Spencer Heath Archive

Item 1242

Penned notes for a letter to an editor on lined, 3-ring-binder note paper.

About 1934-1935?

Dear Sir:

THE ROAD TO BANKRUPTCY

Almost two years ago and with the “utmost seriousness” our playboy president declared to Congress; “For three long years the Federal Government has been on the road to bankruptcy.” The Federal deficit was then two thousand millions. Now, less than two years later, it is ten thousand millions. Where is he so smilingly conducting us? Upon the back of labor and industry and production (all of which is labor) he has fastened an additional load four times greater than the one he so seriously deplored.

And what now does the nation enjoy more than two years ago? Do we produce more food, more clothing, more shelter? Are we richer with the abundance of life? Are the people actively engaged in the creation and enjoyment of wealth? Is the capital being invested in the tools and materials of production and labor thus privately engaged and employed in producing abundance of consumers’ goods and a higher standard of living? What is being done with the savings of the masses of the people and why?

There is only one way to restrict the production of wealth: that is by the disemployment of capital and labor. There is in civilized life only one power or agency that can do this. That is government — government acting as a restrictive, coercive agency instead of a cooperative one. Where government cooperates with industry by performing any services either by stipendiary officers or through corporations to which it delegates its powers, such government activities are rightly called public services, and they are public services not because they are performed by the government (directly or indirectly), but because they are performed on or through the public domain and rights of way. All other activities of government officers, however intended, are invasions of private industry and production. Such relations are not and cannot be cooperative. They are always restrictive. They lay upon industry tolls, taxes and punishments that unbalance the natural economy, destroy voluntary cooperation, demoralize the organization of industry and thus diminish the employment of capital and labor and the volume of production, even where this result is not mistakenly or stupidly intended or designed.

It is nothing new; it is traditional for governments to ravage industry and trade. Where governments are weak, this is the activity of freebooters and pirates. Where they become strong, they extirpate pirates and these activities are taken over by the government itself. (Never mind all the palaver about government protection of the weak; we are talking of the actual activity, not its apology.) So destructive had official restraints become, even during the period of so-called laissez-faire, that the historian, Buckle, imputed it as the highest virtue of a legislature to undo the acts of its predecessors, and he even questions if modern trade and industry could have survived the onslaughts of governments had it not been for the service of those who broke the laws. Yet what Buckle saw in early nineteenth century we speak of today as laissez-faire. Small wonder the old malady of bubble and collapse has persisted to our day.

Let us look at the technique of this destruction. Here is a business, and industry, its members struggling to survive the restrictions, direct and indirect, under which it labors. Unless it is based on new technical or scientific advance (or subsidized at the expense of general business) its returns to those who conduct it have become worn thin. Perhaps nine-tenths of those who have sought to engage in it have failed and those who remain in it resort to “unfair” practices in a desperate struggle to survive by combat upon each other, grinding of employes and frauds upon the public whom they serve. This the ideal setting for that popular refrain, “There orte’r be a law.” So it is with general acclaim that dominant members of the group seek more restrictive laws to “stabilize the industry” and limit “competition.” These laws, even if equally applied, are unequal in their effects. But they are administered by or at least at the behest of the more “political” element of the industry who thus shield and save themselves while destroying their “competitors” by the power of the law. This condition, now become general, is the monopoly economy we now suffer and endure. It is born of government restrictions on production and trade; on this it feeds. Its end is the virtual cessation of production with consequent famine and red revolution, ultimately darkness and decay. The fundamental vice of monopoly is that it is a toll-taking mechanism, that it destroys the fruitfulness of labor and therefore must lead to famine and decay.