Mises Daily Articles
Who Is Garet Garrett?
If Garet Garrett (1878–1954) is known at all today, it is by those who are captivated by the handful of intellectuals who wrote in opposition to the New Deal planning state and the regimentation of national life it brought about. They were a rare breed, but there is much more to Garrett than people know.
Having spent several months steeped in his work and reading everything by him I can find, I remain completely flabbergasted that he is not better known. We go about our lives assuming that there is some magic force of history that causes quality work to last and inferior works to fall by the wayside. What a myth. Garrett is a case study in a forgotten genius. How did it happen? War? Depression? Politics? I don't know. I can only say that he should rank among the master novelists and politico-economist journalists of the last century.
Ludwig von Mises recognized this: "His keen penetration and his forceful direct language are...unsurpassed by any author." He was speaking in particular about his book The People's Pottage (1953), which is a collection of three powerful essays that had appeared earlier, and was on the reading list of the "Old Right" that died out by the early 1960s. Why did this movement die out? The Cold War against Communism became the priority for the Right, while the Left had long ago embraced the New Deal as it its own. Garrett, whose featured writings in the Saturday Evening Post were once read and celebrated by millions, had been relegated to obscurity by a generation that believed they had nothing to learn from prewar popular intellectuals.
Despite astonishing eloquence and prescience, Garrett's stirring attacks on the New Deal and condemnations of the American imperial mindset found few takers in the Cold War era. Meanwhile, his earlier career as a business journalist and wonderful novelist in the 1920s had been entirely forgotten by the 1950s.
This is a tragedy because both his nonfiction and his novels display a most rare talent and offer more than a mere condemnation of the New Deal government. He not only wrote in opposition to war; his entire oeuvre offers a sparkling vision of peace under free markets as well. Whereas many intellectuals on the Right and Left regard the peaceful, bourgeois society as something of a bore — with the middle class amassing wealth and spending it on fripperies — Garrett saw peace and freedom as the essential precondition for the real drama of human life that revolves around creation, association, love, courage, and the full range of human vices and virtues that transform society in spectacular ways.
He began to write fiction after Warren G. Harding had called for a "return to normalcy" after World War I. But for Garrett, "normalcy" was civilization itself. For example, The Driver (1922), The Cinder Buggy (1923), and Satan's Bushel (1924) are novels that tell great stories about American history, with complex plot and character development, in which the glorious drama of commercial life plays the central role. These novels show that you don't need war as a backdrop in order to make a story of national life. These novels chronicle dramatic social and economic transformations in the context of fierce struggle and great risk — all within the framework of peace.
Garrett was not a trained economist but his knowledge of economic forces was so profound that he wrote the first full and widely circulated explanation, in line with the Austrian School tradition, of the 1929 stock market crash. The Bubble that Broke the World (1932) placed the blame on an overextension of credit made possible by the Federal Reserve; this created, said Garrett, a false prosperity that led to a correction. This book alone is proof that his journalism continued through the Depression and war, always with a decidedly and even radically libertarian cast.
As an example of his forgotten legacy, one of his last works was a wonderful history of the Ford Motor Company called The Wild Wheel (1952). John Chamberlain said that this book "should have been the bible for college students of productivity, but in the 1950s it had been forgotten."1
The Life of Garrett
Garet Garrett was born Peter Garrett (he later changed his name to match his pen name) in Pana, Illinois, to Charles and Mary Garrett on February 19, 1878.2 His formal education was very slight — only through the third grade — but his independent study took him through all the classics, as shown by the remarkable erudition of his writings. His influence in economics came primarily through a book by the American mathematician/astronomer Simon Newcomb: Principles of Political Economy (1886). Newcomb was an advocate of the gold standard and laissez-faire, an early convert to the marginalist revolution through William Stanley Jevons, and a fighting opponent of socialism, institutionalism, and historicism. So Garrett's Austrianism is present, but in a back-door way, via William Stanley Jevons and the American hard-money school that was actively writing in the late 19th century.
At the age of 20, he left for Chicago and worked as a reporter for the Cleveland Recorder and then later covered politics in Washington, D.C., writing reports on the administration of William McKinley for the Washington Times. In 1900, he left for New York. He vanished for three years, or, at least, no one seems to know what happened to him. But in 1903, he joined the staff of the New York Sun as a financial writer. He moved on to the New York Times and the Wall Street Journal until he joined the New York Evening Post in 1909.
It was in this period that he met his lifelong friend, Bernard Baruch, who wrote of him,
Garrett was a frequent visitor…. This small, round, intense dynamo of a man was then with the New York Evening Post…. Garrett was one of the few men to whom I could unburden myself. Once, after hearing me express my restlessness with Wall Street, he remarked "I keep telling you, B.M., you don't belong in Wall Street; you should be in Washington." I don't remember my reply; I probably laughed at him. But I thought about his words from time to time…. [They] nourished my discontent.
Biographer Carl Ryant notes that during this period, Garrett probably made an important contribution to the education of Wall Street. In that time, business reporting consisted mostly of reporting prices and dry facts. Garrett wrote with drama on personalities and events, infusing the activity of commerce with a fire and passion that later made his fiction so enormously popular.
He moved to accept administrative duties with the New York Annalist and then later back to the New York Times. During World War I, he was sent to Germany to cover the war's impact on the German people. Following this, he resigned over dissatisfaction with the way the paper was covering the war. This was a period of grim press censorship, and Garrett was probably having trouble getting his stories printed. This experience very likely had the most powerful impact on his views toward war. He later moved to the New York Tribune where he was involved in a regrettable tactic to increase circulation of the paper by attacking rival publisher William Randolph Hearst. In any case, he left the Tribune in 1919 and here began the work for which he justly became famous.
Garrett began as a featured contributor to American's most successful periodical, The Saturday Evening Post, but his contributions were not limited to this publication. He also wrote for Collier's, Everybody's Magazine, and The New Republic. His topics usually centered on financial matters. Garrett was at the top of his game and became one of the most widely read writers on economics in the country.
He developed a close friendship with Post editor George Horace Lorimer, who in turn introduced him to Herbert Hoover, with whom he also maintained a lifelong friendship. He traveled the world for the Post. Once he bumped into Will Rogers on a boat, who later wrote that he was "an awful nice fellow." His works were reviewed with glowing praise in the New Republic, the New York Times, and elsewhere.
On the night of January 18, 1930, Garrett was shot during an attempted robbery at a New York speakeasy, the Chez Madeleine, while having dinner. He was shot three times: in the shoulder, hip, and lung. He recovered, but his health suffered and he was left with a raspy voice (which wasn't helped by his lifelong chain-smoking). Still, his association with the Post continued through the Great Depression, and it was he who gave the magazine its pro-freedom, anti–New Deal flavor through the entire period. He became a vocal and aggressive proponent of staying out of World War II.
With a change in editorial direction at the Post in 1942, Garrett left, and two years later founded a journal called American Affairs. It was funded by the National Industrial Conference Board as a venue for Garrett. He later wrote that it was "one-man job. The staff consists of myself, one secretary, and one man attending to subscriptions and circulation." This journal by itself is a remarkable accomplishment. In a time of all-around planning and war, Garrett managed to produce a free-market publication that took on labor unions, price controls, inflation, war planning, international agencies, centralization of power, and war propaganda, and to fight for liberty of the individual in issue after issue. A typical issue would open with 5 to 6 pages of editorials and then move to correspondence and articles. The publication would print fascinating correspondence between citizens and the government over issues of taxation and monetary affairs. Even in the existing works on the Old Right, this journal hasn't received the attention it deserves. In fact, the entire run of this publication deserves far wider exposure.
The publication folded in 1950, but Garrett did not quit. In 1952, he wrote The Wild Wheel. In these years, he paid some visits to offices in New York and Washington but his reputation faded in the postwar world, which no longer appreciated his pro-commerce, antiwar attitudes. He retired to a New Jersey farm, wore baggy pants and coats with patches on the elbow, and was known to love good bourbon. He suffered a stroke in 1954 and died on November 6. He was buried at the River Cemetery in Tuckahoe, New Jersey.
Let's take a step back and have a look at Garrett's least-known work, his once-popular works of fiction that heralded commerce as the very pith of life. His first book called The Blue Wound (1921) was an impressive effort at writing a history-of-the-world fantasy through the eyes of a dreamy journalist who sought to discover who caused the world war. The book was a literary success but it was less than clear on an issue that would be Garrett's only real ideological failing. The subject in question concerned trade. He rightly saw the dangers of American and British efforts to force open markets abroad, imposing foreign systems of government on an unwilling population; but he failed to clearly delineate in his mind the difference between purely voluntary foreign trade and imperial expansion. This was mixed with a slight protectionist bias that was typical of his generation — a bias that emerges sometimes in his writing, but, fortunately, never overtook his broader analytics.
From a free-market perspective, his next book was a far more impressive effort. The Driver (1922), an exciting book that heralds capitalist accomplishment, tells the story of a Wall Street financier, Henry Galt, a shadowy figure who stays out of the limelight as much as possible until he unleashes a plan that had been years in the making: he uses his extraordinary entrepreneurial talent to acquire control of a failing railroad.
Through outstanding management sense, good pricing, excellent service, and overall business savvy, he outcompetes all the big names in the business, while making a fortune in the process. Garrett has a way of illustrating just what it takes to be a businessman of this sort, and how his mind alone becomes the source of a fantastic revenue stream.
But his success breeds trouble. The government conspires with envious competitors to regulate him using the Sherman Antitrust Act, calling him a monopolist and accusing him of exploiting the public. There is a courtroom scene that allows Galt to explain to the assembled legislators how investors and capitalists are helping society in ways that politicians can't possibly imagine. What the politicians see as shady is really a form of public service that enriches the whole country.
A recurring literary motif through the book has people asking, "Who is Henry Galt?" The shades of Ayn Rand here are obvious and some writers have speculated that she borrowed Garrett's literary motif, which may or may not be true.
In one of many asides, this book contains one of the best explanations of the absurdities of "bi-metallism" that fixed the relationship between silver and gold. Indeed, the book is overall quite sound on the money question, showing the inflationist populist movement of the late 19th century to be a pack of fools. Galt himself delivers some fantastic defenses of hard money and free markets.
In any case, the novel is brilliant and thrilling, one that provides an excellent lesson in how entrepreneurship works. Writes Edward Younkins, "Not only is The Driver a novel of high finance and Wall Street methods, it also paints a portrait of an efficacious and visionary man who uses reason to focus his enthusiasm on reality in his efforts to attain his goals."
His next novel is his epoch story of steel. It is The Cinder Buggy (1923), the longest of the three books in this trilogy and his unforgettable masterpiece. With a great story, and tremendous literary passion, it chronicles the transformation of America from the age of iron to the age of steel.
It covers the period between 1820 and 1870 and its march of technological progress. The plot concerns an ongoing war between two industrialists, one the hero who is beaten in the first generation, and the other who is malevolent but wins the first round in the competitive drive. The struggle continues through the second generation, which leads to a titanic battle over whether steel or iron would triumph and why.
The story is set in the iron town of New Damascus. The two men who made it happen were Aaron Breakspeare and Enoch Gib. Aaron is beloved but not a great businessmen. He dreamed of the steel age but failed to make it economically viable. Enoch is a good businessman but dour and widely loathed for his miserliness and treatment of others. A feud over a banker's daughter leads to the initial dissolution of the partnership, and the son of the resulting union, John Breakspeare, returns to New Damascus to enter the iron business.
This leads to a fascinating repeat of events that causes another dissolution, more bitter and shocking than the last. The feud continues over iron and then over steel until steel wins the victory after many fits and starts. In the course of the story, the reader discovers how it is that technology has such a dramatic effect on society, and how risk and entrepreneurship are at the very heart of it all.
Garrett employs every literary device to make commerce itself the setting for great acts of courage, heroism, sacrifice, and tragedy. And as with his other books, the central mover of events is the price system. It is the signal for and cause of the most notable changes in the plot. The reader discovers economics in a way that might not otherwise be possible, and it is hard to imagine that anyone can come away with anything but love for the whole subject of enterprise.
Garrett does not portray the market as some idealized utopia. We have here the full range of human emotion and motivation at work: arrogance, pride, malice, love, compassion, jealousy, rage, and everything else. What is striking is that all these emotions play themselves out in a setting that, despite all the metaphors involving battles and wars, is ultimately peaceful. No one can fully control price movements, and it is these that act to reward victors and punish losers. Here we have the "manly" virtues playing themselves out not on bloody battlefields but in the peaceful marketplace.
We also have here a realistic portrayal of the truth about innovation. It is not enough to come up with a good idea. That idea must be embodied in real production that takes place in a cost-reducing way, and then marketed in the service of society. The unity of technology, accounting, and marketing must all come together to make possible such things as technological revolutions.
The Cinder Buggy could easily be considered the best of his work in this area. It is a wonderful novel for anyone who loves, or wants to more deeply understand, American history, economic theory, and the place of technology in the molding of society.
Finally, as the third in this series, there is Satan's Bushel (1924), a splendid book, not just from the point of view of economics but also as a piece of literature. What is Satan's bushel? It is the last bushel that the farmers put on the market, the one that "breaks the price" — that is, reduces it to the point where wheat farming is no longer profitable. The problem that afflicts the wheat farmers is that they sell their goods when the price is low and have no goods to sell when the price is high. Withholding goods from the market is one answer but the farmer lacks the incentive to do that.
As implausible as it may sound, the central figure in this book is the price of wheat. It is the main source of drama. The settings are the wheat pit at the Chicago exchange (circa 1915) and the Kansas wheat fields. Linking those two radically different universes, through speculative buying and selling, is the mission of this book.
The action further explores the meaning, morality, and utility of wheat speculation, which was increasing in sophistication during this period of history. The plot is centered at the turn of the 20th century, a critical period when the agricultural economy was completely giving way to the fully industrialized one, and farmers were panicked about the alleged problem of falling prices. There is nothing lost in the passage of time: the allegory could equally apply to the computer industry today.
The book tells the story of one man's discovery of a brilliant speculator and his relationship with an old and legendary farmer/mystic and his daughter. The mystic embodies both the highest wisdom and the greatest economic fallacies of the day. The question that must be confronted is how to make farms profitable in times of falling prices, and the novel shows that speculation, even with all its human foibles, makes a contribution to stabilizing the market.
Here is one of hundreds of brilliant passages describing the speculator:
No rule of probability contains him. To say that he acts upon impulse, without reflection, in a headlong manner, is true only so far as it goes. Many people have that weakness. With him it is not a weakness. It is a principle of conduct. The impulse in his case is not ungovernable. It does not possess him and overthrow his judgment. It is the other way around. He takes possession of the impulse, mounting it as it were the enchanted steed of the Arabian Nights, and rides it to its kingdom of consequences. What lies at the end is always a surprise; if it is something he doesn't care for, no matter. Another steed is waiting. Meaning to do this, living for it, he has no baggage. There is nothing behind him. If he has wealth it is portable. He is at any moment ready.
In a plot twist that foreshadows the New Deal, one person attempts to destroy the wheat crops with a poisonous fungus, thinking that he is doing the farmers a favor by reducing supply — based on logic he learned from unworkable government schemes. The reader is confronted with the challenge of coming to understand whether this is really beneficial to farmers, and if not, why not? (Keep in mind that Satan's Bushel was written a full decade before FDR attempted the same tactics by force from the federal level.)
Another dramatic scene involves the arrest of an opponent of World War I. There are also plot twists that turn on romance, sorcery, criminality, mob behavior, psychological possession, the war, price controls, government interventions, and other surprises, including wholly unimaginable things like water witchery and a teak tree in Burma. The central action, however, deals with the core of economics and the place of production and speculation.
And for financial historians, there is the very special treat of observing the great drama of the early years of the Chicago commodities market — written from the vantage point of one generation later. There are scenes in the wheat trading pit that just take your breath away. This novel demonstrates yet again that no one can make the stuff of enterprise dramatic, tragic, and heroic like Garrett.
The effect is to so closely link the most outlandish and far-flung economic activities to human frailties and uncertainties that one gains not only an understanding of how commodity markets worked earlier this century — and how price movements work in all times and all places — but also a love for the craft.
Several passages provide beautiful insight into how the speculator thinks and how the speculator's actions work to reduce destabilizing price fluctuations. But it is also a very human institution, subject to whim and learning. Also, the government comes across as nothing short of egregious and destructive.
His last novel is Harangue (The Trees Said to the Bramble Come Reign Over Us) (1927). It tells the true story, in fictional form, of the rise and fall of a fanatic and despotic socialist takeover of a single town, and how it led to loss of liberty and economic collapse. It is, said the New York Times in a review, "an analysis of the workings of the self-consciously radical mind and the play of direct action demagogy on the masses...a first-class study in sociology." The socialist takeover was financed by the heir of a Wall Street fortune, and this provides Garrett an opportunity to explain why the rich are attracted to destructive ideology: it is one thing they can consume that sets them apart from the bourgeoisie. He goes further to provide rich and detailed portrayals of all the main activists who are drawn to socialism. He shows how the experiment fails on economic and political grounds.
The book was written only a few years before the socialist left came to influence national affairs in the age of the New Deal, and what's refreshing about this study is its complete absence of red baiting. It treats socialism as dangerous and myopic intellectual error that can lead to ruin, but never as some foreign threat. If capitalism were to collapse, he believed, it would be from within. As a novel, Harangue is just as competent as his others, but it takes a different angle: it explores the dangers of the intellectual and political world as a contrast to the creative world of commerce.
The New Deal
Within a year of being shot in a speakeasy, Garrett came out with a book of high importance to Austrian economists: The Bubble that Broke the World (1931). This book blows away the conventional interpretations of the crash of 1929, not only in its contents, but in the fact that the book exists at all. Garrett ascribes the crash to the pile up of debt, which in turn was made possible by the Fed's printing machine. This created distortions in the production structure that cried out for correction.
What is the answer, according to Garrett? Let the correction happen and learn from our mistakes.
Such is the thesis, but take note: this book was a big seller in 1931. In other words, two years before FDR arrived with his destructive New Deal, ascribing the depression to capitalism and speculation, Garrett had already explained what was really behind the correction. It took Murray Rothbard to resurrect these truths decades later, and by the time he did so in 1963, it was a shocking thesis.
We are still fighting an uphill battle to explain the true causes of the crash and ensuing depression. But here in this wonderful book of Garrett's is an actual contemporary account that spelled it out plainly for the world to see. No more can we say that people back then could not have understood. Garrett told them. And thanks to this new edition of this classic and important work, he is telling us again today.
In 1954, his masterpiece of nonfiction writing appeared: The People's Pottage. This was a collection of his previous essays. "The Revolution Was" first appeared in 1938, the burden of which was to show that the New Deal transformed American society to such an extent that it was foolhardy to listen to American politicians and their warnings of dangers from the outside. "There are those who still think they are holding the pass against a revolution that may be coming up the road," he wrote. "But they are gazing in the wrong direction. The revolution is behind them. It went by in the Night of Depression, singing songs to freedom."
As Murray Rothbard wrote in The Betrayal of the American Right,
One of the most sparkling and influential attacks on the New Deal was written in 1938 by the well-known writer and editor Garet Garrett. Garrett began his pamphlet "The Revolution Was" on a startlingly perceptive note: conservatives, he wrote, were mobilizing to try to prevent a statist revolution from being imposed by the New Deal; but this revolution had already occurred.
Here he chronicles what historians have forgotten, namely, that FDR campaigned for limiting government against the big-spending policies of Herbert Hoover. He shows how the New Deal regimented production to the point of making genuine production impossible. He blasts FDR's monetary policy as nothing short of robbery, and exposes the New Deal as a violation of everything a free country should be.
The second essay is "Ex America" (1951) a shocking look back at what America was and what it had become. The third essay is "The Rise of Empire" (1952):
We have crossed the boundary that lies between Republic and Empire. If you ask when, the answer is that you cannot make a single stroke between day and night; the precise moment does not matter. There was no painted sign to say: "You now are entering Imperium."
Here Garrett spells out the conditions that signal the move from Republic to Empire, including the dominance of the executive, the rise of the military mind, a "complex of vaunting and fear," the subjugation of domestic concerns to foreign ones, and a system of satellite nations.
The list is an eerie one for us today, for it essentially spells out what drives American policy in the post–Cold War world. With the fear of Communism out of the way, we should be more positioned than ever to heed his warnings.
To Garrett, there is no heroism in war but only in creativity and production, and no folly greater than overthrowing the institutions that make creativity and economic progress possible. He was not just a great writer of fiction, not just a courageous opponent of the planning state and war; he was a prophet of the fate of America under government control, a brilliant intellectual force in the 20th century, and a wise and eloquent spokesman for freedom itself. May he be remembered and appreciated anew, and may he teach all to learn to adore peace and prosperity, and all its creative adventures, as he did.
- 1. A Life with the Printed Word, John Chamberlain (Regnery Gateway 1982), p. 139.
- 2. Biographical details from Carl Ryant, Profit's Prophet (Selinsgrove: Susquehanna University Press, 1989). Another excellent analysis of Garrett's work is in Justin Raimondo's Reclaiming the American Right (Burlingame, CA: Center for Libertarian Studies, 1993)
The Blue Wound (NY: Putnam's, 1921)
The Cinder Buggy (NY: Dutton, 1923; Mises Institute, 2007)
The Driver (NY: Dutton, 1922; Mises Institute, 2007)
Satan's Bushel (NY: Dutton, 1924; Mises Institute, 2007)
Harangue (The Trees Said to the Bramble Come Reign Over Us) (NY, Dutton: 1927; Mises Institute 2007)
A Bubble That Broke the World (Boston: Little, 1932; Mises Institute, 2007)
The People's Pottage (Caldwell, Idaho: Caxton, 1953; Mises Institute, 2007)
The Wild Wheel (NY: Pantheon, 1952; Mises Institute, 2007)
The American Story (Chicago: Regnery, 1955)