Essay Introduction

This brief but incisive article from the Monthly Economic Letter of the Northeast Farm Foundation exposes the coercive reality hidden behind government handouts. Published in 1949, it describes the "iron fist beneath the velvet glove" as farmers are forced to limit their planting in exchange for subsidies. The essay highlights the bureaucratic machinery used to enforce these controls—machinery remarkably similar to totalitarian methods—and cites the landmark Supreme Court decision Wickard v. Filburn, which established the legal principle that the government has the right to regulate whatever it subsidizes. The conclusion is a stark reminder that economic dependence and independence cannot coexist.

The Other Side of the Subsidy

From Monthly Economic Letter

WE are this fall beginning to feel more of the iron fist beneath the velvet glove.

. . . Farmers have been forced to sow winter wheat this month in accordance with permission granted by the United States government. One, reading the official document giving a certain farm owner in the Genesee Valley, for instance, permission to sow 13 acres of wheat on his 200 acre farm for the year 1950, cannot help but wonder . . . .

When the farmer applies for a larger allotment he is informed that he can have five minutes on a certain Tuesday afternoon to present his case. . . . "Failure to appear at this hearing may be considered a waiver of your right in connection with such appeal."

An insidious part of this system is that it makes use of local committees to harness the farmers in every county. The allotment is issued in the name of the local county . . . committee, but in fact it is sent out by a bureaucrat in the Federal Building at the county seat. The original idea of having local committees do the hatchet work was borrowed from Russia. It works well and helps to silence opposition.

It is hardly lack of due process for the government to regulate that which it subsidizes.

UNITED STATES SUPREME COURT Wickard v. Filburn, 317 U.S. 111, p. 131, Oct. 1942

This court decision shocked many persons who believed that they could have both liberty and subsidies. But the government must of necessity control the spending of money collected from taxpayers.

Avoiding control requires avoiding a subsidy, whether it be as a wheat payment or in any other form. A person cannot be both dependent and independent.

About the Author

The Northeast Farm Foundation published this article in its Monthly Economic Letter, Ithaca, New York, October 1, 1949.

Attribution

"The Other Side of the Subsidy." In Essays on Liberty, Vol. 1, 144-145. Irvington-on-Hudson, NY: The Foundation for Economic Education, Inc., 1952.