Early Chicago economist Simons backed progressive taxes and corporate breakup

Evidence

Through targeted acts of regulation and redistribution, he believed, the government could curb the cartelization and corresponding destabilization of the modern economic environment without excessively interfering with competitive business endeavors. His “positive program” suggested, for instance, that the government implement a “steeply progressive” income tax, which he believed would combat the concentration of economic power without obstructing the free play of marketplace competition. “Confi ning my remarks to matters of taxation, I may sound to you like a fullfl edged New Dealer, or something worse,” he acknowledged in a speech before an audience of Republicans in 1938. “My criticism of the Roo se velt administration, in this special fi eld, is that it has been unduly backward and diffi dent about reform.” And like Viner, he assailed the increasing centrality of giant corporations within the modern economic system, proposing a series of dramatic steps to discourage consolidation and return the basic structure of American business to a smaller scale. Simons’s “positive program” presumed that the “great enemy of democracy is monopoly, in all its forms,” and proposed counteracting this through a “complete ‘new deal’ with respect to the private corporation,” which involved eliminating horizontal and restricting vertical integrations, as well as nationalizing “both the railroads and the utilities, and all other industries in which it is impossible to maintain effectively competitive conditions.” He further proposed “direct limitations upon size, for the purpose of preventing unnecessary concentrations of power,” asserting in justifi cation that “we have created Frankensteins. The best single remedy lies in drastic narrowing of corporate powers, with the purpose of facilitating use of the corporate form for the or ga ni za tion of enterprise and production, while preventing its use for sheer aggregation of businesses and concentration of power.” Cumulatively, these ideas amounted to a complete reinvention of the corporate form that Simons hoped would counteract a trend toward consolidation and reshape the American economy around competitive small producers. — Angus Burgin, The Great Persuasion, 106

Categorization

• XREF: Connects to the reader’s stated project: the Mont Pèlerin Society’s revision of Simons’s legacy — anti-monopoly Chicago School figures are a surprising ancestor of later free-market advocacy. — connects to: Early Chicago liberal Simons advocated abolishing fractional-reserve banking and heavy wealth redistribution — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 722; Early Chicago economists favored regulated capitalism out of skepticism, not market faith. — Angus Burgin, The Great Persuasion: Reinventing Free…, 108; The Chicago School was founded by Simons and Hayek with Volker Fund money — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin: The Making…, 155 (+1 more)
• SEED: An essay angle: how the anti-monopoly, trust-busting Chicago School of the 1930s became the pro-corporate neoliberal orthodoxy of later decades — a genealogy of forgetting.
• ADDENDUM: Simons’s insistence on competitive small producers resonates with the anti-monopoly thread in ‘Grafting & Growth’ — concentrated power as the enemy both of markets and of diverse infrastructure.

Broader Connections

• Early Chicago liberal Simons advocated abolishing fractional-reserve banking and heavy wealth redistribution #corroborates (0.85) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 722
• Early Chicago economists favored regulated capitalism out of skepticism, not market faith. #expands (0.78) — Angus Burgin, The Great Persuasion, 108
• Postwar market advocates reread Simons and were shocked by his views #expands (0.72) — Angus Burgin, The Great Persuasion, 107
• The Chicago School was founded by Simons and Hayek with Volker Fund money #corroborates (0.70) — Philip Mirowski & Dieter Plehwe (eds.), The Road from Mont Pèlerin, 155