From an address by Senator Daniel Patrick Moynihan (D-N.Y.) to the charter meeting of the new philanthropic organization Independent Sector, in Washington, D.C., March 5, 1980.
I am very much here to congratulate you and to toast you—you did it. If anything exhibits the energy of the private sector over the past short year and a half, it’s that a common sense of purpose and condition has emerged from the most disparate enterprises, from the American Theatre Association to the Audubon Society all in one room, all for one purpose. And what greater tribute could be there in this, his latest public undertaking, than that you have achieved it under the leadership of [the former U.S. Secretary of Health, Education, and Welfare] John Gardner.
A state monopoly over humanitarian activity is not the way to organize one’s society.
How characteristic of him, and how important for you, that he has moved from a principal preoccupation with the role of government in the society to a not antithetical but corresponding concern with the survival of the alternative modes of common provision and public enterprise which Independent Sector embodies. . . . I am here to tell you that you are necessary, you are important, and you are in some jeopardy.
I think it would be useful. . . . to speak a little bit to the large issues of social policy that are involved in what each of you is doing individually and . . . in a group. We are dealing with a resolution that came out of the American and British encounter with those two primal ideas of the nineteenth century that have caused so much sorrow in our own. On the one hand, there grew up in the nineteenth century the stern notion that there ought to be no public or common provision really of any kind, that individuals were on their own and it’s “Root, hog, or die,” such that some get plenty and some get none and that’s the way the species evolves. There was a lot of seeming sustenance in science for unregulated individualism and for what came to be known as the doctrine of laissez-faire. But there also arose, not so much in opposition as in a kind of a parallel heresy to the long experience of mankind, the idea of the all-encompassing . . . state.
These two opposed, incompatible, and, in terms of human experience, almost unrecognizable sets of ideas still grip much of the world. In the jungles of Cambodia and in the farthest reaches of Africa and Latin America you’ll find one extreme or the other still wreaking its savage toll on the peoples who are so afflicted.
But out of a recognition that this is not the way people have lived or should live, there arose the notion of the independent sector, or mediating institutions—the Red Cross in war and the Audubon Society in peace, the Theatre Association, the Community Chest, the foundling hospitals, the Brooklyn Jewish Hospital, Columbia Presbyterian. This kind of mediating institution began to be something characteristically associated with British and with American life and had a reputation, a point of view, that has somehow begun to get lost. It was put forth as an alternative to the all-powerful market or the all-powerful state, and in its heyday, it was powerful in its own right. Professor Calvin Woodard of the University of Virginia came up with a remarkable set of calculations for the year 1871: he found that the budget of the British Navy that year was nine million pounds, whilst that same year the private charities of London dispersed eight million pounds. It was already the perception even at the height of Herbert Spencer’s social statics that a state monopoly over humanitarian activities was not the way to organize one’s society.
If you recall, the first great reaction in this country to the imbalance that these alternative ideas could bring about was the concern with monopoly in private economic affairs. . . . The public life of [President Woodrow] Wilson’s time was absorbed with the fear and detestation of private monopoly. Great chunks of social and political energies were consumed in devising strategies for controlling it. While this was not always an easy undertaking in the practical applied sense, it wasn’t a very difficult one in the conceptual sense because you could always pass a law to do what you wanted to do by way of control and regulation. You could create in the public sector the institutions you wished to provide as a counterbalance to the private sector.
Beware the idea that the government owns your income and permits you to retain a certain amount.
In that manner, step by step, the public sector began to grow—first, to keep the private sector from too great a monopoly of power, and then to acquire a condition of its own and a dynamic of its own.
I think many of you will remember reading Joseph Schumpeter’s last great book in 1948 in which he said how this wonderfully creative civilization which we have produced in North America and Western Europe is going to come to an end—not in some great apocalyptic Armageddon in which one class takes over another class and destroys all classes. No. It will come to an end through the slow but steady conquest of the private sector by the public sector.
There is nowhere that this is more in evidence and more advanced than with respect to the non-government enterprises of public concern which you represent. Little by little, you are being squeezed out of existence or slowly absorbed. The issue of your survival is as important today as ever the issue of private monopoly was in 1912. It’s our job to make it understood as such.
I had not fully understood the depth of the animosity which the state has commenced to acquire toward your very existence until three years ago. Senator Packwood and I introduced legislation that would provide a measure of tax aid to persons who send their children to non-governmental schools. Fifteen years ago, it would not have been thought such a horrible idea, or at least the language and the techniques used in opposition would not have been thought inappropriate. In 1964, when John Gardner was the Secretary of HEW, the Democratic platform called for this kind of assistance. In response to that acknowledgment, a major government program to aid elementary and secondary schools came into being. It came into being because it was said . . . that this aid would be distributed all across the spectrum from the private to the government schools.
But the reality turned out to be that only government schools got it and once they got it, they wanted more, and as they wanted more, they wanted others to have less. An institutional dynamic took place, in which people of the most gentle miens and benevolent dispositions set out to destroy these competitors because they did not control them.
“Destroy” is not too strong a term. You should have heard the language used, the insinuations made, above all, the ultimate insinuation of a statist tendency which is to say, “These institutions are un-American. They are non-governmental.” You have to have felt that experience to know that this is a dynamic that arises quite apart from the individual intentions of those concerned. Institutional interests take hold and command.
Now we are involved in . . . a means to revive charitable contributions by allowing them to be deducted “above the line,” as they say, on the income tax. . . . What is involved fundamentally is the continued participation of a large portion of the American public in the support of the Salvation Army, in the support of the American Cancer Society. We will always have corporations supporting them, as we will always have persons support them who have accountants do their income tax for them. That upper five percent will continue as long as the tax laws make it profitable.
But if you once lose the habit of support which Tocqueville commented upon, you will have lost a fundamental component of the American democracy and of our society. I’m telling you there are institutions in this city that desire that you should. . . . They will do everything they can to oppose it and destroy it. . . .
Private institutions really aren’t private anymore. Many are primarily supplied by government funds. Their private leadership is nominal, their fund-raising scarcely exists. And on the edges, it is thought to be inappropriate. As a matter of fact, the tipping point comes when it is clear that the government would prefer that you didn’t get any money which wasn’t governmental, because it’s not controlled.
Now, that’s happening here. Think of your own institutions and how much money you now get from public sources. I talked the other day with the head of Catholic Charities, the national organization, who reported that last year something momentous happened to Catholic Charities. For the first time, more than 50 percent of its budget came from government. More than half. In time, there cannot be any outcome to that encroachment save governmental control.
We have two possibilities: One is the disappearance of the independent sector, or—just as powerful a possibility—its subversion, so that it only appears to continue. And in fact, this day is upon us. We don’t want that and we don’t have to have it. There are people in this government who feel just as strongly as you do, especially, I think, in the Congress. There is a question of raising this experience to a level where it is generally recognized that this is going on. Secondly, there is a time, that has come, to insist that the federal government not take away your opportunity to exist through contributions. Else it will surely do so. The most seemingly forward-looking attitudes somehow transmute when they get to Washington.
Have you all heard of the idea of tax expenditures? Do you know you’re a tax expenditure? And that every dollar that is deducted through a contribution to United Way is a tax expenditure? It seemed like a good idea to discover what the rich were getting away with, but it slowly transmuted. It took . . . about eight years . . . between the idea of “Let’s note what the expenditures are,” (namely, monies that are not paid in taxes by individuals because they’re used for other things) to the idea only now just surfacing that the government owns your income and permits you to retain a certain amount. That’s the real tax expenditure—what you are allowed to keep.
It’s right there between the lines. Do you know that you are allowed to deduct that money? Not that you gave it to a thoroughly respectable organization like the ASPCA; no, you were allowed to keep it. Well, if you’re allowed to keep it, then it wasn’t yours in the first place, was it? It belongs to the state. The state will consume it if you don’t fight back. . . . Something of the most profound concern to American society is at issue, and that is our tradition of a plural, democratic society. It would be the final irony if, in the name of good purposes, government ended up destroying liberty in the society. But that can happen, and that is what seems to me is your job to make certain does not happen.
For perspective on this speech, see this note from Leslie Lenkowsky and Suzanne Garment.