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IN his most ambitious effort, "The Good Society," Walter Lippmann is most disappointing. He condemns us as an apostate generation for consenting to the "overhead direction" of our economic activities and then, in revealing the true program of liberalism, he travels far on the road he has called apostate. Mr. Lippman writes lucidly and eloquently, but he fails to provide a worthwhile criticism of the New Deal's "gradual collectivism."
He is at his best at the beginning of "The Good Society," where he attacks the totalitarian states as a throwback to the coercion of the Ancion Regime. Mr. Lippman compares the limited abilities of man with the complexities of modern society and asks how the planners can possibly be expected to have a sufficient grasp of the situation to plan wisely. . "The whole social process is beyond any man's comprehension . . . Men cannot direct the social process. They can only intervene here and there."
Mr. Lippmann attacks the Fascist, Communist and Democratic planners with great fervor and much logis. But when he attacks "gradual collectivism . . . the philosophy of special privileges for all," the author founders badly. He claims that gradual collectivism advances by concession to pressure groups, and thus he groups the Republicans who gave special privileges to corporations with the New Dealers who give bounties to farmers. Mr. Lippmann finds that these favors cannot be wisely dispensed by a democracy. "The gradual collectivist. . . has to believe that an elected parliament will distribute its privileges according to the push and pull of organized interests. Is this conceivable in a democracy?" This conception of democracy's limitations is quite different from that of the founding father who said: "The regulation of these various and interfering interests (landed, mercantile, monied, etc.) forms the principal task of modern legislation and involves the spirit of party and faction in the necessary and ordinary operations of the government."
The policy of pressure groups is vicious, says Mr. Lippmann, because the production of wealth is diminished. He agrees with the managers of great corporations who are "fully aware that the production of wealth is restricted by labor laws which enable their employees to do less work for more pay." Mr. Lippmann does not suggest that more purchasing power in the hands of workers enables managers to produce more and so facilitates the production of wealth. At this point Mr. Lippmann does not seem to believe in either the redistribution of the wealth or organization of workers. But 100 pages further on when he writes the agenda of a constructive liberalism, he finds that the liberal state "must by its own principles encourage and protect cooperative organization of producers, such as farmers and working men, who must sell at once and at any price offered, and in ignorance of the true supply and demand, if they bargain individually."
But Mr. Lippmann would say that there is a great difference between the conduct of labor unions seeking more pay for less work under the New Deal, and the labor organizations which he plans for his liberal state. His labor organization, far from being a selfish, self-seeking pressure group, would merely use its power to ensure a nice balance between the bargaining power of capital and labor. Just who is to tell when this perfect equilibrium is reached and who is to keep labor within such bounds?
Mr. Lippmann has a ready answer. It is his great discovery, his golden nugget. Lacking it he never would have had reason to write "The Good Society." The criterion for the activities of the laborer, the farmer, the corporation head, and the public official is to be the perfectly free market, which classical economists have posed as the corollary of the division of labor brought about by the industrial revolution.
"All true progressivism must conform to the necessities and implications of the division of labor." The economy can only be regulated in free markets by means of prices, continues Mr. Lippmann. And yet the collectivists of the right and left are trying a "counter-revolution" against the market. Why? Because, answers Mr. Lippmann, existing markets are ruthless regulators. This was insufficiently appreciated by the nineteenth century economists, but not by the author of "The Good Society." He realizes that the profits of business are not merely earnings due to ability and foresight; he realizes that laborers cannot travel from place to place to seek new opportunities. He recognizes the "paradoxes of poverty and plenty, democracy and insecurity, interdependence and imperialism, legal equality and social inequality, enlightenment and degradation."
And he shows us how to change all this The way to eliminate these unfortunate paradoxes is not by authoritative planning that seeks to master the market, not by the overhead control of the New Deal's gradual collectivism but through liberalism that "seeks to perfect and civilize the market." Mr. Lippmann proposes to civilize the market through "social control by the common law."
The only way to determine whether "social control by the common law" is a new liberal banner or just the old jolly roger of the collectivists in disguise is to scan Mr. Lippmann's agenda for liberalism. His field of reform covers eugenics, education, conservation, the mobility of capital, big business and business corporations, money and credit, inflation and deflation, improvement of markets, necessitous bargains, monopolies, social insurance, taxation and finally the maldistribution of income.
Thus Mr. Lippmann clearly plans no unrestrained freedom for the economy. But instead of bludgeoning it through overhead control, he lulls its ogres into submission by applying the soporific "social control by the common law."
New let us analyze exactly what Mr. Lippmann proposes to do, once he has applied social control instead of overhead direction. He declares that there must be mobility of capital. But if capital is to be mobile, it must be secure. "Thus there must be required stringent liability on the part of promoters for the worth and good faith of the securities they issue . . ." And further capital must not become "entrenched in certain favored corporate structures." Therefore "the limited liability corporation must be deprived of the right to retain profits and invest them, . . . not according to the judgment of the market but at the discretion of the managers." Mr. Lippmann does not say whether he favors the S.E.C. or the undistributed profits tax.
To go on--the architect of the "Good Society" decides that the holding company . . . "is a fartuitous evolution from the condition of the law and marks a vital point at which the law was maladjusted to the economy . . . Thus the renovation of corporate law so as to prevent business from becoming any bigger than it can become in the test of the market is a necessity item on the agenda of liberalism." Mr. Lippmann does not say whether he favors the New Real's Holding Company Bill.
He goes on to declare for "monetary management," for conservation of the land and natural resources, for the cooperative organization of producers "such as farmers and workingmen." He finds that "there is no reason why some part of the wealth produced should not be taken by taxation and used to insure and indemnify human beings against their personal losses in industry." Mr. Lippmann does not say whether he regards the Social Security Board as an agency of overhead control or a method of social control by the common law. He indorses public works, the development of water power, insurance against industrial risk--all in the name of social control.
This is Mr. Lippmann's liberal alternative to the New Deal's gradual collectivism. How much of the New Deal does Lippmann's liberalism invalidate? It does not invalidate the S.E.C., the undistributed profits tax, the "death sentence" for Holding Companies, the C.C.C., the Social Security Board, P.W.A. or T.V.A. It adds to the powers of the Federal Reserve Board and the Federal Trade Commission.
Although Mr. Lippmann never realizes that he has written a powerful endorsement of the New Deal, he does recognize that his agenda requires the establishment of commissions with power. How to explain these cases where the liberal agenda appears to be at odds with the liberal method of control through a common law interpreted by judges?
Here is the final rampart on which Mr. Lippmann must defeat his distention between the New Deal overhead control and liberalism's social control--i.e. commissions at this point. He answers that the officials who inspect, prosecute, and administer must be regarded as exercising merely certain rights and duties instead of possessing the attributes of majesty. When one remembers that the New Deal's Commissions act only under the mandate of Congressional statutes and the threat of judicial review, Mr. Lippmann's collapse seems miserably final and complete.
If inconsistency made Senator Ashurst stand out in politics, by the same standard Walter Lippmann is noteworthy among pundits. He attacks the whole conception of pressure groups and then writes a program that inevitably brings them into being; he stresses the limitation of man and then suggests projects whose administration would tax the wisest of men; he attacks the judiciary's conception of property rights and then tries to repose his social control largely in the hands of the same judiciary; he attacks the Providential State and then builds a liberal state that provides innumerable services for its citizens; he rages at the New Deal's overhead direction and then reenacts its program in the name of social control. In trying to lay bare the framework of the Good Society Mr. Lippmann only reveals the confusions of his own mind
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