The Great Triumvirate:
Architects of the Early New Deal
Joseph Dana Miller
[Reprinted from Land and Freedom,
March-April, 1934]
The three men who are prominent in the administration recovery
programme are interesting as providing studies of character. Tugwell,
Johnson and Richberg are an interesting triumvirate. While Tugwell in
much of his writing exhibits a Torricellian vacuity of thought he
clothes it with a professorial garb of calm superiority. He writes
with a superb disdain of his critics. He indicates that those who
differ with him are animated by some secretly base motive, that they
wish to retain some monopolistic privilege, and that if they venture
to criticise the programme it is quite clear that they are influenced
by motives more or less corrupt.
Johnson, a somewhat more engaging personality, is the raging
tragedian of the heavy melodrama. He is almost ferocious. But we like
him. No one has ever treated economic problems in just this spirit and
his rage is almost demoniac. Yet it is impossible not to admire him.
He puts up a good show. Napoleon said of a certain famous charge, "It
is magnificent but it is not war." And we may say of General
Johnson's great outbursts, "They are magnificent but they are not
business or economics."
Richberg is different. He is a lawyer and will argue with you. It is
true that he has a habit common to all three. He speaks of the "mudslinging
of destructive criticism," and of those who look with "jaundiced
eyes" upon the administration programme. But that is a common
characteristic.
His economics show the same defects as his associates. He is also at
fault in his history. He tells us in a recent article that "recovery
has proceeded at a rate unprecedented in the up-turn after any
previous depression." This is simply not so. The depression of
1857 was over in the Spring of 1858; the stagnation of 1843 was
followed in 1846 by good times and the highest wages ever known; the
years of 1867, 1868 and 1869 were periods of great depression, but in
1870 business improved considerably. Other periods of depression have
been followed by recovery in a time much shorter than today's slight
up-turn. That the N.R.A. is responsible for such recovery as we are
experiencing, if we are, no well informed man will contend.
And if other countries have shown the same slight up-turn, with
little Sweden ranking first, it cannot be due to the N.R.A.
Richberg differs from Tugwell when he speaks in the same article of "the
administration codes of fair competition." Competition, according
to Tugwell is never fair; it is always destructive and always to be
frowned upon.
But what is funny is Mr. Richberg's self-contradiction. He is
indignant at "little stores, shops and restaurants which go
bankrupt in less than five years and which bombard Congress with
complaints that monopolies fostered by the codes are driving them to
the wall." He does not deny this but says: "The N.R.A. codes
may sometimes hasten the end of such small and uneconomic enterprises."
But he says this is a "process which has been proceeding
relentlessly for many years despite the anti-trust laws."
We are still a little puzzled. It seems the N.R.A. codes are
performing a really useful purpose in doing away with "small and
uneconomic enterprises." If this is accomplished, and it is
thought desirable, as Mr. Richberg says it is, and is "proceeding
relentlessly" without the codes, the job seems to be well in
hand.
But who can be sure if these small enterprises are uneconomic? Maybe
some of the larger enterprises are also uneconomic. And we would point
out that where ninety per cent of industrial enterprises fail it is
due not to unregulated competition, nor to the absence of codes, but
to the same set of economic conditions in which the majority of
enterprises, large and small, come to grief.
But the following is of interest where Mr. Richberg says: "It is
profoundly in the interest of large enterprise to preserve the
economic health of small competitors in order that all may enjoy the
benefit of legalized cooperation in promoting their industry as a
whole.
The unconscious appeal here is to the law of competition and that
other law which is made possible by it, the law of cooperation. Of
course, Richberg does not recoginize it, Tugwell cannot, and Johnson
well, Johnson doesn't care. But it is a natural law of business and
economics.
This is the answer to all planning. There are such things as natural
laws of production and distribution. If you interfere with them you do
so at your peril. The great industrial structural edifice, the
delicate laws of distribution, the law of supply and demand which is
nothing less than the exchange of supply for supply, shrinks ... at
the touch of government. What millions of hands have laboriously
erected the hand of a single blundering legislator can undo. Nature
has its way of punishing infractions of the economic law, and any
interference with ilj free play. The authors of the N.R.A. will learn
this at their cost.
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