There was a Director of the Budget who was not at heart a New Dealer. One day he brought to the President the next annual budget—the one of which the President afterward said: "The country, and I think most of Congress, did not fully realize the large sums which would be expended by the government this year and next, nor did they realize the great amount the Treasury would have to borrow."
At the end of his work the Director of the Budget had written a paragraph saying simply and yet in a positive manner that notwithstanding the extraordinary activities indicated by the figures and by the appropriations that were going to be made, the government had really no thought of going into competition with private enterprise.
Having lingered for some time over this paragraph the President said: "I'm not so sure we ought to say that."
The Director of the Budget asked, "Why not, Mr. President?"
The President did not answer immediately, but one of his aides who had been listening said: "I'll tell you why. Who knows that we shall not want to take over all business?"
The Director of the Budget looked at the President, and the President said: "Let's leave it out." And of course it was left out.
It may have been that at that time the choice was still in doubt. Under the laws of Delaware the government had already formed a group of corporations with charter powers so vague and extremely broad that they could have embraced ownership and management of all business. They were like private corporations, only that their officers were all officers of the government, and the capital stock was all government owned. The amount of capital stock was in each case nominal; it was of course expansible to any degree. Why they were formed or what they were for was never explained. In a little while they were forgotten.
Business is in itself a power. In a free economic system it is an autonomous power, and generally hostile to any extension of government power. That is why a revolutionary party has to do something with it. In Russia it was liquidated; and although that is the short and simple way, it may not turn out so well because business is a delicate and wonderful mechanism; moreover, if it will consent to go along it can be very helpful. Always in business there will be a number, indeed, an astonishing number, who would sooner conform than resist, and besides these there will be always a few more who may be called the Quislings of capitalism. Neither Hitler nor Mussolini ever attempted to liquidate business. They only deprived it of its power and made it serve.
How seriously the New Deal may have considered the possibility of liquidating business we do not know. Its decision, at any rate, was to embrace the alternative; and the alternative was to shackle it.
In his second annual message to Congress the President said: "In the past few months, as a result of our action, we have demanded of many citizens that they surrender certain licenses to do as they please in their business relationships; but we have asked this in exchange for the protection which the State can give against exploitation by their fellow men or by combinations of their fellow men."
Not even business would be asked to surrender its liberties for nothing. What was it going to receive in exchange? Protection against itself, under the eye of the Blue Eagle.
That did not last. The Blue Eagle came and went. Gen. Hugh Johnson, the stormy administrator of the NRA, said afterward that it was already dying when the Supreme Court cut off its head. Yet business was not unshackled. After all, one big shackle for all business was clumsy and unworkable. There were better ways.
Two years later the President was saying to Congress: In thirty-four months we have built up new instruments of public power." Who had opposed this extension of government power? He asked the question and answered it. The unscrupulous, the incompetent, those who represented entrenched greed—only these had opposed it. Then he said: "In the hands of a people's government this power is wholesome and proper. But in the hands of political puppets, of an economic autocracy, such power would provide shackles for the liberties of the people."
There, unconsciously perhaps, is a complete statement of the revolutionary thesis. It is not a question of law. It is a question of power. There must be a transfer of power. The President speaks not of laws; he speaks of new instruments of power, such as would provide shackles for the liberties of the people if they should ever fall in other hands. What then has the government done? Instead of limiting by law the power of what it calls economic autocracy the government itself has seized the power.
PROBLEM FIVE: WHAT TO DO WITH BUSINESS—WHETHER TO LIQUIDATE OR SHACKLE IT