Andrew Leonard: The paleolibertarian war on Herbert Hoover

The paleolibertarians have never been Herbert Hoover fans. Listen to Murray Rothbard, the godfather of paleolibertarianism -- an economist who hated not only the New Deal and desperately yearned for a return to the gold standard, but also wanted to abolish the Federal Reserve, the Social Security Act, the income tax, the Internal Revenue Service, and even the Federal Judiciary Act of 1789. From"The Myth of Herbert Hoover:"

In all previous depressions, the Federal government had pursued a laissez faire attitude, keeping hands off and letting market forces bring about recovery quickly; and the recovery always came, no matter how steep the depression at the start. But Hoover had long determined that he was not going to pursue such a"reactionary, Neanderthal" course....

...In pushing through his program, Herbert Hoover created virtually all the lineaments of the New Deal; the New Deal was in fact Herbert Hoover's creation, and historians, now removed from the partisan squabbles of the New Deal period, are increasingly coming to recognize this fact. Massive public works programs, government relief, inflation and cheap money on a grand scale, government deficits, higher taxes, government loans to shaky businesses, farm price supports, propping up of wage rates, monopolizing the oil industry and restricting production, war against the stock market and stock speculation -- all these crucial facets of the New Deal program were launched con brio by President Hoover.

I found my way to Rothbard after a reader alerted me to a post at the Austrian Economists blog by Steven Horwitz, an economist at St. Lawrence University in Canton, New York. Professor Horwitz takes issue with my scoffing at economist Lee Ohanian's thesis that Hoover's"pro-labor stance" caused the Great Depression.

Not surprisingly, he's taking a beating in the left-oriented press (see an example from Salon here) from those who simply cannot imagine that Hoover was anything but Rush Limbaugh's spiritual ancestor. The fact that Hoover might have been a significant interventionist, many of whose policies foreshadowed the New Deal, is one their brains simply cannot accept, no matter how much evidence there is. Of course, the fact that Rothbard and Vedder/Gallaway have hammered this point before is not discussed at all.

I will consider in more depth the nature of Hoover's interventionism in just a moment, but let me make two preliminary points. First of all, I in no way consider Herbert Hoover to be Rush Limbaugh's spiritual ancestor. I am not as much of an expert in the Great Depression as I should be, but what I do know of Hoover suggests that he was a generally decent and honorable person who thought deeply about the issues of his time. He had principles, and tried to stand by them. Rush Limbaugh does not fit into those same categories... ... A biography of Hoover available at the University of Virginia's Miller Center for Public Affairs also paints quite a different picture than does Rothbard.

Even as the crisis deepened in 1931, Hoover held fast to his course. He reiterated that the nation's economic woes were largely the result of depressed world economic conditions. He also made clear that he opposed federal intervention in the economy or the construction of a welfare state. Instead, Hoover maintained that voluntarism and individual effort would solve the country's economic woes.

And yet, in the final year of his presidency, Hoover did bow to the inevitable.

In the summer of 1932, he signed the Emergency Relief Construction Act, which provided $2 billion for public works projects and $300 million for direct relief programs run by state governments. While the bill only appropriated a pittance for direct relief and placed many restrictions on how the $300 million could be used, its endorsement by Hoover testified, at least partially, to the failure of voluntarism and private relief. Hoover, however, saw the act as a temporary measure to provide emergency relief; he remained resolutely opposed to large-scale and permanent government expenditures on relief and welfare.

To Rothbard, the Emergency Relief Construction Act was a cornerstone of the New Deal, making Hoover no different than Roosevelt. What I wonder, however, is whether any politician, of any philosophical persuasion would have or could have acted differently in the summer of 1932? A quarter of the nation's working population was unemployed! Hoover delayed taking effective action until it was too late to save his own presidency. It's like the old economist joke goes -- in a recession, everyone becomes a Keynesian.

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