Salvos Against the New Deal, by Garet Garrett, edited by Bruce Ramsey. Caxton Press, 2002, 282 pages.

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Chronicler of the New Deal

by Stephen Cox

The book was sitting on the mail-sorting table in my office. Other mail obscured the title; all that was visible was the illustration on the cover — a bright blue eagle, its wings stretched wide for flight, its left claw grasping three lightning bolts, its right claw grasping a beautiful blue . . . gear. The gear was a distinctive touch.

"What is that?" one of my colleagues asked, admiringly.

I was astonished by the question.

"It's the Blue Eagle!" I said. "One of the most famous symbols in American history." Judging by his expression, I wasn't sure whether that last statement was true. "At least," I said, "it used to be famous."

"A symbol of what?" he inquired.

"The NRA." No response. No shock of recognition. "The National Recovery Administration!" Still no reaction.

OK, I thought. Here goes.

"It was a scheme to nationalize the economy," I explained. "The federal government would control all major industries by fixing prices, wages, marketing policies, and working conditions. The main goal was to keep prices high. Businesses would be punished if they tried to cater to their customers with cheaper goods than those offered by the competition."

"Why would the government want to do that?" he asked.

"Good question. A lot of well-known experts thought it would rescue the economy. If prices were high, businesses would take in a lot of money and employ a lot of labor. That's what they thought."

"What about the people who had to pay the higher prices? What about the workers?"

"Well, the government would make sure that wages rose faster than prices."

My colleague was now regarding me as if I'd lost my mind.

"Really!" he said. "And who proposed these policies?"

"Franklin D. Roosevelt," I replied. "He not only proposed them; he implemented them. The NRA was the centerpiece of the New Deal economic program. It started in 1933 and continued until the Supreme Court struck it down in 1935."

"Are you sure it was Roosevelt?" he said.

"Yes, of course! Haven't you ever read anything about the New Deal? Here, this is a book about it. [Brandishing the book.] Garet Garrett was a journalist who wrote these essays pointing out the problems in the New Deal's economic programs. A lot of this history has been completely forgotten, but the more you know about it, the more interesting it is. You see . . . "

But I was losing my audience. "'Salvos Against the New Deal,' eh? Well, Stephen," my colleague continued, in a tone of kind indulgence to my not-so-secret vice. "You libertarians certainly have a unique perspective!" Then he walked away.

So much for my re-education campaign. In my office, as virtually everywhere else, Franklin D. Roosevelt remains the most admired American statesman of the 20th century. And Roosevelt's New Deal remains one of the least understood of all great American historical movements. Even the basic facts seem to have slipped out of the collective memory.

There is an obvious reason for the seemingly contradictory phenomena of reverence and ignorance. The actions of the Roosevelt administration, and the assumptions behind them, created the political and economic regime in which virtually all contemporary Americans were reared. Roosevelt was the grandfather of modern America, and his intellectual descendants exhibit a corresponding degree of piety for his memory. You don't want to know too much about your grandfather — not if you want to retain your childhood faith in him.

If you ever should want to know any more, however, Garet Garrett (1878–1954) is an excellent place to start.

He was born Edward Peter Garrett, then renamed himself — choosing, for some mysterious reason, to repeat his last name without repeating its spelling. There were a number of strange things about Garrett, including the fact that on Jan. 18, 1930, he was shot (three times) in a New York speakeasy. But don't draw the wrong conclusion. Garrett was an eminently respectable citizen of his age. He was a reporter, novelist, and financial journalist, the author of a number of popular books, and at the height of his career chief editorial writer for the greatest of all mainstream magazines, The Saturday Evening Post. Salvos is a selection of the writing he did for the Post from 1933 to 1940.

There was one major respect in which Garrett was not mainstream — his political views, which increasingly allied him with a beleaguered minority in American intellectual life. It wasn't that his ideas went through some kind of revolution. Garrett stayed where he was, while the mainstream swept in new courses, far away from him. By conviction, Garrett was of the old regime, the regime before the New Deal.

One way of stating the difference is this: in the old America, it was assumed that not all human problems were capable of being solved, and if a problem did have a solution, it would probably be found in the realm of individual effort and responsibility, not in the realm of political action. In the new America, the America sitting hopefully at the table when the New Deal got dealt, it was assumed that all problems can of course be solved, so long as government exerts itself strongly.

One way of stating the difference is this: in the old America, it was assumed that not all human problems were capable of being solved, and if a problem did have a solution, it would probably be found in the realm of individual effort and responsibility, not in the realm of political action. In the new America, the America sitting hopefully at the table when the New Deal got dealt, it was assumed that all problems can of course be solved, so long as government exerts itself strongly.

Do you remember the Four Freedoms that Roosevelt declared the government must guarantee? No? Then I will list them for you. The Four were freedom of speech, freedom of worship, freedom from want, and freedom from fear. Now, how can a government guarantee that anyone, much less everyone, will be free from want and fear? It can't. But the idea that it can, and must, was the underlying assumption of the Roosevelt administration and its various accompanying economic schemes and dreams. To one degree or another, and usually to a pretty large degree, this has been the working assumption of all successive national administrations. It is the motivating assumption of the American voter, too. The modern social-welfare state is not a regime that politicians have simply imposed on the citizens; it is a regime that many, if not most, people, have ardently desired and insisted on maintaining. Nice people, too — but fully complicit with the state.

Garrett makes this point again and again. Consider what happens when miners (or the members of almost any other constituency) are invited to testify before Congress about whether the federal government should provide relief to distressed communities:

"The miners all said, of course, that the time had come; they described their distress. One complained that in his community, where there had been no work for two years, there was only bread and soup to eat. The soup had rice and barley in it, but wanted potatoes. But why no potatoes? Two years of idleness, land all around them, and no potatoes. Nobody asked them that question." (31)

Garrett was no anti-labor "reactionary." Workers were not the only ones responsible for the regime in which it goes without saying that the state is responsible for giving you potatoes, and you are responsible only for eating them. There was enough blame to go around, and a lot of it would have to fall on the mentality of the American businessman, who lived by the capitalist system and who might be expected to bear some small responsibility for defending it against massive incursions of state power. Garrett describes an argument he had with an auto dealer in New Castle, Penn. Garrett maintained that there was an essential soundness in the attitude of the American people. Even in the depths of depression, they weren't consciously calling for socialist revolution and the destruction of the rich. Why? Because, despite their social-welfarist earnings and expectations, they still wanted to be rich themselves, or at least well-off, and they believed that America's economic system still made it possible for that to happen. Garrett observed that the popular mood was much more anti-capitalist during the depression of the 1890s than it was during the depression of the 1930s:

"You had then millions of people who never expected to own carriages of their own. They couldn't imagine it. Your customers who are afraid to be seen with fine cars are living in the 90s. Tell them so."
"I'll hire you to tell them, if you want a job. They wouldn't believe me."
"That's because you don't believe it yourself." (25)

You don't believe it yourself. That's the verdict passed on American businessmen by all those people whom, looking back, we regard as progenitors of the American libertarian movement — Isabel Paterson, Rose Wilder Lane, Ayn Rand (especially in "Atlas Shrugged," whose economic episodes are clearly derived from the New Deal era), Garrett himself. These people believed that the triumph of big government resulted in very large part from a failure of intellectual leadership by the natural opponents of big government, America's businessmen. While FDR and his ideological allies flayed the "economic royalists," "tories," and "malefactors of great wealth," most of the aforesaid malefactors were doing little or nothing to contest his charges. Often they showed that they deserved to be called those names, because they conspired with the state so as to be enriched for their own incompetence.

If you're a bad businessmen, you have to love a regime in which government sets itself the task of saving everybody, even and especially businessmen who make bad investments. Under the New Deal, the colossal mistakes of business were rewarded with colossal salvation by Washington. Rather than allow foreclosure or liquidation of the incompetent farmer, banker, or industrialist, the federal government saved them — by giving them the wealth of the farmers, bankers, and industrialists who happened to be competent. It didn't stop there. The Roosevelt administration funded its projects by, among other things, reducing the dollar to half its former value, thus destroying half the value of the savings that frugal people had entrusted to their bank accounts. Effects on future investments can easily be surmised. In fact, the 1930s saw negative investment in the American economy. As Garrett says:

"The New Deal saved intact that great mass of obsolete, inflated and imaginary capital that was about to be wiped out and ought to have been wiped out. . . . This alone would have been enough to limit recovery." (224)

And it did limit recovery. The depression of the 1930s lasted roughly twice as long as the comparably severe depression of the 1890s — thanks to the government's kind ministrations.

I have mentioned some of the originators of the modern libertarian movement. Garrett wasn't a pure libertarian. He seems to have had little interest in the personal-rights side of the freedom philosophy. He doesn't seem to have worried very actively about victimless-crime laws and other "noneconomic" invasions by government of the private sphere (although his presence in that speakeasy shows you what he thought about Prohibition, at least). In his career, also, there is a recurrent, and embarrassing, interest in certain kinds of fallacious political-economic ideas, chiefly the idea that war can be prevented if states can manage to make themselves economically self-sufficient. He was in favor of laissez faire, with a few curious reservations. And certainly he had no idea that he was contributing to the foundation of a political movement that, from the 1960s on, would win almost all of its intellectual, and a few of its political, disputes with the regime of big government.

Garrett was not a theorist like Paterson, Lane, or Rand. He was a reporter — a reporter with unrivaled knowledge of his subject, the American political economy. Even more important, he was a reporter endowed with true rhetorical power. Garrett can give you facts and figures; he can give you case studies by the mile; but he can also refute a counterargument by merely reminding you that "everybody knows better" than that (169).

He is a master of both the baroque and the aphoristic style. Indeed, the power of his writing stems very largely from the dynamic tension between the two extremes. Now, a good aphorism is not a simple thing; it's the news of victory after a complex fight. An example: Garrett's little chain of aphorisms about the mystery of the 20th century, the aggressive state:

"No government can in any way extend its powers over people but to limit freedom. . . .
If government cannot be limited freedom is lost. . . .
Let the Government's intent be good. That may be assumed. But the better the intent the worse it is, for the goodness of the intent disarms resistance." (212–14)

Proposition and deduction. The coolness of logic. But when Garrett wants you to see something, he will make you see it; and if this can best be done with a stroke of theatre, that's what he'll use. The building industry is a prosaic topic, isn't it? Well, maybe not:

"We have learned how to make towers stand in the sky." (51)

When there is a need for drama, drama will be provided — even, or especially, when the subject itself seems quite without drama. Here is Garrett on the politics of agricultural relief:

"The farm problem has come to have a kind of specious oratorical reality that removes it entirely from the realm of economic reason. It is covered with imaginary political sores. It is like a lost province or a submerged race. Those who talk rationally about it are cast out." (160)

Note that Garrett chooses a highly oratorical approach to the problem of other people's specious oratory. He has a sense of humor, and you would not want to get in the way of it. It takes a while to unlimber, but once it gets going, it crushes all opposition.

And there is tension here as well, because Garrett's humor is balanced by his noble hatred. He doesn't hate the businessmen, or the politicians, or the labor unions, or the voters. For these people he displays the sympathy, anger, and longing of the disappointed lover. Garrett knew the world, and basically, he loved it. What he hated was the new class of cynically destructive intellectuals. He hated them because they have no sympathies, and thus no disappointments:

"They have no heroes. They know nothing worshipful, past or present, and scoff at worship. If they are radicals, they plausibly deny it. As reckless idol breakers, they might be respected. But neither for anything they believe against idols nor for robust love of melee would they risk it. They want to be comfortable, and to live with small, sharp teeth inside the institutions they despise and bespatter." (138)

"Small, sharp teeth." No one has said it better. Those teeth are dangerous, but they are small.

One can read Garrett for the style; one can also read him for the content. If someone asked me to suggest the book that most clearly tells the story of the New Deal, I would immediately recommend this book. Out of the vast corpus of Garrett's work, Bruce Ramsey has selected the essays and reports that most effectively illumine the New Deal's many aspects, political, social, and economic; and he has arranged these writings so as to provide, not just a series of diverse works, but a connected history that can be read with enjoyment even by people who know nothing about the subject.

The history of the New Deal is notoriously difficult both to write and to read, because so much of it is focused on complex acts of legislation and intricate relationships between economics and politics. Garrett has the true reporter's gift for clarifying history without falsifying it or robbing it of its richness. And Ramsey has the true gift for editorship — in two ways: he selects the right material, and he knows how to annotate it.

I am under obligation to admit the possibility of bias: I appear in Ramsey's acknowledgments as an early reader of his introduction. But the introduction is what it is — a succinct, yet richly informative guide to Garrett's complex career and historical setting. As to annotations, Ramsey has a remarkable sense for what the general reader needs to be told. His notes are both erudite and exactly to the point; and they provide information not only about the names and terms that Garrett mentions but also about the long-range results of the controversies that were important to him. One leaves this book with the conviction that one truly knows the subject.

But it would be a mistake to read the book merely as a history of the New Deal, or even as a document in the history of libertarian thought. It should also be read as an introduction to the strangeness of history.

Here is what I mean. What horrified Garrett most about the New Deal was the weird assumption on the part of many of its managers (e.g., President Roosevelt) that industrial progress had gone too far, that America had suffered, as Roosevelt put it in his message to Congress on Jan. 3, 1934, an "unnecessary expansion of industrial plant" (emphasis added). Speaking to the National Democratic Club, Roosevelt decried efforts to make industry more efficient: "Reduction of costs in manufacture does not mean more purchasing power and more goods consumed. It means the opposite." Huh? Roosevelt, as Garrett points out, went on to contradict this message; but it's a fair sample of the New Deal's economic quackery. Suppose, Garrett argued, it wasn't true that increased efficiency and improved technology created prosperity for the American consumer. Then why did the American standard of living rise with the rise in efficiency? If the president's ideas were correct, "then the 25,000,000 motor cars you see in the highways are not there; it is all an illusion" (229–31).

You see what I mean about the strangeness of history. Who could imagine that an American president, instructed by his economic experts, would ever question improvements in efficiency and technology? Who could imagine that such a president would be revered, ever after, for his nearly supernatural insight into every factor that might contribute to the nation's happiness and well-being?

Now let us consider the ironies of history. Garrett richly communicates his horror of the New Deal, but the final effect of reading this book is something just the opposite of horror. It is relief. As one studies Garrett's analyses of New Deal folly, one keeps thinking: "but America survived."

True: since the 1930s America has gone on to other phases of quackery, propelled in many instances by the vast engines of government constructed during the Roosevelt era. Not since the 1970s, however, has the national pulpit rung with denunciations of technology and material progress. There has been real intellectual motion in America, and much of it has been motion in the direction that Garrett wished to see.

We cannot plot this motion, or predict it. As Garrett said, in his unique way of saying things:

"Public opinion has as many movements as the wind, sudden, unreasonable, cyclonic, erratic, going to and fro . . ."

Seen in this way, the motions of public opinion are inexplicable and irrational. "Opinion" cares nothing about the distinction between quackery and truth — at least until truth appears (as it never has in America) in the form of abject starvation and defeat. But Garrett also mentioned:

"the great trade winds of thought and conviction, rising slowly, moving deliberately, knowing their way and how to go." (127)

Those are the intellectual winds that traffic with reality. And it was those winds that propelled Garrett's own intellectual voyage — though few were they who knew it at the time.

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