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From Socialist Appeal, Vol. III No. 40, 9 June 1939, p. 4.
Transcribed & marked up by Einde O’ Callaghan for the Encyclopaedia of Trotskyism On-Line (ETOL).
On June 1 the Administration completed a very shrewd partisan maneuver by forcing a record vote in the House of Representatives on the Townsend Plan. There are probably less than a dozen Congressmen who really favor the Townsend Plan. However, in many sections of the country, especially in New England and the Middle West, the Republicans found it convenient and even necessary to make an opportunistic bid last autumn for the support of Townsend’s followers. During the election campaign, Republican candidates pledged themselves, openly or by implication, to the Plan.
The expectation of the Republicans was doubt less that a day of reckoning on the pledge could be indefinitely postponed. The Plan could, in accordance with a usual custom, be buried in Committee. Or, at worst, if it came to the floor, the cowardly method of avoiding a record vote, now common in the House, could be employed.
But here was an opportunity made to order for all sections of the Democratic Party, constituting a majority. The Republicans have been trying to make big propaganda on the issue of “economy”. They are also, many of them, pledged to the huge “extravagance” of the Townsend Plan. Very well. Force a record vote on the Plan. Then the Republicans are in a perfect dilemma: if they vote against the Plan, they have broken their pledges and lose the Townsendite support; if they vote for it, they explode their own economy issue.
The parliamentary jockeying went on for weeks. The record vote was forced; and, since the dilemma was genuine, there is no doubt that by it the Republicans were thrown for a loss.
The Plan received 97 affirmative votes, including one-third of the Republican votes in the House. The New York Times the next morning devoted its lead editorial to the outcome. “The Townsend Plan Bill,” the Times begins, “has been defeated in the House by a vote of 302 to 97, and the country is doubtless expected to breathe easier.” The Times dismisses the Plan itself with an economic flourish:
“The Townsend Plan is utterly fantastic. It would call for an astronomical expenditure by the Federal Government in the neighborhood of $20,000,000,000 a year. If any attempt were made to raise such a sum by taxation it would lead to economic chaos.”
But this economic argument is, as often, not decisive for the Times. It is to a moral argument against the Plan that the Times makes its final appeal. The point is well worth pondering:
“Even if the plan were workable it would impose a monstrously unfair distribution of income. It would place crushing taxes on our population with its average per capita income of about $550 a year in order that less than one-tenth of that population should receive per capita incomes of $2,400 a year.”
The injustice of such income arrangements is, apparently, self-evident to the editors of the Times.
But the editors of the Times failed, perhaps, to read carefully the contents of their own paper that morning. If they had turned to a page preced ing that on which their editorial appeared, they would have found an instructive news report dealing with incomes for the year 1937.
There they would have discovered that for the year 1937 forty-nine individuals in the United States reported to the Treasury Department net incomes in excess of one million dollars. When it is recalled that the net income figure is arrived at after a hundred and one deductions for taxes, contributions, exemptions, credits, pseudo-losses and all the other devices thought up by high-priced lawyers, the excess over one million dollars must be very considerable indeed. One individual, even with all deductions, reported a net income of over five million dollars for that year.
Now, if we apply the very same reasoning that the Times used in proving the Townsend Plan unjust, we seem to be led inexorably to a remarkable conclusion.
The million-dollar-plus incomes are admittedly possible because of capitalism, or what the Times sometimes calls the “system of free enterprise”. So, using the argument of the editorial, we are compelled to say:
“Even if capitalism were workable it would impose a monstrously unfair distribution of income. It would place crushing burdens on our population with its average per capita income of about $550 a year in order that less than .00004% of that population should receive per capita incomes of $1,000,000 plus a year.”
So much for the moral argument. But the economic argument which the Times uses against the Townsend Plan applies no less fully against the system which the Times so solicitously defends. Could any system be more “utterly fantastic” than one which destroys food which people need to eat, throws millions who want to work out of jobs, shuts factories while goods are everywhere needed, suppresses inventions and new techniques, plunges all mankind into wars from which no one but a handful of super-financiers benefits?
The Times estimates that the Townsend Plan would cost the Federal Government $20,000,000,000 a year. But according to the government’s own figures, capitalism costs the people at least five times this, at least $100,000,000,000 a year: this figure being the difference between the actual output of goods and services and that which the productive plant of the country is immediately capable of.
The editors of the Times had better be more careful of the arguments they use. They might suggest ideas that would be most awkward for, among others, the editors themselves.
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Last updated: 17 January 2016