Edited and written by David Gordon, senior fellow of the Mises Institute and author of four books and thousands of essays.

Warfare vs. American Liberty

Winter 1995

FORGOTTEN LESSONS: SELECTED ESSAYS OF JOHN T. FLYNN
Edited by Gregory P. Pavlik
Foundation for Economic Education, 1996, vii + 199 pp.

John T. Flynn is best known today as a once-liberal columnist for the New Republic who became a bitter enemy of Franklin Roosevelt and a stalwart of the Old Right. The present collection of brilliant essays, ably edited and introduced by Gregory Pavlik of the Foundation for Economic Education, makes clear that Flynn has been much underrated, even by most of his supporters. He was a comparative historian of major importance, who trenchantly analyzed the economic factors behind militarism.

As Flynn saw matters, governments often face a problem owing to the vagaries of the business cycle. Confronted with the mass unemployment and poverty brought about by economic depression, what is to be done? Unless the condition of those disaccommodated can be bettered, popular discontent threatens to overwhelm the ruling authorities; and few rulers wish to cede power.

The solution that has again and again come to the minds of the rulers is to increase spending. Then, it is hoped, business may revive and all will be well. But the solution leads to new problems, more severe than the difficulties that provoked the initial bout of spending. If government spending is the order of the day, what new projects are to become the beneficiaries of the Treasury's largesse? Justifications for increased spending need constantly to be located. Meanwhile, the burden of new spending and borrowing threatens once more to topple the economy, and with it the government.

Once more the question arises: what is to be done? Flynn contended that the siren song of militarism usually proves irresistible. An arms buildup offers a never-failing outlet for government spending; and the draft of men into the armed services presents a cure for unemployment as well.

Here precisely lies Flynn's greatest contribution to comparative history. He pioneered in the study of domestic pressures that lead to war. Particularly in the brilliant "Militarism: The New Slavery for America," he casts illuminating light on the history of Europe and America in the period from 1870 to 1939.

But Flynn did not do his work in a detached spirit, sine ira et studio. Rather, he strongly rejected the militaristic "solution" to economic depression and wrote to warn his countrymen of the disasters that lay ahead should this policy be adopted. In an essay, "Can Hitler Beat American Business?," first published in 1940, he warned: "Economic dislocation, control and more control, national debt, and militarism these three great facts have now invaded our life" (p. 106).

The strength of Flynn's theory emerges more clearly when its details are examined. Flynn places supreme stress on fractional reserve banking as a cause of instability. He writes, in "The New Deal: An Old Racket," first published in 1955: "A business man wants to borrow $10,000. The bank takes his note. But it does not give him $10,000. It gives him a deposit. It writes in his deposit book a statement that he has $10,000 deposited in the bank. By this simple process, the deposits of the bank are increased by $10,000 though no additional money has actually been deposited" (p. 57; emphasis omitted).

Unlike Murray Rothbard, Flynn did not totally condemn this process. He found "nothing wrong or fraudulent about this" (p. 57). But he was alive to the grave dangers inherent in money thus created; here lay a most potent source of instability. Although he did not work out in detail the causes of the business cycle, Flynn obviously operated in the same neighborhood as the Austrian theory of Mises and Hayek, which places prime responsibility for the cycle on the overexpansion of bank credit.

Flynn's keen insight is evident at another point in his theory, already briefly mentioned: the mechanism by which the search of the government for projects on which to spend money leads to militarism. "We have created a huge national debt to relieve poverty and idleness and produce recovery. With the money we have built schools, hospitals, playgrounds, roads, parkways. But now it is no longer possible to support such expenditures. Powerful resistance has developed. . . . But the spending must go on or the present government will face a collapse. And hence this one great imperious call to national defense is invoked" (p. 105).

Thus Flynn strikes at a key weakness in Keynesian economic policy. Government spending, in Keynes's theory, ostensibly may be on anything. But when the realities of politics are taken into account, the options available prove quite limited. Keynesian policies are apt to lead not to harmless (if useless) public works boondoggles but instead to war and destruction.

At one point Flynn perhaps lays himself open to criticism. When he says that the government must continue to spend in order to avert collapse, is Flynn himself endorsing the Keynesian point that spending is necessary to end a depression? I do not think he need be taken in this way. Perhaps what he wishes to claim is that a government that refused to spend but instead allowed the market to operate unhindered would itself face collapse, owing to political exigencies. But Flynn, neither here nor to my knowledge elsewhere, states in a precise way his view of how the market economy in depression operates; and I am here uncertain of his meaning.

But this is at worst a minor blemish. Flynn is at his superb best in his comparative analysis of the military policies of Germany and Italy during the late nineteenth and early twentieth centuries. He argues that in Germany, Bismarck inaugurated government planning of the economy in order to steal the Socialists' thunder. "The great German Chancellor decided, after some experimenting, that he could give the German people all that the socialists promised without setting up socialism a tragic blunder which politicians in America who have not read history seem not to have comprehended to this day" (p. 117).

Conscription into the armed forces formed a vital part of this quasi-socialist program. It provided employment for large numbers of young men, as well as offering a huge outlet for government spending. Militarism, in brief, met perfectly domestic imperatives. And, as the burden of debt mounted, the pressure for war increased concomitantly: "War, the supreme project of obfuscated politicians trapped in impossible promises, in overpowering taxes and crushing debt" (p. 121).

In stressing the domestic imperatives in German policy that led to war in 1914, Flynn anticipated the influential work of Fritz Fischer and his school in Germany. And Flynn developed his account with much more balance than Fischer, who tends to see the European conflict of 1914 as exclusively the result of German aggression.

To Flynn, the pressures of war caused by expansion of debt were a European-wide phenomenon. (Flynn, incidentally, was a considerable authority on German history. One thinks in this connection of his outstanding comparison in The Road Ahead of the British and German systems of government in 1914 by no means to the advantage of the former. But this is another story.)

Flynn's eloquent arguments against the entry of the United States into the Second World War were rudely interrupted by the Japanese attack on Pearl Harbor. The course of the war confirmed Flynn in the essential correctness of his analysis; and at war's end he renewed the struggle.

His target now was the Cold War. Though a fervent anti- communist, he warned against a military buildup supposedly designed to contain Stalin and his successors. To impose military socialism at home would not help to defeat communism; rather, it would increase militarism, which "was and remains a racket the oldest in history" (p. 132), to unprecedented levels.

Simple common sense, one would suppose; but Flynn's classic defense of Old Right thinking was not to the liking of the warmongering editor of the newly founded National Review. When Flynn submitted an article to National Review that warned against militarism and war, the editor returned it to Flynn. Pavlik quotes in his insightful introduction to this volume from the editor's letter: "This piece just isn't what I had in mind" (p. 4). The editor preferred the interests of the military state to the welfare of the American people. And in the forty years that have passed since that letter, William F. Buckley, Jr., has changed not at all.

The volume contains, besides the essays on militarism, an important early piece, "Whose Child is the NRA?." In this 1934 article, Flynn exposed the business interests who favored subjecting the economy to the straitjacket controls of the New Deal's National Recovery Administration. The later studies of Murray Rothbard fully confirm Flynn's findings. And "What is Senator McCarthy Really Trying to Do?" offers a provocative defense of a figure for whom the right has displayed at best a tepid enthusiasm. Forgotten Lessons, if it receives the attention it deserves, will revive interest in a major social thinker.


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