The Libertarian Republican Heritage

Part I: From the Old Right to the New Nixon: Downhill All the Way

by , March 04, 2013

Editorial note: The following is the first part of a speech to the Republican Liberty Caucus of California, delivered March 2, 2013. The second and final part will appear on Wednesday.

The Republican party wasn’t always the party of war, unlimited military spending, and reckless foreign entanglements. There is a long albeit largely unknown tradition of opposition to militarism in the GOP, starting with the so-called "isolationist" opposition to US intervention in World War II and continuing right up until the 1960s, when an outgoing Republican president said farewell to the nation, and I quote:

"Until the latest of our world conflicts, the United States had no armaments industry. American makers of plowshares could, with time and as required, make swords as well. But now we can no longer risk emergency improvisation of national defense; we have been compelled to create a permanent armaments industry of vast proportions. Added to this, three and a half million men and women are directly engaged in the defense establishment. We annually spend on military security more than the net income of all United State corporations.

"This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence – economic, political, even spiritual – is felt in every city, every state house, every office of the federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society.

"In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

"We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted only an alert and knowledgeable citizenry can compel the proper meshing of huge industrial and military machinery of defense with our peaceful methods and goals, so that security and liberty may prosper together."

That President was Dwight David Eisenhower: hardly a Noam Chomsky type, a man who – at the time, 1960 – represented the mainstream of the Republican party. Today he would be denounced as a "leftist" by the John McCain-Lindsey Graham axis of unlimited defense spending, a "radical" who has no place in the GOP.

When he took office, Eisenhower took a meat-cleaver to the military budget, which had been bloated under Harry Truman, slashing the Truman proposal for the upcoming year by 30 percent. Adjusted for inflation, it was cut from $515 billion in 1953 to $370 billion by 1956.

The Democrats went on the attack, claiming that the GOP’s "Neanderthal" fiscal conservatism was "endangering national security." The general who hated war reduced the land and naval forces, and relied on nuclear deterrence to ward off the Soviet Union. It was all part of his so-called "New Look" military strategy, which was based on the necessity of defending the United States, in direct opposition to the Truman Doctrine which emphasized the ability of the US to project massive military power overseas.

The Trumanite interventionists believed that they had to ensure the ability of the US to fight two overseas wars simultaneously: Eisenhower rejected that as nonsensical, instead reducing real military spending by one-third, shrinking the Army by 40 percent, making significant cuts in naval forces, and demobilizing a million soldiers. For the last time in modern times, Eisenhower actually succeeded in reducing the total federal spending, which declined from 20.4 percent of GDP to 18.4 percent. Since then, no president has ever succeeded in pulling that off. Under the Kennedy and Johnson administrations, total federal spending rose by a whopping 50 percent, while under Reagan, the supposed conservative, it grew by 22 percent.

Yet Eisenhower was no anti-interventionist: although the first thing he did when he took office was to end the by then unpopular Korean war, under his administration the US became entangled in the web of "collective security," especially in Europe where the Soviets were supposedly poised to march on Paris. Other members of his party were critical of the new NATO alliance, among them the leader of the GOP in the Senate, Robert A. Taft, who represented Ohio. Indeed, when it looked like Taft was going to be the party’s nominee in 1952, the entire Eastern Establishment went on the offense and stole the nomination by contesting Taft’s delegates, thus ensuring the victory of the safely "internationalist" Eisenhower. They had done the same thing in 1940 and 1948, when Taft started out as the favorite and yet lost to the party’s Eastern internationalist wing, first to Wilkie, then to Dewey.

The conservative wing of the Republican party had been at the center of opposition to US entry into World War II. They had rightly feared two things: 1) that the war would rescue the Soviet Union from certain destruction, and 2) that we would defeat national socialism on the battlefield, only to find it had triumphed on the home front. In his public pronouncements, President Franklin Roosevelt bowed to popular opinion, which was overwhelmingly opposed to entering the European war, while slowly but surely – and covertly – involving us on the side of Great Britain. He was opposed in this by a coalition of conservative Republicans and Midwestern progressives, such as the Democratic Senator Burton K. Wheeler, who resisted the New Deal as a quasi-totalitarian betrayal of American ideals, and who also saw foreign intervention as a way for the New Dealers to further centralize power in Washington and cement their own dominance of the political landscape.

The major anti-war organization of that time, the America First Committee, was founded and funded by conservative Republican Midwestern businessmen, such as Gen. Robert E. Woods, the head of Sears & Roebuck, and Henry Regnery, a Chicago businessman who would later go on to establish the first large scale conservative book publisher. Such anti-New Deal stalwarts as John T. Flynn, a former liberal who would later go on to become one of the chief defenders of Sen. Joe McCarthy, and a major conservative writer, were among its principal leaders. At its height, the Committee had 800,000 dues-paying members, and the sympathies of 75 percent of the American people.

In those days, it was the left that constituted the core of the War Party. While ostensibly opposed to US intervention in principle, the far-left – that is, the Communist Party and its fellow travelers – turned on a dime the moment Germany invaded the Soviet Union. From that point on, it was the Communists who were in the vanguard of the War Party: it was they who led the vicious attack the America Firsters as pro-Nazi and demanded they be prosecuted for treason. The attack on the antiwar right-wingers was led by the President himself, who questioned the patriotism of the so-called isolationists and openly compared them to the Civil War era "copperheads."

When war finally came, the America First Committee dissolved, and the Roosevelt administration fastened its talons on the American economy – and the political life of the nation – just as the war skeptics and anti-New Dealers had predicted. Rationing was imposed: the economy was militarized, and a wave of political repression swept the nation from coast to coast, as thousands of Japanese-Americans were put in concentration camps and political dissenters from both sides of the political spectrum were charged with "sedition." The federal government spent 43 percent of the gross domestic product in the years 1943-45. As David Stockman puts it in his forthcoming book, The Great Deformation: "Under the exigencies of total war, all of the tools of modern fiscal expansion and monetary manipulation were discovered, tested, amended, and perfected."

Yet the libertarians of that dark time managed to survive, albeit underground, and without much of a public voice. When the war ended, they reemerged onto a political landscape that had been transformed by the war. A country that had once been the freest on earth was now only half-free, with the rudiments of the welfare state established and thriving. Worse, the outlines of the American empire began to take shape: far from freeing the US from the alleged necessity of meddling in the affairs of other nations, our victory only presaged a deeper involvement.

In 1946, Winston Churchill declared that an "iron curtain" had descended over Europe, Harry Truman proclaimed his "Truman Doctrine," and the cold war was on. It remained for the leader of the libertarian Republican remnant, Robert Taft, to answer the British Prime Minister in a speech delivered at Kenyon College entitled "Equal Justice and the Law." In it, Taft disputed Churchill’s contention that the English-speaking peoples had preserved the heritage of classical liberalism, which now had to be defended against a ruthless Communist menace. Wartime had given rise to a new kind of philosophy of government in the West, which looked to state power as the source of vital energy pushing us forward. And he feared that we were repeating the same errors that had led the world into war in the first place: a harsh peace, war crimes trials, the extended occupation of Germany, and the dropping of the atomic bomb on Hiroshima and Nagasaki – all these factors, he said, were moving us toward another age of barbarism. We were, said Taft, following in the footsteps of the British Empire in anointing ourselves the policeman of the world.

Taft opposed the creation of the North Atlantic Treaty Organization, and the dangerous idea of "collective security," which would create new tripwires and new dangers that would "obligate us to go to war" if any of the twelve NATO countries was attacked. This would invest the President with unprecedented power: he could invoke the NATO treaty, and take us to war, without a vote of Congress. When Truman did exactly that, sending troops to Korea without bothering to consult the elected representatives of the people, Taft argued that "If the President can intervene in Korea without Congressional approval, he can go to war in Malaya or Indonesia or Iran or South America." Taft’s prediction, as we know, came all too true.

Eisenhower, Taft’s great rival, was not a libertarian, of course: he was from the party’s internationalist wing, which saw the arrival of the US on the world stage as a necessary and even inevitable evolution. Someone had to take Great Britain’s place as the policeman of the world order, and yet if you look at what Eisenhower actually did during his two terms in office, you have to marvel at how the definition of a "mainstream" Republican has changed since that time, especially when it comes to military spending.

As David Stockman points out:

"Eisenhower’s campaign for fiscal discipline started with the bloated war budget he inherited from Truman. In a notable episode of hitting the ground running, Ike traveled to Korea immediately after the election in November 1952 and set in motion a negotiations process that made an armistice on the Korean peninsula a foregone conclusion.

"Given the expected cutback of war expense, the White House team … was shocked by Truman’s defense budget for the upcoming fiscal year. It was still 6 percent higher than the current year’s. With Eisenhower’s blessing, therefore, the inherited Truman budget request was slashed by nearly 30 percent, with more cuts targeted for future years."

Although Ike never did manage to get the military budget down to the level he wanted, the Democrats took the opportunity to attack the GOP for "allowing their Neanderthal fiscal views to endanger the national security." Those Neanderthal fiscal views consisted of the idea that balanced budgets were a good thing, borrowing money we didn’t have was a bad thing, and that wars – if they had to be fought – should be paid for, not put on Uncle Sam’s credit card.

Yet Eisenhower prevailed, in large part: measured in constant dollars, he succeeded in cutting military appropriations from a high water mark of $515 billion in 1953 to $370 billion in by fiscal year 1956.

It was Eisenhower who introduced what he called the "New Look": an increased reliance on nuclear deterrence of the Soviet Union and a radical reduction of ground and naval forces, amounting to a shrinkage of the armed forces from 3.5 million in the first months of 1953 to 2.5 million by the end of 1960. In short, wars involving massive invasions and occupation were rendered moot: the focus was on the defense of the United States.

Once the economic distortions and disruptions caused by the Korean war had been wrung out of the system, the economy revived under the good old time religion of fiscal prudence: as Stockman points out:

"Between 1954 and 1963, real GDP growth averaged 3.4 percent while annual CPI inflation remained subdued at 1.4 percent. There was no subsequent nine-year period that had a better combined performance of these core variables. And none which left the overall economic and financial system so healthy and stable."

Eisenhower was swimming against the tide. World War II had unleashed the State as the prime mover of the economy, and turned the Federal Reserve into what Stockman characterizes as "a powerful, proactive manager and manipulator of the nation’s entire commercial banking system." In short, the Fed became an instrument of economic and social engineering. Sixty years later, in the crash of 2008, those chickens would come home to roost.

In the meantime, however, Eisenhower actually succeeded where ostensibly "conservative" Presidents who came after him failed – he managed to make a really significant cut in federal spending, which went from 20.4 percent of GDP to 18.4 percent in eight years. In terms of constant dollars, the budget was reduced from $680 billion to $650 billion. Such a happy occasion was never to be repeated – not by Reagan, not by Nixon, not by either of the Bushes, and certainly not by any Democrat.

This remarkable achievement was due in large part to his taming of the warfare state: his cuts in the defense budget put a stop to the log-rolling that jacked up spending as liberals and conservatives traded off spending projects in their favorite areas. This is the key to reining in the federal debt today and breaking the partisan logjam in Washington, which is playing to the Republicans’ disadvantage. It doesn’t help when Bill Kristol and the neocons in Congress – the so-called "Three Amigos," Senators McCain, Graham, and Ayotte – hold up the prospect of a cut in defense spending as a disaster unparalleled in American history. Those three amigos are just as much the cause of our financial woes as the staunchest defenders of the welfare state on the other side of the aisle, if not more so. If "amigos" means friends – and although I failed Spanish in high school, I’m reasonably sure I stand on firm grounds here – then these three are no friends of fiscal sanity and limited government.

Eight years of relative fiscal sanity under the Eisenhower presidency ushered in the greatest economic expansion in modern times: unlike the fake prosperity of the 1920s, created by artificial bank credit expansion, the 1950s was the era of fiscal orthodoxy, of the old-time Republican religion of balanced budgets and monetary prudence. That’s why we remember that as a kind of Golden Age, an era of financial and social stability that, unfortunately, was never to be repeated.

That stability was lost because the Republican party lost its old-time fiscal religion of sound money – that is, money tied to the value of gold – and balanced budgets. In competition with the Kennedy Democrats, who campaigned in 1960 against the supposedly "plodding" growth of the Eisenhower administration, the Republicans adopted their own version of the "new economics," the Keynesian pump-primed fake "prosperity" that would hollow out the heart of American productivity and lead to grave consequences down the line.

This betrayal of fiscal orthodoxy led to the ruinous Nixon years, which really marked the total destruction of principled fiscal sense and paved the way for our present crisis in more ways than I have time to go into here. Suffice to say that Nixon’s decoupling of our currency from gold unleashed the demons of monetary madness, while his wage and price controls ushered in an era of Republican statism that would rival anything the Democrats had so far come up with. The basic elements of the modern welfare state – federal subsidies for housing, affirmative action, the Environmental Protection Agency, and a host of other statist measures – were enacted during his administration. Worst of all was the Vietnam war, which ratcheted up military spending and sent the economy – and the entire social structure – into a tailspin.

Economic and social disaster is often the harbinger of important political changes, however, and not always for the worst. The Nixon years saw the birth of the organized libertarian movement, the creation of the Libertarian Party, and the split with the conservative movement. The cradle of the movement was in Young Americans for Freedom, the conservative youth group organized by Bill Buckley, which saw the strains of the Vietnam era introduced into its internal politics. A huge battle broke out between the Buckleyite leadership and the burgeoning libertarian faction, which culminated in a split at the 1969 YAF convention, in St. Louis, Missouri. The libertarians walked out over the issues of the draft and Nixonian economics, and formed their own independent organization. The modern libertarian movement was born.

I will leave it to others to chronicle the history of the libertarian movement from that point on: Brian Doherty’s excellent and exhaustive book, Radicals for Capitalism, does that quite well. And my own two books, Reclaiming the American Rightand my biography of Murray Rothbard, both cover some of the same territory. So you’ll pardon me if we fast-forward the tape and take up our timeline again sometime in the mid-1980s.

NOTES IN THE MARGIN

I’m on Twitter quite a bit these days, and having a lot of fun: indeed, I just passed 3,000 "followers"! Help me cross the 4000 mark by following me here.

I’ve also written a couple of books, which you might want to peruse. Here is the link for buying the second edition of my 1993 book, Reclaiming the American Right: The Lost Legacy of the Conservative Movement, with an Introduction by Prof. George W. Carey, a Forward by Patrick J. Buchanan, and critical essays by Scott Richert and David Gordon (ISI Books, 2008).

You can buy my biography of the great libertarian thinker, An Enemy of the State: The Life of Murray N. Rothbard (Prometheus Books, 2000), here.

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