One of the great heros of American classical liberalism was William Graham Sumner (1840–1910), author of this weekend’s read.

Wikipedia calls him “the leading American advocate of free markets, anti-imperialism, and the gold standard."

Also:

Sumner opposed the Spanish American War and the subsequent U.S. effort to quell the insurgency in the Philippines. He was a vice president of the Anti-Imperialist League which had been formed after the war to oppose the annexation of territories. In his speech “The Conquest of the United States,” he lambasted imperialism as a betrayal of the small government ideals of anti-militarism, the gold standard, and free trade. According to Sumner, imperialism would enthrone a new group of “plutocrats,” or businesspeople who depended on government subsidies and contracts.

But 19th-century classical liberals (with the exception of a few radical liberals in France) were supposed to be minarchists, right? Defenders of the State as a necessary evil.

Well, according to Irving Fisher, a neoclassical economist from the early 20th century and certainly no friend to laissez-faire thought, Sumner told his Yale students the following:

Gentlemen, the time is coming when there will be two great classes, Socialists, and Anarchists. The Anarchists want the government to be nothing, and the Socialists want government to be everything. There can be no greater contrast. Well, the time will come when there will be only these two great parties, the Anarchists representing the laissez faire doctrine and the Socialists representing the extreme view on the other side, and when that time comes I am an Anarchist.

(From a biography of Fisher by his son, quoted by Mark Thornton in his book on Prohibition — a policy Fisher supported, by the way — and also on Roderick Long’s website, where Fisher is quoted as commenting, "That amused his class very much, for he was as far from a revolutionary as you could expect. But I would like to say that if that time comes when there are two great parties, Anarchists and Socialists, then I am a Socialist.")

Auguste Renoir, “Moulin de la Galette” (1876)

Who are the classes respectively endowed with the rights and duties of posing and solving social problems? William Graham Sumner says they are as follows: those who are bound to solve the problems are the rich, comfortable, prosperous, virtuous, respectable, educated, and healthy; those whose right it is to set the problems are those who have been less fortunate or less successful in the struggle for existence. The problem itself seems to be, How shall the latter be made as comfortable as the former? To solve this problem, and make us all equally well off, is assumed to be the duty of the former class; the penalty, if they fail of this, is to be bloodshed and destruction. FULL ARTICLE

A revision to the history of economic thought:

Econonmics has often been called “the dismal science,” mainly because of the results that would flow from Malthus’s population hypothesis: Since population grows geometrically and food arithmetically, the economic prospects of humankind are dismal. This usage is generally attributed to essayist Thomas Carlyle. Joseph Persky (”Retrospectives: A Dismal Romantic,” Journal of Economic Perspectives, 1990) and David Levy (”How the Dismal Science Got Its Name: Debating Racial Quackery,” Journal of the History of Economic Thought, 2001) point out, however, that that attribution is incorrect. Carlyle did, indeed, coin the phrase, but it was in reference to classical economists’ views on race, not their views on population. He called it the dismal science because economics saw all races as equally capable of entering into trades, whereas Carlyle believed that the races were different and that slavery was natural for blacks. Levy argues that modern economics should see its history as being pro-equality, and that it is too often characterized as anti-egalitarian. Whether Levy is right in this argument is debatable, but it is worth remembering that the initial use of the term “dismal science” was not made in reference to Malthus’s population thesis. That association came later and did not begin with Carlyle, who coined the term.

– Harry H. Landreth, David C. Colander, History of Economic Thought, page 111.

Cross-posted at blog.Mises:

In “The Forgotten Man,” William Graham Sumner wrote:

“All schemes for patronizing “the working classes” savor of condescension. They are impertinent and out of place in this free democracy. There is not, in fact, any such state of things or any such relation as would make projects of this kind appropriate. Such projects demoralize both parties, flattering the vanity of one and undermining the self-respect of the other.”

Sumner wrote that in 1883, as part of a chapter in his short book What the Social Classes Owe Each Other. The chapter was called “On the Case of a Certain Man Who Is Never Thought Of.” It was republished as a standalone essay with the more memorable title, “The Forgotten Man.”

If you google “The Forgotten Man” you will get around 600 hits for Sumner … and over 18,000 hits for Franklin Delano Roosevelt!

Why FDR?

Because on April 7, 1932, Roosevelt gave a now famous radio speech with the same title:

These unhappy times call for the building of plans that rest upon the forgotten, the unorganized but the indispensable units of economic power, for plans like those of 1917 that build from the bottom up and not from the top down, that put their faith once more in the forgotten man at the bottom of the economic pyramid.

Obviously, these few minutes tonight permit no opportunity to lay down the ten or a dozen closely related objectives of a plan to meet our present emergency, but I can draw a few essentials, a beginning in fact, of a planned program.

It would be hard to find a writer more opposed to a planned economy than William Graham Sumner. And it would be hard to find someone guiltier than FDR of what Sumner called social and economic quackery, against which, “the obvious injunction to the quacks is, to mind their own business.”

A major point of Sumner’s book is that FDR’s “forgotten man at the bottom of the economic pyramid” isn’t forgotten at all. He is the central focus, at least rhetorically, of all “social doctors” who “enjoy the satisfaction of feeling themselves to be more moral or more enlightened than their fellow men.”

Who is the real forgotten man?

The type and formula of most schemes of philanthropy or humanitarianism is this: A and B put their heads together to decide what C shall be made to do for D. The radical vice of all these schemes, from a sociological point of view, is that C is not allowed a voice in the matter, and his position, character, and interests, as well as the ultimate effects on society through C’s interests, are entirely overlooked. I call C the Forgotten Man.

Was FDR trying to make sure that C remained forgotten? Was he appropriating Sumner’s title in the hope that we’d forget both C and Sumner himself?

Sumner again:

The Forgotten Man is not a pauper. It belongs to his character to save something. Hence he is a capitalist, though never a great one. He is a “poor” man in the popular sense of the word, but not in a correct sense. In fact, one of the most constant and trustworthy signs that the Forgotten Man is in danger of a new assault is that “the poor man” is brought into the discussion. Since the Forgotten Man has some capital, anyone who cares for his interest will try to make capital secure by securing the inviolability of contracts, the stability of currency, and the firmness of credit. Anyone, therefore, who cares for the Forgotten Man will be sure to be considered a friend of the capitalist and an enemy of the poor man. [emphasis added]