The Number One political issue in 1956 will be the perennial "farm problem." The Democrats are now gargling gleefully and flexing the party larynx—setting the pitch for the opening of Congress when they can bewail the plight of "nature's nobleman."
For months, the Democrats hunted for an issue that would make Republicans look like the "reactionaries" they are supposed to be.
When Republicans faithfully adopted New Deal farm policies—lock, stock and barrel—the Democrats had their work cut out for them.
Of course, the Republicans did make a few very timid reductions in the levels of farm price support. But actually, the farm policies of the two parties differ hardly at all. Now trust the Democrats' publicity drive to blow up the microscopic differences into a grave and fundamental split over principle.
The important issues remain buried. So far, only the farmers are really interested. Most of them want bigger handouts, which means the Democrats will gain some votes—unless, of course, the rest of us realize the vital stake we all have in the "farm question."
For all, the farm muddle thickens into a solid lesson in applied economics. The First Republican New Deal originated price supports, in 1929. Since then, the government has trod the logical path to tyranny—by way of economic chaos.
The Federal government took the first wobbly step in this direction when it tried to guarantee artificially high prices for farmers in 1929. Naturally, they could do this only by buying food at an unnaturally high price.
Consider the consequences of this "first step." A price higher than consumers pay on the free market—a "monopoly price"—can be enforced only when supply is hauled out of the market picture. But what can the government do with all the wheat and pork and potatoes? Keep it indefinitely? Burn it? Dump it somewhere? Sell it; that is the first answer. But this only depresses prices again—Federal farm policy manipulators wind up right back where they started.
And thus begins the "farm surplus" problem. For thousands of years, people bought and used farm products. No one ever talked about "surplus." Now, suddenly, a surplus appears—a surplus which couldn't sell at the new monopoly prices. What's more, the farmers, attracted by the government's high prices, rush to produce even more of the supported goods—more production builds larger surplus. Larger surplus sends government farm subsidies shooting skyhigh. Skyhigh subsidies snatch more food out from under the consumer's nose (he's deprived of the other foods the farmers had produced before).
The meddling creates new problems—forces the government to withdraw completely, or clamp down some new control. The "free" course is unthinkable, of course. The government has a quicker solution: clamp down on farm production. Page the AAA.
They Shot Some Little Pigs
Farmers were happy: we paid them to plow under crops, kill little pigs; they got higher prices for potatoes and wheat and pork. But one problem disturbed them: the program was voluntary, and some efficient and individualistic farmers spurned the handouts, refused to stick to their quotas, made more money by selling more of their crops at the high prices.
Clearly this wouldn't do.
So 1938 saw a change in attack. Public resentment mounted. The public didn't like the idea of killing pigs in the middle of a depression. So now the government called it "soil conservation." The effect was the same, but it lulled the critics. Now came the next step to socialism: Congress declared production quotas compulsory. But these were ineffective because the quotas controlled the marketing of farm products, not actual production. Black markets developed.
After the war, the Department of Agriculture plugged these "loopholes." Penalties are stiffer, quotas are enforced on production. These quotas are based on the output of some former year. This means inefficient, unprogressive farmers shelter under the quotas, while efficient, progressive farmers are hogtied—can't expand production without heavy penalty. And the quotas are imposed, hallowed by "farm democracy," since two-thirds of the farmers must vote to approve the program.
Faced with the choice: accept the controls or lose your subsidized monopoly prices, the vast majority of farmers rubber-stamp this scheme. The whole procedure bears the mark of the Middle Ages, when the guilds, propped up by the State, voted to regulate their members. What about the rest of us, who suffer from the farm program monstrosity in so many ways? When do we get to vote on the issue?
But the end is not yet; the problems of statism never end. The government pays the farmer to cut wheat production, so he naturally puts his land into some other crop not covered by the program. More price cuts; more surpluses; more controls. And so the government must expand its quota controls to nearly all crops.
The latest scheme1, in political favor, simplifies the complex problem. The plan: pay the farmer more money to keep the land idle, period! And just to make enforcement easy and put a fancy cloak of legality on the scheme, the government will "rent" the land from the farmer. The Department of Agriculture will call the operation a "soil bank," and use some "conservation" dodge to appease the city folk.
Are any farmers rebelling against this whole economic insanity? Sure. Over 14,000 farmers grew "too much" wheat last year, so they must pay stiff penalties. A few refuse to pay; they'll take their case to the courts. But independent farmers can do little until the vast number of non-farm citizens, who suffer from socialized farming, come to their rescue.
The Ford Foundation's Fund for the Republic is generating a battery of news. Patriotic groups are denouncing its activities as left-wing, and some Congressmen threaten to investigate. True, the Foundation has made a few good grants—study of draftees' treatment and legal defense for objectors to "civil defense" dictation. But, on the whole, there is no doubting its strongly left-wing taint.
The question is: what to do about it? Public exposure is fine. Public criticism has already brought changes in the Fund's personnel. Voluntary action can work wonders.
Let's take good care, however, not to advocate government control of foundations. If we call for government repression of foundations, we abandon the very principle of liberty for which we fight. Does government control supply the answer to our problems? If so, why criticize the Ford Foundation for coming up with the same answer.
This was the basic trouble with the Reece Committee investigation of foundations last year. The Committee did excellent research. But it suffered from a fatal flaw: here a government committee denounced private foundations and called for government control of these foundations. Why? Because these foundations advocated government control of private institutions!
Neither the supporters, nor the opponents, of the Reece Committee saw the contradiction; or realized this mockery of basic libertarian principle.
Libertarians must face the fact that everyone must enjoy freedom of person and property—leftists included. And this means that everyone has the right to spend his money however he wishes—including the endowment of foundations to propagate any ideas he chooses: individualism, socialism, vegetarianism, or the Single Tax. Similarly, everyone has the right to criticize these ideas—but not to call for suppression by government coercion.
One of the tragic, neglected aspects of the foundation problem is that government repression of "controversial" grants from foundations would also outlaw libertarian grants by right-wing foundations. The tiny minority of right-wing intellectuals would wither on the vine, and any long-run hope of regaining a free society would be lost.