The bad effects are merely better dissipated—the burden is more evenly borne. The total devastation is the same!

If the incidence, that is the shift, of these political excesses were more generally understood, if the unemployment and the discontent they create were blamed to these excesses, blamed where much of the blame really belongs, public opinion and public action would soon make short work of them. Instead, the public has been made to believe there is economic virtue in these excesses and has joined in support of the trend that insures its own destruction. Any government beyond the minimum of necessity is excessive and to the extent it is excessive, to that extent is the “X” factor subverted!

[*] So many different interpretations are placed on statistical data, too often molded to fit personal fancy, that the general figures used here may stimulate some disagreement. However, a principle is being argued, not statistics.

[1] There are somewhere in the neighborhood of 250,000 units of government involved in this increase. The federal government, for instance, spent $520,000,000 in 1900 and $8,879,000,000 in 1936, an increase of 1500%!

[2] No doubt the cost of government must rise more rapidly than the increase of population or wealth as a society becomes more complex. However, the deviation from an exact ratio should be modest—not on the pretentious order we are now witnessing.

[3] Many contend that a dollar’s worth of service from government for a dollar expended makes any increase in government cost justifiable. Suffice it to say that this writer disagrees with this philosophy. It involves an argument in socialism for which this thesis was not designed; nor is it admitted that present increases in cost represent corresponding increases in service.