Ames: 'Libertarianism' started by Big Business lobbyists

This one's worth re-posting in full, since libertarianism -- or somebody's naive understanding of it -- is making something of a comeback lately.  

At the heart of libertarianism is a disdain for democracy and an abiding belief in the right of corporations to rule the nation.  

Think what Ames revealed history is telling us: in 1946, 11 years before Ayn Rand's Atlas Shrugged, the real-life titans of corporate America were already pooling their funds and lobbying the hell out of the U.S. Congress in the guise of a "think tank."  And their pseudo-intellectual front for corporate lobbying has grown tremendously in size and influence since then.

So either Big Business has been "under siege" for the past 65 years... or else they've been in control all along, outspending and out lobbying everybody else, to their benefit.  It can't be both.  If you're not sure what's true, just remember this quote from a Congressional Committee looking into libertarian lobbying in 1946:  "It is ... difficult to imagine that the nation’s largest corporations would subsidize the entire [think tank] venture if they did not anticipate that it would pay solid, long-range legislative dividends."

When Congress Busted Milton Friedman (And Libertarianism Was Created By Big Business Business Lobbyists)

By Mark Ames

November 16, 2012 | NSFW Corporation

Last Friday, November 9, saw the big “Milton Friedman Centennial” celebration at the University of Chicago’s Becker Friedman Institute for Research in Economics. It was a big day for fans of one of the Founding Fathers of neoliberal/libertarian free-market ideology, and those fans are legion on both sides of the narrow Establishment divide —as Obama’s economy czar Larry Summers wrote in 2006, “Any honest Democrat will admit that we are all Friedmanites now.”

One episode in Milton Friedman’s career not celebrated (or even acknowledged) at last week’s centennial took place in 1946, the same year Friedman began peddling his pro-business “free market economics” ideology.

According to Congressional hearings on illegal lobbying activities '46 was the year that Milton Friedman and his U Chicago cohort George Stigler arranged an under-the-table deal with a Washington lobbying executive to pump out covert propaganda for the national real estate lobby in exchange for a hefty payout, the terms of which were never meant to be released to the public.

The arrangement between Friedman and Stigler with the Washington real estate lobbyist was finally revealed during he Buchanan Committee hearings on illegal lobbying activities in 1950. But then it was almost entirely forgotten, including apparently by those celebrating the “Milton Friedman Centennial” last week in Chicago.

I only came across the revelations about Friedman’s sordid beginnings in the footnotes of an old book on the history of lobbying by former Newsweek book editor Karl Schriftgiesser, published in 1951, shortly after the Buchanan Committee hearings ended. The actual details of Milton Friedman’s PR deal are sordid and familiar, with tentacles reaching into our ideologically rotted-out era.

It starts just after the end of World War Two, when America’s industrial and financial giants, fattened up from war profits, established a new lobbying front group called the Foundation for Economic Education (FEE) that focused on promoting a new pro-business ideology—which it called “libertarianism”— to supplement other business lobbying groups which focused on specific policies and legislation.

The FEE is generally regarded as “the first libertarian think-tank” as Reason’s Brian Doherty calls it in his book “Radicals For Capitalism: A Freewheeling History of the Modern Libertarian Movement” (2007). As the Buchanan Committee discovered, the Foundation for Economic Education was the best-funded conservative lobbying outfit ever known up to that time, sponsored by a Who’s Who of US industry in 1946.

A partial list of FEE’s original donors in its first four years includes: The Big Three auto makers GM, Chrysler and Ford; top oil majors including Gulf Oil, Standard Oil, and Sun Oil; major steel producers US Steel, National Steel, Republic Steel; major retailers including Montgomery Ward, Marshall Field and Sears; chemicals majors Monsanto and DuPont; and other Fortune 500 corporations including General Electric, Merrill Lynch, Eli Lilly, BF Goodrich, ConEd, and more.

The FEE was set up by a longtime US Chamber of Commerce executive named Leonard Read, together with Donaldson Brown, a director in the National Association of Manufacturers lobby group and board member at DuPont and General Motors.

That is how libertarianism started: As an arm of big business lobbying.

Before bringing back Milton Friedman into the picture, this needs to be repeated again: “Libertarianism” was a project of the corporate lobby world, launched as a big business “ideology” in 1946 by The US Chamber of Commerce and the National Association of Manufacturers. The FEE’s board included the future founder of the John Birch Society, Robert Welch; the most powerful figure in the Mormon church at that time, J Reuben Clark, a frothing racist and anti-Semite after whom BYU named its law school; and United Fruit director Herb Cornuelle.

The purpose of the FEE — and libertarianism, as it was originally created — was to supplement big business lobbying with a pseudo-intellectual, pseudo-economics rationale to back up its policy and legislative attacks on labor and government regulations.

This background is important in the Milton Friedman story because Friedman is a founder of libertarianism, and because the corrupt lobbying deal he was busted playing a part in was arranged through the Foundation for Economic Education.

False, whitewashed history is as much a part of the Milton Friedman mythology as it is the libertarian movement’s own airbrushed history about its origins; the 1950 Buchanan Committee hearings expose both as creations of big business lobby groups whose purpose is to deceive and defraud the public and legislators in order to advance the cause of corporate America.

The story starts like this: In 1946, Herbert Nelson was the chief lobbyist and executive vice president for the National Association of Real Estate Boards, and one of the highest paid lobbyists in the nation. Mr. Nelson’s real estate constituency was unhappy with rent control laws that Truman kept in effect after the war ended. Nelson and his real estate lobby led what investigators discovered was the most formidable and best-funded opposition to President Truman in the post-war years, amassing some $5,000,000 for their lobby efforts—that’s $5 million in 1946 dollars, or roughly $60 million in 2012 dollars.

So Herbert Nelson contracted out the PR services of the Foundation for Economic Education to concoct propaganda designed to shore up the National Real Estate lobby’s legislative drive — and the propagandists who took on the job were Milton Friedman and his U Chicago cohort, George Stigler.

To understand the sort of person Herbert Nelson was, here is a letter he wrote in 1949 that Congressional investigators discovered and recorded:

"I do not believe in democracy. I think it stinks. I don’t think anybody except direct taxpayers should be allowed to vote. I don’t believe women should be allowed to vote at all. Ever since they started, our public affairs have been in a worse mess than ever."

It’s an old libertarian mantra, libertarianism versus democracy, libertarianism versus women’s suffrage; a position most recently repeated by billionaire libertarian Peter Thiel —Ron Paul’s main campaign funder.

So in 1946, this same Herbert Nelson turned to the Foundation for Economic Education to manufacture some propaganda to help the National Association of Real Estate Boards fight rent control laws. Nelson knew that the founder of the first libertarian think-tank agreed with him on many key points. Such as their contempt and disdain for the American public.

Leonard Read, the legendary (among libertarians) founder/head of the FEE, argued that the public should not be allowed to know which corporations donated to his libertarian front-group because, he argued, the public could not be trusted to make “sound judgments” with disclosed information:

"The public reporting would present a single fact—the amount of a contributor’s donation—to casual readers, persons having only a cursory interest in the matter at issue, persons who would not and perhaps could not possess all the facts.

These folks of the so-called public thus receive only oversimplifications or half-truths from which only erroneous conclusions are almost certain to be drawn. If there is a public interest in the rightness or wrongness of corporate or personal donations to charitable, religious or education institutions, and I am not at all ready to concede that there is, then that interest should be guarded by some such agency as the Bureau of Internal Revenue, an agency that is in a position to obtain all the facts, not by Mr. John Public who lacks relevant information for the forming of sound judgments...Public reporting of a half-truth is indeed a significant provocation."

So in May 1946, Herbert Nelson of the Real Estate lobby, looking for backup in his drive to abolish federal rent control laws, contacted libertarian founder Leonard Read of the FEE with an order for a PR pamphlet “with some such title as ‘The Case against Federal Real Estate Control’,” according to Schriftgiesser’s book The Lobbyists.

What happened next, I’ll quote from Schriftgiesser:

"They were now busily co-operating on the new project which the foundation had engaged Milton Friedman and George J. Stigler to write. It was to be called Roofs and Ceilings and it was to be an outright attack on rent controls.

When Nelson received a copy of the manuscript he wrote Read to say, “The pamphlet...is a dandy. It is just what I wanted."

The National Association of Real Estate Boards was so pleased with Milton Friedman’s made-to-order propaganda that they ordered up 500,000 pamphlets from the FEE, and distributed them throughout the real estate lobby’s vast local network of real estate brokers and agents.

In libertarianism’s own airbrushed history about itself, the Foundation for Economic Education was a brave, quixotic bastion of libertarian “true believers” doomed to defeat at the all-powerful hands of the liberal Keynsian Leviathan. Here is how Brian Doherty describes the FEE and its chief lobbyist Leonard Read:

"[Read] would never explicitly scrape for funds... He never directly asked anyone to give anything, he proudly insisted, and while FEE would sell literature to all comers, it was also free to anyone who asked. His attitude toward money was Zen, sometimes hilariously so. When asked how FEE was doing financially, his favorite reply was, “Just perfectly.”... Read wanted no endowments and frowned on any donation meant to be held in reserve for some future need."

And here is what the committee’s own findings reported—findings lost in history:

"It is difficult to avoid the conclusion that the Foundation for Economic Education exerts, or at least expects to exert, a considerable influence on national legislative policy....It is equally difficult to imagine that the nation’s largest corporations would subsidize the entire venture if they did not anticipate that it would pay solid, long-range legislative dividends."

Or in the words of Rep. Carl Albert (D-OK): "Every bit of this literature is along propaganda lines."

The manufactured history about libertarian’s origins, or its purpose, parallels the manufactured myths about one of big business’s key propaganda tools, Milton Friedman. As the author of The Lobbyists, not knowing who Milton Friedman was at the time, wrote of Friedman’s collaborative effort with Stigler:

“Certainly [the FEE’s] booklet, Roofs or Ceilings, was definitely propaganda and sought to influence legislation....This booklet was printed in bulk by the foundation and half a million copies were sold at cost to the National Association of Real Estate Boards, which had them widely distributed throughout the country by its far-flung network of local member boards.”

Which brings me back to last Friday’s “Milton Friedman Centennial” celebration at the University of Chicago’s Becker Friedman Institute, featuring a distinguished panel of economists from Stanford, Princeton and of course U Chicago, among them two Nobel Prize winners — James Heckman and Robert Lucas —all gathered together to “explore both aspects of Friedman's legacy: the impact of his policy insights and his enduring scholarship”...

Like everything involving modern economics and libertarianism, it was a kind of giant meta-sham, shams celebrating a sham. Even the Nobel Prizes in economics awarded to people like Milton Friedman, George Stigler, or Friedman’s contemporary fans Heckman and Lucas, are fake Nobel Prizes — in fact, there is no such thing as a Nobel Prize in economics; its real name is the “Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel” and it was first launched in 1969 by the Swedish Central Bank and has since been denounced by Alfred Nobel’s heirs.

And yet — in the words of Larry Summers, "Any honest Democrat will admit we are all Friedmanites now." Of course, there are no honest Democrats. And there are no honest economists. And these are the people who are framing our politics, the people who have told Greece and Spain they have no choice, and the people who today are making sure that the number one item on Obama’s and Congress’s agenda is cutting Social Security and cutting Medicare and cutting "entitlements" — and the only thing that divides the elites in charge of this mess is “how much of these moochers’ lifelines can we cut?”

Essay: Why is the end of the world so American?

Despite my far-left politics, I feel the strange allure of American survivalism. Post-apocalyptic movies like Planet of the Apes, The Omega Man, The Road Warrior, Waterworld, The Postman or The Book of Eli, wasteland lit. like The Road, or even zombie movies (my favorite) like 28 Days Later, Resident Evil: Apocalypse and Dawn of the Dead, not to mention the top-rated AMC television series The Walking Dead, instruct us that those who are hardened and prepared, psychologically and materially, stand a better chance of survival. Part of me -- I'm not sure which part -- warns me to ignore this instruction at my own peril.

There is something primal and basic in survivalism that seems so true due to its harsh black-and-white morality, its whittling down of priorities, and its focus on saving loved ones and treasured ideals. And there is something so manly about it, let's face it. (I don't have a very good feeling how popular all this stuff is with girls, I admit. Survivalism -- and my lack of it -- is not something I'm keen to talk about with most guys, much less the ladies.)

But why in America is survivalism suddenly so popular? And why are we churning out all this pop disaster that makes it feel necessary? (To be sure, the Brits are catching up). More concretely, why do we also have so many real-life American Redobuts, ready and waiting for God knows what and when? As alluded to, it must have something to do with our culture, starting with our fear of nuclear war in the 1950s with our fully stocked bomb shelters all the way up to our fear of flu epidemics, Big Government collapse, and resource shortages from global supply chain shocks. And to be sure, there are those who yearn for the terrible, black day that proves that America's love affair with firearms, so deadly in the short run, is supremely justified in the long run.

But that doesn't explain it all. No, I suspect it partly has to do with a sense of foreboding, a subconscious resignation to an imminent Day of Reckoning for us in the West, and America in particular*, for how good we've had it in a world that is so violent and unequal. And perhaps retribution for our sins. And our sins, depending who you talk to, are myriad and profound.

(* And New York in particular. I often recall the hilarious yet insightful question of a very dear non-American: "Why is Hollywood so obsessed with destroying New York City?" Indeed, why? Is it Los Angeles's way of getting back at its coastal rival? Is it because Wall Street assholes deserve it? Or is it jealousy because they are cleverer, richer and win more pennants? Anyhow, I feel sorry for New York and New Yorkers already, both pre- and post-9/11. Give it a rest, guys. Why not let Boise, Branson, Lubbock or Fargo take one on the chin for America for once, huh, Hollywood?)

On the Right, they say the Reckoning will come when we can't pay our profligate debts, or the digital currency collapses and Big Government turns violent and despotic, or even when we become so self-centered, decadent and idolatrous that an angry God "raptures" the good souls to heaven while leaving the sinful dregs to fight over the smoking remains while being hounded by the armies of the Anti-Christ. And Randroids have been threatening us with retribution for our sins since Atlas Shrugged in 1957.

On the Left, they say the Reckoning will come when we have depleted all the planet's resources, or genetically modified crops suddenly collapse and we forget how to feed ourselves and by extension, the world, or when climate change deprives the U.S. and many other places of the necessary conditions for industrial agriculture.

Both sides still fear the spectre of nuclear war -- from an errant Russian nuke, a burgeoning China, a jihadist's dirty bomb, or a crazy Iranian missile attack. Strangely (?), the end of the Cold War has done little to calm our fear of, and fascination with, the nuclear end times.

Then there is sci-fi pop culture which terrifies us with hordes of flesh-eating zombies, rapacious or blood-drinking aliens, planet-killing meteors, and super-diseases engineered by the government -- ours or another's -- leaked into the general population.

There is a pretty well-accepted psychological theory that argues we humans love horror stories because they help us to imagine and prepare for the worst: we can thus live out the worst case scenarios in our minds, and anticipate how we would deal with them, without actually suffering them. If that is the case, then the growing popularity of apocalyptic tales means that we are giving tremendous thought to such what-if scenarios. Does that mean such scenarios are becoming increasingly more likely?

Another well-accepted psychological theory states that we humans evolved in an environment of ever-present danger; and when danger is absent, we don't quite believe our eyes; so we seek to invent or imagine it, for example, through extreme sports. If so, then one could argue that the growing peacefulness in the West and America in particular is causing a corresponding psychological backlash, a secret yearning for an equal measure of danger to balance the scales. And it doesn't get any more dangerous than the end of the world.

Then there is the explanation that with technological progress we have become so psychologically and physically flabby and self-unreliant that we subconsciously yearn for the ultimate workout, the ultimate test of self to weld six-pack abs and Jim Brown's chest on our manliness. I mean, we don't know how to hunt or grow food anymore. We don't recognize any of the plants around us, even in our backyards. Most of us don't even know first-aid, CPR, or basic wilderness survival skills taught in Boy Scouts. This is not to mention the social epidemic of U.S. obesity, especially among the poor, and Southerners.

I find some evidence for this explanation in the growing popularity of survival shows on TV, which allow us to sit on our couches munching chips while "learning" something about taming -- or rather, bonding with -- those dwindling oases of wild nature. There is more evidence for this theory in the popularity of figures like James Wesley Rawles, best-selling author of Survivors: A Novel of the Coming Collapse and How to Survive the End of the World as We Know It. I mean, what kind of pathetic nerd learns how to survive from a book? It sounds like something I'd do*. (Both books are available on MP3 and Kindle for all you hardcore woodsmen.)

(* I admit I read The Zombie Survival Guide: Complete Protection from the Living Dead by visionary survivalist Max Brooks, but only because there are no real-life zombies to practice on (yet), not even in the woods.)

But I think the vogue of contemporary Western survivalism is best explained by something else: our modern sense of helplessness in the face of unstoppable globalization and the towering power of mechanistic, bureaucratic de-humanizing corporations and governments. The West -- that is, its diplomats and business cabals -- presently rules the world; but as individuals we Westerners, and especially we Americans, seem to matter less and less. And that doesn't feel right. It doesn't sit well with our myth of ourselves as ruggedly self-reliant cowboys riding life's range of possibilities.

And now it's time to return to my more familiar political-moralistic tone. The Tea Parties -- may they fail miserably -- and the Occupy movements -- may God bless them -- are looked down upon by a majority as malcontents trying to impose their fringe worldview on the rest of us, but at least they're trying to change something. Most of us, despite our vague dissatisfaction, have given up. Organizing, protesting, questioning authority, grassroots campaigning to pass a law or Constitutional amendment -- these are looked down upon as naive pursuits at best, and anti-American at worst. Labor unions -- who traditionally gave voice to the voiceless and balanced normal people's concerns with the national-industrial plans of commerce and government -- at least in the private sector, are nearly dead in America.

Compounding our sense of helplessness, the Left-Right consensus that impersonal "free markets" and "the invisible hand" solve most problems better than a group of actual human beings with a singular purpose leaves most of us convinced that nothing we do matters (except in the statistical, mystical aggregate), and even worse, we nowadays believe that interfering with those impersonal forces is tantamount to a political and economic crime, a la apocryphal capitalist "wrecker" spies in the Soviet Union who managed to throw a monkey wrench into otherwise humming factories churning out a better life for the masses.

In the face of perceived unstoppable, impending collapse, some choose to wall themselves off from it, and/or to create something new and pure in its place. You don't have to be a flower child to recognize the similarities between a rural survivalist practicing sustainable agriculture and pursuing renewable energy and water supplies with hippy communes starting in the '60s. These loose networks of survivalists formed by social networks, radio programs, shared books and films, and even their common choice of redoubt (Idaho-Wyoming-Montana) points to a yearning for their own like-minded community, albeit separated by hills, woods and fences. They don't want to be alone alone.

So modern American survivalism cannot be dismissed as silly, fringe, or just good fun. It's serious business. We ignore this phenomenon at our own peril. Moreover, we ignore what they're feeling -- and our inexplicable commiseration with them -- at our own peril.

The antidote to impotent rugged individualism (expressed through survivalism) is organization. Not building another party, NGO, or corporation -- but organizing actual groups of human beings with a singular purpose around common goals and then acting resolutely. Those people in the Tea Parties and Occupy movements who have tasted what such gatherings of like-minded, everyday people feel like know it is intoxicating -- and eye-opening. They want more and more of it. Regardless of their politics, they are acknowledging their individual powerlessness yet exercising their individual will to voluntarily join a powerful collective. Heck, even survivalist communities, conventions and social networks are an ironical cry for "Community!" by neglected, rejected, and self-exiled loners.

Don't get me wrong, I'll keep enjoying my Walking Dead, Max Brooks and Bear Grylls. I even enjoyed Atlas Shrugged... when I was a teenager. But I am not under any illusions as to the power of the rugged individual survivalist. Rather, in him I see my own fears and shortcomings... and the failure of globalization to preserve a sense of community and individual security even for many Americans.

Analysis: Taxed Not Enough Already?

"Taxed Enough Already?" Maybe not enough, historically speaking. Aw, but who cares about that? It's all about ME! Me and the Founding Fathers who were untaxed, free, devout geniuses... with slaves. Why can't we go back to the good old days? Not the good old days of the '40s or '50s and the "Greatest Generation" when men were men and women were women and nuclear families did pretty much everything for themselves, but back to the good old days of the 19th century when the gubument took in almost no taxes and provided almost no services! Then we would be free! Ah, this Medicare, this public education -- it chafes, it burns, it burdens! Cast it off! And don't forget that all the rich self-made moral geniuses (those descriptors are redundant: we can just call them "rich") might at any time go Galt and shrug off us "moochers" to wallow and starve in our poor misery. We'd better cut their taxes to zero so they'll stick around and hire us for not-quite-Mexican-immigrant wages!


U.S. tax burden at lowest level since '58
By Dennis Cauchon
May 6, 2011 | USA TODAY

Americans are paying the smallest share of their income for taxes since 1958, a reflection of tax cuts and a weak economy, a USA TODAY analysis finds.

The total tax burden — for all federal, state and local taxes — dropped to 23.6% of income in the first quarter, according to Bureau of Economic Analysis data.

By contrast, individuals spent roughly 27% of income on taxes in the 1970s, 1980s and the 1990s — a rate that would mean $500 billion of extra taxes annually today, one-third of the estimated $1.5 trillion federal deficit this year.

The analysis comes as President Obama and Congress debate whether to cut federal spending, raise taxes or both.

The latest dip in the tax burden came from a Social Security tax cut included in a December budget deal between Democrats and Republicans. It will reduce taxes $100 billion this year.

"We have a 1950s level of taxation and a 21st-century-sized government," says Robert Bixby, executive director of the Concord Coalition, a deficit-reduction advocacy group.

The fall in taxes is almost entirely caused by a weak economy rather than lower rates, says Curtis Dubay of the conservative Heritage Foundation. "It's easy to draw the wrong conclusion," he says.

Federal, state and local government spending hit a $5.6 trillion annual rate in the first quarter. That's the highest ever but, as a share of the economy, slightly below last year.

USA TODAY examined the full range of taxes that individuals pay to all levels of government. That includes income taxes for Medicare, property taxes for schools and gas taxes for roads.

At the national average, a person with an income of $100,000 would pay $23,600 in taxes today vs. $28,700 in 2000 and $27,300 in 1990.

The recession of 2001 and tax cuts championed by President Bush started a decade-long trend of taxing less income. The 2007-09 recession and new tax cuts in Obama's stimulus effort accelerated the change.

The one-year Social Security tax cut reduces the worker's rate from 6.2% to 4.2% — or $2,000 a year on a $100,000 income.

That has boosted the economy short-term, says Chris Christopher, an economist at the IHS consulting firm. "It's helping absorb the cost of higher gas and food prices," he says.

Other findings:

• Taxes per person. Individuals paid taxes at an annual rate of $10,549 per person in the first quarter — about the same as individuals have paid since 1990 when adjusted for inflation. Incomes have grown; tax payments haven't.

• Spending per person. Government spent at an annual rate of $18,086 per person in the first quarter. That's up from $13,552 in 2001, adjusted for inflation. The difference between individual taxes and spending comes from corporate taxes, user fees and borrowing.