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The Libertarian Legacy of R.C. Hoiles, Part 1

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The libertarian publishing giant Raymond Cyrus Hoiles created the newspaper and media chain known as Freedom Communications. He was an immensely successful businessman who opposed all governmental privileges for business. As a self-made man, he deeply respected the “working man” and willingly did the “grunt work” involved in publishing because, as he declared, he would never ask an employee to do anything he wouldn’t.

Nevertheless, he vehemently fought against labor unions that were the self-declared champions of average working people. Both anti-privileges for business and anti-union, Hoiles may seem to be an enigma on the subjects of business and labor until the simple principles from which he proceeded are understood. At that point, his position becomes intelligible and obvious.

Basic principles

Politically speaking, no belief was more important to R.C. Hoiles than the rejection of a double standard of morality for individuals and for groups. In an editorial entitled “The Most Harmful Error Most Honest People Make” (December 17, 1956), which appeared in his flagship newspaper, the Santa Ana Register, Hoiles explained the error “is the belief that a group or a government can do things that would be harmful and wicked if done by an individual and produce results that are not harmful, unjust and wicked. It is the belief that a number of people doing a thing that is wrong for an individual to do, can make it right and just.”

An example of this double standard is taxation. Taking wealth by force is called theft when committed by an individual, but it is widely deemed appropriate when done by government. This double standard regarding taxation produces “harmful, unjust and wicked” results.

An October 31, 1958, editorial in the Register explained just one of those harms: “It is our belief that any person who creates wealth and gains understanding injures no one, but benefits himself and everyone else in the world.” Hoiles believed the “profit motive” was more accurately called the “hope of rewards” and that a man worked for one of two reasons: “Either he has hope of rewards or he is forced.” The former was freedom; the latter was slavery. Applying a double standard to individuals and to government in regard to expropriating wealth created slavery.

Government violated the “hope of rewards” not only through taxation but also by granting legal privileges that constituted a form of theft because they robbed creators of the right to compete fairly and, so, receive the rewards of merit. (By “creators,” Hoiles referred not merely to businessmen but also to working people who traded their labor for wages.)

Hoiles explained (the Register, January 11, 1944), “It is time we as individuals take a stand to limit our government to setting us free from men rather than taking from A to give to B, thereby taking from A his natural rights, and calling it orderly adjustment, orderly market, collective bargaining or any other false name that destroys individual freedom.” Its true name was what Hoiles’s associate D.R. Segal once called the “penalizing of success and subsidizing of robbery.”

Hoiles believed the “profit motive” was more accurately called the “hope of rewards” and that a man worked for one of two reasons: “Either he has hope of rewards or he is forced.”

What a businessman or laborer could not gain through merit should never be granted through force or fraud. Hoiles applied this principle equally to both, but he recognized the practical differences between the two groups.

On business

Hoiles insisted that all goods and services be provided on a competitive basis without government involvement; that is, by private contract. The depth of his commitment to what he called economic “voluntaryism” was reflected in an exchange of correspondence with the noted Austrian economist Ludwig von Mises, which occurred in May 1962. Hoiles wrote to comment on an article by Mises entitled “A Dangerous Recommendation for High School Economics.” Declaring the piece to be “a splendid representation,” Hoiles took exception to one paragraph. Mises had written,

[There] are things that private enterprise cannot achieve, e.g., police protection and provision of national defense…. No reasonable man ever suggested that the essential function of state and government, protection of the smooth operation of the social system against domestic gangsters and foreign aggressors, should be entrusted to private business.

Hoiles certainly considered himself a “reasonable man.” In a letter to Mises dated May 21, he insisted that even the services of police and national defense should be provided privately and competitively. He explained,

The insurance companies should take care of the fire department, and insurance companies should take care of protecting your life and property. And if you didn’t like the service the one insurance company was giving you, you would employ another insurance company to help protect your life and property. Of course, there is no such thing as absolute protection, but we’d get more protection by a voluntary basis than by the coercion of the majority.

Elsewhere Hoiles expanded on the primary importance of free competition: “[There] must be competition or the threat of competition in order to have a true value of the worth of the service. When there is no competition, there is no true value….”

In a letter to Mises dated May 21, he insisted that even the services of police and national defense should be provided privately and competitively. Another means through which government prevented competition and the “hope of rewards” was the granting of privileges to specific businesses or businessmen. The privileges might be embedded in law — for example, a tariff; or they might occur on a case-by-case basis — for example, a municipal contract awarded for a political kickback. Whatever the form of privilege, it was the honest businessman and the working man in the role of consumer or taxpayer who suffered.

On labor unions

Hoiles’s opposition to labor unions must be understood in the context of the tactics used by unions of his day and the legal status they came to enjoy. During the 1930s, Hoiles gained the newspaper experience that would result in a media empire.

In its most basic form, a labor union is nothing more than an organization of workers who come together to achieve common goals such as higher pay or better working conditions. In America of the 1930s, however, unions began using force in various forms. (In fairness, some force was in response to the unjustified violence of businessmen who often enjoyed the protection of law.) For example, one tactic of the emerging unions was the “sit-down strike” during which workers remained inside places of employment but refused to work. Thus, employers could neither produce nor replace the work force. When workers were forcibly expelled, they formed picket lines to prevent replacement labor from entering the workplace and sometimes beat up those who tried to cross the line.

Under the presidency of Franklin Roosevelt, labor unions also received legal privileges. In 1935, a federal law known both as the National Labor Relations Act and as the Wagner Act limited the ways in which an employer could respond to workers in the private sector who engaged in collective bargaining, strikes, or other union activity. For example, the Act defined “refusing to bargain collectively with the representative of the employer’s employees” as an unfair and prohibited business practice. In short, the Act protected workers as a class.

During the 1930s, Hoiles gained the newspaper experience that would result in a media empire; it included 16 newspapers at the time of his death in 1970. By all accounts, despite his considerable wealth and stature, he consistently displayed an egalitarian attitude toward employees. From editors to secretaries, from writers to janitors, he treated employees as intellectual equals and never failed to engage them in conversation or to proffer a book, urging them to give him feedback. Hoiles deeply respected the working man and, yet, he despised labor unions. All of his newspapers were open shop.

Hoiles rejected unions on two grounds. First, they violated the Golden Rule, which was a foundation of his moral code; and, second, they invited government intervention or force into human relationships.

This claim of privilege — which led to a partnership with government — was the second reason Hoiles rejected labor unions.

The Golden Rule is stated in Matthew 7:12: “Therefore all things whatsoever ye would that men should do to you, do ye even so to them; for this is the law and the prophets” (King James Version). Hoiles called upon workers to treat employers as they themselves wished to be treated; in other words, they should engage in free negotiation that acknowledged each party’s right to say “no.” Of equal importance, union members should respect the rights of the nonunion workers who were willing to assume the jobs and contracts that the unions rejected. Union members were claiming a right that they denied to others, which meant they were claiming a privilege.

This claim of privilege — which led to a partnership with government — was the second reason Hoiles rejected labor unions. One result of the partnership: a manufacturer had the right to refuse to negotiate working conditions with an individual employee but he had no similar right regarding the group called “a union.” The law forced him to negotiate. This was the double standard by which a group is allowed to act in a manner that was improper for individuals.

And, again, union privileges inflicted harm on the nonunion worker. In a 1937 editorial entitled “Whom Will a Worker Obey?” Hoiles expounded on the “harm” collective bargaining inflicted on working people:

Collective bargaining advocates delude the poor, honest working man, who has not had time to study the matter through, with the idea that giving them the right to regulate his life — tell him at what he must work, for what price and how long — they will greatly add to his comfort of life. [Emphasis added.]

The phrase “who has not had time to study” is key. In a July 1938 editorial, Hoiles explained that the purpose of his columns was to make people think. Elsewhere, in a 1940 editorial, he stated, “Collective bargaining makes its members collectivists and tyrants instead of Americans and true Christians.”

Part 1 | Part 2

This article originally appeared in the June 2010 edition of Freedom Daily.

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    Wendy McElroy is an author for The Future of Freedom Foundation, a fellow of the Independent Institute, and the author of The Reasonable Woman: A Guide to Intellectual Survival (Prometheus Books, 1998).