Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is...

36
Socialism Grips Norway JULY 13, 1953 25¢ Trygve J. B. Hoff The Great Confrontation William Henry Chamberlin Is Lobbying Honest? Gold versus Paper Dark Eyes, Red Hearts Frank Chodorov Ludwig von Mises Peter Schmid

Transcript of Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is...

Page 1: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Socialism Grips Norway

JULY 13, 1953 25¢

Trygve J. B. Hoff

The Great ConfrontationWilliam Henry Chamberlin

Is Lobbying Honest?

Gold versus Paper

Dark Eyes, Red Hearts

Frank Chodorov

Ludwig von Mises

Peter Schmid

Page 2: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

ill!!1I1I illII III 111111 III 11111111 11111111111111111111111111111111111111111111111111111111111 1111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111111II1111111111111111111111111111111111111111111111111ll1l

a marriage ...'o,f business and educati'on

~ ~If our beginners in· higher education ti,cketing, ,refrigeration, bearings, brakes,were offered the privilege of alternating commutation, express, equipment, ter-between college and business, hospital minals. I call think of scores where theor law office, in equal relays of three, promise of reward to our stockholdersfour or six months, business to pay the from such an up-to-the-minute educationcosts, would not business and education center would be, to steal the title of aboth benefit? Would not our colleges recently published book, MERELY CO-

a have more beginners and our businesses LOSSAL. I am sure other. industries suffer ~

I better suited ones? How much more as costly deficiencies in the specialized ~

i intelligent would be the choice they education of their upper age groups. If I== finally make of a career! Under such a education does not offer such clearing ==

system our institutions of learning, like houses for every industry business soonerour businesses, would function continu- or later will.ously throughout the seasons; no morewould future doctors or engineers spendtheir summers washing dishes.

PROPOSED: So organize that one-half of thetime of the youth undergoing higher educa­tion is shared with business so that it may bemore effective and self-supporting, hence more

W . h ., db' d universal. ... Make of our universities ande, In t e ral roo uSlness, nee a colleges industry dearing houses for the ad-

clearing house for the interchange of vance. technical. education of executives....Establish equality of pay and a system of

the most advanced ideas and methods interchange of teachers and executives to the

dend of more proficient professors and better

use on all our 130 great railroads in bosses.all departments. There are problems of

(From an address by Robert R. Young at the Fifth Barnard Forum, New York)

CHESAPEAKE AND OHIO RAILWAYTERMINAL TOWER, CLEVELAND 1 , o H 10

millltllllllllllll\lllllllllllllllllllll\llllllllllllllllll\llllllll\lllllllllllltnnnlllllllllllllll\lllllllllllllllmlllllllllIi11l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l1l111llll1111IllIl1111Il11ll11llllllllll11llllll1111111111111111111111111111111111111111111111111111 1!1I111111111111111111111111111l1l1l1l1l1l1l1l1l1l1l1l111I1I1I1I1I1I1I1I1l1I1I1I1I1!l1l1l1l1l1l1l1l1l1l1l1l1ll1l1l1l1l1lllluumlllnif

Page 3: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

WE HAVE SOMETHING TO SELL

EVEN WE CAN'T BUY

Though they can't be bought, we have 62 of thenl in inventory.

They're the 62 members of Field's Half Century Club ... 62 employees who

have devoted 50 years of service to this company.

To some people where they work is just the place to go to every

morning five days a week and come hOlne from at night. But the people who work

at Field's ... like these 62 veterans ... believe their place of business is more

than this, and they are right. Inherent in a job at Field's is opportunity.

This is perhaps the nlost important element of all, important not only to the

person, but to this place of business and to this country. But, opportunity is just a

condition. The individual's attitude of service is what we can hope for.

We can't buy it ... we can't even write it up for "orders of the day." What we ca'n

and do do is to insure conditions where the individual can develop and express himself.

Field's employees spend nlore time here than anywhere else

outside their homes. On the selling floor, in the stock roonlS, behind a desk

or at lunch, they share a community of interests with their feHows

and their community spirit is everywhere evident. The many social activities they

themselves have created make Field's not only a place for thenl to work,

but a community in which to grow.

It is our people who are the spirit 0.£ growth and good will of

Marshall Field & Company.

Page 4: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

We put the zip in the new Zephyrs

YOU'LL NEVER KNOW HOW CLOSE CHICAGO and Kansas Cityare - till you ride the. Burlington's new Kansas City orAmerican Royal Zephyrs.

With a new short route to shrink the miles and Timken®roller bearings to quicken their pace, they clip hours off the

old running time. By eliminating speed restrictions due tobearings, Timken roller bearings made high-speed stream­liners like the Zephyrs possible. By licking the No. 1 causeof freight train delays-~~hot boxes"-they're now readyto revolutionize freight service, too.

Now here's the next great step in railroading

"HOT BOXES" (overheated friction hear­ings) cause most freight train tie-ups.Railroads are finding the answer to~~hot boxes" in ('~Roller Freight"­freight cars on Timken tapered rollerhearings.

60 MILLION car-miles without a ~('hot

hox" is the record of one railroad's('('Roller Freight". By contrast, freightcars on old-style friction hearings aver­age only 212,000 car-miles betweenset-outs for ('('hot hoxes".

"ROLLER FREIGHT" can travel at sus­tained .high speeds without frequentinspection stops. Inspection man-hourscan be cut 90%. In Timken hearings,tough cores absorb shock, hardenedsurfaces resist wear.

~iSEALED JOURNAL BOX HOLDS LUBE IN.FITS STANDARD SIDE FRAME

TIM KEN BEARINGSCUT STARTINGRESISTANCE 88% •••ELIMINATE "HOT BOXES" ,

AXLE TURNS FREELY.NO SLIDING FRICTION

RAILROADS ,WILL SAVIE an estimated$190 million a year, net a 22% yearlyreturn on the investment when theyall go ~(' Roller Freight". One railroadcut running time in half on a livestockrun, upped its livestock husiness 30%in two years.

COMPLETE ASSEMBLIES of cartridge jour­nal box and Timken hearings for freightcars cost 20% less than applications ofsix years ago. Applications are availablefor existing cars. Other products ofthe Timken Company: alloy steel andtubing, removable rock bits.

NOT JUST A BALL 0 NOT JUST A ROLLER a:::::::>

THE TIMKEN TAPERED ROLLER D BEARING

TAKES RADIAL ~ AND THRUST ._@)- LOADS

OR ANY COMBINATION*Copr. 1953 The Timken Roller Bearing Compan1l, Canton 6, O.

Cable addre88: .. TIMROSCO" •

Watch the railroads GO . .. on TIaMJ(~N Tapered Roller Bearings

Page 5: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Editor

Managing Editor

HENRY HAZLITI

FLORENCE NORTON

A. Fortnightly

For

Individualists

TRYGVE J. B. HOFF is well known on both sidesof the Atlantic as a distinguished scholarand as the publisher and editor of the Nor­wegian economic weekly Farrnand.

WILLIAM HENRY CHAMBERLIN, a regular con­tributor to the FREEMAN, is now on a three­months' tour of Europe and the Middle Eastgathering material for articles. "The GreatConfrontation" (p. 733) will form part of abook to be published in the fall by the HenryRegnery Company.

Our ContributorsHAROLD LORD VARNEY, editor and writer, wasadviser to the government of China from 1947­49. He is a frequent contributor to nationalmagazines.

JULY 13, 1953VOL. 3, No. 21

THE

reeman

Contents

Editorials

The Fortnight...................................... 727Conceived in Liberty. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 729Incredible Truce Terms 730The Ordeal of European Democracy 730

Articles

Our Failure in Korea HAROLD LORD VARNEY 731

The Great Confrontation WILLIAM HENRY CHAMBERLIIN 733

Socialism Grips Norway TRYGVE J. B. HOFF 737

",Is Lobbying Honest? FRANK CHODOROV 741Gold versus Paper LUDWIG VON MI8ES 744Dr. Mackay's Strange Scales HOWARD E. KERSHNER 746Dark Eyes, Red Hearts PETER SCHMID 747

FRANK CHODOROV, co-editor with Frank Hanig­hen of Human Events, is author of the recentlypublished One Is a Crowd.

LUDWIG VON MISES, whose article in the issue ofMay 4, "Agony of the Welfare State," has beenwidely commented upon by our readers, isauthor of Human Action and The Theory ofMoney and Credit, which is soon to be pub­lished in a new enlarged edition by Yale Uni­versity Press.

HOWARD E. KERSHNER has served as executivevice president of the International Commissionfor Child Refugees. He is president of the'Christian Freedom Foundation and editor ofits paper, Christian Economics. The Frenchgovernment recently named him a Chevalier ofthe Legion of Honor.

Books and the Arts

Cultural Subversion MAX EASTMAN 749This Sorry World ALICE BEAL PARSONS 750Pessimist's Delight DON KNOWLTON 751

Shall We Choose Starvation? JAMES ROR'ry 752

Wit and Versatility EUGENE DAVIDSON 753Caesar Comes to Town JOHN VERNON TAB'ERNER 754

Worth Hearing Again................................ 736

THE FREEMAN is published tortnightly. Publication Office, Orange, Conn. Editorial andGeneral Offices, 240 Madison Avenue, New York 16, N. Y. Copyrighted in the UnitedStates, 1953, by the Freeman Magazine, Inc. Henry Hazlitt, President; LawrenceFertig, Vice President; Claude Robinson, Secretary; Kurt Lassen, Treasurer.

Entered as second class matter at the Post Office at Orange, Conn. Rates: Twenty-fivecents the copy; five dollars a year in the United States; nine dollars for two years;six dollars a year elsewhere.

The editors can not be responsible for unsolicited manuscripts unless return postage or,better, a stamped, self-addressed envelope is enclosed.

Articles signed with a name, pseudonym, or. initials do not necessarily represent theopinion of the editors, either as to substance or style.~II Printed in U.S.A., by Wilson H. Lee Co., Orange, Connec::ticut.

PETER SCHMID, Swiss correspondent and author,has just spent a year traveling in Latin Amer­ica, where he was assembling material for abook, now near completion.

Among OurselvesTrygve J. B. Hoff, whose article on socialismin Norway we publish in the current issue,writes us that he found this particular articlehard to write. He has studied socialism, he tellsus, since he was a young student. The sympathythat he originally felt for it has now been sup­planted by a strong skepticism. "It is unpleasantto criticise one's own country and its policiesto a foreign public," he writes, "and though Ihave tried to write coolly and disinterestedly,and to suppress my skepticism, I am afraid that >

I have not succeeded very well." The editorsof the FREEMAN do not agree with this judg­ment. The calm picture that Trygve Hoff givesof what socialism has meant in Norway is onecalculated to deter the citizens of other coun­tries from urging further socialism in theirown. We plan to print similar full reports fromother countries of what socialism and economiccontrols have meant to them.

Page 6: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

What Thoughtful A'mericans Are Saying! about

"THE PEOPLE'S POTTAGE"and Garet Garrett, its author

• • •

Here in one book are three penetrating studies of our political and cultural wayof life. Garet Garrett, a relentless critic of our alien ideologies, has written a hookevery true American should have.

Read what other freedom-loving Americans have to say about THE PEOPLE'SPOTTAGE ... then get your own copy of this forceful book which not onlypoints out the pitfalls into which we have fallen but also shows how this nationcan return to sanity and real progress.

internal dangernow facing Ame:rica

"Garet 'Garrett ... is one of the bestpolitical and economic minds and oneof the outstanding pamphleteers of ourtime, and I know no one who ha,sbetter stated the internal danger nowfacing America."----HENR.Y HAZLITT,Editor of The Freeman.

a! tr!ue mirror

"THEP.EOPiuE'S POTTAGE holds atrue mirror before America. Thosewho look are stunned. Our destinyhinges upon what we do to correctthe picture which Garet Gar,r'ett sodearly presents."---4GENERA,L BON·NER FEDLERS, author of Wings forPeace.

h'e recognized thei trend

"Despite the fact that this countryis the grandest nation in the world,there ,are men in power 'anxious toturn us into a collectivistic society • • .to the eternal credit of 'Garet Garretthe r,ecognized the trend early, andshouted himself hoarse trying to arousethe ,citizenry. His rwritings belong inthe home of every Amedcan who lovesour one nation indivisible, with libertyand justice rIor all."---.FRANK E.PACKARD, Executive Vice-President,Western Tax ICouncil, Chicago

frightening but truly ,A,merican

"... this (book) pro~es beyond doubtthat we have gone far on the dizzyjourney toward the mechanized andbureaucratic slave state. Every libraryand every school in the nation shouldurge the study of this frightening buttruly American book."~FELIX WITT­M,ER, Author of The Yalta Betrayaland other books.

most realistic appraisal"Caret ,Garrett's three trenchantbrochures represent perhaps the mostrealistic appraisal 0.£ the dominanttrends in Amedcan life which hasbeen written in this generation. Theyare indispensable to anybody whowishes to understand 'the strangedeath of liberal America' and desiresto do something to check these dolor­ousand .fatal trends in our politicaland economic life."-.4DR. HARRYELMER iBARNES, H'istorianandAuthor, Editor of Perpetual War forPerpetual Peace.

'must' reading in coUeges

"It seems to me the three monographs... presented a most wonderful ex­posure of . . . the most hypocriticaland damaging government experiencein the history of our country. I wishthey could ,all be made must readingin our ,colleges." - EDWARD A.CABANISS, President, Joseph DixonCrucible Company.

courage'ous and stimulating".. . I find his [Garet Garrett's] writ­ings ,courageous ,and >stimulating. Heis accurate as to ,fa,cts, incisive inhis reasoning, and, therefore, reachesirrefutable conclusions."-SPRVILLEBRADEN, former Under Secretary ofState and Ambassador.

anbalancine and de'structiveferces whichth,reaten lour nation

"... h has long been my ,consideredjudgment that these three monographsrepresent 'Some of the very best anal­yses which have been made of theproblems of these times. Indeed, Ihave found in these monographs moreheI,p to the understanding of the un­balancing and destructive ,forces whichthreaten our nation and this civiliza­tion than I have found in any otherwritings on the problems of our time."-We C. MULLENDORE, President,Southern California Edison ,Company.

a believer in' the, IConstitutionand its Bill of Rights

"Garet Garrett is a profound thinker.He is ,a believer in the Constitution,and its Bill of Rights, which hasproven to be the long and well-testedsafeguard of our liberties since 179l.He is opposed to any 'change in theConstitution unless it is changed hythe provision of the Constitution itself-and not via the back door in theshade of the night."~EDWARD F.HUTTON, New York City.

$3.00 a'taU bookstores or dire'c:+ from publisher

Send fo,r free folder. "Books for Li1berta'rians: '

1b)gThe CAXTON PRIN'TERS~ Ltd.

Caldwell, Idaho

Page 7: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

THE

rreemanMONDAY, JULY 13, 1953

The FortnightIn our last issue we expressed the fear that thePresident's "Don't join the book burners" speechmight only add to the hysteria-about-hysteria al­ready so rampant. The result has been worse thanwe imagined. The next development was the ap­pearance of front-page stories reporting thatthere had indeed been some literal book burnings-by the Eresident's own Department of State!Secretary Dulles set the number of "books"burned ,at eleven-whether eleven copies or eleventitles was not made clear. (This rather importantdistinction was neglected in most of the subse­quent press enumerations also.) Apparently madeaware of some of the implications of his off-the­cuff speech at Dartmouth, Mr. Eisenhower triedto correct it at his press conference a few dayslater, but he hardly clarified his previous meaningwhen he said that it was all right for the StateDepartment to burn the kind of book IIwhich is anopen appeal for everybody in those foreign coun­tries to be a Communist/'

The next development was an "exposure" by theNew York Times that "several hundred books" bymore than forty authors had within the previousfour months been removed from the shelves ofAmerican libraries abroad. It is hard to saywhether this list was more noteworthy for itsrevelations of the titles that had been removedfrom the shelves or for its revelations of the titlesthat had been acquired in the first place. Whatexcuse was there, in an official information serviceostensibly devoted to combatting Communism, forstocking the pro-Communist books on Asia byOwen Lattimore and the propaganda novels ofHoward Fast? Perhaps there was no urgent rea­son for removing the detective stories of DashiellHammett; but what necessity had there been foracquiring them? And the inclusion of WhittakerChambers' Witness in the books taken off theshelves gave justifiable ground for Senator Mc­Carthy's suspicion that "somebody is trying tom1ake the State Department look silly in the han­dling of this program."

This was the already baming status of the ques­tion before the American Library Association re­moved it from the realm of sense and rationalityaltogether by publishing its manifesto entitledliThe Freedom to Read." This declaration is hys­terical beyond belief. It assumes a state of factswhich exists only in the hyperbolic imaginationsof its framers. Innocent foreigners will gather fromreading it that there are wholesale burnings ofbooks going on all over the country, and that no onewho has written a book with the slightest "contro­versial" tinge can now get it published-if indeed,he is lucky enough to keep out of jail or escapehanging for the attempt.

This A.L.A. manifesto, to :be blunt, is dishonest.It diverts attention from the real issues by theancient trick of raising a false one. The first realissue (not even mentioned in the manife,sto ) iswhether it was sound policy in the first place tospend the taxpayers' money in order to set up gov­ernment-selected and government-run librarieseither for foreign "education" or for foreignpropaganda. These librarie,s necessarily representarbitrary choices and purchases of books by gov­ernment bureaucrats. The government gives itseconomic support and its implied imprimatur tothe books that it stocks. It saY's in effect: "Mr.Owen Lattimore's book, which we have put on ourshelves, is informative and worth reading, whetheryou agree with it or not; but Mr. J. F.'s book,which is not on our shelves, :is beneath notice; youare safe in neglecting it." 'Thi,s,at best, is pater­nalism, favoritism, and discrimination. The A.L.A.manifesto talks as if the only form of injury, "cen­sorship," or "suppression" is for the governmentlibraries first to buy a book for their shelves andthen to take it off. But the author of such a bookgets the royalties when it is bought and the pub­licity when it is removed; whereas the authorwhose book has not been taken at all gets neither.Yet the A.L.A. manifesto yells bloody murder aboutthe fate of the first author and is completely silentabout the fate of the second.

If we grant that there should be U. S. govern­ment propaganda libraries abroad to combat Com­munism, then it ought to go without saying that

JULY 13, 1953 727

Page 8: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

the least the bureaucrats in charge of such libra­ries could do. is to' refrain from stocking themwith propaganda by Communists and for Com­munism. No doubt there is a case for carryingreference copies of the works of Marx, Engels,Lenin, and Stalin. But if there is a case for gov­ernment sponsorship of the works of Owen Latti­more and Howard Fast, we should like to knowwhat it is.

The real question, which is not even mentionedby the A.L.A. manifesto and its hysterical sup­porters, is whether our government librariesabroad in fact carry the best anti-Communistbooks and the best defenses of American free en­terprise-or whether the librarians who did or dothe stocking even know which these books are.No one can answer this question until he has seenthe whole list of books and periodicals carried.This is a piece of information which the defend­ers of "the freedom to read" have so far shownno interest either in getting or supplying. Did ordo the government libraries carry the relevantworks of James Burnham, William Henry Cham­berlin, Whittaker Chambers, David DaHin, MaxEastman, John Flynn, Eugene Lyons, George Or­well? Did or do they, on the level of theoreticalanalysis, carry the defenses and explanations offree enterprise by F. A. Hayek, Ludwig von Mises,Frank Knight, Benjamin Anderson?

The question is one in which the framers of theA.L.A. manifesto manifest not the slightest inter-'est. Instead they pretend disingenuously thatthere is a real threat in this country to the free­dom to publish and the freedom to read; and thatthis' threat is only against the "Left" and comesonly from the "Right." It is time they asked them­selves in all candor whether it is not they who aretrying to discredit, intimidate, and suppress allcriticism of government library choices and col­lege textbook choices.

The Eisenhower Administration started out as ifit really meant to put a halt to the Roosevelt­Truman inflation spree. It refused to resume thepolicy of trying to force the Federal Reserve Sys­tem to peg government bonds. It tried not to floodthe' inarket with new short-term governmentissues. It put out a long-term bond issue at 3thper cent. But as soon as the money market gotjust a little tighter, and firms began to complainthat they could not float their bonds at the pre­ceding low rates of interest, the Treasury and themoney managers got scared and started to re­inflate. The Federal Reserve System on June 24announced that, effective July 9, it was reducingthe amount of funds that it requires member banksto keep in reserve against their demand deposits.The New York Times correctly described thismeasure in its new'S columns' as a move to "expand

728 THE FREEMAN

bank ¢credit by an estimated $5,780,000,000 · · ·in anticipation of Treasury plans next week toraise about $6,000,000,000 of new money to meetgovernment running expenses." Or in still plainerterms, the government is back in the business ofprinting fiat money for deficit financing.

From the Winnipeg Free Press we learn that theC.O.F. 'government of Saskatchewan closed downin June the fourth of its ,socialist ventures. Thiswas a woolen mill a't Moose Jaw. It lost $144,614in 1952. Its cumulative losses over the years havebeen $523,216. The official announcenment saidthat the close-down was due to "depressed condi­tions in the textile industry," increased importsfrom abroad, etc. The woolen mill followed thesocialized tannery and shoe factory in which $155,­763 was lost, the Fish Board and filleting plantswhich lost $364,264, and the Provincial HousingCorporation whose deficit was $42,400. "All theselosses," comments the Free Press, "were borne bythe taxpayers of Saskatchewan.... Under social­ism they were committed willy-nilly." Why doesn"tone of these foundations that loves to subsidize"research" pay for an annual compilation of thereal history and deficits of socialized ventures allover the globe-from the huge losses of the Frenchand British railways to those of the New Yorksubways and the 'TVA? It would be a real contribu­tion to knowledge.

We do not believe in detailed economic forecast­ing, any more than in crystal gazing of any otherkind. The economic forces are too complex, and itis not given to mortal man to foresee the future.So we do not intend to predict a depression simplybecause some people are predicting continuanceof the boom. Occasionally it is worth while, how­ever, to point out the fallacies on which mosteconomic forecasts, optimistic or pessimistic, arebased. The other day, to take one example, an ex­uberant stockbroker got into print with a predic­tion of practically perpetual prosperity on theground that our population 'has been increasing.The present rate of growth in population in Amer­ica, he pointed out, is the equivalent of 'addinga new community of 50,000 people every week.Maybe it is. And obviously that would make moreconsumers. But it would also make more peopleseeking jobs and more people turning out goodsthat they had to sell in order to keep the jobs.If mere ,growth of population can bring prosperity,then China and India ought to be enormously moreprosperous than we are. The tr,uth is that whenpopulation grows beyond a certain density, it meansmainly that there are more people per acre offarm land and more people to share limitednatural resources. Old Malthus' ghost has anobstinate sort of vitality. We may deport it fromthe United States in disgrace, only to have it turnup with a grim triumphant smile in Pakistan.

Page 9: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Conceived in LibertyOne hundred andsev,enty-seven years ago the rep­resentatives of the thirteen British colonies inNorth America asserted the inalienable rights oflife, liberty, and the pursuit of happiness. Theypledged their lives, their fortunes, and their sacredhonor to the cause of independence. This is not·· along span in ,the life of a nation.

But during this period of less than two centuriesthe United States has grown from an agriculturalcommunity of some three million people, sparselyscattered along the Atlantic s,eaboard, into the mosthighly industrialized nation in the world, with160,000,000 inhabitants. Flourishing cities andtowns and mechanically cultivated farms have re­placed trackless wilderness and almost emptyprairies. From a new nation with an untried formof government that counted for little in the coun­cils of European .statesmen, America has becon1ethe strongest free power in the world.

Except for the one great and terrible schism ofthe Civil War, when the two unsolved issues ofslavery and secession were fought out to a decision,Americans have achieved and enjoyed a remarkablecombination of individual liberty and nationalunity. People of many racial stocks and varied re­ligious faiths have blended into an American type.The inauguration of a new President lacks theantique ceremonial color of a British Coronation.But, especially when it follows a shift of powerfrom one par,ty to the other, it is the world's mostimpressive symbol of orderly self-government. Itexpresses two fundamental principles of a freesociety: that the will of the majority, within clearconstitutional limitations, shall prevail, and thatthe majority shall not oppress the minority.

Abraham Lincoln, most eloquent of Americanstatesmen, summed up the American Idea ~n threewords of his Gettysburg Address: "Conceived inliber,ty." It was "to secure the blessings of libertyto ourselves and our posterity" that the Constitu­tion was "ordained and established."

But it was not only during the French Revolu­tion that many crimes were ,committed in the nameof liberty. This noble ideal, like many other wordswith fine historical associations-liberalism, forinstance, and democracy-has been profanely in­voked, especially in modern times, by its worstenemies. The men who led the American Revolutionand framed the American Constitution showed arare prescience ,in foreseeing and, ,so far as possible,guarding against the reefs on which many experi­ments in free government have been wrecked.

The American Revolution was made' against aroyal government. But the Founding Fathers knewthat tyranny has many roots and may even beginin the guise of zealous concern for the rights of the

people. As Alexander Hamilton wrote in the firstof the Federalist Papers-a storehouse' of wisdomin political science:

... Of those men who have overturned the libertiesof republics, the greatest number have begun theircareer by paying an obsequious court to the people,commencing demagogues and ending tyrants.

In striking contrast to the doctrinaire fanaticswho shaped the course of revolution in France', thefirst American statesmen were keenly conscious ofthe dangers of absolute popular sovereignty. Theycreated a government of limited and dividedpowers, with specific functions for the legislative,executive, and judicial branches, and they wroteinto the Constitution every conceivable safeguardagainst the possibility that one of these branchesInight usurp the proper functions of the others.

Madison suggests in Number 48 of TheFederalist that "legislative usurpations, by as­sembling all power in the same hands, must lead tothe same tyranny as is threatened by executiveusurpations." In short, the Founding Fa,thersgrasped the essential truth that excessive power isalways to be distrusted, and can best be curbed bya carefully constructed sys,tem of governmentalchecks and balances.

Along with liberty, buttressed against encroach­ments of mob or dictator, an essential element inthe American Idea "is individual opportunity. De­mocracy, a word that is tossed about with equalfacility on both sides of the Iron Curtain, has apositive implication, the right of every individualto rise as far as his character and ability will carryhim, regardless of his birth. It also has a negativeside-a tendency toward envious leveling. John' C.Calhoun, one of America's great conservative politi­cal thinkers, pointed out the incompatibility ofliberty and equality when he wrote:

... As individuals differ greatly from ea'ch other, inintelligence, sagacity, energy, perseverance, skill,habits of industry and economy, physical power,position, and opportunity, the necessary effect ~f

leaving all free to exert themselves to better theIrcondition must be a corresponding inequality be­tween those who may possess these qualities and ad­vantages in a high degree and those who may bedeficient in them.

American democracy has not escaped some of theevil fruits of leveling, such as the high and almostconfiscatory burden of that monstrous leviathan,the progressive income tax, and the qualitative de­te'rioration in the humanistic side of education.

But individual opportunity still remains greaterin the United States than in any land in the world;arid this is an enormous and incalculable asset.

JULY 13, 1953 729

Page 10: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Liberty, opportunity, individualism. This is theAmerican heritage. So long as the American peopleprese'rve this heritage, conscious of how much theyowe to the men who won freedom by arms and pre­served freedom by wise :}Iaws and institutions, theymay be confident that America will emerge strongand triumphant from the storms and trials of thefuture, as it survived the stern orde'als of ValleyForge and IGettysburg.

Incredible Truce TermsElsewhere in this issue we publish an article byHarold Lord Varney on our lost opportunities inKorea. If· we accept the assumption that we shouldhave involved ourselves directly in an infantrywar in Korea, and if we accept the testimony ofboth General MacArthur and General Van Fleetthat victory in such a war was within our graspat any time up to 1951, then it seems to us thatMr. Varney's conclusions follow inevitably. If, onthe contrary, we begin with the premises that wegot ourselves bogged down in a foot-soldier warin Asia through a series of Truman-Achesonblunders and usurpations, and that superiorChinese numbers plus our immense logi,stical prob­lem have made victory impossible, then we mustagree that the Eisenhower Administration hadlittle choice except to withdraw or to patch up thebest truce it could get.

Even these premises, however, cannot excusethe needless surrender of a moral principle. TheFREEMAN wrote editorially in its issue of June 1:"Should we weaken on this primary moral issue,should we allow direct or indirect pressure to beused against the approximately fifty thousandprisoners (about 35,000 North Koreans and ·15,000Chinese) who have expressed the strongest ob­jections to returning, we would have little rightor reason to expect tha't soldiers in the armies ofCommunist governments will ever surrender tous in the future ... There was one clear, simplesolution ... These men should have been im­mediately and unconditionally released, the NorthKoreans to mingle withthe South Korean popula­tion, the .Chinese for resettlement in Formosa orin overseas Chinese communities. This very actwould have been a moral victory...."

Without consulting South Korea, beyond com­parison our most important fighting ally and thenation chiefly concerned, we combined with ourU.N. token allies in consenting to put the fate ofthese prisoners in the hands of a five-nation com­missionon which neither Korea, nor the UnitedStates, nor even our U.N. allies were represented,though pro-Communist India and two Communistsatellites were. Syngman Rhee's chief crime, ap­parently, is that he did what in honor andhumanity we our,gelvesshould have done long ago.

730 THE FREEMAN

The Ordeal ojEuropean DemocracySuch deve'lopments as the chronic paralysis of ef­fective government in France (a horrible exampleof the impotence that can be produced by a factious,hopelessly divided, and all-powerful legislature) andthe frustrating" deadlock that is threatened ,afterthe Italian elections, show that the ordeal of freeinstitutions in weste'rn Europe is far from over.There is little if any danger that democracy willbe discredited by its failure to make possible' the­first function of government, which is to govern.

The avowed purpose of the late war was to ex­tirpate totalitarian tyranny (then conceived exclu­sively in terms of nazism and fascism) and restoresystems based on political and civil liberty. In thecountries behind the Iron Curtain the failure wascomplete and resounding. Nazi conquest and localfascist tyranny were merely replaced by Sovietconquest and local Communist tyranny.

In western Europe the problem of getting anaffirmative majority for any regime threatens torob parliamentary government of sense and content.A two-party system, such as prevails in the UnitedStates and Great Britain, by the test of historicalexperience is best adapted to ,stability and con­tinuity of administration. But continental Euro­peans are seldom willing to divide along suchsimple lines. The normal picture in a continentalparliament is at least half a dozen fairly substan­tial parties, to say nothing of splinter groups,organized along political, economic, and sometimesreligious and ethnic lines.

A coalition form of government can work; thetwo big partie's in the United States may be de­scribed as loose coalitions, with no firm discipUneand with room for individuals of quite varyingviewpoints. But a condition for a successful coali­tion is a spirit of mutual tolerance and understand­ing, which permits give-and-take and compromise'.It is just this spirit that is so often lacking inEuropean politics.

Democracy in Germany's Weimar Republic couldbe considered mortally sIck, if not de'ad, when therewere more Nazis and Communists (both on prin­ciple rejecting free institutIons) than membeTs ofthe more moderate parties in the Reichstag. Thesituation is not quite so desperate in France andItaly at the present time; but there are ominouspoints of similarity. A familiar pattern in theEuropean political scene is a left wing of Com­munists and fellow-traveler .socialists, a right wingof extreme ,conservatives, nationalists, and neo­fascists, and a center committed to middle-of-the­road policies at home and a pro-American orienta­tion in foreign policy.

The're are signs that this center is being seriouslyeroded. Even a mild form of stacking the electoral

Page 11: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

cards, which has been resorted to in France andItaly, has not yielded the' hoped-for results. Themethod has been to give the combination of partiespolling the largest popular vote a bonus of extraparliamentary seats. This was expected to favorthe moderate parties, which are more willing towork together, as against Communists andnationalist extremists.

But although this method was used in the lastFrench elections, the French Assembly, even withfewer Communists, is as unmanageable as ever,unable to muster a majority for any measure thatinvolves some small degree of sacrifice and un­ple'asantness. And the moderate conservative regimeof Alcide de Gasperi in Italy has been gravelyweakened by its decline of support in the Italiane'lection and seems to be at the m.ercy of shiftingand unstable coalition arrangements.

There is some likelihood that a difficult deadlock

will emerge from the ne'xt German election, whichwill be held this year. Chancellor Adenauer's gov­ernment has achieved a remarkable measure ofpolitical and economic revival. But in a countrywhere there are so many unhealed wounds of warthe psychological temptation to vote against isstronger than the impulse to vote for. There islittle prospect of a Communist upsurge in Ger­many; but a victory for the Social Democratsmight produce disastrous consequences for theGerman economy and for German foreign policy.

The large'st and most important countries .ofvvestern Europe are all suffering from a bad caseof political negativism. The most convinced ideo­logical democrat is puzzled as to what the answershould be when it is impossible to get even 51 percent agreement for any program of action. Whenthe ship of state flounders, there is grave dangerthat it may be boarded by a pirate captain.

Our Failure •In KoreaBy HAROLD LORD VARNEY

Unles,s Syngman Rhee's surprise release of theNorth Korean prisone'rs snags the truce negotia­tions, Washington is in a fair way to lose a war.

It is not an alluring prospect for self-respectingAmericans. In the 164 years of our national historyno Administration, strong or weak, has ever ac­cepted defeat in a foreign war. After their firstinstinctive rejoicing over the end of bloodletting,the American people are going to feel rather nau­seous about the outcome. They are going to ask thetruce-signers, why was it necessary for our nationalleaders to accept such a national humiliation at atime when our power overshadowed the world?

Not that the Korean run-out will be acknowledgedas a defeat. The clever phrasemakers who writegovernment handouts are going to sell it to theAmerican people as a shining victory over aggres­sion. The stalemate is going to be transformed bythe magic of words into a success. We will be fedplausible stories about Red China's war wearinessand craving for peace. However, all such pap maybe dismissed as the most transparent kind of ration­alization after the event. We have lost a war.

Unfortunately, it has not been a minor war, ora mere "police action" as Harry Truman used toput it. It has been one of America's most deadlyordeals. It has cost us over 136,000 human casual­ties. It has cost our faithful allies, the SouthKoreans, over 2,000,000 corpses, military and civil­ian. Its financial cost-$15,000,000,000-is close tothe total for our participation in World War One.And this does not include the additional billionswhich we have poured out in rearmament, nor the

$1,750,000,000 which we have promised for Koreaneconomic rehabilitation. By any accepted test, theKorean War has been a major war for the UnitedStates.

But such an inventory tells only part of thestory. Behind these stark figures looms the appall­ing fact that the acceptance of defeat in Koreameans the final and the total loss of Asia. It com­pletes the disaster which we suffered when Com­munism took China in 1949.

What is most tragic about this shabby outcomeis that Korea offered us an extraordinary opportun­ity to give Communism a virtual coup de grace inEast Asia. Victory in Korea could have given usunchallenged hegemony in the Far East. Instead,we have chosen stalemate. A recapitulation of theforfeited opportunities in Korea is an almost un­believable commentary on the incompetence of ourhigh-level national leadership during the last threeyears. No reflection is intended upon our heroiccommanders in the field. The blunders were madein W'ashington.

Let us glance briefly at the five major oppor­tunities which we have muffed in Korea:

1. The opportunity to solve all our Asiatic prob­lems by a smashing and prestige victory over theKorean and Chinese Communists. Such a victorywas within our grasp any time up to 1951, asGenerals MacArthur and Van Fleet have pointedout. We threw away thi,s chance in order to followthe will-o'-the-wisp of NA'TO. Instead of massingoverwhelming superiority in men, guns, tanks, andplanes in Korea, where we were fighting a shooting

JULY 13, 1953 731

Page 12: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

war, we diverted a large part of our equipmentand ·men to Europe where no visible war was inprospect. By this blunder we permitted the RedChinese to build up military superIority and toforce us into a hopeless war of position.

2. The opportunity to use the Korean crisis as achance to wipe out Mao Tse-tung's rule in Chinaand to restore a pro-American government to China.It is so vitally important to American security thatChina be restored to the free world that this shouldhave been our Number One objective in the fight­ing. lVlao virtually delivered himself into our handsin N'ovember 1950 by attacking our troops. Wecould have seized this opening for a bold frontalattack upon Red China, and our "allies" would havehad to accept our decision. Instead, we allowed our­selves to be talked out of this logical move by sillywarnings about a "third World War"-somethingwhich Russia was patently unready to launch.

'The Chinese Communists would have collapsedlike a house of cards if we had undertaken thefollowing operations, all of which were within ourpower: (a) a tight blockade of the China coast,including Hong Kong; (b) another Inchon oper­ation behind the Yalu River line at anyone of thefollowing points: Antung, Hulatao, Yingkow, Chin­wangtao, or even Tangku; (c) equipment and sup­port of Chiang Kai-shek's Formosa army to makea southern landing either in Chekiang or Kwang­tung, and establish a third front in Mao's rear;(d) systematic bombing of all Manchuria andNorth China railway lines and bridges to paralyzetroop and supply movements; and (e) preparednessto use the atom bomb to relieve any situation wherewe encountered unbeatable opposition. There canbe little question that the unhesitating applicationof these measures would have toppled Mao's re­gime, which was still unstabilized in 1950 andchallenged by large numbers of Nationalist gueril­las throughout China. Moreover, such a strategywould have immediately ended the Korean War onour terms, as Mao would have been forced to pullback his troops to defend China itself.

3. The opportunity, by bringing off a spectacularvictory in Korea, to regain the respect of suchfence-sitting nations as Burma, Indonesia, andIndia. Such a victory would have created a psycho­logical situation which would have disinclinedthese nations to follow Mao Tse-tung's lead in thefuture. Everyone wants to be with the winner.Vice versa, the American failure in Korea willdefinitely range these "neutraHsts" with theCommunist bloc in Asia.

4. The opportunity to create a strong alliance .ofWest-oriented nations in Asia to counterbalanceRussia. Mr. Acheson torpedoed such an attempt,initiated by the Asiatics themselves, in 1949. Itwa's still possible to set up .such an Asiatic N,ATOin 1950. But what Asiatic nation in its right mindwould now trust us after the exhibition of ourirresolution, first in China and now in Korea?

732 THE FREEMAN

5. The opportunity to readjust our relations withour so-called "allies" and regain freedom of Ameri­can initiative in the [i'ar East. The repeated re­fusal of Great Britain, India, and other U.N. alliesto back our play in Korea gave us justification todetach our Atsiatic policies and to adopt a coursebased solely on American self-interest. The enun­ciation of such a policy would have saved us frommost of the frustrations which led us to defeat inKorea. We muffed this chance. In consequence, wehave lost a particularly advantageous opportunityto escape intolerable foreign involvements and toplace our foreign policy upon the sound basis ofAmerican self-interest.

International Bush-Leaguers

These five forfeited opportunities will stand be­fore the American people like specters in the evildays which may lie ahead. Never has a nation hadsuch a gratuitous chance to redeem its pa1st mis­takes and to redress its balance by one all-outmilitary thrust. Never has a great nation soignobly bungled the chance. Having attained para­mount power in the world, are we too faltering­too racked with Hamletian self-doubt-to use thatpower to advance the interests of America?

Some fatal quirk in the American characterseems to turn us into veritable bush-leaguers whenwe face other and weaker nations in the inter­national arena.. Transcendently great in technologyand economic imaginativeness, our genius stops atthe water's edge. Possessing supreme world power,we are afraid to use it unilaterally, and we erectan unnecessary United Nations as a dreary vehiclefor the sharing of our hegemony. vVe bribe whenwe could command. We compromise and appeasewhen we could halt opposition to our will by asimple gesture. We carryon our back a wholecontinent of vacillating "allies," and we allow themto veto our decisions in matters of the most vitalnational interest. And to complete the absurdity,we do all this in the name of ideaUsm, and werationalize our ineptitude by smug phrases abot'J.tthe new world order.

The Korean debacle has objectified this nationalfault in black relief. It has been a nightmarishrevelation of just what is wrong with us.

Let us face the naked truth that we have. muffedthe Korean chance because we have been more con­cerned with placating Britain than with advancingour own American interests. In the name of fidelityto our "allie's," we have walked out on two allieswho were willing to fight for us--Syngman Rheeand Chiang Kai-shek-in order to please a third"ally," Britain, which was not even willing toabandon its profitable trade with the enemy wewere fighting.

Until the United States looks these ugly factsin the face, it will be doomed to other and greater .Koreas, as the world shadows lower.

Page 13: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

The Great Confrontation

B.y WILLIAM HENRY CHAMBERLINAmerica and Russia are locked in a struggle thatwill determine the future of the world. We must/ta.ce squarely the s'trengths (lnd weaknesses of both.

"There are', at the present time, two great nationsin the world which seem to tend toward the sameend although they started from different points; Iallude to the Russians and the Americans.... TheAnglo-American relies upon personal interest to ac­complish his ends, and gives free scope to the un­guided exertions and common sense of the citizen;the Russian centers all the authority of societyin a single arm. The principal instrument of theformer is freedom, of the latter servitude. Theirstarting point is different and their courses arenot the same; yet each of them seems to be markedout by the will of Heaven to sway the destinies ofhalf the globe."

There are few examples of prophetic insightso conspicuously vindicated by the course of events.When Alexis de Tocqueville wrote these thoughts(1835-1840) the young American Republic countedfor little in European politics. Russia was alreadya great power, though somewhat later in thecentury Great Britain and France successfully in­vaded Russia during the Crimean War-a ventureneither would embark on today.

But there were elements of fundamental strengthin the future of the United States and Russiawhich de Tocqueville comprehended in making hisforecast. Both countries possessed, for the needsof their growing populations, untapped resourcesof continental scope. In the Russian Far East, asin the American Far West, there were only sparsesettlements of primitive tribesmen.

Neither Russia nor the United States felt anyeconomic pressure to build up overseas empireswhich might become restive and break away. Bothheld vast stretche'S of land which only awaitedmigration for development. A thoughtful observercould foresee the time when !both America andRussia could undertake enterprises of internal de­velopment beyond the possibilities of the compara­tively small and crowded European countries.

Moreover, America and Russia each symbolizedan idea, carried to its final conclusion. The UnitedState'S represented a new experiment in socialequality and individual opportunity, within aframework of free institutions, protected by asystem of checks and balances .against excessiveconcentration of government power. In Russia, inour time as in de Tocqueville's, all the authorityof 'Society was and is indeed centered in "a singlearm." Stalin was a far more absolute ruler than

Nicholas I because he added to the unlimited po­litical authority of the tsars complete control ofthe national economy.

More than a century and a half elapsed after theAmerican Revolution before America and Russiacame face to face in the arena of world politics.The Second World War fulfilled de Tocqueville'sprophecy of a supreme confrontation. In spite ofAmerica's wish for friendship, this relation couldnot from the very start have been amicable. Thecushions that had formerly softened American­Russian contacts had disappeared. Every contin­ental Europe'an nation except a few minor neutralshad been overrun and shattered by Nazi Germany.Germany itself had been finally hurled into com­plete defeat. Great Britain, technically a victor,emerged from the war impoverished and weak­ened, no longer able or willing to apply those prin­ciple'S of free trade and keen competition on whichits rise to industrial power in the nineteenthcentury was based. The postwar anti-colonial re­volts in Asia destroyed or impaired major sourcesof British wealth.

Prophecies Fulfilled

The destruction of German military power inEurope and of the Japanese empire in Asia leftpower yacuums which the Soviet Union was quickto fill. 'The late Jan Christian Smuts, Prime Min­ister of South Africa, clearly fore'Saw the shape ofthings to come. In a speech delivered toward theend of 1943 he summed up the prospect:

Russia is the new colossus on the European con­tinent. What the after-effects of that will be no onecan say. We can but recognize that this is a newfact to reckon with, and we must reckon with itcoldly and objectively. With the others (Germany,France, and Italy) down-and-out and herself themistress of the continent, her power will not onlybe great on that account, but will be still greaterbecause the Japanese empire will have gone theway of all flesh. Therefore any check or balancethat might have arisen in the East will have dis­appeared. You will have Russia in a position whichno country has ever occupied in the history ofEurope.

Smuts proved as true a prophet as de Tocqueville.Stalin after the war achieved conquests, directand indirect, which far surpassed those of his mostimperialist tsarist predecessors.

JULY 13, 1953 '133

Page 14: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

The great confrontation of America and Russia,which finally occurred in the twentieth century,soon came to its inevitable impasse: bitter rivalryand antagonism. The United Nations became thedivided nations. The allies in the war againstGermany became opponents in the cold war thatceased to be cold after fighting began in Korea.

There is no common American-iSoviet territorialfrontier. 'The two powers face each other withmilitary, economic, diplomatic, and propagandaweapons deployed along a long global frontier.This runs from the Arctic area of northern Nor­way, along the frontiers of Yugoslavia, Greece,and Turkey, through the fermenting Near andMiddle East, to the steaming rice paddies of Indo­China and the bleak hills of Korea.

Behind the Cold War

'The two nations of which the instrument ofone is freedom, of the other servitude, 'stand atthe peak of their power in the middle of thetwentieth century. Their dispute, incomparably themost important issue in contemporary politics, ismost difficult to resolve, because it is not causedby specific disputes about territory or trade whichcould be easily settled on some compromise basis.The' four ,basic ,cause's of the cold war 'are of anintangible nature which make the most generouscompromise fruitless. They are:

1. The conviction of irrepressible conflict. It isan article of dogmatic faith with ISoviet leaders,set down repeatedly in the writings of Lenin andStalin, that a last decisive struggle between theCommunist and non-Communist worlds is inevit­able. Before this final struggle comes there may betemporary truces and adjustments, but never gen­uine or lasting peace'.

2. The persistent bad faith of the Soviet gov­ernment, a product of Communist contempt for allmorality. Soviet diplomatic history is a long recordof broken promise's and violated treaties. To men­tion only a few conspicuous examples:

The Soviet government, on its own initiative,concluded treaties of nonaggression and neutral­ity with its five western neighbors: Poland, Fin­land, Latvia, Lithuania, and Estonia. (The treatywith Lithuania was first signed in 1926 and twiceextended. The treaties with the other four countrieswere concluded in 1932 and extended for ten yearsin 1934.) All these pacts were torn up as part ofStalin's 1939 pact with Hitle'r, when Latvia, Lith­uania, Estonia, and large sections of Poland andFinland were conveniently :annexed by Russia.

At Yalta the Soviet go'vernment subscribed tothe principle that "free and unfettered elections"should be he'ld in Poland. Stalin also solemnlyagreed that the ~'liberated" peoples of eastern andsoutheastern Europe should create "democratic in­stitutions of their own choice." But Polish electionshave been fraudulent farces. Communist minorities

734 THE FREEMAN

have imposed a similar pattern of dictatorshIp anaterror throughout the large area under Soviet con­trol. The only exceptions are Finland and, to someextent, the Soviet Zone in Austria.

The Soviet government signed the "Big Three"Potsdam Agreement of August 2, 1945, which con­tains the following constructive provisions, amongmany others that were foolish, vindictive, and im­practical:

All democratic political parties, with rights ofassembly and of public discussion, shall be allowedand encouraged throughout Germany.

Subject to the necessity for maintaining militarysecurity, freedom of speech, press, and religionshall be permitted....

During the period of occupation Germany shallbe treated as a single economic unit.

All these provisions have been systematicallynullified or infringed in the Soviet Zone of Ger­many.

3. The Iron Curtain. N'o great power in historyhas remotely approached the Soviet record inmethodically isolating its subjects from foreigncontacts. This is just as true for the people in thesatellite countries. The abatement of mutual fearand suspicion which might comel from free andfrank intercourse with foreigners, is deliberatelymade impossible by Soviet policy.

4. The Fifth Column. This, like the Iron Curtain,is something formidably new: the government ofa great empire ,acting simultaneously as the headof a vast international revolutionary conspiracy.To reconcile normal friendly relations with foreigngovernments with direction of movements whichaim to destroy these governments is as impossibleas it would be to square the circle.

Soviet official repudiation of responsibility fortheactivitie~ of the Comintern and for the closelycoordinated activities of foreign eommunist partiesis not convincing. For the last quarter of a centuryof his life Stalin was undisputed master of theSoviet government. And there is the testimony ofD. Manuilsky, prominent Russian official in theComintern that "not one important document ofbig international significance was issued by theGomintern without the most active participationby Comrade Stalin in its composition." Headquar­ters of the Comintern were in Moscow, The Sovietauthorities have always maintained the closestcontrol over foreign activities in Soviet territory.It would be absurd to suppose that an organizationlike the Comintern, with its far-flung internationalramifications, would have been permitted to func­tion for ,five minutes on Soviet soil if the Sovietgovernment had not fully approved of and con­trolled its activities.

The confrontation of the United States and theSoviet Union is far more than the normal antagon­ism of two leading world powers. It is an irrepres­sible conflict between two diametrically opposednational ideas, accurately described by de Tocque­ville as freedom and servitude.

Page 15: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

America was able to develop and grow strongwithout any serious threat from without. Suchfamiliar features of life in Europe as large stand­ing armies, conscription, and heavy taxation formilitary purposes, were unknown in the UnitedStates until very recent times. This freedom fromfear of external attack was very favorable to thesmooth development of free institutions. It helpedto implant in the American character thespirit ofindividual self-reliance that does not flourish in amilitarizedsociety.

The medieval Russian state, by contrast, waslocated in a vast plain, with no natural frontiersand many enemies. It expanded in an atmosphereof continuous war, regular and irregular. The earlyRussian principalities were swamped :by the tide ofthe Tartar conquest. As the Muscovite tsars be­came more powerful they widened their frontiersin a long series of wars with Turks and Tartars,Swedes, Lithuanians, and Poles. Ultimately Russia,by sheer bulk and size, became a strong factor inEuropean politics. Russian troops temporarily oc­cupied Berlin during the Seven Years War (1756­1763). The stubborn courage of the Russian armiesand the rigors of the Russian winter startedNapoleon on the road to decline and fall. Bothunder the tsars and under the Soviets Russiamaintained a huge military establishment.

Russia's Tradition of Autocracy

Absence or presence of outside military pres­sure is not the only reason why Russia andAmerica, as they grew into world powers, developeddiffering sets of values, especially as regards in­dividual freedom. Autocracy, absolute power of thetsar, was the distinctive principle of Russian po­litical life. Its origins were oriental and semi­oriental. Russian ideas of government were largelyderived from the absolutist Byzantine Empire,from which Russia accepted Christianity, and fromthe Tartar khans who we're overlords for twocenturies.

Russia remained almost entirely outside the in­fluence of three movements which, in various ways,fostered the growth of individual judgment: theRenaissance, the 'Protestant Reformation, and theFrench Revolution. Russian autocracy stood likean immovable rock while most of Europe wasevolving in the direction of constitutional regimes,with limitations on the sovereign's power.

There was some softening of the rigid characterof the Russian political, social, and economic orderduring the half century before the First WorldWar. Serfdom was abolished by Alexander II in1861, only to be restored by Stalin, in the form ofthe collective farms,seventy years later. The sameTsar introduced some local self-government andgave Russia a modern and civilized judicial system.A national parliament, the Duma, electe'd on a nar­row franchise and invested with limited powers,

came into existence afte'r the 1905 Revolution. Butmost Russians, apart from a minority of Western­ized intellectuals, conceived of governmental poweras something far removed, vast, unlimited, beyondtheir check or control.

A Tragic Revolution

Westernized Russian liberals and radicals andforeigners who admired Russian achievement inliterature and the arts and found Russians ashuman beings congenial looked hopefully for thecoming of a revolution that would sweep awaytyranny and release the creative energies of theRussian people. The Revolution came; but thetyranny over the minds and bodies of men becameonly more intense. This is evident from compara­tive figures of executions and numbers of politicalprisoners in slave labor' camps under the tsars andunder the Soviets.

I t was a profoundly tragic development, especiallyfor the civilized and humane pre-Bolshevik Russianintellectuals, who counted among their number ahigh proportion of the finest human beings whocould be found anywhere in the world. But theSoviet addiction to methods of barbarous tyrannyis not surprising if two historical facts are con­sidered. First, there was the poverty, ignorance,often downright illiteracy, combined with totalinexperience in self-government, of the Russianmasses. Second, few Russian revolutionary thinkerswere genuine liberals. This observation holds truenot only for the Bolsheviks, but for Russian rebelsof other points of view.

If one studies Russian revolutionary literatureone finds very little emphasis on assuring the rightsof the individual, on protecting the individualagainst the state. Property, one of the most funda­mental of human rights, is regarded with hostilityand contempt. The emphasis is almost always onrealizing some kind of social utopia, if necessaryby the most ruthless means. The aspiration of thetypical Russian revolutionary was not to curb thepower of the state, but to capture that power anduse it to force people into the mold of some am­bitious blueprint of social reorganization that wassupposed, in some happy future, to produce a mil­lennium of virtue' and happiness.

The founders of the American Republic wereequally far removed in their political thinking fromthe models of, Byzantine emperors and Tartarkhans and from such revolutionary fantasies asI.Jenin's belief that absolute freedom would someday emerge from a pe'riod of a'bsolute "proletarian"dictatorship. Jefferson and Madison, Adams andHamilton were among the best-read men of theirtime. The Federalist Papers, the intellectual back­,ground for our IConstitution, are full of pertinenthistorical analogies, drawn from the experiences ofthe Carthaginian Senate, the Achaean League, theArchons of Athens, the League of ·Cambray.

JULY 13, 1953 735

Page 16: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

This study of history convinced the founde'rsof the American Republic that there were otherdangers to liberty beside's the :voyal arbitrarinessagainst which they had rebelled. A mob could be atyrant as well as a monarch. The people's tribuneof today could become the dictator of tomorrow.They reached the conclusion that the best means ofassuring "life, liberty and the pursuit of happi­ness" was to establish a government of limited anddivided powers. The Constitution bristles with"Thou Shalt Nots," directed against possible abusesof power.

How completely opposed and contrasted is theSoviet conception of the state as an instrument forthe suppression of one clas£ by another. Lenin re­fers to the state as a machine or cudgel, with whichthe ruling class crushes other classes. And hisabsolutist utopianism finds expression ina phrase];1e borrowed from Engels: "While the state' existsthere is no freedom. When there is freedom therewill be no state."

Promises vs. Prohibitions

I t is profoundly instructive to compare theAmerican and Soviet Constitutions. The former isconceived in terms of natural rights of individualcitizens which the state· may not touch. The latteris full of promises of material benefits which anall-powerful state will confer on obedient citizens.Says Article 125 of the Soviet Constitution:

In accordance with the interests of the work­ing people and in order to strengthen the socialistsystem, the citizens of the USSR are guaranteed bylaw: (a) "Freedom of speech, (b) Freedom of thepress, (c) Freedom of assembly and meetings, (d)Freedom of street processions and demonstrations.These rights of citizens are insured by placing atthe disposal of the working people and their organi­zations printing shops, supplies of paper, publicbuildings,. the streets, means of communication, andother material requisites for the exercise of theserights.

On paper this seems to suggest a paradise forlibertarians. What makes a mockery of these as­surances is the fact that the government, providingthese facilities, inevitably decides who is to usethem. ISoviet civil liberties in practice amount tothis: that the citizen may read what the govern­ment wants him to read, say publicly what thegovernment thinks he should say, and demonstratefor what the government thinks he should demon­£trate for. How infinitely surer as a genuine guar­antee for the expression of varied viewpoints isthe simple negative injunction in the AmericanConstitution, instructing the government to keepits hands off freedom of speech and press!

'The richest, most powerful and populous nationof the New .. World, the largest, most populous andpowerful nation of the Old World have come tomaturity as world powers at the same time. TheSecond World War has left as its political legacy

736 THE FREEMAN

a two-power world. More than a rivalry of twonations is involved. There is an antagonism of twocamps.

The United States and the Soviet Union maylose their ascendancy in time, as other gleat powershave declined before them. But for the near futurethe predominant position of these two nations,"each marked out by the will of Heaven to swaythe destinies of half the globe," seems solidly as­sured. Only in the United States and in the SovietUnion are to be found all the elements necessaryto sustain very long the effort and sacrifice re­quired to sustain modern war: population, re­sources, space, industrial and technological develop­ment, large stockpiles of modern weapons. At thepresent time the strength of the United States andof the Soviet Union is in precarious balance. Shouldeither of these leviathans be greatly weakened, thescales of world power would tilt swiftly and heavilyin favor of the other.

All-out war between the two camps, divided bythe barricade of the Iron Curtain, is not inevitable.Both sides are conscious of the tremendous lossesand risks involved in a final, irrevocable appeal toarms. But true' peace, which has nothing to dowith [Soviet "peace offensive" maneuvers, is alsoimpossible, unless there is some almost miraculouschange in the Soviet Union. Barring such a change,strife and tension, 'struggle· with all means shortof all-out war, seems to be the destiny of thegreater part of the human race in the second halfof the twentieth century. The Great Confrontationis here and has already assumed many aspects ofan irrepressible conflict.

II WORTH HEARING AGAIN II:-_--------------------

Our Unintelligent Intelligentsia

Our intelligentsia [is] easily the most emotionaland voluble, and, as I often think, so far a's con­cerns the realities of international life, the mostuninformed, the most injudicious, and the mostsusceptible to propaganda.

JOHN BASSETT MOORE, as quoted in C. P. Ives'column, The Baltimore Sun, February 2, 1953

As A Lawyer Sees It

The greatest change I've seen in law stems fromthe rela1tionship between the citizen and his gov­ernment. When I began in 1895 litigation was be­tween one man or one concern and another. Therewas very little litigation in the fede·ral courts ex­cept on the criminal side. Now the arguments arebetween a citizen and his government, and with anever-widening field of government interference.

JOHN W. DAVIS, as quoted in The New YorkTimes, April 14, 1953, on the occasion· of hiseightieth birthday

Page 17: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Socialism Grips Norway

By TRYGVE J. B. HOFFWith a newlrLw for the permanent regulationof prices, the p'ower of Norway's governme!ntover business and trade has become absolute.

Socialization has become a foggy term, and so hassocialism. Most modern Socialists define socialismby pointing to conditions considered desirable byeverybody. Such descriptions are useless as defini­tions. The following definition has been acceptedby the advocates as well as by the opponents ofsocialism. Socialism means (1) the abolition ofprivate owne'fship of the means of production; and(2) centralized State direction of trade and busi­ness. This definition is not as clear and unam-bigious as it might appear, because taxation andother devices may undermine, and even eliminate,the right of private ownership, even if such own­ership still exists on paper.

Norwegian industry· is not formally socialized ornationalized. It is true that the telegraph serviceand the railways are State-owned, but this hasalways been so in Norway. Few Europeans considerState ownership of telegraph lines and railways associalization, though it is admittedly a step in thatdirection. Even before the war Norway had Statemonopolies for grain, wines and liquors. Since thewar the Labor government has established twomore monopolies-for medicines, and for fishing­gear, nets and tackle.

Some State-Owned Industries

The Norwegian telephone companies used to bepartly State-owned and partly privately-owned.Since the war there has been ·a tendency. for theState to buy the privately-owned telephone com­panies. The reason given is the necessity of co­ordination to attain higher efficiency.

Since the war the Labor government has alsotried to acquire holdings of shares in other privatecompanies. The opportunity presented itself veryconveniently when Germ'an lnterests in Norwegiancorporations, acquired during the occupation, wereconfiscated as part of the war indemnity. In thisway the State has become the greatest stockholderin Norway's biggest corporation-the Norsk Hydro,a nitrate company.

'The government has gone farther than. takingover war indemnitie's. On June 1, 1952 the Stateowned stocks in seventy-seven corporations, andcontrolled a majority in forty-one of them. Thetotal share capital of these seventy-seven corpora­tions was 496,000,000 kroner, of which the' Stateowned 344,000,000. As a comparison, the total share

capital of all Norwegian stockholding companie,sis calculated to be 3,000,000,000 kroner.

The shareholding interest of the State is con­siderably greater than the above amounts indicate.The Vinmonopolet, for example, with its ware­houses, stocks of wines and liquors,and retailoutlets all over the country, is obviously worthmuch more than the share capital, a paltry 100,000kroner.

With the unanimous consent of the Storting,Norway's Parliament, the government has startedbuilding a big iron-works, Statens Jernverk, whichwas calculated Ito cost 334,100,000 kroner but willin fact cost three times as much. This may be'described as a socialist undertaking, not becauseit is State-owned but because it does not satisfy theprivate prerequisite that it should be profitable.Even according to the preHminary estimates it willonly cover its expenses in boom years; it will losemoney in normal as well as in depression years.

Limitation of Dividends

The Labor government has followed other prac­tices which have brought Norway still nearer to'socialism. One device is the limitation of dividends.The general rule is that no stockholding companymay pay more than a 5 per c~ntdividend. Theresults are in some cases so absurd that dispensa­tions are given. One effect of this limitation is thatstocks actually are not equities any more', repre­senting real values, but nominal values of the samecategory as bonds.

Con5idering the risky character of certain Nor..;wegian industries, such as whaling, shipping, andfur-farming, a limitation of dividends mustnaturally reduce the supply of venture capital. Ithas already done so. The number of stock-listedcorporations has fallen drastically.

A permanent limitation of dividends means ofcourse the permanent abolition of the shareholders'right to private ownership of the means of pro­duction.

It may be added that most big ente'rprises inNorw~y are limited joint-stock companies. Someprominent lawyers assert that Norwegian Joint­stock companies have already been socialized forall practical purposes. In addition to the limitationof dividends a ban has been imposed on the dis­tribution of companies' funds, and on the dissolving

JULY 13. 1953 737

Page 18: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

of companIes, in order to prevent indirect paymentof dividends.

The financial benefits from the ownership of themeans of production have also been reduced inother ways. Up to January 15, 1953, there existed aceiling on salaries. It was never quite' clear whatthat maximum was, and the law was permitted toexpire.

It is still forbidden to pay corporation officershigher salaries than in 1940. A,s the index ofwholesale prices is 276 and the official cost-of­living index 222 (with 1938 representing 100);this ceiling can hardly be maintained. But it existstoday.

House-owners have been compelled to reduce pre­war rents by 10 per cent. It is a matter of defini­tion whether residential houses are a means ofproduction, but this decision has at any rate' re­duced the financial benefits of being a house­owner.

'The financial benefits of owning capital goodshave been· further undermined because the PriceControl Office has authority to place special leviesor dues on any branch of industry or any business,corporative or not. These levie's are partly used forreducing prices of any products that the PriceDirectorate wants to subsidize. The due'S levied forthis purpose and the subsidies paid over the StateBudget have now re'ached such heights that theyequal the total amount of direct taxes.

The Price Directorate has also the right to con­fiscate profits in orde'r to subsidize unprofitablefirms, in the same branch or in other branches ofbusiness. This is the very opposite of competition.The marginal producers are' not only not elimin­ated; they are subsidized out of the profits of thewell-managed firms.

Are They Taxes?

As according to the Norwegian Constitution,only the Storting has the right to assess taxes,it has been maintained that levies collected by thePrice Directorate are unconstitutional. The Su­preme Court decided a few months ago, however,that the first-mentioned levies are not taxes andtherefore not unconstitutional.

i~he groups which disputed the le·gal right ofthe Price Directorate to collect these levies were'the whaling companies. To them it was a matteT ofprinciple rather than of money, as the Treasurywould have taken the money anyway. The corpora­tion taxe's in Norway vary between 60 and 70 percent, but individuals may have to pay up to 100per cent. The maximum income tax rate wasformerly 95 per cent, but has lately been reducedto 90 per cent. However, as this limitation will re­duce the State income tax only, it cannot prevent100 per cent income tax in some cases. According toformal definition, high taxes may not be real social­ism, but those who pay their whole income in taxes

738 THE FREElIAN

hold that private ownership under such circum­stances is rather illusory.

Moreover, there are other tendencies whichundermine the ownership of the means of pro­duction and which, therefore, have brought Norwaynear to complete socialization.

Government Interference

Ownership does not mean the right to financialbenefits only. Ownership is also the right of dis­posal, the right of management.

'This right has been seriously undermined inNorway owing to extensive State interference' intrade and business. When the leading socialisteconomists in the 1930s planned the coming trans­formation of Norwegian society, they maintainedthat socialization was feasible without formal aboli­tion of private ownership of the means of produc­tion. It was considered sufficient that the Stateshould secure for itself the right of disposal. Theywere right.

Owners and managers are still formally in com­mand, but few inde'ed are the decisions they maytake without the permission of departments anddirectorates. They cannot import or export goodswithout a license. Dealings in foreign exchange areregulated, and the current receipts of foreign cur­rency have to be sold to the central bank at theofficial rates of exchange (which are lower thanin the free markets).

The shipowners are not allowed to build, buy, orsell ships abroad without permission. They haveeven been forced to convert into Norwegian kronertheir foreign exchange holdings, obtained throughinsurance abroad for ships lost during the war.These transfers (which incidently have contributedto the inflation in Norway) have resulted, in theshipowners' paying high 'interest on loans whichthey have been compelled to contract with foreignshipbuilders, while they get little or no interest ontheir holdings in kroner.

T,he Norwegian mercantile fleet, of which nearly50 per cent was lost during the war, has been re­built; but the shipowners maintain that their com­petitive power has been impaired by the govern­ment's refusal to let them build when and to theextent they wanted. From late 1948 to late 1950there was virtually a ban on shipbuilding. This hascost the shipowners about 1,000,000,000 kroner andthe irreparable loss of important markets.

Freedom of management in industry and tradeshas been still further impaired. In addition to theother difficulties placed in the way of exporting andimporting, trade is permitted only at the pricesfixed by the' Price .control Offices. The Pristidende(the publication of the Price Control Office) hasdecreed official prices for some hundred thousanddifferent goods and qualities of goods. For window..frames alone there exist 721 different prices, andso detailed are the specifications thalt they baffle

Page 19: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

even the carpenters and the building experts.Freedom of trade and the right of management

have been further impaired by the Price ControlOffices' prohibition against establishing new busi­nesses without permission. The starting of newbusinesses in certain tr'ades is also prevented bythe foreign exchange regulations. Building offactories and warehouses is forbidden withoutspecial license.

To 'sum up: the owners of the means of produc­tion are still in nominal command, but their spheresof activity and power of decision have been solimited that many of them feel they are pr,acticallycivil servants.

State interference in Norway is certainly ex­tensive. It does not, however, satisfy the secondcriterion of socialism. Trade and production arenot centrally directed. It is doubtful whether theyever can be, as long as Norway remains a countrydependent on foreign trade; but there is no denyingthat the government has attempted to create acentrally directed economy. Even if the so-calledNational Budget has little by little been reduced toprognoses and bulletins of information, the originalrole was to draw up "a program for the wholenational economy," and the Premier recently con­firmed that socialization is the goal.

Difficult to Evaluate Results

It is outside the scope of this article to investi­gate and evaluate the consequences of the socializ­ing tendencies in Norway. But it is natural forreaders to ask what the results have been.

It is too early to pass a final and conclusive ver­dict. In the first place the government (and thePrice Directorate) have not availed themselves ofthe full powers delegated to them by the "tem­porary" Price Law. This has been openly admitted.It may be that they first wanted the law madepermanent.

In the second place, the socialist experiment hastaken place under exceptional conditions. After thewar Norway had the advantage of very favorableterms of trade due to the international boom. Ithas also profited from generous Ame'rican giftsunder the Marshall Plan. According to a member ofthe government, Mr. Erik Brofoss, Norway wouldhave had a crisis without this help. Finally, pricesand wage'S have been continually rising owing tothe inflationary tendencies in Norway's economy.As long as inflation is going on, everything appearsrosy.

There are also general reasons why caution isindicated. The consequences of any economic pol­icy are difficult to evaluate'. because causal relationsin economic and political fields are uncertain. Otherfactors. may have either strengthened, weakened,or neutralized the ;effects of the policy in question.One never knows what might have happened ifanother policy had been followed.

Finally, the rationality of an economic policy (orof any human action, for that rnatter ) depends onthe goals aimed at. Some' people seem to considersocialization an end in itself. The Norwegian Lahorgovernment does not. Its members have statedquite clearly what their aims are: (1) full em­ployment; (2) equalization of incomes and capitalwealth; (3) increased productivity; and implied inthat (4) a higher standard of living. The govern­ment has also stressed that society above allmust remain democratic. Another underlying as­sumption is that inflation must be avoided.

The first goal has so far undoubtedly bee'll at­tained. Norway has full employment; indeed, Nor­way has over-full employment. On the otheT hand,socialization was hardly necessary for the attain­ment of that goal. The need for reconstruction andthe pent-up demand for capital-and-consumersgoods accumulated through five years of iGermanoccupation and exploitation had created such aneed for manpower that full employment wasalmost unavoidable'.

The Labor government is convinced that un­ernployment can be combated by Keynesian tactics.Even during the boom peTiod it has faithfully ad­hered to a low-interest policy. As a result Norwayhas the lowest interest rates in the world, outsideof Switzerland. The government has recently sub­mitted a bill according to which interest rates inNorway are to be kept permanently low. Thearguments advanced in favor of this optimisticview are quite extraordinary, but cannot be dis­cussed here.

The possibility that unemployment may alsofollow from other causes than lack of purchasingpower (such as loss of export markets due to highcosts, and lower productivity) has not been serious­ly contemplated in government circles. Some smallsigns of unemployment this spring thus createdconsiderable surprise and consternation.

The Second Goal

As for the second goal in the foregoing list, thereis no denying that there has been an equalization ofcapital and income. The lot of the well-to-do hasdeteriorated; the lot of the lowest-paid groups,such as fishermen and foresters, has been verymuch improved. Such an improvement was probablein any case, due to the high prices for fish and woodproducts in the postwar period, but it is of coursean open question whether the improvement wouldhave really taken place without State interference.The strategically strong position of the workers,however, due to the over-full employment, makessuch a possibility appear likely.

On the other hand, the high taxes levied in orderto attain equalization have' had important side­effects. When capital taxes are so high that noperson can live off income from capital (irrespec­tive of the magnitude of the capital), the propensity

J'UL Y 13, 1953 739

Page 20: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

to s'ave is lowered. For those who think individualsaving is harmful (leading Norwegian plannersdo), this is all to the good, but the high taxes plusdisinclination to s'ave have prevented the attain­ment of other goals.

Taxpayers at all income levels have become lessinterested in increasing their income beGause of thesteep progre'Ssion in tax rates. As a result of theinflationary rise in prices and wages, everybody isin fact taxed at higher progressive rates than be­fore, even if his real income is the same. The in­clination to prefer leisure to extra work is not con­ducive to the attainment of another important goal-a higher standard of living. The high taxes havefinally contributed to a widespread disregard ofcost minimization. This must be regarded as adisquieting development. Unnecessary costs meanwaste in any society, irrespective of political viewsand status.

Misdirection of Resources

Another form of waste is the result of thePrice Directorate's policy of putting maximumprices on so-called necess-aries of life. This meansless profit on such goods, or none at all. Conse­quently resources are transferred to production ofgoods which neither the authorities nor :the con­sumersconsider important. We get what ProfessorWilhelm Ropke has so aptly called "ashtray" in­dustries. The supply and assortment of ashtrays,souvenirs, and lampshades is excellent, while goodsthat are much needed are not produced.

The socializing tendencies in Norway have hadother side-effects in conflict with the government'sown program. The government insists that de­mocracy as well as democratic rights must bemaintained. The' central direction of trade andbusiness has, however, been followed by the lossof one central democratic right-consumers' freechoice of goods. What goods are to be produced andimported is in most cases not decided by the' con­sumers themselves, but by the civil servants indepartments and directorate'S.

Anothe'r essential democratic right, the freechoice of occupation and working place, is in thedanger zone. A "Labor Directorate" has been e'Stab­lished, and a bill has been passed which gives thisinstitution the theoretical right to direct labor. Theauthority to do this has so far not been used, butit is difficult to see how that can be avoided ifsocialism is practiced consistently and "full em­ployment" preserved under adverse conditions.

Finally~ it may be mentioned that socialization­or at any rate the means used for the purpose ofsocializing industry--has had some important moralside-effects as well. The first is that respect forthe law has sunk. The regulations have become sonumerous thait people cannot keep abreast of them,eve'll if they wish to. In addition, many of theregulations are so impractical that it is not possible

740 THE FREEMAN

to carry them out. An economist (Professor Wil­helm Keilhau in N orsk Pengehistorie) re'centlystated that the present exchange regulations mustbe evaded, otherwise trade and business wouldsuffocate.

The Price Directorate has decreed that pricesfor houses, land, and building sites must not exceedthose of 1940. The result is that hardly any propertyis being sold without some extra payment "underthe table." This has been openly admitted in Parlia­ment by the Minister of Finance.

The high taxes have caused general tax evasion.This was revealed by a registration of capital im­mediately after the war. Incidentally, the registra­tion disclosed that tax evasion was j l:1.st as commonin poor communities as in others.

The government 'and its supporters contend thattax evasion, the breach of exchange .regulations, thebuying and selling at market prices (i.e., at otherprices than those' fixed by the Price Directorate)are particularly harmful. They have named suchpractices "white-'collar crimes," and insist thatthey must be punished with particular severityprecisely because they are not considered crimes inthe eyes of the public. ~:his may seem surprising toother peoples, but the inner logic of socialism (plusthe acceptance of the ends stated by the govern­ment) has made this view on crime and punishmenta natural one.

State Power over Business

The bill for permanent price regulation has justbecome law. It is significant that this bill wasforced through ina period when other countries­even Great Britain--had abolished or were abolish­ing price controls.

'This new Permanent P'rice Law is more than alaw for regulating prices. It will give the govern­ment complete power over trade and business. The'State will have the rlight to decide the compensationpaid for, all goods, all contributions, and all se'rvices,including those of scientists, professional men, andartists.

A business may be denied the right to close upor even to reduce its activities. Likewise-or con­trariwise-the starting of new enterprises or theextension of existing ones may be forbidden bythe State. What criteria are to be used for makingsuch important decisions is not quite clear. Regionalequalization and the degree of unemployment inthe different districts may become the decidingfactors. The 'question whether the enterprises areprofitable or not wilL hardly enter. The Labor gov­ernment views profits with disfavor because it as­sociates them with private capitalism. It is animportant aspect of the socializ'ation process inNorway that the authorities do not consider profitsas a measuring-stick of rationality, showingwhether output ,exceeds input, whether resourcesare employed wastefully or not.

Page 21: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Is Lobbying Honest?

By FRANK CHODOROVHow the la;w req~'t,r'Lng lobbyists to register hasbeen used against "typic,al" groups, all of whichareactive,ly opposed to collectivis,t programs.

The word "lobbying" came by its thad characterquite honestly. It designates a method of briberymuch in vogue during the early days of our coun­try, to which representative government naturallylends itself. Judging by the newspaper reports ofcorruption in high places, it is still in style. Thelate Buchanan Committee tried to change the moralcontent of the word for reasons which are in them­selves of dubious morality. Up to this recent exer­cise in semantics, however, lobbying has alwaysbeen associated with the purchase of legislationfavorable to the fortunes of the buyer. An on-the­barrel transaction.

Lobbying has been, and is, a conspiracy to de­fraud the rest of the citizenry. Whether the desiredlegislation is a tariff, a franchise, a license, or asubsidy, the net result of lobbying is to createprivileges for a favored segment of the populationand disabilities for consumers and taxpayers. Thatis what makes lobbying immoral. We' are faced withthe question: Is it the buying lobbyist who is im­moral, or the selling legislator?

The seeking of something for nothing is a char­acteristic common to all human beings. It cannotbe immoral in itself because it is natural. Theact of robbery, not the inclination to rob, is im­moral. Hence, the lobbyist i.s wicked only if hesucceeds in obtaining legislation that puts hisfellow men to disadvantage. But his wickednessis dependent on the government official; it is thelatter's willingness to barter away the trust placedin him that makes the fraud possible.

Yet when public clamor against this fraudreached a disturbing point, the legislators managedto shift the onus of immorality from themselvesto their lesser partners in crime. It was made toappear that those who asked for special privilegeare sinful, not those who granted it. Thus, whenthe Federal Lobbying Act was passed in 1946, itsprincipal feature was the requirement of registra­tion; all· lobbyists must avow their presumably ne­farious occupation in writing. Congress might havedeclared it an offense against society for a publicofficial to accept compensation of any kind, even acampaign contribution or the promise of a job, inexchange for his vote for or advocacy of any bill.Such a law would go a long way toward destroyingthe lobbying conspiracy, for it would place thefault where it properly belongs.

The worst feature of the registration law is that

it gives the government another police club to beused against the governed. 'The law was the start­ing point for the Buchanan Committee's advocacyof ,a rather novel political doctrine-that it is theduty and right of government to view with sus­picion all attempts to influence public thought onlegislative matters.

Frank Buchanan is dead. His committee diedbefore him-in December 1950-and since no legis­lation followed from its findings, reference to itmight seem gratuitous, if not ghoulish. But Bu­chananism is quite alive, for the ide:a of govern­mental control or regulation of propaganda relatingto public policy-which is the prelude to sup­pression-pops up from time to time.

The Case of Dr. Rumely

A case in point is that of Dr. Edward A.Rumely,executive director of the Committee for Constitu­tional iGovernment.Dr. Rumely was recently clearedof .a "contempt of Congress" charge by the UnitedStates Supreme Court. A lower court had convictedhim and sentenced him to serve nine months. Thecharge arose from his refusal to furnish theBuchanan Committee with a list of the purchasersof hooks issued by the organization. The bookswhich Dr. Rumely's committee had distributed inspecial paper editions were against New Dealismand the trend toward socialism. They includedJohnT. Flynn's The Road Ahead, Thomas J. Nor­ton's The Constitution of the United States, andDr. Melchior·Palyi's Compulsory Medical Care.

Despite the legal exoneration, the Treasury De­partment has, within recent weeks, notified aninquirer that contributions to "such organizationsas the Committe'e for Constitutional Government"are not deductible, even though an exemption statushas been established. Buchananism marches on.

In 1950 the House 8elect Committee on LobbyingActivities was "authorized and directed" by theEighty-first Congress "to conduct a study and in­vestigation of (1) all lobbying activities intendedto influence, encourage, promote or retard legisla­tion." Frank Buchanan, representing a strong laborunion district of Pennsylvania, was appointedchairman.

'The character and purpose of the "study and in...vestigation" were revealed right from the start.In the [General Interim Report (published October

JUL Y 13, 1953 141

Page 22: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

20, 1950) the committee states that it was undergre-at difficulty when it began its work, because ofthe very large number of organizations and in­dividuals engaged in what it chose to designate aslobbying. It therefore decided to select for studyand investigation a few "typical" cases. The selec­tion turned out to be four organizations activelyand openly opposing collectivist programs: publichousing, rent control, socialized medicine, taxationand spending. None of the many organizations urg­ing increased government intervention was calledin; no labor unions, none of the subsidy-huntingeducational fraternity.

The study and investigation began with the' seiz­ureand impounding of letters and records by meth­ods of ,questionable legality, and by a telegraphicinquiryaddre'Ssed to the known supporters of the"typical" organizations, obviously for the purposeof intimidation. But with the methods of the com­mittee-so blatantly unfair as to come up for cen­sure on the floor of the House-we' are not nowconcerned. If the doctrine of the surveillance ofthought be admitted, the' methods follow as amatter of course ; a policy of thought control cannotcountenance respect for personal prerogatives.

A Matter of Semantic8

The first concern of the committee was with adefinition. 'The dictionary defines lobbying as "brib­ery, promise of reward, intimidation or any otherdishonest means" of attempting to influence legis­lation. For the committee to accept this definitionwould have meant restraining its work consider­ably. 'Therefore it posited, not a new definition,which might prove confining, but a series of un­charted generalities. "In the final analysis," saysthe report, "there' are only two praotical gauges oflobbying activity-intent and some substantial ef­fort to influence legislation."

This is what is known as "proof by definition."You make the de'finition fit what you intend toprove, and thus safeguard yourself against refuta­tion. It will be seen that the amorphous definitionconcocted by the' committee exempted only the soap­boxer, simply because he is without means. And thecommittee made sure of freeing itself of any pos­sible confinement by adding: "These criteria donot define lobbying, but they do set forth the con­ditions without which lobbying does not exist. Wefeel that these are the only criteria inclusive enoughto span the entire present system of pressurepolitics." That is to say, any effort which the com­mittee, or any agency of government, decide'S toendow with "intent" to affect legislation, and con­siders "substantial," comes within the' scope ofsurveillance.

The one liberty which underlies all liberty isthat of criticizing the government. It is exactlythat prerogative that the Buchanan Committeeaimed to undermine by its trick of semantics. If it

142 THE FREEMAN

could be established as a principle, and then enactedinto law, that any "substantial effort" to influencelegislation is properly a matter of government jur­isdiction, government could easily de'stroy that ef­fort by intimidation and harassment. That this wasin the minds of the formulators of Buchananismis inadvertently suggested by this admission:

Today, the long-run objective of every significantpressure group in the country is and must inevitablybe the creation and control of public opinion; for,without the support of an articulate public, the mostcarefully planned direct 'lobbying is likely to beineffective.

That is exactly the point. Why should "lobbyingat the grass roots" be a matter of governmentconcern? Is it not essential to the pre'Servation ofour liberties that means for the 'cre'ation of publicopinion be fre'e from restraint?

Effort to Discover Financial Sources

Throughout the hearings there was gre'at ur­gency to find out who had contributed money forthe printing and dissemination of literature criticalof New Deal legislation and practices. "I think,"declared a committee member, "that the publicought to be able to tell, when the organizations mailout this stuff, who is financing it." This was theburden of one of the committee's legislative sug­gestions in its final report.

In the ,first place, this idea of disclosure offinancial sources is somewhat at odds with the' as­sumed right of an American to spend his moneyas he sees fit-with the basic right of property.Putting that point aside, why was the committee,or the majority, so insistent on disclosure? Theanswer springs to mind even as the question isasked: to put the contributors under fear of pos­sible pressure.

"Where there is nothing to hide, there is nothingto fear," pontificates the Inte'rim Report. But thereis something to fear: the vindictiveness of thepolitician under attack. 'The likely effect of dis­closure was demonstrated even while the committeewas discussing it, b~fore 'it ever reached the legis­lative stage. Much of the revenue of the Committeefor Constitutional Government, at the time of theinve'stigation, was derived from the sale of bookscritical of collectivi~m. Many industrialists boughtand distributed quantities of these books. As soonas the insistence on disclosure became known, thesales of the'se books d.ropped, and so did the revenueof the publishing organization-which was, ap­parently, what the Buchanan Committee had in­tended.

The principal, commodity in the business of demo­goguery is class hatred, and the principal purposeof disclosure is to replenish that stock. The im­plication which the committee could hardly hidewas that those who nnancepropaganda organiza­tions do so because they, hope, to gain from the

Page 23: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

legislation that might follow from the work; theycannot be patriotic or unselfish for the simplereason that they are rich. Yet how the' rich canprofit from trying to affect thought ofa long-termnature, the committee failed to point out. Howcould the rich gain from buying and distributingcopies of the 'Constitution?

Besides disclosure, the committee stressed regis­tration. Why? Because unless an organization isregistered as a lobby there is no legal reason forpeering into its pocketbook. But some of the "typi­cal" organizations under "investigation" insistedthat they had no interest in specific legislation,but we're carrying on educative efforts only. Theymaintained that they were not lobbying and there­fore not subject to registration. The committeestuck by its arbitrary definition. As one memberput it: "The committee has discovered that one ofthe very effective ways to influence legislation is tooperate at the grass roots and possibly to deal inpublic opinion."

If that constitutes lobbying, then newspaperpublishers should be required to register, also pub­lishers of books of a tendential character, andradio commentators and teachers of doctrines thatare translatable into legislation. To avoid thattrap, the committee made haste to point out thatcommercial publishers, those who publish for profitand pay taxes, are definitely not lobbyists; onlythose who sustain losses need watching. The incon­gruity of this distinction is less important than thethought it suggests : how long might it be beforethe commercial publishers are put on the roster?

Behind the urgency for registration, and the op­position to it, isa matter that has nothing to dowith lobbying. A registered organization loses allclaim to tax exemptions. Contributions to its workare not deductible from income, nor may they belisted as "business expense." Thus, registrationautomatically reduces the income of these organiza­tions-and that is its only practical effect. Did thecommittee have that in mind?

Lobbying or Education?

Involved in the matter of registration is a def­inition of education. If a college were endowed toteach classical economics only, and consequentlyto disparage the Keynesian doctrines, would thatcollege, or its economics department, qualify as aneducational ora lobbying institution? Of a cer­tainty, its teachings would, if effective, result infar-reaching legislation. Suppose a university pub­lishing department were to issue a book denouncingthe Sixte'enth Amendment and advocating its re­peal. Would it lose its educational standing? Ifthe government presumed to decide what is lobby­ing and what is education, and should imposerestrictions on one and give privileges to the other,we would he pretty close to a regime of thoughtcontrol.

The House Select Committee on Lobbying Activ­ities was "authorized and directed to conduct astudy and investigation of ... all activities ofagencies of the Federal ,Government intended toinfluence, encourage, promote,and retard legisla­tion." The largest lobby in the country is the gov­ernment. Every agency is so concerned with theenlargement of its powers, personnel, and purse,that toward that end it proposes legislation andcarries on "selling" campaigns. For example, thePostmaster General, in explaining his deficit for1949, listed an item of $149,000,000 as the cost ofdelivering government propaganda during the pre­ceding year.

.Aside from the costs, aside from the questionablemorality of diverting appropriations from theauthorized work of the agencies to the unauthorizedself-serving propaganda, there is the larger ques­tion of the propriety of using the taxpayer's moneyto condition him to an acceptance of subservienceto the State. The acquiescence of the citizenry is aprerequisite for dictatorship.

Did the Buchanan Committee inve'stigate thepropaganda efforts of these governmentagencies ?It did not. Rather, it culled out of the Constitutiona phrase that by a far-fetched interpretation wouldjustify this propaganda:

Article II, relating to the duties and powers of thePresident, provides that... "he shall from time totime give the Congress information of the state ofthe Union and recommend to their considerationsuch measures as he shall judge necessary andexpedient."

This, the report intimates, is ample justificationfor the propaganda work of many departments."In connection with the obligation to keep thepublic informed on matters within their jurisdic­tion, the departm~nts and agencies carryon exten­sive information services through press releases,speeches, and publications." A neater whitewash oftheir lobbying activities could not have' beenphrased by the agencies themselves.

The report concludes the Ustudy and inve'stiga­tion" of lobbying by government agencies with thestatement, "We Ibelieve that Government must leadas well as follow"-the usual excuse for a grantof power-and then hastily adds: "There arelimits."

What these limits might be deponent sayeth not.

Save Your Neck Jor Socialism

Do not get off the streetcar while it is still in mo­tion, because Socialism is based on workers whoare strong and able. If you suffer an accident, youwill cause inconvenience to hundreds of others andthus inb~rfere with the development of Socialistsociety....

POSTER'in Budapest streetcars, quoted in Newsfrom Behind the Iron Curtain, April 1953

JULY 13, 1953 743

Page 24: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Gold versus Paper

By LUDWIG VON MISESA non-inflationa,ry policy is all that is needed fora return to the gold s,tandard and a sound currencysystem free of PioU,tical parties and pressure groups.

Most people take it for granted that the world willnever return to the gold standard. The gold stand­ard, they say, is as obsolete as the horse and buggy.The system of government-issued fiat money pro­vides the treasury with the funds required for anopen-handed spending policy that benefits every­body; it forces prices and wages up and the rate ofinterest down and thereby creates prosperity. It isa system that is here to stay.

Now whatever virtues one may-undeservedly-ascribe to the modern variety of the greenbackstandard, there is one thing that it certainly cannotachieve. It can never ,become a permanent, a lastingsystem of monetary management. It can work onlyas long as people are not aware of the fact that thegovernment plans to keep it.

The Alleged Blessings of Inflation

The alleged advantages that the champions offiat money expect from the operation of the systemthey advocate are temporary only. An injection ofa definite quantity of new money into the nation'seconomy starts a boom as it enhances prices. Butonce this new money has exhausted all its price­raising potentialities, and all prices and wages areadjusted to the increased Iquantity of money. in cir­culation, the stimulation it provided to businessceases. Thus even if we neglect dealing with theundesired and undesirable consequences and socialcosts of 'Such inflationary measures and, for thesake of argument, ,accept all that the harbingersof "expansionism" advance in favor of inflation,we must realize that the alleged blessings of thesepolicies are short-lived. If one wants to perpetuatethem, it is necessary to go on and on increasing thequantity of money in circulation and expandingcredit at an ,ever-accelerated pace. But even thenthe ideal of the expansionists and inflationists, viz.,an everlasting boom not upset by any reverse, couldnot materialize.

For a fiat-money inflation can be carried on onlyas long as the masses do not become aware of thefact that the government is committed to such apolicy. Once the common man finds out that thequantity of ,circulating money will be increasedmore and more, that consequently its purchasingpower will continually drop and prices will rise toever higher peaks, he begins to realize~ that themoney -in his pocket is meltingaway.~.Thenhe adopts

744 THE FREEMAN

the conduct previously practiced only by thosesmeared as profiteers. He "flees into real values."He buys commodities not for the sake~ of enjoyingthem 'but in order to avoid the losses involved inholding cash. 'The knell of the inflated monetarysystem sounds. We have only to recall the manyhistorical precedents beginning with the ContinentalCurrency of the War of Independence.

Why Perpetual Inflation Is Impossible

The 'fiat-money system as it operates today in thisand in some other countries could avoid disasteronly because a keen critique on the part of 'a feweconomists alerted public opinion 'and forced uponthe governments cautious restraint in their infla­tionary ventures. But for Ithe opposition of theseauthors (usually labeled orthodox and reactionary),the dollar would have long since' gone the way of theGerman mark of 1923. What :brought about thecatastrophe of the Reich's currency was preciselythe fact that no such opposition was vocal inWeimar Germany.

The champions of the continuation of the easymoney scheme are mistaken when they think thatthe policies they advocate could altogether preventthe adversities they complain about. It is certainlypossible to go on for a while in the expansionistroutine of deficit spending by borrowing from thecommercial banks and supporting the governmentbond market. But after some time it will be 'im­perative to stop. Otherwise the public will becomealarmed about the future of the dollar's purchasingpower and a panic will follow. As soon as one stops,however, all the unwelcome~ consequences of theaftermath of inflation will be experienced. Thoseconsequences will be: the more unpleasant, the longerthe preceding period of expansion has lasted.

The attitude of a great many people with reg,ardto inflation is ambivalent. They are aware, on theone hand, of the dangers inhe:rent in a continuationof the policy of pumping more and more money intothe economic system. But as soon as ,anything suh­stantial is done to stop increasing the amount ofmone'Y, they 'begin to cry out about high interestrates and bearish conditions on the stock and com­modity exchanges. They are loath to relinquish thecherished illusion which ascri:bes to government andcentral hanks the magic power to make peoplehappy by endless spending and inflation.

Page 25: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Full Employment and the Gold Standard

'rhe main argument advanced today against thereturn to the gold standard is crystallized in theslogan full employment policy. It is said that thegold standard paralyzes efforts to make unemploy­ment disappear.

On a free labor market the tendency prevails tofix wage rates for each kind of work at such aheight that all employers ready to pay these wagesfind all the employee'S they want to hire, and alljob-seekers ready to work for these wages findemployment. But if compulsion or coercion on thepart of the government pI' the labor unions is usedto keep wage rates above the height of these marketrates, unemployment of a part of the potentiallabor force inevita!blyresults.

Neither governments nor labor unions have thepower to raise wage rates for all those eager tofind jobs. All they can achieve is to raise wagerates for the workers employed, while an increasingnumber of people who would like to work cannotget employment. A rise in tne market wage rate-Le., the rate at which all job-seekers finally findemployment- can be brought about only by raisingthe marginal productivity of labor. Practically, thismeans: by raising the per-capita quota of capitalinvested. Wage rates and standards of living aremuch higher today than they were in the past be­cause under capitalism the increase in capitalinvested by far exceeds the increase in population.Wage rates in the United States are many timeshigher than in India because the American per­capita quota of capital inve'Sted is many timeshigher than the Indian quota.

There is only one method for a successful full­employment policy-to let the market determinethe height of wage rates. 'The method that LordKeynes has baptized "full-employment policy" alsoaims at reestablishment of the rate which the freelabor market tends to fix. Its peculiarity consistsin the fact that it proposes to eradicate the dis­crepancy between the decreed and enforced officialwage rate, and the potential rate of the free labormarket, by lowering the purchasing power of themonetary unit. It aims to hold nominal wage rates,Le., wage rates expressed in terms of the nationalfiat money, at the height fixed by the government'sdecree or by labor union pre'Ssure. But as thequantity of money in circulation is increased andconsequently a trend toward a drop in the monetaryunit's purchasing power develops, real wage rates,Le., wage rates expressed in terms of commodities,fall. Full employment ,is reached when the differ­ence between the official rate and the market rate ofreal wage'S has disappeared.

'There is no need to !examine anew the questionwhether the Keyne'Sian scheme could really work.Even if, for the sake of argument, we were toadmit this, there would be no reason to adopt it.Its final effect upon the conditions of the labor

market does not differ from that achieved by theoperation of the market factors when left ~lone.

But it attains this end only at the .co~t of a veryserious disturbance in the whole price structureand thereby the entire economic system. The Key­nesians refuse to call infla,tion any increase in thequantity of money in circulation that is designed tofight unemployment. But this is merely playing withwords. For they themselves emphasize that thesuccess of their plan depends on the emergence of ageneral rise in commodity prices.

It is therefore a fable that the' Keynesian full­employment recipe could achieve anything for thebenefit of the wage earners that could not beachieved under the gold standard. The full-employ­ment argument is as illusory as all the other argu­ments advanced in favor of increasing the quantityof money in circulation.

The Specter of an

Unfavorable International Balance

A popular doctrine maintains that the gold stand­ard cannot be preserved by a country with whatis called an unfavorable balance of payments. It isobvious that this argument is of no use to theAmerican opponents of the gold standard. TheUnited States has a very considerable surplus ofexports over imports. This is neither an act of Godnor an effect of wicked isolationism. It is theconsequence of the fact that this country, undervarious titles and pretexts, gives financial aid tomany foreign nations. These grants alone enablethe foreign recipients to buy more in this countrythan they are selling in its markets. In the absenceof such subsidies it would be impossible for anycountry to buy anything abroad that it could notpay for either by exporting commodities or byrendering some other service, such a'S carryingforeign goods in its ships or entertaining foreigntourists. No artifices of monetary policy, howeversophisticated and however ruthlessly enforced bythe police, can in any way alter this fact.

It is not true that the so-called have-not countrieshave derived any advantage from their abandon­ment of the gold standard. The virtual repudiationof their foreign debts, and the virtual e'xpropriationof foreign investments that it involved, broughtthem no more than a momentary respite. Its mainand lasting effect, the disintegration of the inter­national capital market, hit these debtor countriesmuch harder than it hit the creditor countries. Thefalling off of foreign investments is one! of themain causes of the calamities they are sufferingtoday.

The gold standard did not collapse. Governments,anxious to spend (eve'll if this meant spendingtheir countries into bankruptcy), intentionallyaimed at destroying it. They are committed to ananti-gold policy. But they have lamentably failed inthe'ir endeavors to discredit gold. Although officially

JULY 13, 1953 745

Page 26: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

banned, gold in the eyes of the people is still money~ven the only genuine money. The' legal-tendernotes produced by the various government printingoffices enjoy the more' prestige the more stable theirexchange ratio is against gold. People do not hoardpaper, but gold. The citizens of this country, ofcourse, are not free to hold, to buy, or to seH gold.If they were allowed to do so, they certainly would.

No international agreements, no diplomats, andno supe'rnational bureaucracy are needed in orderto restore sound monetary conditions. If a country

f'adopts a non-inflationary policy and clings to it,t then all that is required for the return to gold isi present. 'The return to gold does not depend on theI fulfillment of some material condition. It is an

ideological problem. It presupposes only one thing:the abandonment of the illusion that increasing the'quantity of money creates prosperity.

The excellence of the gold standard is to be seenin the fact that it make'S the monetary unit's pur­chasing power independent of the arbitrary andvacillating policies of governments, political parties,and pressure groups. Historical experience, especial­ly in the last decades, has clearly shown the evilsinherent in a national currency system that lacksthis independence.

Dr. Mackay's Strange ScalesI am loath to believe that the Rev. Dr. John Alex­ander Mackay, President of Princeton TheologicalSeminary and ne'wly elected Moderator of thePresbyterian Church in the United States, wascorrectly quoted in the press as having said, in astatement issued in connection with the GeneralAssembly of the Presbyterian Church in Minne­apolis, May 29: "Anti-Communism is just asdangerous as Communism and sometimes evenmore so."

I share with Dr. Mackay his concern that hysteriashould not be countenanced or practiced by Chris­tians or other responsible citizens in their effortsto destroy Communism. But such concern cannotjus,tify Dr. Mackay's extreme statement.

I have seen nothing in anti-Communist activitiesthat compares in wickedness and cruelty with Com­munism itself. To oppose slavery is not as bad asslavery. 'To oppose the murder of countless millionsis not as bad as the murde'r itself. In short, opposi­tion to sin is certainly not as bad as sin.

Has Dr. Mackay followed the testimony of scoresof missionarie'S who have devoted their lives toserving the Chinese people and proclaiming theGospel? :Many of these have been destroyed by theCommunists, but others have escaped to tell thestory. Burial alive, beheading, and beating to de'athare favorite forms of Communist execution. Onemissionary tells of 5,260 executions within a period

746 THE FREEMAN

of three months, and in a small district near hismission. It was officially reported by Dr. T. S.Tsiang, chief of the Chinese delegation to theUnited Nations, that the Chinese Communistsexecuted 15,600,000 persons and starved 20,000,000others to, death in the two-year period ending justa year ago. Communist papers report. the names ofmulrtitudes who have been executed.8ome mission­aries who have lived in China believe that a secretagreement wa's made between the Chine'Se Commu­nists and the Moscow tyrants to destroy no fewerthan 100,000,000 Chinese.

The ruthless campaign of Communist de'Structionof life in the Far East has not been surpassed byany of which we have historical record. 'I'he objec­tive is the cold-blooded slaughter of all opposition.That opposition comes in large part from ChineseChristians.

How can a Christian leader equate such evilswith opposition to Communism?

It will be recalled that Dr. Mackay has longbeen an advocate of the recognition of CommunistChina. On January 16, 1950, an ar,ticle in thePresbyterian Outlook quoted him as warningagainst our present "anti-Communist psychology.""No matter what we might think of the social andpolitical aspects of Communism," he said, "thegovernment now in control of China deserves ourrecognition."

According to the article, Dr. Mackay based thisconclusion on the following grounds:

1. The excellent behavior of the Communistarmies in their conquest of the Chinese mainland.

2. The fact that missionary activity had notbeen disrupted.

3. The widespread view that Chinese Communismwould take a "diffe'rent expression" than Com­munism in Russia and eastern Europe.

4. The overwhelming support of the people forthe new regime'.

We believe Dr. Mackay would find it hard tosubstantiate these four grounds. In fact, almostthe opposite has proved to be true. Surely it is timefor Christian leaders to recognize Communism asthe anti-Christ it is and to start mobilizing thespiritual power of the Christian world to overthrowthis mighty ,Goliath which has so long defied theChurch. Many Christian leaders seem slow to real­ize that the Kremlin tyrants have declared a war ofextermination against all who refuse to bow th~

knee to them. Any truce or "peace" they make willbe only a temporary pause until they can renewtheir aggression under more favorable conditions.

Church leaders have been partly responsible forthe betrayal of Christian leadership in Asia andthe rise of Communist control over the most popu­lous part of the world. It is time to awake to therealization that the very existence of WesternChristian civilization hangs in the balance.

HOWARD E. KERSHNER

Page 27: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Lette,r from Santiago

Dark Eyes, Red HeartsBy PETER SCHMID

An unusual woman an(l a Communist poet personifythe comp'eting elements in Chile's political arena.

The first time I took a walk in Santiago, I couldscarcely believe my eyes. It is hard to define thebeauty of the Chilean women. It is not so ll1uch aparticular type of face but rather a delicate grace,a mildness which gives their faces an inner radiancewithout the help of cosmetics.

Chilean women also seem tt) have more personal­ity than any of their Latin American sisters. Onlywith their women do Chilean men become meek­mannered. "In my house I am the boss, and every­body doe'S what my wife says," is a favorite sayingof Chilean husbands. It is the woman who decidesupon the education of the children, thus guarantee­ing the future of the household. So she can dismissthe small triumphs of the male with generoustolerance.

Throughout Latin America the emancipation ofwomen is under way; ,already fourteen of theAmerican republics have national woman suffrage.Nowhere, however, has the feminist movementgained such momentum as in Chile, where it isbecoming a major political factor. And with itsgrowing strength the movement has also slowlychanged its character. It began under the lead­ership of the pro...JCommunist Movimiento por laEmancipaci6n de las Mujeres de Chile, and in 1946culminated in the creation of the' Partido Feminino,which, though "progressive," bears deeply religiousand traditionalist marks.

When I visited the headquarters of the Woman'sParty, I read its "Doctrinaire Principles." There isno mention of equal rights for the sexe'S in thisdocument. 'On the contrary, the Woman's Partyacknowledges the right of the male to hold the po­litical reins. But, says the "Principles," man hasfailed dismally in his attempt to shape humansociety without the help of women. The world isfull of injustice, and instead of affording oppor­tunities to the' capable and intelligent, educationand professional success have become a' class pre­rogative. It is necessary to return to the Christianprinciple "Love thy Neighbor" as the basis ofhuman society, and this can be accomplished onlyby women, who are more sensitive and compassion­ate than men.

But as soon as this charitable logic enters intothe rougher climate of political action, it becomesentangled in a hopeless contradiction. On the onehand a woman's life is not supposed to be political;

her first thought should be dedicated to her home.But at the same time, the Partido Feminino wantsto rescue the working classe'S from the materialistclaws of the ,Marxist parties, and unite them inwhat it calls a new spiritual movement dedicatedto loving brotherhood rather than class struggle.

What is likely to emerge from this conglomerateof idealistic sentimentality and amateurish politicalconceptions? That is a grave question,especiallysince the Woman's Party played a major role inthe election of General Carlos Ibanez del Campolast August, and has entered the traditional politi­cal arena as a kind of enfant terrible.

It was obvious in 1950, when Chile extended thevote to women, that their 350,000 votes would playa major part in the' coming presidential election.Gonzales Videla, the radicalist president at thattime, immediately tried to woo the women's vote.He sent the beautiful Ana Figueroa as Chile'sdelegate to the United Nations. He gave women alegal voice in the administration of marital prop­erties. And, shortly before the elections, he re­shuffled his cabinet to include a woman lawyer,Adriana Olguin de V,altra, as minister of justice.But these gestures could not compare with thedemagogy which worked on behalf of his opponent.

Eva Peron's Disciple

General Ibanez' victory by a tremendous ma­jority can be ascribed to a large extent to an extra­ordinary woman, Maria de la Cruz, most prominentleader of the Partido Feminino. Indeed, politicalobservers in Santiago estimate that of the 430,000votes cast for the General, at least 250,000 wereturned in by the women. Naturally, other factorscontributed to the victory. The corruption of theprevious regime had resulted in skyrocketing in­flation, the brunt of it borne by the housewives.

Ibanez took over the presidency in November1952. He was elected by a loose coalition of splinterparties of various hues, and many independentvoters. But discord has already entered the ranksof this mixed company. Ideologically, the regimehas lost all direction and is simply drifting. Inview of the social unrest that is shaking Chiletoday, this situation might become dangerous.

Few, if any, know just where Ibanez stands po­litically. In 1931 he was forced into exile. After

JULY 13, 1953 747

Page 28: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

his return in 1938 he offered himself as a candidateto Chile's Nazis, and in 1942 he tried the samething with the liberal and conservative parties ofthe right. He entered the recent campaign without aparty and expounded a program that strangelyresembled the ideas of Argentina's Juan Peron.

'The activities of Maria de Ia Cruz confirm thisresemblance to Peronism. In her headquarters nooffice is without its autographed picture of heridol, the late Eva Peron. Maria dyed her brunettehair an Evita-blonde and she affects the s,amemadonna-like coiffure. But, unlike Eva Peron,Maria did not discover her social consciousness ona political platform. Even before she became prom­inent she published her own little magazine, Lightand Shadow, and had it distributed on the streetsby the blind, who benefited from the small profits.

When I met Maria de la Cruz she talked withoutinterruption about love, spiritualism, and socialism.But my skepticism was not quite as pronounced asit had been when I read her "Principles." Thiswoman obviously believes what she professes. TheCommunists concentrate their heavie'Stfire onMaria and her party, whose ideology threatens theirposition. But her leaning toward Peronism andthe idea of fighting the devil by employing 'Satanare far from appealing to many Chileans.

The Chilean people have a biting political wit,comparable to that of the French, which immediate­ly re'cognizes and exposes a ridiculous situation.Maria de la Cruz has naturally become a maintarget of their political satire. Thus there is littlepossibility that Chile's political scene will take onthe trappings of Peronism.

Communism among the Intellectuals

Immediately after my arrival in Santiago Ibought a collection of magazines, ,and dropped inat the editorial offices of the ones which seemedmost interesting to me. The popular weekly Vistazo(Outlook) had attr,acted my attention because itcombined seemingly objective reporting with veiledpro~Communist and anti-American statements. Thestaff consists mostly of younger people who, Ilearned after some talking,are militant Com­munists.But they, leave the outright smear cam­paigns to the party org,an F;l Siglo. By their as­sumed moderation they widen their audience.

At the home of the Chilean correspondent of awell-known magazine, I discovered a copy of Truth,an anti-American Argentine weekly notorious forits especially undisguised lies. "Silly," I said, Htolie so openly." He smiled. "N:o," he replied, "it's'quite a good paper. It exalts the spirit, it delightsthe heart." I thought at first he' was joking. Thenhe told me that he was a Communist and wrotehis dispatches actually against his own convictions.

Almost 'all the young intellectuals I met wereeither outright Communis1ts or sympathizers. Dele­gations from nearly all parties, including the con-

748 THE FREEMAN

servative, attended the "peace" congresses inPeking and Vienna.

There are various explanations for the virulenceof Communism in Chile. A most important one isthe influence of the poet, Pablo Neruda, whoseposition among Latin American intellectuals iscomparable to that of T. S. Eliot in Anglo-8axoncircles. He started as an individualist aesthete, anddiscovered his Red leanings only during the Spanishcivil war. Since then Neruda has become a politicalpoet. During World War Two the m,an who oncecreated some of the finest love poems in theSpanish language'wrote hymns to the heroes ofStalingrad.

In 1948 Neruda was slated to be arrested for in­sulting President Gonzales Videla. But, strangelyenough, though the police knew where' he washiding out, Neruda was not ,arrested. With a pass­port from former President Alessandri he escapedto Argentina and from there to Europe. Shortlybefore the last election, Gonzale'S Videla allowedNeruda to return to Chile, in the hope that hewould agitate for the Communist candidate 'andthus take votes away from Ibanez. But the poet'spolitical enthusiasm seemed to have been dampened,for he made only a few academic statements. Heremains a party-line Communist, however-anardent advocate of "social realism," and thus, likeso many other Communis1t artists, a victim of partydoctrine.

"I have realized," Neruda said to me when Ivisited him in his villa in suburban iSantiago, "thata poem .is good only if one canrecite it over aloudspeaker to ten thousand people. That is thepoetry of our time." When I protested that he wastoo subtle an artist not to lose his innermost sub­stance in proletarian platitudes, I had the' impres­sion that he secretly agreed with me. But hisanswer was a vitriolic smear of those "imperialistswho try to conque'r the world in the name ofcultural freedom."

Chile is remote from the d.anger zones of theworld. There is a lack of first-hand knowledge ofthe realities of Communi'sm, coupled with an almostnaive lack of :skepticism toward Red propaganda.People talk of "imperialist exploitation" by theAmerican mining companies. But nobody stops tothink that of the thirty-six cents paid for a poundof copper, sixteen cents go for labor, twelve centsto the state's Central Bank, four cents to the gov­ernment, and only four cents are left as profit forthe mining company. People talk of the mountainsof gold Chile could earn by trading freely withthe ;Soviet bloc (if the military pact did not exist),and since fantasies are pleasanter than facts,American counter-propag,anda lags f,ar behind.

IThe poor and illiterate people in Chile, who wouldlogic-ally seem to be most accessible to Red propa­ganda, scorn it-as do their Indian brothers in theAndes countries and Mexico. And with intellectualsalone one does not make 'lia revolution.

Page 29: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

By MAX EASl"MAN

Cultural Subversion I~----------~----.__a

Czeslaw MiIosz is a Polish refugee poet who has awife and two children in the United States and isunable to join them thanks partly to the 'McCarranAct, partly to 'anonymous denunciations. He wasnever a member of the Communist Party, but heworked for the present Polish government until1951, serving as cultural attache, <first in Washing­ton, then in Paris. His devotion to poetry, his wishto write-as a poet only can-in his own language'accounts for his long forbearance of the Soviet in­,cursion. If there remained any doubt of his detesta­tion of that "stupefying and loathsome phenom­enon," it is dispelled ina glow as from an atombomb by this brilliantly intelligent and sincerely­spoken hook. (The Captive Mind, AlfredA. Knopf,251 pp., $3.50.) It is one of the few indispensablebooks for those who want to understand the marchof the Communist epidemic throughout lthe world.

Others in plenty have described the physicalprocess by which the Kremlin spreads its im­perium: the underground conspiracy, the politicalintrigues, the infiltrations, the org-anized lies andslanders, the deportations, executions, assassina­tions, the dolling-up of puppets, the march-in of theRed Army. No one else has described how, sur­rounding and enveloping this process like an in­duced current, the "New Faith," as they call it­and they compare it to early Christianity-creepsinto the minds of the intellectuals and the intelli­gentsia. Milosz makes a distinction Ibetween thesetwo terms, using the latter, it seems to me, ratherambiguously. At any rate, he is speaking of thepeople who dominate the culture of a nation andprivately determine what its public opinion is goingto be. To grasp this intellectual phenomenon -andput it in relation to the verified truths and assuredvalues of our Greco-Christian civilization requires agreat deal more scholarly knowledge than mostpoets, as we know them, possess. I do not think Mr.Milosz has fully or lucidly ae:complished this task.He has many of the bad habits of the purely liter­ary mind. He makes simple assertions of fact wherefacts are complex. And he is still captive to certainproblems which, 'but for the monumental philosophi­cal hoax of dialectic materialism, would never occurto a rational being. But I must pay 'a tribute to hiswealth of ideas and the easy grace with which hemoves among them. "When Poles are intellectual,"an experienced friend tells me, "they really are in­tellectual!" And I am ready to believe it.

Although presented as a unit, The Captive Minddivides itself into three parts. The first threechapters describe the general situation of thought­ful people in the satellite countries, their forlornlooking to the West for help, their falling backupon a very inward sort of play-acting to concealtheir "unbounded contempt for Russia as a bar­barous country." Mr. Milosz knows of but one pre-­cedent in history for this 'Cultivation of what maybe called total histrionics. It is a practice called"Ketman," found in Persia by Gobineau and de­scribed by him in his Religions and Philosophies ofCent'ral Asia. Mr. Milosz writes:

The people of the Mussulman East, says Gobineau,believe that "He who is in possession of truth mustnot expose his person, his relatives, or his reputa­tion to the blindness, the folly, the perversity ofthose whom it has pleased God to place and n1ain­tain in error." One must, therefore, keep silent aboutone's true convictions, if possible. "Nevertheless,"says Gobineau, "there are occasions when silence... may pass for an avowal. Then ... not only mustone deny one's true opinion, .but one is commandedto resort to all ruses in order to deceive one's ad-versary. One makes all the protestations of faiththat coan please him, one performs all the rites ...one exhausts all the possible means of deceit. Thusone acquires the multiple satisfaction and meritsof having placed oneself and one's relatives undercover, of not having exposed a venerable faith tothe horrible contact of the infidel, and finally ofhaving, in cheating the latter and confirming himin his error, imposed on him the shame and spiritualmisery that he deserves. Ketman fills the man whopractices it with pride.

Ketnlan, Mr. Milosz 'assures us, is widely practicedin the satellite countries, the fe'eling of superiorityover those unworthy of knowing the truth aboutRussia -and about Communism being "one of thechief joys of people whose lives do not in generalabound in pleasures." How widely practiced it is hedoes not say, but he gives us the satisfaction ofknovving that a certain Persian told Gobineau:"There is not a single true Moslem in ·Persia."

This satisfaction is short-lived, however, for inthe second part of his book Milosz relates thespiritual history of four inte'llectual friends of hiswhose reactions to the' Sovietization of Poland wereless astute and offered less hope either for Polandor for the race of man. 'This is the most absorbingpart of his book, the most masterly, the least sub­ject to any question or objection. Each chapter is a

JULY 13, 1953 749

Page 30: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

little jewel-if jewels can be terrible things-ofcharacter study and narrative art. I was not Isur­prisedafter reading them to learn that the author,who now live's in Paris, has won a European liter­ary prize with a novel.

In his last two chapters, Mr. Milosz reverts againto the general problem, dealing especially with therelations between Communism and Christianity,and extending his field to include the Baltic coun­tries. What he says hereabout Catholics who ac­cept the party line will startle some' readers intorealizing the menace of this process of cultural sub­version, the scope of its ambitions. Its engineers inthe Kremlin are aware, he tells us, that the exist­ence of a large number of loyal half-Christians inthe subjugated areas of Europe would be useful totheir plans for an imperium. They tolerate and sup­port the'se "Christian patriots," as they are called,in order to evade a head-on conflict with theChurch.

The transition from Christianity to a cult ofHh;tory [that is, to, Marxism] takes place impercep­tibly. Without doubt the greatest success of the Im­perium would come if it could install a party-HnePope in the Vatican. A mass in the Basilica of St.Peter's in Rome performed by such a Pope, with theassistance of dignitaries from those subjugatedcountries which are predominantly Catholic, wouldbe one of the most important steps toward the con­solidation of world empire.

I leave this brilliant, if at times unsatisfying, bookwith a fe'eling that it would do both America andMr. Milosz good if our government could dig upenough freely functioning commonsense to let himcross the ocean. ,A real participation in Americanlife, about which he makes some rather superficialremarks, might cure him of certain faults he hasacquired by living in what he himself describes asa "literary ghetto." There is no literary ghetto overhere. Even the Partisan Reviewers have a hardtime keeping up that slightly hoity-toity intellectualpreciosity which separates the true litterateur fromthe man who merely writes down his thoughts,fancie's, and passions, and publishes them in apaper. It would improve Mr. Milosz a lot to forgetabout being "an intelleC'tual," and see' if he couldn'tbe a little more like Mark Twain or Walt Whitman.

The book is beautifully made, and is translatedby Jane Zielonko with skill and artistry. Thanks tothe necessity of leaving most of the dramatis per­sonae anonymous there are not too many untrans­literated Polish names to clog the mind and mixvexation with the emotions. I take this occasion,however, to renew my plea to the Poles to translit­erate their names with some regard for the valuesof the English alphabet instead of filling our teethwith bunches of unpronounceable letters. Che'SlavMilosh is the author',s name, and why not let usknow it?

750 THE FREEMAN

This Sorry WorldThe House of Strangers, by Edith Simon. 311 pp.

New York: ,G. P. Putnam's Sons. $3.50

That she intends deeper significance in this novelthan its surface tale' of a group of archaeologistsquarreling with each other as they excavate a pre­historic settlement in Scotland is indicated by thetitles the author ,gives the four parts of her 'book:"The Past-:Masters," "The Ever-Present," "DryRot," and "'The ,Break of Life."

The story is seen through the e'yes and feeling ofa war widow, who has been persuaded to try toconquer her hatred of life by getting a job on thearchaeological project. 8he'finds a jangling groupliving together in a huge old mansion. These arethe Past-Masters. Their quarrels and plots againsteach other are the Ever-Present. The old mansiondevelops dry rot in various of its rooms. This un­doubtedly represents the Dry Rot in our contempo­rary civilization. The heroine, whose sensibility isexpressed in such sentences as "I was sorry for theworld because it was so beautiful," marries one ofthe two feuding directors of the project, conquersher previous resolution never to condemn "anyoneI loved, yet safely unborn, to the pains and possiblehorrors life might bring to them," and bears achild. This is the Break of Life.

The tale is ineptly told. Characters are thrownat us helter-skelter. The many conversations arecontrived and literary. Miss Simon works too hardat her descriptions; carefully noted details are ac­cumulated, but they don't put the reader there. Shegives many unimportant facts about furniture,food, and often-repeated daily routine. The' barbsthe characters let fly at each other are venomousand vulgar. Every;body in the book has a smatter­ing of Freudian the'ory.

Since the characters come from all layers of so­ciety, I judge the author intends to ,make themrepresentative of present-day English life as awhole. If they are, England is in a state of de­moralization, for the people in this book have givenup all inherited standards of social courtesy, moralprobity, and delicacy of feeling as a result of gulp­ing down a lot of vaguely understood psychologicaland social theory. But of course they are no morerepresentative' of England than the characters fromsome of our own novelists are representative of us.Miss Simon may simply wish to show us fashion­able decadence, and to point to a more robust fu­ture :by marrying he'r shadowy heroine to a hardyScot. Many of her passages, however, seem to im­ply that she shares the mental indigestion of hercharacters. Her heroine reminds her husband thatin the thirties "one believed not only that intelli­gence and all the talents are equally latent in allhuman beings, dependent only on favorable nur­ture, but that these factors are indeed introducedby the fortuities of environment and luck ... any-

Page 31: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

body could he Mozart or Shakespeare, if only theytried hard enough." Did the highly praised authorof The Golden Hand ever believe anything so naIveherself? And after knocking down this straw man,must we go back with her protagonist to the con­viction that progress is impossible?

ALICE BEAL PARSONS

Pessimist's DelightThe Quest for Community, by Robert A. Nisbet.

303 pp. New York: Oxford University Press.$5.00

Everyone who is convinced that the world is goingto hell in a handbasket will get a gre'at deal of satis­faction out of this scholarly treatise on what theauthor terms "the towering moral problem of theage, the problem of community lost and com'IDunityregained."

That we have lost "community" is conclusivelyand repetitiously set forth in a series of convincingarguments buttressed by an imposing array ofquoted authorities, reflecting a vast deal of re­search and an unusua'l capacity for sound histori­cal interpretation. The conclusion is that it is toobad, and that something ought to be done about it.The author suggests what ought to be done, butpresents no blueprint as to how to do it. In thesedays, such restraint in a professor of sociologydeserves a medal.

Unfortunately for the layman, a large share ofthe book is written in "pedaguese" and considerablelabor is involved in translating it into English. Inthe vulgar, the main premise of the bookl as nearas I can tell, is to this effect. Two centuries ,ago aman's life centered in the community and was sub­ject to local friendships, associations, and authori­ties which were close to him personally and bothsustained and controlled him by usage and custom:family, guild,church, social class, etc. 'The Capitol?The Federal Government? They were remote.

But people re1belled against their communitychains. A man got tired of not being able to doanything that wasn't approved of by the preacher,or the mayor, or papa, or the guild, or his wife'sAunt Minnie. So up sprang ,a crop of proponents ofindividual freedom. The' world had several revolu­tions, the ancient community bondage was broken,and men became free individuals in a nation, in­stead of integral parts of community groups.

So we got democracies composed of millions ofpeople who collectively were the government, butwho individuaUy became just so many atoms knock­ing around ill social spa'ce without anything localto tie to any more'. ,sure" they were free now, that'swhat they'd wanted--.;but to whom could they turn?Their old community props were gone. This gaveBig National Government its chance, and it movedin in its big way.

Today Big National Government is taking over,one by one, the functions formerly fulfilled by thecom'munity. Rest easy, little man. Government willtake care of you. You'll get se'curity. In fact, you'llget more than that. You'll get government runningevery facet of your daily life, until finally you findthat in the name of freedom you have bought abondage far more hopeless than that from whichyou e,scaped.

The remedy? Reverse the trend. Get nationalgovernment out of community affairs, and put com­munities back into business as social and politicalentities. "Create new contexts of association andmor'al cohe'sion within which the smaller aUe'giancesof men will assume both functional and psycho­logical 'significance. . . . Freedom thrives in cul­tural diversity, in local and regional differentiation,in associative pluralism, and, above aH, in diversi­fication of power."

These last words have a nostalgic flavor of states'rights and local self-government. Remember? ButNis!bet has a hint that goes even deepe'r into Amer­ican history. He says: "Freedom . . . lies in theinterstices of authority." The Boston Tea Partyboys made their way through such an "inter'stice."Let's hope we can alw,ays maintain a healthy disre­spect for authority. As the tenant on my farm saidto me: "Would you mind if this ye'ar we told thegovernment to go to hell?"

Dr. NIsbet has be'autifully summed up govern-ment,as my tenant farmer sees it, in these words:

There is the kind of state that seeks always to ex­tend its administrative powers and functions into'all realms of society, always seeking a higher degreeof centralization in the conduct of its operations,always tending toward a wider measure of politici­zation of social, economic, and cultural life. It doesnot do this in the name of power but of freedom­freedom from want, insecurity, and minority tyr­anny. It parades the symbols of progress, people,justice welfare, and devotion to the common man.It strives unceasingly to make its ends and pur­poses acceptable-through radio, newspaper, anddocument--to even the lowliest of citizens. It buildsup a sense of the absolute identity of st~te a~d so­ciety-nothing outside the state, everythIng In thestate.By contrast-and this is what should make Dr.

Nis'bet's book "required reading" for everybodynow taking Dr. Eisenhower's course in "Govern­ment I"-the author summarizes, in the followingmasterful paragraph, the proper "role of politicalgovernment in the democracies":

Not to sterilize the normal authorities of associa­tions, as does the total state through a pre-emptionof function, a deprivation of auth~rity, and a mo­nopolization of allegiance, but to reInforce these as­sociations, to provide, administratively, a meanswhereby the normal competition of group differencesis held within bounds and an environment of lawwithin which no single authority, religious or eco­nomic, shall attain a repressive and monopolisticinfluence-this is the role of government in a de­mocracy.

JULY 13, 1953 751

Page 32: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

How is government to· achieve this role 1 That,dear sir or madamJ the author quite properly leavesto you. He has written "Community Lost." Thevoters will have to write "Community Regained."

DON KNOWLTON

Shall We Choose Starvation?The Road to Abundance, by Jacob Rosin and Max

Eastman. 166 pp. New York: McGraw-Hill BookCompany. $3.50

Although the dour ghost of Pastor Malthus contin­ues to mock the efforts of Point Four missionariesand other apostles of plenty, there is actuallyvery little doubt that hunger, as a limiting factorof life on this planet, is at least potentially obsolete.The rope that hobbles the modern technologicalelephant is made out of nothing more substantialthan ancient habit and contemporary political in­eptitude. Given full release, in what Dr. Rosin calls"a chemistic society," the existing potentials ofabundance provided by multitudinous applicationsof physico-chemistry could probably be realizedsufficiently within a century so that mankind wouldhave to find something else to worry about thanphysical ·survival.

In The Road to Abundance Dr. Rosin, helped byMax Eastman's expert editing, argues persuasivelythat we have in our hands the weapons needed toslay all the dragons of scarcity with respect tofood, metals, and energy. All we need to do is tomobilize on a sufficient scale, as we did when wedeveloped the atomic bomb and the synthetic rubberindustry, our available resources of knowledge,skills, and technological ,equipment.

What's stopping us, then? A vicious circle, saysDr. Rosin. "A chemistic society is impossible," hewrites, "until scientists' think along chemistic lines,and such scientists are not produced by a nonchem­istic society. However, we have faith in humanityto believe that this vicious circle can be broken.We refuse to admit that scientific conservatism,mental procrastination, and plain ignorance willprevail forever over the vital interests of the entirehuman race..."

The writer shares this faith, but regrets thatDr. Rosin did not include in his excellent but too­short book an adequate analysis of the social andpolitical forces that not only delay the parturitionof a chemistic society but threaten to abort it. Theresult may weU be that we shall actually choose theroad to starvation and destruction rather than theroad to abundance.

The roadblock is essentially political and it isnot adequately described by the phrase'S "scientificconservatism, mental procrastination, and plainignorance." Again and again, in this book, onefeels these obstructive forces casting their chillingshadow over the sunny and far from utopian land-

752 THE FREEMAN

scapes Dr. Rosin is able to sketch out of the admir­able breadth of his knowledge'.

What would a chemistic society be like? It wouldbe a society freed from the tyranny of the plantand of the' mine; a society that would turn itswheels and power it,s television sets-if we musthave television sets even "in a chemistic society­by energy drawn directly from the sun and possiblyconcentrated by means of vast fie'lds of parabolicmirrors.

;Such a society could feed itself by growingchlorella, an alga which multiplie's itself seventimes a day and yie'lds harvests of 55,000 poundsan acre-either proteins or fats, as desired. Wemight also sieve from the ocean its inexhaustibleharvests of plankton.

For a little while we would continue to growpotatoe,s and the cheap grains for carbohydrate'S, .but only until vast supplies of solar energy be­came available. Then we would proceed to tap the'inexhaustible store of carbon dioxide in the airand synthesize starch from formaldehyde. At thatpoint, writes Dr. Rosin, " 'Give us our daily bread'will begin to sound as incongruous as would 'giveus our daily oxygen' today. The abundance of ourmost essential food will be absolute."

To achieve these prodigies machines will benecessary, of course, and machine'S are made ofmetals, the supply of which is nearing exhaustion.Dr. Rosin leaps this hurdle with the greatest ofease. Sea water, he points out, is not only incom­parably richer in minerals than the mines but isconstantly enriching itself with the' mineralsleached from the eroding land, including about twobillion tons of uranium and still greater amountsof the common metals such as iron, copper, lead,and tin. Wealready get magnesium by electrolyzingsea water; we'll get all the other metals from thesame source, or by processing the "dilute a1bund­ance" in which many of them are found in theearth---thisassuming they are not displaced bynew plastics. As for gasoline, supposing that wecontinue to use this fuel, the answer might be togrow about 35,000 square miles of chlorella,carbonize it into coke, and convert the coke intogasoline.

But when we .grow chlorella we are still depend~

ing upon the plant for the photosynthesis thatutilizes solar energy. Why not bypass the plantentirely, employ photochemical reactions to decom­pose water, and burn the hydrogen to generateelectricity? Or better, generate electric currentdirectly in photogalvanic cells? Promising startsin both directions have been made at the Massa­chusetts Institute of Technology and the Universityof Illinois. And Dr. Rosin is probably right in hisopinion that "if a fraction of the organized effortinvested in the atomic bomb project had been in­vested in photochemistry, an absolute abundanceof energy would already be at man's disposal."

No such investment is in prospe'ct, because ours

Page 33: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

is not a chemistic society, which Dr. Rosin de­fines as "the kind of society that would arise ifthe natural sciences, with chemistry in the' lead,were given a chance to create a genuine abundanceof all the necessities of life."

Instead we have the kind of society in whichprobably half the time of our food chemists-tochoose an example in a field where Dr. Rosin doesnot always write as critically as one might like­is spent not in releasing abundance but in loadingthe diet of an already malnourished population withscores of dubious chemical additives and ersatzes,the only justification for which is that they makemoney for somebody-sometimes. Or to put it morebroadly, we have the kind of society in which ourchemical and other mental and physical resourcesare largely wasted on silliness, on countless eva­sions, disto~tions, and perversions of valid humanobjectives, and on actual destruction as in war.

What's more, if we are to have any other kindof society, it is not likely to be the chemists whowill give it to us. All roads lead to politics, andthe release of abundance is finally a political prob­lem, vastly more difficult to solve even than themystery of photosynthesis. JAMES RORTY

Wit and VersatilityThe First Morning: .New Poems, by Peter Viereck.

120 pp. New York: Charles Scribner's Sons.$3.00

Pete-r Viereck is a wit, raconteur, ironist, andlyricist who can sing both high and low. He canuse invective; he is intelligent and resourceful; andhis imagination plays over the scenes around himin such fashion as to transform them even beforethe poem begins. For example, "Arethusa: TheFirst Morning," a Phi Beta Kappa poem read atWilliam and Mary College in 1951, is based on thetheme that the nymph changed into the springbrings life and consciousness with her into thesehitherto inanimate waters:

Is being alive just something to get used to,Or always startling, like hoofprints on my mirror?

In these poems trees rise against men to cutthem down; a plank addresses the people who haveused it over the centuries for a coffin, the sides,and then the end of a ship; returning sons andheroes welcomed with all the appurtenances of loveand civilization go berserk, and their father ends inthe isolation of a magic and far island. All thiscould be mere virtuosity and playfulness, and some­times indeed it is; but for the most part it ispoetry of substance and many facets. Wit is notoften lyrical; intelligence often strains off the emo­tion until anagrams of feeling are all that is left.But here the liveliness, the vigor of the percep­tions, the willingne'ss to take on any subject, are

pretty 'well matched with a technical skill that turnshis themes to poetic account.

Viereck's lyric poetry is deceptively simple.Words are repeated, girls compared to flowers, butthey are also girls that can be whistled at:

If blossoms could blossomOne petal of petalsTo whom all other blooms areAs leaves are to flowers,It would be to the othersAs you are, my daughter,To all other daughtersWhom songs are adoring.For what am I herel forIf not to make love-songsOf all the world's beautyWhose birthday we share?

Viereck enjoys attacking his subjects by remov­ing them from their ordinary contexts, by chang­ing their names and habits. In two poems, "TheSlacker Apologizes" and "The Slacker Need NotApologize," he writes:

We trees were chopp,ing down the monsters in theStreet to count their rings.

The willow here is the poet and he triumphs bothover a weed who merely writes verse, and an oakwho stands for an arboreal chamber of commerceand all bounden duty. In "Gladness Ode" the poetis a net fishing the moon from the midnight lake;bad news is brought from Ratisbon to Browning;a gnarled old apple tree answers that permanenttarget, Joyce Kilmer:

I'll bow Iny trunk to true simplicityBut not to folksy simperings that drool.Poems are made by trees like me,But only God can make a fool.

Mr. Viereck has three poems in German thatexpertly parody Rilke and 8tefan George. He cheer­fully goes to battle against the faddists of poetry:

Today the women come and goT'alking of T. S. Eliot.

and the new critics:

Because a texte without a Muse inIs but a snore and an allusion.Well, then, let's turn the tables hard:The snobs all snubbed, the baiters baited,The explicators explicated,The avant-garde the new rearguard.

As for ,Mr. Viereck, he is his own man. Thereare, of course, ·perils in such versatility, in thequick hand and eye, and there are lines that betraythem. Viereck is sometimes mannered and clever ina way ,more likely to convulse the undergraduatesat 'Mount Holyoke than their elders. But there is atalent that breaks up the surfaces, that makespoetry a sharp weapon for onslaught and defense,the cherishing of virtue, and the undoing of philo­sophical hassles that have led to much confusedprose. EUGENE DAVIDSON

JULY 13, 1953 753

Page 34: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Ij C I N E M A II-----

Caesar Comes to TownJoseph L. M'ankiewicz and John Houseman havedone a fine thing in giving us a Julius Caesar aseloquent and faithful to Shakespeare as theM-G-M movie now on view. And if these gentle­men had ,any qualms about the outcome of theirenterprise, they must have been dispelled on theopening night. From the first moment there wasnot a '8oundamong the absor.bedaudience. 'The im­mediate impact was that here we had ne'ither awarmed-over stage presentation nor a blood-and­thunder movie transmogrification. It was, in itsown right, a pie'ce of cinematic excellence. Not onlyhave the camera and the giant screen managedto supply realism without sacrificing dignity; theyhave actually given continuity to what on themodern stage seems a somewhat disjointed play.More than that, the movie contrives a quite startlingmeasure of freshness. As the actors speak thefamiliar line'S (and what wonderful lines they are),it is almost as though we had read them in ourchildhood and forgotten-or perhaps never realized-how apt they are,and how modern.

The present production runs two hours, whichhas meant a certain amount of cutting. Otherwisenothing has been changed, nor-thank heavens­has anything been added. The' movie falls roughlyinto two parts. The first leads to Caesar's realistic­ally gory murder and ends with Mark Antony'sspeech in the Forum; the second takes in the civilwar and the suicides of Brutus and Cassius. Herethe cutting has been particularly good. For Elizabe­than audiences, with no scenery to help out, thedenouement had to be indicated by sudden switchesof locale, with snippets of battles and alarumswhich nowadays are ,apt to be confusing. The tele­scoping action of the camera knits these scenestogethe'r; what is superfluous in the new mediumis discarded.

In the acting department Louis Calhern as Caesaris masterful and vain, sometimes pompous-a legi­timate interpretation, I think, though a bit reminis­cent of Mussolini's antics on the balcony of theP,alazzo Venezia. John Gi'elgud Inakes a brilliantCassius; with all his envy and scheming he is stillvery human. This cannot be claimed for others· inthe cast. A steadfast grimness weighs them down,as if they are overcome with awe at finding them­selves playing Shakespeare; as if, in order to inducea properly reverent mood, Mr. Mankiewicz hadadvised them first to listen to Mr. Milton Crossgiving a commentary on the opera and then, toclinch matters, had introduced Miss Judith Ander­son in the opening scene of Medea.The stern faceand gimlet eyes of James Mason as Brutus, for

754 THE FREEMAN

instance, may convince us that he is an honorableman, but they are not calculated. to arouse oursympathies. Surely he could have unbent a littleto his wife kneeling at his feet and imploring hisconfidence. But no. He strides away, wrappedalways in noble thoughts. Poor Portia might as wenhave been a sack of kindling.

I'm afraid that Marlon Brando is rather out ofhis class as Mark Antony. There was no denyinghis excellence in A Streetcar Named Desire, butShakespeare is something else ;again. Not that hisAntony bears any resemblance to 8tanley Ko­walski. Far from it. But the part demands a dealmore subtlety than he seemed able to give it. "0pardon me thou bleeding piece of earth. . ." shouldmove us to pity and rage; "instead it leaves us onlyembarrassed for Mr. Brando. And, facing the mobin the Forum, he begins with a shout and continuesto a roar, until the human lungs (and ears) canscar/cely bear more. As for Caesar's wife (GreerGarson) lean only say that among the proudmatrons of ancient Rome Mrs. Miniver is a dis­placed person. And Portia (Deborah Kerr) appearspossessed by the unfortunate fear that· any emotionother than gazing starry-eyed at her husband mayplay havoc with her make-up. The're was in fact acurious and persistent lack of mobility in the facesof the actors throughout-with the notable excep­tion of Gielgud. They might have' been sufferingfrom a mild catalepsy.

By and large the photography hits the right,unobtrusive note; it supplies visual aid which theElizabethans, whose imaginations were' not asdulled as ours, did not require. The columns andarches of the Senate against the background ofolive tre'es and bare hills seem more a part of theaction and less like stage props; Rome is not quiteso remote with the charmingly intimate squareswhose pedestals support innumerable heads ofCaesar-or rather of Louis Calhern. One wonders,in fact, how the few glaring error,s crept in. Why,such a drilled effe'ct in the Forum? The Romanmob should not have been treated as a cross be­tween a Gre,ek chorus and a group of eage'r grand­stand fans at Forest Hills. Did the director andthe producer every now 'and then decide thatenough was enough, and take the day off to gofishing?

Julius Caesar is not a masterpiece, but it is first­rate entertainment. Perhaps it is churlish to askmore. Over the years Hollywood has made a numberof excursions into Shakespeare. The first was in1916 with Theda Bara (who appeared uncertainwhether she wa,s playing a highborn Juliet or thevamp in A Fool There Was),. fairly recently we hadMacbeth, through which Orson Wenes smolderedhis way with such devastating effect that the enter­prise went up in smoke. Julius Caesar is not ofthat ilk. I cannot believe'· that anyone could fail tobe engrossed by it. JOHN VERNON TABERNER

Page 35: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Youngmangetting ideas

With the calculated look of an expert he inves­tigates from the lofty level of his full threeyears' experience. His is a whole new gen­

eration of "King Customers." And more arecoming along at the rate of 3,910,000 a year. Be­fore we know it they will all be clamoring for

service ... demanding the finest productsAmeri­can industry knows how to produce.

Through all the many decades InternationalHarvester has been in business we have lived bythe axiom that the customer is always right. Itis his right to expect and receive fine machinesthat do their job, that are available at a fair andreasonable price and our future customers areentitled to exercise the same rights.

So, Mr. Customer, whether you have beenwith us a long, long time or are still in "three-cor­nered-pants" and won't call on us for anothertwenty years or so-we'll keep right on with

product research anddevelopment ... con­stantly temper fineproducts with your im­mediate and anticipatedrequirements becauseit's the best way weknow to keep progressand prosperity movingalong in the rightdirection.

~

INTERNATIONAL HI HARYESTERChicago 1, Illinois

Builders of products that pay for themselves in use . .. International Trucks • McCormick Farm Equipment

and Farma" Tractors • Crawler Tractors and Power Units· Refriqerators and Freezers

Page 36: Socialism Grips Norway Trygve J. B. Hoff · Socialism Grips Norway TRYGVE J. B. HOFF 737 ",Is Lobbying Honest? FRANK CHODOROV 741 Gold versus Paper LUDWIG VON MI8ES 744 Dr. Mackay's

Speed! ... speed in the air ... but speed on the ground, too,Only planes on the flight line are ready for the "scramble."And the hangar feeds the flight line.

The Mitchell Hangar opens or closes completely in 3 minutesby moving its halves completely off the hangar floor.

Four Fairbanks-Morse Electric Motors are the answerto this need for speed and reliability.Fairbanks, Morse & Co., Chicago 5, Illinois