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A funny thing happened on the way to socialism

By Samuel L. Blumenfeld
web posted September 10, 2001

Back in 1978, William E. Simon, a Wall Streeter who became Secretary of the Treasury in the Nixon and Ford administrations, wrote a powerful book defending the cause of freedom, "A Time for Truth." What led to the book was his first-hand experience in government as Treasury Secretary and his often combative dealings with Congress. It created in him a profound sense of alarm about "the cancerous growth of government and its steady devouring of our citizens' productive energy." He saw "the early warning symptoms of a disease that threatens the very life of our body politic. And if we continue to move down this same path, the disease will be irreversible, and our liberty will be lost." The disease, of course, was socialism, generally peddled by liberals under the less repulsive name of "social democracy."

William E. Simon
Simon

"Freedom," he wrote, "is strangely ephemeral. It is something like breathing; one only becomes acutely aware of its importance when one is choking. ... When men are left free by the state to engage in productive action, guided by self-interest above all, they do create the most efficient and powerful production system that is possible to their society. And the greatest misfortune in America today is that most people do not understand this."

As a practical capitalist, Simon offered practical ideas and means to change this situation. He wrote: "If we are to fight the 'New Despotism' effectively and respect the very individual liberty for which we are fighting, we can only do it by building up the influence of the counterintelligentsia, whose views, if known, would command a respectful hearing in the marketplace of ideas."

Simon was aware to what great extent the egalitarians of the left were dependent on the great foundations for their financial support. The Ford, Rockefeller, and Carnegie foundations poured millions into leftist causes every year, whereas the counterintelligentsia represented "an impoverished underground." Thus, Simon argued, the first order of business was for wealthy conservatives to create foundations to support the work of the pro-capitalist freedom fighters. He wrote:

One does not work from "within" the egalitarian world to change it; one can only work from without-and this absurd financing of one's philosophical enemies must not be tolerated in the new foundations. On the contrary, they must serve explicitly as intellectual refuges for the non-egalitarian scholars and writers in our society who today work largely alone in the face of overwhelming indifference or hostility. They must be given grants, grants and more grants in exchange for books, books and more books. ... There is an enormous diversity of viewpoints within the center-to-right intellectual world which endorses capitalism. The point is simply to make sure that the thinkers on that broad band of the American spectrum are given the means to compete in the free market of ideas. ... I know of nothing more crucial than to come to the aid of the intellectuals and writers who are fighting on my side.

And so, there came into being a small number of new foundations dedicated to supporting the cause of freedom exactly as Simon expected them to do. In fact, Simon became head of the John N. Olin Foundation, which has supported any number of pro-freedom organizations, their writers and programs.

But has enough been done to stop and reverse the liberal drive toward socialism? Back in 1978 Simon complained about a federal government that was spending a billion dollars a day. That would have amounted to a federal budget of only $365 billion a year. That's peanuts today. We now have a federal budget of over 2 trillion dollars. This is how you write 2 trillion dollars: $2,000,000,000,000. That's about $170 billion per month. That's about $56 billion per day. In other words, our federal government now spends in ten days what it spent for the entire year of 1978. Of course, our economy has grown since then. But has it grown 56 times from what it was in 1978? The federal government has grown 56 times since 1978.

But something happened on the way to socialism. The personal computer and the Internet were born. The home school movement was born. And more and more pro-freedom think tanks have come into existence. In addition, Eastern Europe has been freed from communist domination, and the Soviet Union with its red star and hammer and sickle has become Russia, freed of totalitarianism, with a new flag, a religious revival, and who knows what else.

Yet, in America, government continues to grow like topsy. In other words, politicians are the last people who will restore freedom to this country. It will be done by the citizens themselves. The lifeblood of politicians in Washington is money to spend on government programs. In 1950, federal spending was $42.5 billion. Ten years later, in 1960, it had doubled to $92.1 billion. In 1970, it had doubled again to $195.6 billion. In 1980, it had tripled to $590.9 billion. In 1990, it was up to $1.2 trillion. And in 1999 it was up to $1.7 trillion. In only nine years, it had increased by half a trillion dollars.

Do we have more government than we need? Has the burden of government simply become too heavy for the average American to bear? My answer to both questions is yes. But to the Democrats it's obviously no. They are criticizing President Bush for giving taxpayers back the surplus money that the government didn't need. The Democrats had wanted to use that surplus to create new programs. To them, the government is not large enough. Yet, the reason why American families now need two or more bread winners in order to maintain their standard of living is because the burden of government has become the monkey on their backs.

Meanwhile, the only stand the Republicans have taken is a defensive one. There is not a single proposal by the Bush administration to cut the size of federal government by getting rid of unneeded federal programs or departments. The idea of limited government promulgated by the founding fathers has been replaced by the idea of unlimited government, which is the aim of social democrats the world over. To them, the more government, the better.

Naturally, our government schools teach American children how dependent they are on government programs. The dumbing down process makes sure that the children will never be able to understand the federal budget or what a trillion dollars is. They get very little history. The other day I watched a PBS program on the problems of new young teachers in public schools. It showed one male teacher in a class of 14-year-olds teaching social studies. The topic was "Feudalism in Medieval Japan." What possible interest could these inner city kids have in feudalism in medieval Japan? Did they know anything about American history? The program didn't say.

When these kids leave the government schools they will confront economic reality. Some of them will go on to college with the help of large loans, which they will have to begin paying back after graduation. Many of them will become conservatives when they also begin to pay taxes. The last ten years have provided most Americans with a course in free-market economics. The breathtaking growth of the high-tech industries and the phenomenal growth of the stock market have taught Americans that wealth is not created by government but by private free enterprise. And just about everyone has wanted to get into the act.

But nothing can dampen the faith in free-market capitalism more quickly than a downturn in the economy. The cry for government measures to get things moving becomes almost universal. Of course, true entrepreneurs keep doing what they do best: invent, innovate, scrape up capital, take risks, move ahead. And inventors keep inventing. That's the secret behind America's leadership in economic development and growth. Not the politician, but the inventor--the inventor, who makes small improvements in large processes and creates new products. Their patents keep the patent office forever busy. There is no other country on earth with so many inventors and entrepreneurs.

Once an invention is made, money must be raised to manufacture and market it. That's where venture capitalists come into the picture. When a public offering of stock is needed to raise sufficient capital, that's when Wall Street comes in. And that's how new wealth is created. Instead of being taught about feudalism in medieval Japan, those students should have been studying the life of Thomas Edison, so that they could understand how America works.

William E. Simon died in June 2000 at the age of 72. He spent 20 years at the Olin Foundation supporting those who supported freedom. If there is still a sense of optimism about the promise of freedom in America's future, we owe much of it to Simon's wisdom and dedication. ESR

Samuel L. Blumenfeld is the author of eight books on education, including, "Alpha-Phonics: A Primer for Beginning Readers," "The Whole Language/OBE Fraud," and "Homeschooling: A Parents Guide to Teaching Children." These books are available on Amazon.com.

Buy William E. Simon's Time for Truth at Amazon.com

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