CHAPTER VI THE SUBVERSION OF THE “X” FACTOR BY GOVERNMENT MIS-DIRECTION

Throughout this thesis runs the principle that when the consumer interest is served, the general welfare is served. The consumer interest must be the paramount objective. The national well-being is threatened any time that objective fails to be our guide post.

Yet, government growth and government intervention clearly develop a contrary situation. And, as will be seen, this situation aids and abets government growth and intervention, thereby creating a vicious circle. To appreciate properly this phenomenon, we merely need to recall that iron law of fundamental economics: man tends always to satisfy his needs and desires with the least possible effort. There are two methods or means, and only two, whereby man’s needs and desires can be satisfied. One is the production and exchange of wealth; this is the economic means. The other is the uncompensated appropriation of wealth from others: this is the political means.

We have plenty of evidence today of what happens when we permit the government to grow to unbounded proportions. We enlarge the avenue for the political means. And when man can satisfy his wants by this effortless process he simply will not take the sweat-of-the-brow route of production and exchange. Thus, as we make the political means available we wipe out of our national order the possibility of retaining the economic means.

Man, however, has little chance of exploiting the political means as an individual. So he organizes and does his exploiting as a group or as a class. Exploitation of the political means is carried on by industry, by agriculture, by labor, by relief workers, by veterans, by cities, states and other geographical entities. Likewise, government, interested principally in its own growth and affluence, generally finds groups and classes far more convenient with which to deal than individuals. Government prefers to wholesale its favors—it shuns retailing them.

To illustrate roughly, industry has used the political means to secure subsidies of one sort or another. Labor has used the political means to secure higher wages and monopoly restriction. Because of these and other comparable reasons, agriculture has found itself out on the limb unable to get its share of the national income. Has agriculture attempted to correct its position by minimizing the use of the political means by other classes and groups? No. It has compensated what it has thought to be wrongs on the part of others by adopting some wrongs of its own. It has employed the political means itself. It has confirmed the iron law of economics by satisfying needs with the least possible effort. It has said to the other groups, “All right, you have done some uneconomic things, I shall be uneconomic also.” And, as has been inferred, agricultural interests have no monopoly on this attitude.

Now, as this bad boy polity is pressed by each group seeking a superior position to others in the grab for the national income, government is itself enlarged, stifling production and distribution, thus resulting in less national income to be shared. And worst of all, the avenue of the political means is increasingly enlarged, making the lesser national production subject to the political raids of more and more groups.

Today we are witnessing thousands of groups and innumerable pet projects getting funds through the political means which now or in the future must of necessity come from the real forgotten people: those who have chosen or have been forced to make their way in the world by the economic means; i. e., the production and distribution of wealth, of goods and services. Government has encouraged groups to seek the political means for funds. These funds, in turn, have been extracted by the government from those who have acquired them by the economic means. This proposition is officially defended by the unsound argument that spending of itself is a virtue. Let any man who argues in favor of this idea condemn the plan of the California messiah, Dr. Townsend. Logically, if the spending theory is sound, the Townsend Plan is sound. The difference between the spending which is advocated and that which is condemned is merely one of degree and not of kind. The difference between WPA and OARP is simply one of astronomical proportions. The aged doctor has done nothing more than glorify, magnify and capitalize upon the fallacious theories that are finding hospitality in official and, may we add, all too many business circles.

The main point is that government, by absorbing the social functions, i. e., the functions of the individual and his private institutions, has given a mis-direction to our national behavior. It has been giving the medicine to the wrong patient and by its prestige has encouraged private groups to do likewise. Government has sought to bring back prosperity by making groups prosperous. The focus has been on the group or the class, not the consumer. As a consequence, consumers have forgotten their identity as consumers and now think of themselves as New Yorkers or San Franciscans, as laborers, ship owners, bankers, veterans, reliefers, farmers or industrialists.

These powerful alignments of classes, organized to exploit the political means, which is to say, organized to exploit other classes, has seriously retarded the advancement of the economic means, and consequently has resulted in the production of fewer goods and at higher prices. As this process goes on, goods and services are available only to higher and higher income consumers. The poor get poorer and the rich also get poorer. By what stretch of the imagination can we pit group against group, class against class, interest against interest, geographical areas against each other and solve the problem we started out to solve—the problem of impoverishment in the midst of plenty? Can we continually produce less and less at a progressively greater cost and have more goods to distribute? The elements of wealth, the things for which we materially strive, are goods and services. Can we have more of these for more of our people by creating less of them by fewer of our people?

This mis-direction at the hands of government, a mis-direction that inheres in the very nature of government, because the interest of its principals compels it, is a subversion of the “X” factor.