R.C. Hoiles, Friend to Workingmen, Foe to Privilege
by Wendy McElroy
The libertarian publishing giant Raymond Cyrus Hoiles 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' of publishing himself because, as Hoiles 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 the average working person. 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.
PROCEEDING FROM 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) that appeared in his flagship newspaper the Santa Ana Register, Hoiles explained, “it 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 through granting of 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' associate D.R. Segal once called the “penalizing of success and subsidizing of robbery.”
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.
HOILES ON BUSINESS
Hoiles insisted that all goods and services be provided on a competitive basis without government involvement; that is, by private contract.
His 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:
“[T]here 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 21st, 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 , “{T]here 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...”
Another means through which government prevented competition and the 'hope of reward' was through granting 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 workingman in the role of consumer or taxpayer who suffered.
HOILES ON LABOR UNIONS
R.C. Hoiles' 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.
In its most basic form, a labor union is nothing more than an organization of workers who come together to achieve common goals like 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 D. Roosevelt (1933-1945), labor unions also received legal privileges. In 1935, a federal law known both as the National Labor Relations Act and 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 was establishing his path as a publisher which 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, Hoiles consistently displayed an egalitarian attitude toward employees. From editors to secretaries, from writers to janitors, Hoiles 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 workingman 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.
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.” 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 non-union 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 was the second reason Hoiles rejected labor unions because it led to a partnership with government. 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 non-union worker. In a 1937 editorial entitled “Whom Will A Worker Obey?” RC expounded on the “harm” collective bargaining inflicted upon working people. He wrote, “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.” Elsewhere, in a 1940 editorial, he stated, “collective bargaining makes its members collectivists and tyrants instead of Americans and true Christians.” [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 were to make people think.
THE EARLY ROOTS OF BUSINESS AND LABOR IN HOILES' LIFE
Hoiles began his newspaper career by working for the “Alliance Review” (Ohio), a daily owned by his brother Frank. In 1919, he and Frank bought the “Lorain Times Herald” (Ohio) of which RC owned two-thirds. In 1921, they each purchased a one-third share in the “Mansfield News” (Ohio) of which RC became a hands-on publisher. He wanted to use the “News” to speak out against oppressive labor unions but Frank refused to print such articles. The disagreement led to a professional break in which RC received Frank's interest in the “Herald” and the “News,” eventually becoming sole owner of both. Then, in 1927, RC purchased the “Bucyrus Telegraph-Forum” (Ohio), which was managed by his son Clarence under R.C.'s direction from Mansfield where he lived.
A colorful page in Ohio newspaper history followed. The “Herald” had exposed the fraudulent awarding of a paving contract to a Cleveland company despite the presence of a lower bid; public pressure resulted in the lower bid being accepted. The enraged owner of the Cleveland company, S.A. Horowitz, purchased rival papers in both Lorain and Mansfield in order to run RC out of business. The attempt failed and the conflict blazed on. In his essay “The Uncompromising R.C. Hoiles,” biographer Carl Watner highlighted its bitterness:
“[T]he front porch of the Hoiles home was destroyed by an explosion in November 1928, Hoiles' car was wired with dynamite (which fortunately failed to detonate), and a dud bomb was discovered in the office of the Mansfield News. None of this gangsterism was ever explained, but it did motivate R.C. into selling the papers in Mansfield and Lorain.”
RC purchased a bullet-proof automobile and hired an armed guard to accompany him. Some blamed Horowitz; some blamed the labor unions that Hoiles lambasted. Hoiles held firm. Of labor unions, he stated, “I don't believe in unions, in a closed-shop. Never did and never will. Oh, I don't object to the principle of someone representing an employee if that employee wants representation. But that's not how unions work. They force the representation on you whether you want it or not. And I didn't want it.”
In 1932, Hoiles sold the papers. It is not clear why. Perhaps it was due to the stress of the situation. Perhaps, as a June 4, 1986 letter from R.C.'s son Harry to Carl Watner suggests, it was because the papers had ceased to be sufficiently profitable.
Hoiles spent much of the next three years poring through the books that created a libertarian fervor within him. In a 1955 editorial, Hoiles explained, “Ralph Waldo Emerson was one of the first libertarians who aroused my interest in liberty and how a government should be limited...Then I ran across Herbert Spencer....Then a socialist told me that Frederic Bastiat made the best explanation of the disadvantages that come from protective tariff...Bastiat so impressed me that I republished his 'Social Fallacies (Economic Sophisms) and his 'Harmonies of Political Economy' in two volumes, and his essay on 'the Law'.”
Events in his personal life contributed to Hoiles' disillusionment with government. According to a term of the sale, RC was not to receive full payment for his two newspapers until 1935. Meanwhile, New Deal legislation enacted under President Roosevelt caused the value of the dollar to plunge on one hand and nullified the gold clause in private contracts on the other; gold clauses were common with business contracts of the day and gave a creditor the option of receiving payment in gold or gold equivalent. In a letter written on February 4, 1964 to Robert LeFevre, RC explained that as a result of “the government abrogation of contracts...I lost $240,000.”
When he bought the Orange County, California newspaper “Santa Ana Register” in 1935, RC imported his views of labor to the West Coast. A 1961 policy statement expressed the positions RC held without waiver from 1935 until his death in 1970. That statement referred to the “Three Guides to Morality”: the Ten Commandments (the Decalogue); the Golden Rule (the Sermon on the Mount); and, the Declaration of Independence. All of the guides indicated that men were born with equal and inalienable rights that “are not the gift of any government.”
Hoiles' newspaper chain experienced repeated strikes but his office in Orange County was picketed by the union only once. D.R. Segal explained why 'only once'. He wrote, “after the first few days the pickets quit and refused to come back. They said R.C. Walked with them, lecturing to them, handing out pamphlets and obviously having the time of his life with a captive audience. They said the hell with it and called off the picket line.” The view of picket lines that Hoiles undoubtedly presented to the protesters as he marched at their side could not have been popular. An advocate of crossing picket lines, Hoiles declared picketing to be “nothing but a racket. It throws wages out of balance, causes unemployment, poverty, misery...” An editorial entitled “Pickets Hitler's Real Aid” (February 12, 1941) called picketers “leeches and parasites on society...traitors to the principle of equal freedom and the American way” who try “to persuade other people not to work or buy from the firm that does not consent to pay tribute to their arbitrary, coercive demands.”
No wonder that, after one such anti-union editorial, thousands of union members canceled their subscription to the Register. Undeterred and perhaps roused by opposition, Hoiles personally went house-to-house to get signatures to put “right to work” legislation on the California ballot.
Hoiles even managed to sway some union members to his perspective. In an article entitled “What Would Call Mr. Hoiles?” Thaddeus Ashby described R.C.'s modus operandi. “One of the first things Hoiles does when he buys a newspaper is to refuse to sign a closed shop contract with the union. He has a strike on his hands.”
Ashby recounted the reaction of a man who had lost his job due to one such strike. “I was in sympathy with the union. Of course, I quit when the strike was called I went to...work on a union paper. I soon got tired of it. I could do as much work in an hour as a union man did all day. They told me to slow down. Then, on warm day I opened a window and was promptly informed by the shop steward that there was a union man who got paid for opening windows, and was I trying to throw him out of work? I came back to Hoiles. I like working here and wouldn't go back to a union shop under any circumstances.”
Hoiles never deviated from these early beliefs and experiences regarding business and labor. His economic credo remained: America's enviable standard of living owed nothing to governmental laws and regulations. It was entirely due to the voluntary exchanges, contracts, production, inventions and investments that resulted from men who were free to choose for themselves.
CONCLUSION
As important as economic discussion may be, it can lose the more human face that underlies matters of dollars and cents. Thaddeus Ashby was once asked about Hoiles' economic stance that both excoriated business and labor, and championed them. Was he a scoundrel? Was he a genius? What human being lay beneath the economic theories?
Ashby answered, “He's the kindest man I ever met. You've heard he's against tax-supported schools, tax-supported old age pensions, social security, child labor laws, taxes of any kind. You've heard how he throws labor unions out on their ears. But I say he is kind because he respects men as individuals. You feel he wants to find the best that's in you and drag it out of you where you both can stand and admire it. He looks for the truth in a man.”
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