Socialism At Its Best; P. L. Poirot

Also required would be the needy-persons who would submit willingly to identification and classification as Dr. Poirot is a member of the staff of the Foundation for Economic Education. [91 ] deserving dependents of the society. Such an experiment surely would be facilitated if all the people had been more or less conditioned for controls-perhaps having experienced a series of world wars, much international bickering and unrest, a prolonged period of heavy taxa tion, a huge government· debt-yes, and a debauched currency. Other conditions may come to mind as you enter the spirit of this search. Or perhaps you will agree that we have already provided an ideal testing ground for social ism, right here in the United States, during the 25-year period since the depth of "The Great Depression." The tests have been underway for a full generation, and many examples could be cited. But to be speCific, lefs look at the cotton business, an experiment in socialism under conditions as ideal as anyone-or any committee-could have planned.

A Perfect Set-up When and where else in the world has there been more skilled planning, more effective control, more able and willing participation, and less resistance or interference? We've been taught socialism in the schools, read it in the papers, heard it on the radio, seen it on television, and even lived it in our daily affairs. Surely, cotton growers-with a few outstanding exceptions-have been well-organized and persistent in acknowledging and pro claiming their need. And who on earth really has stood and denied it? This test of socialism-involving the cot[92 ] ton business of the United States-should have had suc cess if such a project ever has or ever will! Sornepersons may protest, of course, that the cotton business has not been socialized. And it is true enough that the name of socialism is not popularly associated with the program which has substituted compulsory government direction and control for competitive private enterprise as the regulator of cotton production and dis tribution in the United States. Indeed, many of the formalities of private ownership and control have been retained. The farm land is nominally under private own ership. The cotton is planted, cultivated, and harvested by so-called private operators. But in order to grow cotton on "his own land" or sell "his cotton," the farmer is obliged to obtain a license, or permit or quota or certificate; he must ask permission. In other words, the freedom of choice that is the essence of private owner ship does not exist for the cotton farmer.

Instead of a free market in which willing buyers and sellers bargain to arrive at a price that tends to balance effective demand against available supplies, the price of cotton is fixed by the government-and variations in sup ply and demand for cotton show up either as shortages or, more likely, as unmarketable surpluses. The name socialism qu~te properly describes such an arrangement. As the Secretary Sees It So what do we have to show for this experiment? How well has socialism functioned under these nearly ideal [93 ] conditions? Let's consult the person who has had charge of the experiment since early 1953. The following quota tion is from a book published in 1956, Farmers at the Crossroads, by Secretary of Agriculture Ezra Taft Ben son (as told to Carlisle Bargeron) 1: The story of cotton is a tragic one. Becoming frightened at the problem of abundance, cotton farmers elected to live by rigid high price supports. What has been the result?

Twenty-five years ago, cotton grew on 43 million acres of United States farm land. In 1956 the acreage is not 43 but 17.4 million. Twenty-five years ago, before American cotton growers began to hold the price umbrella for foreign producers, cotton production abroad totaled 12 million bales. This past year foreign production was not 12 but 25 million bales. Twenty-five years ago the United States exported 7 million bales of cotton. During the past year our exports were not 7 but 2 million bales. Twenty-five years ago, before cotton tied its own hands, synthetic nber consumption in the United States totaled the equivalent of about a quarter of a million bales of cotton. Today synthetic fiber consumption has reached the equiva lent of about 4 and a half million bales. Cotton producers, frightened by abundance, had a carry over of nearly 15 million bales before the 1956 crop was harvested. This carryover was the largest in history and posed a major threat to world cotton markets.

After twenty-five years of the utmost government solici tude, cotton has lost markets everywhere. Its producers have lost freedom. Cottonseed crushers are limited in the avail ability of their raw material. Cottonseed oil supply is limited and soybean oi~ is increasingly taking its place. 1 New York, Devin-Adair. $2.75. [94 ] The pity is that the road back is a long, long one, even if cotton should set its feet finnly in that direction. Markets once lost are not easily regained. The Farm Bureau Comments If one chooses not to rely entirely on the report of the administrator of the cotton experiment, he may check with one of the major farm organizations. Early in 1957, the American Farm Bureau Federation published a "dis cussion sheet" on "Subsidies," with these observations: Through price support, the government has guaranteed agriculture a market. This guaranteed market causes farm production to increase in spite of production controls. In other subsidized industries overproduction is checked either by limits on the amount of the subsidies or by the fact that production must be sold on the open market.

The restrictions and waste in agricultural programs are an inevitable result of price supports. For it is well to remember -we have wheat and cotton export subsidies because of price supports; we have quotas and allotments because of price supports; we have surpluses, surplus removal programs, and diverted acre problems because of price supports. With all of the experience we have had with government attempts to boost farmers' income, which is down while the income of "free" industries is up, it seems wise to take a hard look at what subsidies really do. The total cost of these· programs is almost impossible to calculate. However, the realized cost of efforts to stabilize prices from 1933-1956 has been in excess of $14 billion. In addition, payments in excess of $3~ billion have been made to ':':conservethe soil." Examples of program costs in stabiliz ing prices during this period are: [95 ] com - $1-3/4 billion cotton - $2-1/5 billion wheat - $8-1/8 billion peanuts - $183 million rice - $100 million tobacco - $241 million Estimated soil bank payments for 1957 are $1.2 billion.

The export subsidy programs, while moving surpluses, have been expensive. For example, the International Wheat Agree ment for the export of wheat has cost $759.6 million since 1949. Cotton exports are costing an estimated $45 per bale on 6.5 million bales in 1956-57. In addition, public funds totaling $476.2 million have been made available to finance about half of these exports through loans, gifts, and foreign cur rency sales. Farmers must live under laws, rules, regulations, and orders that divide up the right to produce. Under government con trols the tendency to "level down" all farmers to a low "com mon denominator" gathers momentum every year. Views of a Cotton Dealer In Houston, Texas, recently, before the Agriculture Committee of the United States Chamber of Commerce, Mr. Lamar Fleming, Jr., board chairman of Anderson, Clayton & Company, the world's largest private cotton dealer, offered his appraisal of the cotton experiment: We have tried to perpetuate prices that would support cotton production on marginal farms. Experience shows that we cannot do it without creating prices that make cotton production a bonanza on more efficient lands without acre[96 ] age restriction-or even with it, under intensive fertiliza tion and care. Experience shows that we cannot do it without also creating huge government cotton stocks, eventually to be liquidated at tremendous losses, and without having to choose between the loss of our foreign cotton markets to foreign cotton and rayon, or perpetuation of a dumping policy which challenges the World to economic warfare-anyhow not with out losing more of our domestic market to rayon.

What would we accomplish that is worth all this? For a while, we would keep some people in a precarious living, growing cotton where it cannot be grown economically or efficiently. This would help them continue a struggle in which ultimate defeat is certain. If you have a friend engaged in a hopeless undertaking, do you give him money to help him continue in it? Or do you help him to get into an occupation that offers hope of success? The answer is obvious. I believe a time has come when efficient cotton growers who are truly thoughtful will come in increasing numbers to the conclusion that a business which depends on government support, obtained through log-rolling~ with the inevitable accompaniment of government restrictions, is a dangerous business; because, what government gives today, it too easily can take away tomorrow. Aggravating Influences As if to compound its failure, the same government that squanders tax funds to restrict production and boost the price of cotton simultaneously attempts to increase yields per acre and to improve the techniques of cotton production and harvest. Tax supported colleges and ex periment stations, along with USDA's own vast field force, spread the findings of their research on matters such as disease resistance, more and larger bolls per [97 ] plant, longer and :finer and stronger :fiber, adaptability to mechanical harvesting, seed bed preparation, insecti cides, fertilization practices, and weed control, to men tion a few. As a consequence of this, as well as much privately financed research and development, the average yield of cotton lint per acre in the United States has climbed from about 200 pounds in the early 1930's to more than 400 pounds in recent years.

The Failure of Monopoly So, the record is clear for anyone who cares to observe the results of a socialistic experiment under conditions as ideal as could be contrived by the mind of man and his powers of compulsion. The intended relief program for American cotton growers has turned the cotton busi ness into a government monopoly, with laws to exclude competition. This is the usual pattern for attempts at socialism; the good intentions succumb to the corrupting influence of power. Monopoly power is difficult to assemble and wield, for the competitive spirit has great vitality. Suppress compe tition among growers of cotton in the United States, and foreign suppliers will enter the market. Restrict a man's production of cotton, and he will produce a substitute. Overcharge a customer, and he will take his business elsewhere. Overtax a citizen and, sooner or later, he will institute a new government. Such are the reasons why socialism must fail, even under the most favorable cir cumstances in the world.

[98 ] The cotton fiasco in the United States can be concluded if the government will sell its holdings and get out of the cotton business completely-no more support pro grams, acreage and production controls, research, or any other intervention in what is none of the business of government. Nor is there any reason why this much needed corrective should be applied gradually. The only way to be rid of socialism and excessive taxation is to allow freedom for the creative activities of men. [99 ] UNION POWER AND PUBLIC POLICY INSTITUTIONS, public or private, which are allowed to accumulate power may be expected sooner or later to abuse their power. This is the moral to be drawn from what a United States Senate investigating committee is learning about the management of the International Brotherhood of Teamsters and the behavior of that union's officers. If there is a known cause of the corrup tion and abuses that feature the operations of this union, it consists of wrong public policy and the incapacity or unwillingness of public officials to enforce simple laws state, local, and federal-when they apply to organized labor.