When and Why Libertarianism Was Created
Modern Libertarianism arose in America in response to President Franklin D. Roosevelt’s New Deal politics and programs of the 1930s and 1940s, because Roosevelt was hated by very rich Republicans who called Roosevelt a “traitor to his class.” Some even accused him of be a “socialist,” because that is a tactic they’ve been using against progressives since 1917.
The first critics of Roosevelt to call themselves “Libertarians” were Albert Jay Nock and H. L. Mencken, who believed strongly in very lax, Laissez Faire government with very limited power, and they opposed President Roosevelt’s New Deal policies because they held banks and corporation accountable and regulated them properly.
The next influential figure to oppose Roosevelt’s New Deal and tout Libertarian ideology was Ayn Rand, an author born in 1905 in Russia. Her wealthy family was financially ruined after the Russian Bolshevik Revolution of 1917, which ushered in Soviet-style Communism. She grew up hating Russian Communism, and she moved to America. Then, when the wealthiest few and the unregulated economic system they had created became so corrupt that it caused an economic collapse in 1929 followed by the Great Depression, Rand simply misunderstood the solutions provided by President Franklin D. Roosevelt’s New Deal, and therefore suspected and feared it.
Ayn Rand’s assumptions and suspicions were a result of her experience in Russia. Consequently she just assumed and feared that Roosevelt’s solutions were the same as the Soviet Socialists. She feared the New Deal would create dictatorship and rule by an elite, but she ignored the fact that it was rule by a wealthy elite that had cause the economic collapse of 1929, and she failed to recognize the value in Roosevelt’s needed reforms, regulations, safeguards and protections.
Furthermore, since Rand simply hated government control because she had seen what Soviet-style government had done in Russia, especially under Stalin, she supported Laissez Faire government that left capitalism unregulated. She believed it was the only social political economic system that "protected individual rights" and ensured “free enterprise.”
Even though history has proven many times that is not true – as is obvious just considering the fact that the economic collapses of 1929 and 2008 were similar and were both preceded by lengthy periods of Republican Laissez Faire government that left banks, corporations, financial institutions and industries largely unregulated and provided them with free license to operate as they chose, with little or no government oversight, and little or no taxation.
Clearly, those and other instances have always shown that banks and corporations, when left to their own devices, are usually tempted by greed, become corrupt, and exploit and take advantage of people any and every way they can. In fact, that has been the case increasingly since Reaganism infected the country.
They of course like to think — and want us to think — that they are ethical and trustworthy, and that because they are successful in business and have acquired great wealth, they are entitled to be in control of the country in all they ways that have been made available to them.
However, the fact is that power corrupts, and absolute power corrupts absolutely. And it is clear that corruption is rampant in America’s government, banks, corporations, and industries, because the culture in America’s giant multi-national banks and corporations has grown more and more corrupt during the last 30 years. That’s why they think they are entitled to rule, and are obviously oblivious to the harm and hardship they have caused.
In spite of that fact, many Libertarians and Republicans still consider Ayn Rand’s book, Atlas Shrugged, a prophetic work. But Americans who have been told that Ayn Rand was correct should understand that even though she may have been well-meaning and had some good insights, the reality and the historical record has shown and still shows that she was very mistaken about some very crucial issues.
In the 1980s, of course, most Americans knew nothing about that, and by then they had forgotten or did not know what had made America and its middle class so great. Most Americans had forgotten or did not know that what saved America and made it great was the New Deal of President Franklin D. Roosevelt, which established proper and needed regulations, wage and price controls, and safeguards for the people.
Ronald Reagan, the Libertarians, and the Republican Neo-Conservatives took advantage of that, and Reagan revived that Randian ideology, touting Laissez Faire government, “free enterprise and free markets” and claiming that “big government” was antithetical to freedom.
The American people bought it and swallowed it, hook, line and sinker – and many Americans still believe in Reaganism. But, unfortunately, all that was propaganda and rhetoric designed to make the American people forget or ignore the lessons of history and forget or ignore how and why Laissez Faire government had almost brought about the ruination of America before Roosevelt saved it in the 1930s and ‘40s. Instead, Reagan wanted Americans to believe it was the cure and the “right” way.
However, the proof is “in the pudding,” and the widespread general prosperity in the 1950s was very evident and it was all due to the value and effectiveness of Roosevelt’s New Deal policies and programs.
Due to the success of Roosevelt's New Deal, early Libertarianism went nowhere in the 1930s and 1940s, because the vast majority of the American people loved President Roosevelt for what he had done and was doing. He had reined in the banks, financial institutions and corporations whose greed and corruption had collapsed the economy and caused the Great Depression. He not only put needed regulations and programs in place. He put millions of poor Americans to work, enabled America to win World War II, and ultimately enabled the middle class to grow large and great.
Unfortunately, by the 1950s, the John Birch Society and Libertarianism produced McCarthyism. And as has been mentioned, McCarthyism was a sneaky and deceptive way to attack Roosevelt’s New Deal and sling mud at progressives by accusing them of being socialists or communists.
That second “Red Scare” tactic was much like the tactics used by “Tea Party” members against Obama and progressives recently. In the 1950s it was taken seriously by the Congress in The House Un-American Activities Committee, driven by Republican Senators Joseph McCarthy and Richard Nixon. And, at the same time, Screen Actor’s Guild President Ronald Reagan was accusing progressives in Hollywood of being communists. (And one of those accused by Reagan and the Committee was Frank Capra, the Director of the great movie, It’s a Wonderful Life, starring Jimmy Stewart.)
Unfortunately, McCarthyism and the “Red Scare” tactic worked. The tide and the political pendulum began to swing to the Right, despite the election of President John F. Kennedy. But Kennedy did help significantly before he was assassinated. He recognized many of the problems and saw that young progressives were expressing some very valid critiques of the political economic system, and he even tried to rein in the U.S. Military Industrial Complex, as preceding Republican President Eisenhower had advised. In fact, President Kennedy went against the military brass at the Pentagon and planned to pull all American military advisers out of Vietnam by 1965 and put an end to U.S. involvement there. But he was assassinated on November 22, 1963, and it is not difficult to see why.
Even though President Kennedy had faced down the Russian Soviets in the Cuban Missile Crisis, right-wing extremists in America believed that his domestic agenda was too favorable toward organized labor, African-Americans, women, and other groups that were considered as inferior by certain white males who held much of the wealth and power. They didn’t like “bleeding heart liberals,” who they also labeled as socialists or communists.
It wasn’t much later that Robert F. Kennedy and Martin Luther King, Jr. were also assassinated for the same reasons, and by then progressives were devastated. The Democratic Party became deeply divided and split between progressive peace advocates like Eugene McCarthy and conservatives like Hubert Humphrey – which enabled Republican Richard Nixon to become president in 1969.
Nixon of course proved himself a crook, and the following two presidents, Gerald Ford and Jimmy Carter, were not strong even though both were good, reasonable men. And because America was actually feeling stunned, confused, and still very divided by all the issues that had been fought over during the 1960s, in a way it opened the door finally to Ronald Reagan, who had been trying to become president since 1976.
However, Reagan did not step through the door honestly. In fact, as is explained in the article on Reagan, he made a secret deal with Iran during his campaign against Jimmy Carter, who had been unable to free American hostages held by Iran. That was causing Carter’s popularity to dwindle. So Reagan’s deal was for Iran to free the hostages only after Reagan’s victory (which would be assured if Carter couldn’t win freedom for the hostages), and in return Iran would receive arms. (That’s the Iran-Contra Scandal was about when it became public during Reagan’s reign.)
Thus Reaganism was established in America, which was compatible Libertarianism. For as defined by the Libertarian think-tank, The Cato Institute (which was founded by Billionaire Charles Koch), Libertarianism lauds not only what they claim is “freedom and liberty.” They tout something they call "the virtue of production," a term designed to enhance the status of those who interests they serve — banks, financial institutions and corporations.
The problem is that they fail to understand what production actually is. Economics defines what production is, but Libertarianism attempts to narrow it down to fit their right-wing agenda, and to dismiss or ignore those who are essential to the means of production.
In other words, Libertarians want us to believe that “the virtue of production” is demonstrated mainly by “the producers of wealth.” But the fact is that these days nearly 50 percent of corporate profits come from the banking and financial sector and are “produced” merely by the manipulation of money and by making money with money.
That does not really fit the definition of "production." Furthermore, it is difficult to see its "virtue" when that kind of “creation of wealth” does not necessarily lead to the creation of jobs, nor to economic growth. It mainly makes the richest few much richer. By manipulating laws, they’ve managed to manipulate the power of money to serve their own self-interests.
The Libertarian idea of economic production fails to see, or ignores the fact, that economic production is actually the result of many things and many factors -- especially the labor of employees and workers, each of which should be recognized and rewarded fairly, and each of which is a crucial part of the means of production. But instead, Libertarianism and Reaganism devalues workers and employees and belittles their importance to the economy.
In spite of the facts of the matter, Libertarians and other Republican “free-market” advocates who serve corporate interests have refused to see the value of encouraging and rewarding workers as a crucial part of a free market economy. Instead they have treated employees and workers worse and worse, especially during the last three decades since Reaganism took hold. In fact, since the early 1980s they have striven to destroy or denigrate organized labor and discourage and even deny collective bargaining and negotiations between labor and management.
That kind of thinking and ideology is all part of the Reaganite “Gospel of Prosperity,” which touts the well known saying that “God helps those who help themselves.” But the truth is that Reaganism turned Christianity up-side-down by claiming that the rich are blessed by God and the poor deserve their lot because they are just lazy and, as Ronald Reagan claimed, “are not self-reliant.”
That part of Reaganism is still touted by Libertarians, and by many other Republicans on the “Religious Right.” And even these days The Cato Institute still says, "Modern libertarians defend the right of productive people to keep what they earn, against a new class of politicians and bureaucrats who would seize their earnings to transfer them to non-producers."
That again reveals a misleading concept of who the producers really are. And that kind of thinking is common among Libertarians, Republicans and the New Right or Neo-Conservative Reaganites who have been pushing these ideas for a long time, even since the 1950s when the Koch brothers were influenced by their father and by the John Birch Society. And it was shortly after that when Ronald Reagan became indoctrinated by anti-union and corporate philosophy and ideology by top executives at General Electric Corporation.
That is why during the last presidential campaign Republican Mitt Romney criticized “non-producers” and labeled certain people as an “entitlement class” – which meant people receiving unemployment insurance payments and other federal insurance payments like Social Security, for which we all pay premiums our entire working lives.
That is the kind of distorted thinking many people have been misled by. And that is really amazing when you think about it. After all, there is an entitlement class, but it is the wealthiest ten percent of the population who rake in half of the total income of the nation every year. And more specifically, it is the very wealthiest few who hold 95 percent of the nation’s wealth. And it is that entitlement class that apparently feels that their wealth entitles them to rule and make the rules.
And some of them are sticking to their guns and sticking to their story, still thumping their chest, waving the flag and thumping their bible, as Reagan did, still thinking that they can perpetuate Reaganism even though it has proven disastrous to the nation and world.