Editing 76-15-B6 (section)

=== Transcript ===
Many decades ago the Fabian movement was born. Its purpose was to impose
socialism on the world through gradual and silent encroachment. The Fabians
believed that by achieving certain programs not perceived by the citizenry as
socialistic the world would one day awake to find it had accumulated so many
of socialism's goals that it might just as well go the rest of the way.

So far, the Fabians have been pretty successful. And their success could
be used as evidence that "gradualism" is the way to get things done.

I'm sure the Fabians, however, didn't have anything to do with the
gradualism which keeps those of us who want less government and more freedom
from doing something about it. The gradualism I'm talking about is our tendency
to believe that if we were to suddenly wipe out unnecessary and unwanted
government programs chaos would result.

Two years ago Leonard Reed, head of the Foundation for Economic Education,
exposed the fallacy of this fear with three classic examples, Going back to
the early 1930's -- the depression and New Deal days -- he reminded us of the
National Industrial Recovery Act - know then as NRA. Its symbol was a blue
eagle, which was a pretty shabby way to treat an eagle. NRA was fascism pure
and simple - government control of business and industry. Their courage
destroyed by the traumatic experience of the 1929 crash and the depression that
followed, business and industrial leaders embraced NRA. But after a year or
two of government interference the honeymoon was over. Business wanted to rid
itself of the political monster. But, gradually they were convinced that to end
it suddenly would wreck the economy.

Then, in May, 1935, the Supreme Court declared the Blue Chicken (no one
called it an eagle anymore) unconstitutional. As of that moment every provision
of NRA was abolished. There was no chaos. The economic indicators started
upward and, though the depression would continue until World War II, business
was better not worse.

Reed's second example came with V.J. day and the end of World War II.
President Truman greeted the news of victory by ordering cancellation of all
war contracts. They amounted to $45 billion. He was told that would ruin
the economy. He replied, QUOTE: "Cancel them". UNQUOTE. Telegrams were sent,
ordering all contractors to halt all production. There was no pandemonium,
production of long-denied consumer items took over and again the economic
indicators moved up. No one went bankrupt and there was full employment.

Third example was also postwar. The allied command in Germany had
imposed Keynesian economics and all manner of controls on the German
industrial complex. They chose Dr. Ludwig Erhard as their German economic
adviser. Then, one Sunday evening, Dr. Erhard went on nationwide radio and
announced, "Beginning tomorrow morning all wage, price and other controls
are off". The allied planning commission told him he could be imprisoned
for such an unauthorized action. They said, "You have modified our controls".
He denied this. He said, "I haven't modified your controls; I have abolished
them".

He was ordered to appear before the Allied Commander, our General Clay,
who (bless him) told Erhard he was the economist and he would have the General's
backing. We all know that chaos and disaster did not result from the Doctor's
unprecedented action. An economic miracle did -- the recovery of West Germany
that astounded the world. So much for gradualism. 

This is Ronald Reagan.

Thanks for listening.

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