Saturday, September 5, 2015

Lost and Found: The Hoover Policies, Part I The Social-Economic Policies

Work in Progress - Pardon the Dust

When we are sick, we want an uncommon doctor; when we have a construction job to do, we want an uncommon engineer, and when we are at war, we want an uncommon general. It is only when we get into politics that we are satisfied with the common man. - Herbert Hoover

The Hoover Policies

Lost and Found: L&F is a series devoted to old books which veer from our modern interpretation of historical events. The series devotes itself to seeking out truth which often lies somewhere twixt the gap between understandings.

The first of this series is devoted to Herbert Hoover, an orphan, who rose to President of the United States mainly on the power of his outstanding business and humanitarian record only to fall and be vilified for the rest of his life for his supposed lack of empathy for the common man during the Great Depression. In particular, this installment delves into The Hoover Policies by Ray Lyman Wilber and Arthur Mastick Hyde which was first published in 1937 by C. Scribner's Sons.

Preface: Clash of Philosophies

The preface is perhaps the most important section of the book as it lays out the author's, Wilber and Hyde's, case for Hoover and his policies. In it, they posit the Great War had unleashed many conflicting social and economic forces that had caused the economic system to fail to live up to society's humanitarian expectations. In order to solve these humanitarian concerns society had turned to two differing philosophies:

European Centralization - This system is characterized by:

  • Centralization of government
  • Centralization of economic planning by government
  • Strong measures used to coerce individuals
  • Personal government where the state is master of men
  • Drive is towards collectivism
  • Insists in fundamental changes in authority under it
  • Philosophy represented by the "New Deal"
  • Revolutionary

American Individualism - This system is characterized by:

  • Framework of strong local and Federal Government
  • Develops an understanding and voluntary cooperative action among free men
  • Government of laws where men are masters of the state
  • Drive is towards individualism
  • Progress in spirit of the Constitution
  • Philosophy represented by the policies of Herbert Hoover
  • Evolutionary

Hoover, during his term as President, had to deal with two often conflicting problems:
  • Resolve the social and economic conflicts that WWI has unleashed
  • Deal with an unparalleled economic emergency, the Great Depression.
It is the author's contention that Hoover developed the new government policies that ultimately laid the foundation for these economic and societal conflicts to be resolved all the while remaining faithful to our constitutional form of government with its dedication to free men.

The Hoover Policies
Social-Economic and governmental Policies

Problems and Objectives

In this section the author review Hoover outlook by quoting from his speeches:

November 19, 1920 address before the Federated American Engineering Societies paraphrased:

  • Our economic system has accomplished individual improvements of the highest order
  • Yet it presents a series of social difficulties of which we are groping for a solution
    • Population congestion
    • Repetitive labor which dulls the mind
    • Indeterminacy of employment due to poor business coordination
    • Wave of unemployment due to business cycles
    • Industrial strikes and lockouts which cause suffering and waste
    • Aggregation of wealth and power in a few hands

October 16, 1926 speech in New York paraphrased:

  • Intellectual and spiritual progress is not the product of poverty
  • The highest ideal is the freedom from want (anxiety about tomorrow's food)
  • Only with peace of mind can man's humanity expand
  • Another ideal is a parent's confidence that they can provide and education for their children
  • These confidences rest upon stable employment
  • Further, educational institutions can only be erected with previous accumulations of material prosperity
  • Absence of poverty has been the dream of idealists since the beginning of time.
  • That condition has been more nearly achieved in the United States than anywhere else
August 11, 1928 speech in Palo Alto paraphrased:
  • One of the oldest and noblest aspirations is the abolition of poverty.
  • In America we are closer to the final triumph over poverty than ever before in history
  • There is no greater guarantee against poverty than a job for every man
  • The foundation of American life rests upon home and family
  • My conception of America is a land where men and women may:
    • walk in ordered freedom
    • In independent conduct of their occupations
    • enjoy the advantages of wealth not concentrated into the hands of a few
    • build and safeguard their homes
    • give their children the fullest advantages
    • shall be respected in their faith and conscience
    • have the leisure to seek a fuller life
Inaugural Address paraphrased:
  • The larger purpose of economics should be the stability and security of business and employment in order to remove poverty
  • The American people are building a new economic, social and political system
  • The government must give leadership to the realization of these ideals:
    • Preservation of self government particularly local government
    • The perfection of economic and social justice
    • The maintenance of ordered liberty
    • The denial of domination by any one group or classs
    • The preservation of the equality of opportunity
    • The stimulation of individual initiative
    • The progress towards prosperity
    • The freedom of public opinion
    • The sustaining of education
    • The growth and tolerance of religious faith
    • The strengthening of the home
    • The advancement of peace
March 22, 1935 communication to a Sacramento, California meeting paraphrased:

  • What is the objective of the vast complex of invisible governmental, economic and social forces which dominate our civilization:
    • Upbuild and protect the family and the home:
      • This is the unit of American life
      • The moral, spiritual and economic unit
      • Its independence and security brings spiritual blessings to the nation
    • The fundamental protection of these homes is the spirit and letter of the Bill of Rights with support from the framework of the Constitution
    • They must be given:
      • Peace in the world
      • Confidence
        • in jobs
        • in business
        • in savings
    • Increases in standards of living come through unshackling the productive genius of our people
    • The advancement of knowledge must translate into increased health and education of our children
    • There must be safeguards to protect people from the dislocations of economic life and of old age
    • With the growth of great industrial forces, we must protect against exploitation and abuse.
    • We must liberally reward those who add wealth to those homes.
    • Those who do not increase the wealth of homes deserve no reward.
  • It is vital that we preserve the opportunity for young men and women and not burden them with the unbearable debt due to our follies
  • The solution lies in orderly individual liberty and responsible constitutional government
  • As opposed to un-American regimentation and bureaucratic domination
Author Wilbur and Hyde comments paraphrased:

Hoover separated the national problems into 80/20 marginal problems:
  • 80 Percent:
    • Maintain the high standards of the upper 80% of the population by:
      • Attaining economic stability uninterrupted by:
        • War
        • Depressions
  • 20 Percent
    • Extend these same high standards to the bottom 20%
The solution in Hoover's mind was to be found in the American system of:
  • Self government
  • Spiritual freedom
  • Free initiative
  • Free enterprise
While this system had weaknesses that needed to be cured, it had produced unparalleled human development and was the only sure basis of progress. Hope lay in building upon this system not crippling and destroying it.

His economic policies placed absolute fidelity in protecting the American system of free enterprise from private and governmental attempts to limit this freedom. His support for this freedom lay in the belief that without a free economic system their would no foundation for the other essential of a free people such as freedom of speech, press and worship. Hoover also felt that a freedom was not a freedom if it permitted monopolistic domination by any one group. Hoover believed in equal opportunity over privilege and protection of the American system from exploitation and abuse over laissez faire.

Hoover was opposed to pseudo-liberalism:

  • Collectivist doctrine
  • Encroachment on freedom:
    • Coercion and regimentation of the individual
    • Destruction of democracy via autocratic bureaucracy
Hoover held that man progressed during three great eras of free men:
  • Democracy in Greece
    • Produced logic, art and our philosophical foundations
  • Democracy in Rome
    • Which produced self government, laws and peace
  • Modern democracy
    • Which produced scientific discovery, invention and humanitarianism government
Hoover was one of the first Americans to recognize that our economic system had lagged behind in the advancement of humanitarian and ethical ideas compared to new social philosophies that sprang from the miseries and dislocations caused by WWI. To Hoover, the greatest challenge was living up to these humanitarian goals without sacrificing the economic freedom upon which everything rested.

Hoover believed that the community as whole had an obligation to children, the aged, sick, disabled, unemployed and poverty stricken. He held that the method of the first resort to meeting this obligation was community volunteerism and local government. The method of the last resort should be the federal government since this would involve coercion.

JohnQuincy comments:

Here are some links that may assist the reader in further researching these matters:

What is the ideology of the engineer? In a book entitled The Revolt of the Engineers (Layton 1971), Edwin T. Layton described it as a kind of "philosophy of engineering" grafted atop the ethics of Herbert Spencer, resulting in a creed that values professional excellence, practical rationality, rugged individualism, and laissez-faire capitalism. 

This seems contradicted by the fact that Wilbur and Hyde make clear that Hoover was not believer in laissez-faire capitalism.

The American System

The author,Wilbur and Hyde believe that Hoover was the first person to use the terms "American Individualism," "American System," and "American Way of Life." In their opinion, Hoover's great contribution was to impress to the American people that they had a defined social philosophy. It is one that he outlined in several book and, perhaps most notably, outlined the book, American Individualism, referenced below:

American Individualism by Herbert Hoover
In the book, Hoover notes that there are several social philosophies struggling for ascendancy in the world. There was American Individualism, European individualism in the more democratic European states with all its social classes, Communism, Socialism and Autocracy.

Hoover noted that there were many partisans of foreign social philosophies in America that sought to tear our system down and replace it with ones foreign to us. Hoover recognized that our system had issues with potential individualism run riot and inequalities but believed that our system was tempered by the American principle of equality of opportunity. He notes that this concept has a long history in America and dates back to at least President Lincoln's concept of the Fair Chance.

For readers unfamiliar with it, here is a quote from Lincoln referencing his fair deal concept:

President Abraham Lincoln, From his First Message to Congress, at the Special Session. July 4, 1861.

This is essentially a people's contest. On the side of the Union it is a struggle for maintaining in the world that form and substance of government whose leading object is to elevate the condition of men--to lift artificial weights from all shoulders, to clear the paths of laudable pursuit for all, to afford all an unfettered start and a fair chance, in the race of life. Yielding to partial and temporary departures from necessity, this is the leading object of the government for whose existence we contend.

Hoover did not believe that legalistic justice that simply protected contracts and property was enough of a foundation to preserve our unique system of American Individualism. Further, he believed that the time of pure, unfettered laissez faire, "every man for himself and the devil take the hindmost," capitalism was past. This era ended with the adoption of Lincoln's fair chance and was further abandoned with the adoption of social and economic justice legislation. Hoover believed that social injustice is the destruction of justice and that high productivity depended on a fair division of products.

Hoover believed that America had developed its own system that was unique from Europe or anyplace else in the world. In his mind what made America unique is that it stimulated human progress by giving each individual a chance to develop according to what talents they are endowed with. This was America's special system of American Individuality.

According to Hoover, preserving American Individuality requires that we curb business interests that inhibit equality of opportunity and do our best to spur individual initiative. Curbing business domination requires the regulation of activities that tend to squash equal opportunity in order to promote initiative. There is a dividing line between the American System and Socialism. Socialism inserts itself as an active player in the production and distribution of goods and even nationalizes certain industries. The American system does not negate private business, equality of opportunity and individual initiate via these socialist practices.

Hoover cautioned Americans to keep a sense of perspective. One crime does not make a crime wave. When we compare the American system to other systems such as Europe with its class system, America has a broad middle class with smaller bands of poor and wealthy at each end. Based on this perspective, America must be doing something right.

Here is an excellent academic paper that deals with these matters:

Herbert Hoover: The Triumph and Tragedy of 'American Individualism' by Stephen E. Sachs

The American System vs Collectivism

NOTE: Hoover uses the term liberal according to its classical meaning. Liberal in its classical meaning equates to something more akin to what we would currently label conservative beliefs. It is the liberal that harks back to its root word, Liberty. For Hoover and others of his day, a Liberal would believe in strong protection of the rights of the individual over central government particularly in terms of items found in our Bill of Rights. For Hoover Liberal does not equate to what we would term today Progressive, Leftist and/or Socialist. In fact, it is the exact opposite. 

Below is an excellent discussion of the differences between the classical and modern definitions of liberal:

Goodman Institute - Classical Liberalism vs. Modern Liberalism and Modern Conservatism

Basically, classical liberalism is based on a belief in liberty. Even today, one of the clearest statements of this philosophy is found in the Declaration of Independence. In 1776, most people believed that rights came from government. People thought they had only such rights as government elected to give them. But following British philosopher John Locke, Jefferson argued that it’s the other way around. People have rights apart from government, as part of their nature. Further, people can both form governments and dissolve them. The only legitimate purpose of government is to protect these rights.

The 19th century was the century of classical liberalism. Partly for that reason it was also the century of ever-increasing economic and political liberty, relative international peace, relative price stability and unprecedented economic growth. By contrast, the 20th century was the century that rejected classical liberalism. Partly for that reason, it was the century of dictatorship, depression and war. Nearly 265 million people were killed by their own governments (in addition to all the deaths from wars!) in the 20th century – more than in any previous century and possibly more than in all previous centuries combined. 2
All forms of collectivism in the 20th century rejected the classical liberal notion of rights and all asserted in their own way that need is a claim. For the communists, the needs of the class (proletariat) were a claim against every individual. For the Nazis, the needs of the race were a claim. For fascists (Italian-style) and for architects of the welfare state, the needs of society as a whole were a claim. Since in all these systems the state is the personification of the class, the race, society as a whole, etc., all these ideologies imply that, to one degree or another, individuals have an obligation to live for the state.
Hoover rejected the claim of socialists that America was dominated by laissez faire capitalism. According to Hoover, this form of capitalism perished in America generations ago. He posited that whatever true laissez faire policies that existed died in America starting early in the industrial age when rules and regulations started being implemented to prevent economic domination by a few over many. Further, America has always has a strong sense of public responsibility that is demonstrated through institutions like our public schools and public works.

Socialism promotes equality of economic rewards while true liberalism values equality in birth, before the law and of opportunity. True liberalism rejects the socialist lie that men are more free working for a sole employer, the government. True liberalism believes that equalizing rewards eliminates incentives for individual inventiveness, risk and independence.

Liberty (classical Liberalism) rejects the notion that men will do their best if they are denied the full rewards of their efforts and confidence that their savings from their efforts are protected. It rejects the notion that government bureaucracy can manage the economic system as competently as those whose well being directly rests in its advancement.

The American system already has ample evidence that demonstrates the favorability of private management of private versus government management of economic assets. In Hoover's day, he points to the mismanagement of the post office and certain railroads and shipping lines that the government had taken over. If everything was run as poorly as these organizations, we would soon find ourselves having difficulty providing basic necessities such as food, clothing and shelter.

Socialist like to claim that, once in power, they will maintain democracy in every area except for economic ones. Hoover rejected that claim as false. He questioned how independent democratic institutions could be maintained if everyone was, in a sense, a government employee. Not only does this preclude the possibility of electing independent officials, these officials will ultimately need to be overseen by a dictator required to provide mandates over official lacking the independence required for a democratic system to work.  Since socialism requires authoritarianism, the our whole structure of individual liberty would need to be suppressed: No freedom of speech, press, assembly or free legislature or judiciary.

Hoover points to Italy and Germany as recent examples of how adoption of socialist principles rapidly led to authoritarian forms of government. He posits that experience has shown that more advanced societies who adopt wholesale socialistic economic principles degenerate into fascist governments. He predicts that the United States with it large middle class would also be ripe for fascism too.

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