Good For The Goose

When the United States entered The Great War, many captains of industry moved to DC, volunteering their services for a mere dollar per year. Most of these “dollar men” turned out to be worth every cent their government paid them.

Once behind Federal desks, these captains found little to do, for most had inherited their privileged position and maintained it by limiting wages and promoting equities. They knew little about production, considering fabrication to be work suitable only for common people.

Consequently, industry, which they had always managed to maximize profits, was minimally productive. One economist calculated that the typical enterprise was at best 15% efficient, though wildly profitable.

Over the emphatic protests of these Dollar Men, a small group of progressives “socialized” American industry for the war effort: dictating wages (which rose), fixing prices (which stabilized) and production levels (which nearly doubled, to almost 25% productivity), creating effective co-ops and combines (illegal under the Sherman Acts), and boosting the overall standard of living while dramatically increasing industrial output.

One progressive explained this unprecedented intrusion into the free market this way: Industry must be of service to the community. If an industry’s pursuit of profits threatens society, society holds the responsibility to put it back into service again.

The Dollar Men protested, but under these regulations, their stock market nearly doubled in value. Following the war, anyone championing continued regulation was labeled a socialist or a communist. The Dollar Men re-took the reins, and by 1929 had successfully captained their economy into The Great Depression. Progressives, many veterans of the old War Production Board, picked up the few remaining reins and eventually got the battered horse pulling the cart again.

What does this history lesson have to do with our current health care crisis?

Those who label as evil socialism anything intruding on the free market’s invisible hand might consider that the market exists to serve our community, and not merely the much narrower profit expectations of shareholders and speculators. If an industry provides real service, it has nothing to fear from any competitor. Occasionally, some seem to need a more visible thumb to goose them into proper focus.

Of course, the Dollar Men getting goosed into service honk loudest, but it’s no walk in the park for those doing the goosing, either. Just sometimes necessary.

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