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Walter Lippmann (1889-1974)
Born to a prosperous family in New York City, Lippmann studied philosophy and languages at Harvard. He became a journalist and in 1913 founded The New Republic with Herbert Croly. He aided Woodrow Wilson in his writing his Fourteen Points speech that outlined the principles of the Versailles Treaty, but criticized the president for his extensive censorship of the press during World War I.
Lippmann is best known for his critique of the contemporary news media as being too willing to accept what its sources said without subjecting it to critical analysis. He was also critical of the American public, which he saw as unintelligent and uniformed, and thus of little help in solving the problems facing the country. Lippmann preferred that government decisions be guided by a technocratic elite, but he drew the line at centralized economic planning, which he saw as inimical to both freedom and democracy.
Planning in an Economy of Abundance (1937)
As the Roosevelt administration transformed the US economy through adoption of various forms of public assistance, some advocated adopting centralized economic planning as a way of attaining prosperity for all. Lippmann acknowledged that such planning made sense during wartime, but criticized it in peacetime due to the widespread discretion that government officials would have in setting planning targets. Lippmann’s work thus presents a critique of a planned economy in peacetime as well as a justification for permitting such planning as a wartime emergency measure.
Although all the known examples of the species have had their origin in war or hold as their objective the preparation for war, it is widely believed that a collectivist order could be organized for peace and for plenty. “It is nonsense,” says Mr. George Soule, in A Planned Society, “to say that there is any physical impossibility of doing for peace purposes the sort of thing we actually did for war purposes.” If the state can organize for war, why can it not organize for peace and plenty? If it can mobilize against a foreign enemy, why not against poverty, squalor, and the hideous social evils that attend them?
It is plain enough that a dictated collectivism is necessary if a nation is to exert its maximum military power: very evidently its capital and labor must not be wasted on the making of luxuries; it can tolerate no effective dissent or admit that men have any right to the pursuit of private happiness. No one can dispute that. The waging of war must be authoritarian and collectivist. The question we must now consider is whether a system which is essential to the conduct of war can be adapted to the civilian ideal of peace and plenty. Can this form of organization, historically associated with military purposes and necessities, be used for the general improvement of men’s condition? It is a critical question. For in answering it we shall be making up our minds whether the hopes invested in the promises of the collectivists are valid, and therefore entitled to our allegiance.
We must remind ourselves again, not only why collectivism is necessary in war, but why war is so favorable to collectivism. In wartime the political conditions fix the “imperatives”’ which Mr. Stuart Chase lays down in The Economy of Abundance: “the scrapping of outworn political boundaries [vide Belgium, Greece, and the neutrals] and of constitutional checks and balances, where the issues involved are technical [sic]; centralization of government; the overhead planning and control of economic activity.” Under the system of centralized control without constitutional checks and balances, the war spirit identifies dissent with treason, the pursuit of private happiness with slackerism and sabotage, and, on the other side, obedience with discipline, conformity with patriotism. Thus at one stroke war extinguishes the difficulties of planning, cutting out from under the individual any moral ground as well as any lawful ground on which he might resist the execution of the official plan. The dissenter, the conscientious objector, the indifferent and the discontented, have no rights which anyone is bound to respect, and if they are dealt with leniently it is because the war administrators have scruples or regard the opposition as negligible. In the degree of their interference with the prosecution of the war, they have no more standing against military authority than has been enjoyed by the victims of Lenin, Trotsky, Stalin, Mussolini, and Hitler. The polite name for all this has been found by Mr. Soule, who puts first among “the lessons from our war planning” and names as one of the four basic conditions, if we are to plan successfully for peace, that “we must have an objective which can arouse general loyalty and enthusiasm.”
War easily provides such an objective, and it is incomparably suited to the creation of a collective sentiment in which all lesser purposes are submerged. For the sentiment is specific and intelligible to everyone. The cry that the enemy is at the gates, even the cry that beyond the deserts and mountains of Africa lies the promised land, can be understood by all. This is a very different thing from blowing the bugles and summoning the people to the abundant life to be achieved by “capacity operation of its plant, on the balanced load principle.”’ Anyone can imagine an enemy and hate him; but the concept of an abundant life is merely the beginning of an interminable argument. This is the reason, based on a deep psychological necessity, why the socialist propaganda has always relied more upon an appeal to class war than upon the vision of a socialist society, why the effective leaders from Marx to Lenin have always derided as “unscientific” and “utopian”’ any detailed concern with the nature of a socialist society. Their intuition has surely been sound. For it is the war spirit that most readily imposes unanimity for collective action among masses of men. When men are at peace, they have an incorrigible tendency (if you like collectivism), a noble tendency (if you dislike it), to become individuals. For reasons of this sort, war provides an excellent climate for the administration of a planned economy….
An overhead planning and control of economic activity is feasible because the plan is calculable. It is calculable because there is a specific purpose to be achieved, the supply of a military force of known size with known requirements out of known resources, and to this concrete objective all other needs must conform. The planners know definitely what goods are needed and in what amount. There is no problem of how much can be sold. There is only the problem of how much can be produced. There is no worry about the varying tastes of voluntary consumers; the consumer is rationed. There is no such thing as a choice of occupation; labor is conscripted. Thus, though war economies are notoriously inefficient, they can be administered by the method of overhead planning and control because, theoretically at least, there are no unknown factors, and there can be no resistance; it is possible, therefore, to calculate the relation of the means to the end and execute a plan whether people like it or not….
Without such specific directives it would be impossible to plan. Yet in the popular discussion of planning this crucial point is rarely appreciated, and it is naïvely assumed that the planning boards determine the character of the plan. They can no more do that than an architect can plan a building until he is informed whether it is to be a church, a factory, a tenement, a garage, or a gambling casino. Even when he knows that, he has to be told whether the church is to be a cathedral or a mosque, whether the garage is to hold one Ford or a fleet of omnibuses. If he knows what is wanted he can plan a building. But no planning can tell him what is wanted. That decision must come from someone higher up than the planner: in a society it must come from the sovereign.
The question whether an economy can be planned for abundance, for the general welfare, for the improvement of the popular standard of life, comes down, therefore, to the question of whether concepts of this sort can be translated into orders for particular goods which are as definite as the “requisitions”’ of a general staff. An objective like “the general welfare” has to be defined as specific quantities of specific goods—so many vegetables, so much meat, this number of shoes, neckties, collar buttons, aspirin tablets, frame houses, brick houses, steel buildings. Unless this can be done there will not exist the primary schedule of requirements from which to calculate the plan. The general staff can tell the planner exactly how much food, clothing, ammunition, it needs for each soldier. But in time of peace who shall tell the planners for abundance what they must provide?
The answer given by Mr. Lewis Mumford, in Technics and Civilization, is that “a normal standard of consumption” can be defined by biologists, moralists, and men of cultured taste; that the goods necessary to support it can be “standardized, weighed, measured”; that they should be supplied to all members of the community. He calls this “basic communism.” It is not quite clear to me whether he believes that the goods listed in this normal standard are to be furnished as they are to soldiers out of a public commissariat or whether he proposes to guarantee everyone a basic money income sufficient to buy a “normal” quantity of goods. If he has in mind the providing of rations of standard goods, then, of course, he has considerable confidence in his ability to determine what is good for the people, small respect for their varied tastes, and an implied willingness to make them like what they ought to like. Conceivably this could be done. But I should suppose it could be done only under the compulsion of necessity: that is, if goods were so scarce that the choice lay between the official ration and nothing. On the other hand, if he has in mind a guaranteed minimum income which may be spent freely, then he has no way of knowing whether the consumers will have his own excellent tastes, and go to the stores demanding what he thinks they should demand. But if they do not wish to buy what he would like them to buy, then his planners are bound to find that there is a scarcity of some goods and a glut of others….
[T]he fundamental characteristic of a rising standard of life is that an increasing portion of each man’s income is spent on unessentials; it is applied, in other words, to things in which preference rather than necessity is the criterion. If all income had to be spent on the absolute necessities of life, the goods required would be few in number and their production could readily be standardized into a routine. Now it should be noted that all known examples of planned economy have flourished under conditions of scarcity. In the war economies of 1914-1918, in the collectivist régimes in Russia, Italy, and Germany, the supply of necessary goods has never been equal to the demand. Under such conditions, as during a siege or a famine, the communist principle is not only feasible but necessary. But as productivity rises above the level of necessity the variety of choice is multiplied; and as choice is multiplied the possibility of an overhead calculation of the relation between demand and supply diminishes….
By what formula could a planning authority determine which goods to provide against the purchases of thirty million families with seventy billions of free spendable income? The calculation is not even theoretically possible. For, unless the people are to be deprived of the right to dispose of their incomes voluntarily, anyone who sets out to plan American production must first forecast how many units of each commodity the people would buy, not only at varying prices for that commodity, but in all possible combinations of prices for all commodities.
Within limits, some narrow and others almost indefinitely elastic, more articles of one sort will be bought at a low price than at a high price. Let us suppose, then, that the planning authority wishes to make a five-year plan for the production of automobiles, and that by means of the familiar mathematical curves used by economists it determines that at $500 a car the people will buy ten million new cars in five years. The planners could then calculate the amount of steel, wood, glass, leather, rubber, gasoline, oil, pipe lines, pumps, filling stations, needed to manufacture and service that many additional automobiles. This would be theoretically feasible. The problem would not differ essentially from planning to supply an army; the industrial system would be planned to produce ten million automobiles. There would be a single, specific quantitative objective as the premise of the plan. But such a planned economy would be for monomaniacs.
So let us suppose that the authority has also to plan the construction of houses. The task immediately becomes more complicated. For now it is no longer possible to stop at determining how many houses the people will buy at, let us say, $3000 a piece. It is necessary also to decide how they will choose, and in what proportions, between a new car at $500 and a new house at $3000. With cheap houses available, some will prefer them to cars; others will prefer cheap cars to houses. The planners would have to predict the choice. They would then find, of course, that since houses also require steel, wood, glass, they would have to recalculate the plan drawn up when they had only automobiles in mind.
But that would not be the end of their difficulties. For there would be a party saying that housing is more important or, as Mr. Mumford would put it, more vital than joy-riding; that therefore cars should cost 20 per cent more, or $600, and houses 20 per cent less, or $2400. The planners would have to consult an oracle; they could have no objective criterion by which to determine whether freedom of movement or stability of residence was more conducive to an abundant life. But suppose they listened to Mr. Mumford, and agreed to raise the price of cars and reduce the price of houses. Everything would have to be recalculated and replanned. For now there would have to be less rubber imported, but more cement produced domestically; there would have to be less filling-station equipment and more bathroom fixtures.
In line with the decision to favor a settled as against a nomadic way of life, many other activities would have to be replanned. There would probably be more demand for radios and carpet slippers, less for movies and roadside eating places. The state would either have to provide more subways and buses to take the man of the family to work, the woman to the market, and the child to school, or have to move factories, shopping centres, and schools nearer to the home. The authority would have to calculate these shifting demands correctly in order to do away with the chaos and waste of competitive individualism. It would require some mighty arithmetic. As a matter of fact, a regiment of Einsteins could not make the calculation, because the problem is inherently incalculable. For even if we make the fantastic hypothesis that the planning authority could draw up reliable estimates of what the demand would be in all combinations of prices, for all the thousands of articles that Americans buy, there is still no way of deciding which schedule would fit the people’s conception of the most abundant life.
Out of all the possible plans of production some schedule would have to be selected arbitrarily. There is absolutely no objective and universal criterion by which to decide between better houses and more automobiles, between pork and beef, between the radio and the movies. In military planning one criterion exists: to mobilize the most powerful army that national resources will support. That criterion can be defined by the general staff as so many men with such and such equipment, and the economy can be planned accordingly. But civilian planning for a more abundant life has no definable criterion. It can have none. The necessary calculations cannot, therefore, be made, and the concept of a civilian planned economy is not merely administratively impracticable; it is not even theoretically conceivable. The conception is totally devoid of meaning, and there is, speaking literally, nothing in it.
The primary factor which makes civilian planning incalculable is the freedom of the people to spend their income. Planning is theoretically possible only if consumption is rationed. For a plan of production is a plan of consumption. If the authority is to decide what shall be produced, it has already decided what shall be consumed. In military planning that is precisely what takes place: the authorities decide what the army shall consume and what of the national product shall be left for the civilians. No economy can, therefore, be planned for civilians unless there is such scarcity that the necessities of existence can be rationed. As productivity rises above the subsistence level, free spending becomes possible. A planned production to meet a free demand is a contradiction in terms and as meaningless as a square circle.
It follows, too, that a plan of production is incompatible with voluntary labor, with freedom to choose an occupation. A plan of production is not only a plan of consumption, but a plan of how long and where the people shall work, and what they shall work at. By no possible manipulation of wage rates could the planners attract to the various jobs precisely the right number of workers. Under voluntary labor, particularly with consumption rationed and standardized, the unpleasant jobs would be avoided and the good jobs overcrowded. Therefore the inevitable and necessary complement of the rationing of consumption is the conscription of labor, either by overt act of law or by driving workers into the undesirable jobs by offering them starvation as the alternative. This is, of course, exactly what happens in a thoroughly militarized state.
The conscription of labor and the rationing of consumption are not to be regarded as transitional or as accidental devices in a planned economy. They are the very substance of it. To make a five-year plan of what a whole nation shall produce is to determine how it shall labor and what it shall receive. It can receive only what the plan provides. It can obtain what the plan provides only by doing the work which the plan calls for. It must do that work or the plan is a failure; it must accept what the plan yields in the way of goods or it must do without….
[W]ho, in a civilian society, is to decide what is to be the specific content of the abundant life? It cannot be the people deciding by referendum or through a majority of their elected representatives. For if the sovereign power to pick the plan is in the people, the power to amend it is there also at all times. A plan subject to change from month to month or even from year to year is not a plan; if the decision has been taken to make ten million cars at $500 and one million suburban houses at $3000, the people cannot change their minds a year later, scrap the machinery to make the cars, abandon the houses when they are partly built, and decide to produce instead skyscraper apartment houses and underground railroads.
There is, in short, no way by which the objectives of a planned economy can be made to depend upon popular decision. They must be imposed by an oligarchy of some sort, and that oligarchy must, if the plan is to be carried through, be without responsibility in matters of policy. Individual oligarchs might, of course, be held accountable for breaches of the law just as generals can be court-martialed. But their policy can no more be made a matter of continuous accountability to the voters than the strategic arrangements of the generals can be determined by the rank and file. The planning board or their superiors have to determine what the life and labor of the people shall be.
Not only is it impossible for the people to control the plan, but, what is more, the planners must control the people. They must be despots who tolerate no effective challenge to their authority. Therefore civilian planning is compelled to presuppose that somehow the despots who climb to power will be benevolent—that is to say, will know and desire the supreme good of their subjects. This is the implicit premise of all the books which recommend the establishment of a planned economy in a civilian society. They paint an entrancing vision of what a benevolent despotism could do. They ask—never very clearly, to be sure—that somehow the people should surrender the planning of their existence to “engineers,” “experts,” and “technologists,’”to leaders, saviors, heroes. This is the political premise of the whole collectivist philosophy: that the dictators will be patriotic or class-conscious, whichever term seems the more eulogistic to the orator. It is the premise, too, of the whole philosophy of regulation by the state, currently regarded as progressivism. Though it is disguised by the illusion that a bureaucracy accountable to a majority of voters, and susceptible to the pressure of organized minorities, is not exercising compulsion, it is evident that the more varied and comprehensive the regulation becomes, the more the state becomes a despotic power as against the individual. For the fragment of control over the government that one man exercises through his vote is in no effective sense proportionate to the authority exercised over him by the government.
Benevolent despots might indeed be found. On the other hand, they might not be. They may appear at one time; they may not appear at another. The people, unless they choose to face the machine guns on the barricades, can take no steps to see to it that benevolent, despots are selected and the malevolent cashiered. They cannot select their despots. The despots must select themselves, and, no matter whether they are good or bad, they will continue in office so long as they can suppress rebellion and escape assassination.
Thus, by a kind of tragic irony, the search for security and a rational society, if it seeks salvation through political authority, ends in the most irrational form of government imaginable—in the dictatorship of casual oligarchs, who have no hereditary title, no constitutional origin or responsibility, who cannot be replaced except by violence. The reformers who are staking their hopes on good despots, because they are so eager to plan the future, leave unplanned that on which all their hopes depend. Because a planned society must be one in which the people obey their rulers, there can be no plan to find the planners: the selection of the despots who are to make society so rational and so secure has to be left to the insecurity of irrational chance.