She Nailed It, in 1943!
by Jeffrey Tucker, Executive Editor for Laissez Faire Books

This week, my master has been Isabel Paterson and her book, God of the Machine.

How could someone have been so wise, so insightful, so correct on issue after issue, and to put all this on display in 1943?

It is nothing short of dazzling.

It might have been written about our exact political moment, right now. It all applies, whether talking about debt, war, invention, bailouts, guarantees, spending or the desire for universal provision at the point of a gun.

I can see why Paterson had such life-changing influence on those who read and knew her at the time. What I can’t understand is how this book dropped down the memory hole! Or maybe we already know. An entire generation of writers from this period were essentially banned from public discourse.

As I went through the book, I highlighted some key passages that you just have to see. Some are long and some short but it’s all unforgettable.

Taxes

There is no means by which “the rich” can be taxed without ultimately taxing “the poor” far more heavily. And one tax tends to increase all other taxes, instead of lessening them, because tax expenditure goes into things which require upkeep and yield no return (public buildings and political jobs).

Government Growth

Political power has a ratchet action; it works only one way, to augment itself. A transfer occurs by which the power cannot be retracted, once it is bestowed. In the lowest illustration of this, a candidate for office may promise the voters that he will reduce taxes, or the number of offices or the powers of office. But once he is elected, he can use the taxes, the officeholders or the powers to ensure re-election; therefore, the motive of the promise is no longer operative. By cutting down expenditure or the number of officeholders or graft, he will certainly create enemies, so the reverse motive, impelling him to evade his promise, is doubled. The voter can only vote the incumbent out; but the next officeholder will come into those augmented powers, and be still harder to get rid of in turn.

Monopoly

Government cannot “restore competition,” or “ensure” it. Government is monopoly; and all it can do is to impose restrictions which may issue in monopoly, when they go so far as to require permission for the individual to engage in production.

Property

Two bodies cannot occupy the same space at the same time. This is the reason why private property belongs to man as a creative being (a right both natural and divine).

Money

The free economy produces its money as it produces steel, by going and getting it, digging the ore out of the ground...

Gold was not and is not given value by fiat, any more than cheese or cotton or leather were given value by fiat. It has value because it serves a vital need. Nothing can be given value by fiat. If a gold coin of the Roman Republic were dug up now, it would have its original value, though the Roman Republic perished two thousand years ago. So would a Russian gold ruble minted under the czars, or a gold coin of Germany or France dated before 1914; though the last czar was shot in a cellar, the last German emperor fled the country and died in exile and France has suffered invasion and conquest. But paper currency of Russia, Germany or France before 1914 is now waste paper.

There was once a government which really prohibited gold, and kept none itself, in the belief that gold was bad for people. That was Sparta. But the Spartans believed that comfort, convenience, industry, were bad; and work was ignoble. The Spartans used iron for money, because nobody could carry enough of it around for general exchange. The object was to keep the nation poor, to keep the citizens on a bare subsistence economy. The plan succeeded perfectly. That is just what the prohibition of gold will effect; it will reduce a nation to a dead level of poverty and keep it in that condition. But the rulers of Sparta were willing to remain poor themselves. They enjoyed no more luxury than anyone else; no more than the very slaves who did the work. Yet even in Sparta, where food was doled out at a common soup kitchen, something had to be used for money, and that material had to have intrinsic value.

The modern despots do not wish to be poor themselves. They wish to grab every luxury an industrial economy can supply. What they want is to keep the producers poor, by taking the product and doling a little back again for subsistence...

Government Spending

When paper currency is depreciated, the difference has to come out somewhere; and the main cut is in wages. The fact is that heavy government expenditure must always be taken from the workingman’s wages; there is no other possible source. But the depreciation in currency comes out of wages immediately; whatever anyone gets in his pay envelope will simply buy him that much less in goods.

Invention

All the inventions of man have individualism as their end, because they spring from the individual function of intelligence, which is the creative and productive source...

Because man is not deterministic, there can be no set order of his discoveries. Progress is always possible, but it depends upon the unpredictable use of intelligence. From the known record, it does not appear that men have ever wholly lost any important body of knowledge once attained; though it might lie unused for a time, until the moral principles were affirmed by which material science could be applied beneficially. The precedence of the moral order is clear, since useful discoveries occur only when men secure liberty by restraint of the political power. Such discoveries were made at various times and places, and brought together; but the principles involved are universal.

Great Depression

What was the cause of the panic? Enormous government loans abroad which were not repaid; and the existence of the Federal Reserve system, a political creation, which made an inordinate credit extension possible.

If a financial system is unsound, it can only be so by the possibility of overextension of credit, and paper currency. A true remedy could only consist of limiting such facilities. Government “guarantees” merely put the property of prudent men at the disposal of speculators in case of loss. There is no such thing as a “money panic”; a financial panic occurs from collapse of credit.

Security

Men enslave themselves, forging the chains link by link, usually by demanding protection as a group. When businessmen ask for government credit, they surrender control of their business. When labor asks for enforced “collective bargaining,” it has yielded its own freedom. When racial groups are recognized in law, they can be discriminated against by law.

Amazing, isn’t it? And that’s just the beginning. This sampling is long, but for the article, I cut back dramatically from what I wanted to quote. And as you can see, she is not only prophetic and highly intelligent; she was able to write like very few others of her day.