Despite all the endless care exercised by the framers of the Constitution, and the judgments of the Courts for over 148 years, these revolutionary elements in the United States found a way in which to complete their perversion and subversion of the Constitution without submitting these radical changes to the states—the only authority empowered to make changes in the Constitution.
The stock market crash came in 1929. Thus was ushered in what came to be known as the Great Depression, the causes of which we have already examined. The crash was followed in the next four years by a widespread flight from investment, a growing army of unemployed, the gradual undermining of our banking system, a rising tide of radical opinion in our labor unions, academic circles and certain political spheres. President Hoover struggled painfully against this current of angry agitation, but as his term neared its end, his power to do anything passed from his hands. His defeat in 1932 was clearly foreshadowed and, with the election and inauguration of President Roosevelt, the whole banking and economic system was swept into collapse.
This was in 1933 and it was as of this date and amid these scenes that President Roosevelt inaugurated an incredible series of adventures that defied almost every sentence in the Constitution. In general, the President brought into existence a collection of commissions and bureaus empowered to take over the direction, supervision and in some cases the management of vast areas of American industry and finance, utterly outside the limits of his constitutional powers. The central organism in this fantastic circus was the National Recovery Act (NRA) and the Agricultural Adjustment Act (AAA). Every department of American business was compelled to organize under the stewardship of the federal government into what were called “authorities” which were empowered to make laws governing every phase of industry. A more shocking defiance of the Constitution could not possibly be imagined. It literally liquidated vast areas of state power and set up a wholly new system of legislative bodies in the “authorities” which all employers and labor bodies were compelled to join, each in his own field of trade. These “authorities” were empowered to make the most extensive regulations respecting hours of work, prices, profits, relationships with labor and suppliers, etc. It was, although few Americans realized it, modeled on Mussolini’s corporative State. It was not socialism or communism. It was pure fascism on the Italian model.
A similar operation was organized for the farms in the AAA, directed by Henry Wallace, under whose guidance food and crops were destroyed to create scarcities and thus raise prices. The “slaughter of the little pigs” became the classic example of this insane scheme. The AAA was empowered to make the rules for farming, farm labor, crop controls, prices—all supervised by a vast bureaucracy which was authorized to compel compliance by rugged powers buttressed by the ability to reward complying farmers with generous government checks. The farm and the farmers became wards of the federal government on a scale which even the socialist agricultural arrangements later instituted in Britain never attempted.
There were other agencies and laws reaching almost every department of American industry and commerce which, when they began to function, literally tied the American economy in a fantastic strait jacket. The Administration acted as if the Constitution had ceased to exist.
Then in May, 1935, the Supreme Court declared the NRA unconstitutional in a unanimous decision, even the “liberal” Justices Brandeis, Cardozo and Holmes joining in the decision. After this, in a succession of decisions, the Court invalidated the Agricultural Adjustment Act, the Guffey Coal Act, and various similar adventures of socialist and fascist tinge. And this episode set off a violent debate about the Constitution and the Supreme Court, whose judges were scornfully dubbed the “Nine Old Men.”
In the midst of these controversies over the Constitution, President Roosevelt was reelected by an enormous majority, carrying every state save Maine and Vermont. Despite this, he entered upon his second term with grave misgivings. The whole program of the first term was in ruins, not only because it was declared unconstitutional but because it didn't work. It was reprobated by the conservatives. What was more serious for the President, it had found little favor with the leftists—not because it was unconstitutional (which it was) but because it was fascist or syndicalist in essence. And finally there stared him in the face those vast legions of the unemployed. There were still, at the beginning of his second term, ten million working people unemployed. There were families comprising 15 million persons on relief, which would swell to over 20 million in another year. The only thing which sustained the President was the enormous sums of money appropriated, out of heavy government loans, to spend on relief activities of all sorts. But there was no recovery.
There was no recovery because no effort was made to produce recovery. There was no intelligent examination of the defects in the system of free enterprise. Instead there was a succession of proposals for socialistic or collectivist schemes and endless interference in the machinery of the private enterprise system which created in the minds of investors and managers a deadening feeling of frustration and fear. There were, of course, many evils in private business. But the end that should have been held constantly in view was the correction of these evils and the revival of industry. Instead business, the businessman and the investor were set upon by the government, not to reform abuses, not to make private agencies of production and distribution work more effectively, but to punish them and discredit them and, in some cases, to milk them or destroy them.
This situation produced the golden moment for the socialist revolutionaries. What had gone before was a confused hodgepodge of measures—some socialist, some fascist, most of them mere devices for keeping people on the dole. The student of this epoch must never lose sight of this fact—that the so-called first New Deal was not in any sense a communist or socialist operation. It had actually found little favor with the communists or socialists, in spite of the fact that large numbers of them managed to insert themselves into the numerous collectivist agencies set up in 1933.
The crackpot schemes had failed; most were liquidated. And recovery remained aloof. The socialist cabal, now well schooled in the stratagems of a socialist Europe—in Germany, France, Italy and England—saw its opportunity here. They now appeared in Washington to confront a triumphant but frustrated and planless President with a workable plan.
This was the hour of fate for America. We can see now and understand clearly the overall program of the socialist revolutionaries to make a socialist America—without making any lawful change in our great charter of freedom, the Constitution of the United States.
It is essential once more to remind the reader that the socialist revolution no longer appears before us under the name of socialism. The cause of socialism is no longer promoted in the United States by a Socialist Party which, as we have seen, once upon a time polled almost a million votes but in 1952 could muster only 20,000. But today the socialist revolution is more vigorous than ever and has actually succeeded in inserting immense sections of its program into the structure of the American government. This was possible, to repeat, because the promoters of that philosophy operate on a wholly different level and have discarded the jargon of socialism and the unpopular socialist label.
To understand this we must recognize that there are in America a variety of groups which pursue various parts of the socialist objective; that they are interested for personal reasons in this or that socialist scheme. The promoters of socialism have different names for the several sectors of the socialist program. They are united in one objective—that the federal government have unlimited authority to do whatever the politicians think is good for the country. One group favors some moderate scheme to promote something called the “good life”sometimes called “security.” Another thinks a large part of all the vast machinery of education should be subject in one degree or another to federal control and support. Others think the federal government should take over the immense field of electric-power production and distribution, first through TVAs and then all other types. Then there are advocates of government ownership of railroads, airlines and steamships, or of state or local ownership of subways and buses. New York City already owns and operates its subway, of course at a staggering loss. Others think the federal government should take over such basic industries as coal, iron, copper, aluminum, oil, etc., or should make the rules under which they are operated.
One or more of these measures is advocated by different groups, while they disclaim any affection for socialism—not realizing that when one group succeeds, the path is open for another. Politicians interested not in socialism but in votes cultivate the support of these various minorities. There are certain powerful business groups which support other schemes, such as the government’s staggering and fatal foreign aid programs and its incredible military adventures, because they make the weapons and depend for their dividends on these gaudy international adventures. This is just one example of a powerful minority in business interested in profits and blinded by that to the gravity of their course. They seem to be unaware of the fact that the business they enjoy piles up the taxes and deficits of the federal government and that this gradually moves the government and the society to economic disaster in which these business groups will be engulfed. For a temporary gain they weaken the system at one spot and thus promote the socialist strategy of breaking down one piece at a time the economic apparatus of free enterprise and the political apparatus of republican government. The revolutionaries believe that this will go on until what is left of our historic system will crumble in ruin.
Thus the stage is set for the socialist revolution. The staggering majority received by President Roosevelt in 1936 installed him with immense power. But he was without a program. That was the moment for which the collectivists had been waiting.
We have seen how George Soule and Stuart Chase, in two sly volumes, had revealed the strategy for selling socialism under a new and attractive brand label—The Planned Economy. Shortly after Roosevelt’s second inauguration, a new group appeared. There was a sense of apprehension in Washington at the time at the immense sums that were being spent by the government, much of it borrowed money. At this critical moment a new batch of philosophers turned up with an answer to these misgivings—at the very instant when President Roosevelt was complaining that “no one tells me what to do.” This happy and welcome idea came, like the Chase and Soule proposals, in a book called An Economic Program for American Democracy by seven young Harvard and Tufts scholars.21 It was, of course, not a program for American democracy. It was a program for American socialism. Its central theme was that a government, unlike an individual, can borrow and spend indefinitely without fear of bankruptcy. When Roosevelt was elected in 1932 the federal debt, after 143 years, was $19,487,000,000. After denouncing Hoover as a spendthrift, Roosevelt had borrowed almost as much money in four years as the total national debt after 143 years. Both Roosevelt and his Congress were gravely troubled about this. But this little volume pointed out that a government, unlike an individual, can borrow and spend indefinitely without fear of bankruptcy. A government debt, it said, was not like a private debt. A government borrows from its citizens. The debt is in fact owed by the citizens. And as the citizens own the government, the debt is really due to the citizens. A government debt, these gentlemen argued, is therefore due by the people to themselves. No matter how big the debt grows, they assured us, the actual impact on the citizens and government is negligible—unlike a private debt.
The apostle of this sly philosophy was Dr. Alvin H. Hansen of Harvard. When this small book, written by Dr. Hansen’s disciples, appeared, the doctor was promptly brought to Washington and installed in the Federal Reserve Board as the economic philosopher of this new dispensation. And most of the book’s seven authors turned up in posts in various New Deal bureaus. Now Roosevelt had a luminous guide through chaos: (1) The American economic system planned and directed from Washington, and (2) an endless flow of funds to spend, supplied by endless borrowing.
21 Vanguard Press, 1938.