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KEYNES
AT
HARVARD
Economic Deception
as a Political Credo
A  Veritas  Study
2009 Web version transcribed from the
REVISED AND ENLARGED EDITION (1969)

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 I 

CAMPUS SOCIALISM

We undertook this study because of a flood of complaints about the philosophy and conduct of the undergraduates and recent graduates of our colleges and universities. Although the bulk of such charges related to Harvard University, other academic bodies came in for their share of criticism.

In sifting through the complaints we found that one general conception was found to prevail. These recent graduates reflected the attitude that “our free enterprise society is doomed.” The result is a general despair for any chance of an individual future under the present social order. Private initiative and individual enterprise are considered outworn concepts. The modern educated mind is taught to look only for stop-gap measures to tide it over until a “dying capitalist system” is replaced by some form of government socialization.

Those graduates who manage to attach themselves to government bureaucracies are deemed fortunate. They are “riding the wave of the future.” Other alternatives suggested to graduates are the large corporate bureaucracies (called “self-socialized forms”) or the huge tax-free foundations.(1) These are considered entities which are about to merge into the inevitable socialism.

All arguments against this philosophy of despair are called “reactionary.” The entrepreneur, merchant or banker is the villain of the piece. The chief-devil and whipping-boy is the National Association of Manufacturers (N.A.M.), which is accused of conspiracy against the people, against progress and against humanity in general. Attitudes of these college graduates towards the private enterprise practitioners sound like a demonology of capitalism. The most capable executives and entrepreneurs are symbolized as wicked creatures who are fanatically opposed to true progress. Organizations such as the N.A.M. are charged with a conscious plot to keep the rest of society in economic and political subjugation.

We all know that communists have been preaching such an ideology for many years; however, the answer is not so simple. Investigation discloses that the philosophy responsible for the bulk of our university thinking does not bear the label of Marxism or Communism; it is instead propounded as something called Keynesism. Keynesism is so-called after John Maynard Keynes, British economist, (1883-1946). His teachings are today considered an ideological base for British and American Socialists.

To get at the nub of the matter, one must trace back the evolution of such thinking, starting with the undergraduates and working back to the source of the infection. Using as a basis only factual material, this study penetrated the labyrinths of a socialist-communist-fascist underworld. The term underworld has been found to be the most descriptive of this melange.

It is well known that in the criminal underworld many divergent elements, some of which fight each other to the death, find a unity in their general opposition to regularly constituted authority.(2) In the general political underworld of socialist-communist and fascist movements, totalitarians may kill, maim and enslave one another without mercy but a hatred of free enterprise capitalism represents a common faith and gives them a common denominator.(3)

No matter what phase of left-wing infiltration we study, be it in government, in information media, in foundations, in labor unions, or whether we deal with Keynesian socialism, neo-Marxian socialism or with Bolshevik communism, the tracks lead inevitably to Harvard University. This does not mean that Harvard has a monopoly of the leftist host. The roots of left-wing ideology have penetrated deep into most of the large universities and colleges of America. However, Harvard has led all the rest in spawning exponents of the three brands of leftism mentioned above. The Harvard Graduate School has flooded the whole academic world with teachers trained in such leftist thinking.

The question arises whether there is something about the nature of Harvard which makes it a generator of leftist thought. The fact is, that Harvard did not adopt the left-wingers, the left-wingers picked Harvard.

The prestige, influence and importance of Harvard University in the life of America automatically made it the target of those who want to subvert society for collectivist purposes. The Harvard liberal policy of allowing free expression of ideas, no matter how extreme, gave conspiratorial groups carte blanche for their activities.

Frank W. Taussig (1859-1940), beloved teacher of economics at Harvard for 53 years, was a man of great tolerance. He believed that a show of good-will and a policy of free intellectual inter-play would liberate the left-wing doctrinaires from their unbending attitude. He was not alone. Men of good-will and believers in pure academic freedom in other Harvard departments made the same miscalculation of the nature of leftist intentions.

Taussig took Joseph A. Schumpeter, an old time socialist of the Austro-German socialist school, into his own home and used his influence to build up Schumpeter as an international authority in the field of economics.(4) Taussig also aided the academic career of another economics instructor at Harvard, Harry Dexter White.(5) Harry White, using the prestige of Harvard secured a position in the United States Treasury Department until he became the chief financial policy maker for the United States. He repaid Taussig, Harvard University and his country by becoming a Soviet espionage agent, diverting our financial power to serve Soviet interests.(6) Harry White was at the same time dubbed as America’s chief Keynesian economist by none other than John Maynard Keynes himself.

A check of the pattern of the growth of leftist forces at Harvard soon revealed that the economics department was the fountainhead of leftist ideology at the University. True other departments—Sociology, History and Anthropology—also reflected considerable leftist thought. But a comparison of reading material of all of them shows that the same references recur, and generally the economics courses took the lead. The economics department actually was selected by leftists as a point of concentration at the very beginning of the twentieth century.

There are three main trends of socialist thought in the Western world. They are: the communist soviet brand; social democratic neo-Marxism; and Keynesian theories which are actually an extension of the Fabian movement. Curiously, Keynesism proved to be adaptable to the Fascist as well as the Socialist world.

All three together have dominated the Harvard economics department for years and have managed to muzzle free enterprise advocates. Of the three factions the Keynesian element predominates. Paul M. Sweezy, who reflected the Kremlin line in teaching economics, complained that the Keynesians were “regularly in a substantial majority after 1936.”(7) The economics department was the ideological beachhead from which leftism invaded the rest of Harvard University. Harvard was the launching pad for the Keynesian rocket in America.

This was not just a Harvard condition; it extended to the whole academic world. Henry Hazlitt in his great analytic work The Failure of the “New Economics” states:

If we bring Keynes’ comparison up to date, we shall have to say that Keynes has conquered the present Anglo-American academic world, and the present Western political world, almost as completely as Marx conquered Russia and China.(8)

Neo-Marxist Joseph A. Schumpeter, Harvard economics professor for twenty years, complained that Keynes’ General Theory had supplanted Marx and “was the outstanding success of the 1930’s and that it dominated analytic work for a decade after its publication, to say the least.”(9)

However, the picture is not quite so clear-cut. There have been notable cases of Soviet partisans operating sub-rosa under a Keynesian label. Harry Dexter White, mentioned earlier, was such a Keynesian. Lauchlin Currie, another Keynesian economics instructor at Harvard, used the prestige of his position to secure an appointment to the Treasury Department, as a stepping stone to the Federal Reserve Board. After being accused of espionage on behalf of the Soviet Union, Currie removed himself from our shores and exiled himself to Columbia, South America “well outside the national jurisdiction of the United States government.”(10)

Harvard has been the source of socialist penetration long before the Bolshevik revolution. W.E.B. DuBois, a historic Negro favorite of the Kremlin, emerged as a full-fledged socialist from Harvard in 1890. Harry F. Ward acquired his socialism in Harvard before 1898.(11) There were many such instances of individual indoctrination before the turn of the century.

After the year 1900, the pattern at Harvard followed the general evolution of socialism-communism in the Western world. Among the most virulent radical groups in Harvard were the Fabian socialists. Felix Frankfurter, Harvard Law School 1906; Walter Lippmann, Harvard ’10; Roger N. Baldwin, ’05; Stuart Chase ’10 were some of the Fabians in Harvard during that period. British Fabian lecturers taught at Harvard: Graham Wallas (about 1910), Bertrand Russell (1914), Harold Laski (1918). Professors and teachers of leftist persuasion, aided by professional agitators, organized extremist groups among students and the faculty. These in turn infiltrated established student organizations and the Harvard administrative apparatus.

The Bolshevik Revolution whipped the socialist ranks into a ferment. Young radicals like John Reed (Harvard ’10) joined the Bolshevik movement outright. Large segments of the Fabian Socialist and Marxian Socialist groups broke away to help form the Communist Party of the United States. Others remained socialists, enjoying the cover of respectability while secretly sympathizing with the Bolsheviks.

In the 1920’s revolutionary coteries formed around leftist leaders. One was Felix Frankfurter. His Harvard proteges spanned the full spectrum ranging from Fabian socialism to Russian Bolshevism.(12) Ex-President Theodore Roosevelt wrote Felix Frankfurter that:

. . . you have taken, and are taking on behalf of the Administration an attitude which seems to me to be fundamentally that of Trotsky and the other Bolsheviki leaders in Russia; an attitude which may be fraught with mischief to this country . . . Here again you are engaged in excusing men precisely like the Bolsheviki in Russia, who are murderers and encouragers of murder, who are traitors to their allies, to democracy, and to civilization, as well as to the United States, and whose acts are nevertheless apologized for on grounds, my dear Mr. Frankfurter, substantially like those which you allege.(13)

During this period Frankfurter was a director of the National Association for the Advancement of Colored People (NAACP) and also served as national committee member of the American Civil Liberties Union.(14)

Among Frankfurter’s intimates at Harvard was British Fabian leader Harold J. Laski whose pro-bolshevik bias eventually secured him a teaching post in Moscow. After Laski left Harvard for England his collaboration with Frankfurter was satirically referred to in academic circles as the “Frankfurter-Laski Axis.”

Harvard became a pink and red hotbed. However, all these groups agreed on one goal i.e. socialism. Their common purpose bound them all into one general political underworld. Their overall foe was capitalism, and their individual enemies were men of business. In this they all agree regardless of disagreement on method, to this very day.

In spite of Fabian socialists’ claims that they are non-communist, they have been performing a yeoman service for the Kremlin throughout the years. Indoctrination of undergraduates in socialism usually proceeded in three phases. First, the socialist lecturers conditioned the young minds to hate capitalism as an outmoded and cruel system; the second phase was to depise and distrust individual capitalists as exploiters and reactionaries who oppose social improvements; and thirdly the fledgling radical is hooked by clever “scientific examples” and formulae which prove to him that the present social order is predestined to collapse and socialism is foreordained to take its place.

Communist logic thus takes over with the appeal; “if you believe that capitalism is outmoded then we have a quick, clear and precise program of how to bury it and install a socialist government without procrastination or red tape.” Communists also possess the added authority of a Soviet power which actually dominates a large part of the world. Not only impatient young minds fall for such blandishments. Seasoned socialists are also drawn inexorably towards the logic of the communist position. Once socialism is accepted as an aim then the communist program furnishes the most direct road to its realization.

In checking the backgrounds of 36 ex-communists it has been found that 34 of them went through the above mentioned process.* The leadership of red political armies is traditionally recruited through the socialist movements.

Among the alumni of Harvard and other universities and colleges there is a prevailing attitude of benign tolerance towards the “nice” and “harmless” reform socialist. The “harmless” socialist in turn looks upon the communist as a kind of Peck’s bad boy who possess intrinsic goodness if only he weren’t quite so rough. When face to face, no matter how hot the argument, socialists and communists refer to each other as “comrades.” Behind the iron curtain even those socialists who are about to be shot are described as those “comrades” who do not see the light according to the “pure Party” line.

The folklore among conservatives which pictures the socialist as “harmless” is something that left-wingers have implanted through many years of constant repetition. The socialist approach may be “soft” and “harmless” in appearance but the inevitable consequences of socialist activity are both tragic and catastrophic to society.

Harvard gave the world a socialist firebrand, John Reed, who before dying in Russia became a bolshevik and published his Ten Days That Shook The World. This book kindled the revolutionary fervor of young collegians from Harvard and other universities. Under the cloak of “socialism” and “liberalism” this trend bore fruition with the outpouring of recruits for Soviet spy rings. James Burnham in his Web of Subversion points out that:

Almost the entire membership identified as belonging to the first Ware cell (Soviet spy ring –ed.) came out of the Harvard Law School: Alger Hiss, Nathan Witt, Lee Pressman, John Abt and Henry H. Collins, Jr., Harry Dexter White and Lauchlin Currie were teachers (Economics teachers –ed.) as well as students at Harvard. Among other Harvard products we find Harold Glasser, Russell Nixon, Maurice Halpern, George R. Faxon, Allan Rosenberg and Irving P. Schiller, all Fifth Amendment cases.(15)

In 1924, R. M. Whitney in his Reds in America sounded the alarm against the use of the “liberal” label to cover socialist and communist agitation. He wrote:

The Intercollegiate Liberal League was born at Harvard, April 2, 1921, and it was a result of the activities of the Socialist and later the Liberal League that developed the “modern intellectuals,” or as they are better known, the “parlor Bolsheviki.” There is so much in the teaching of radicalism that appeals to the mental processes which invariably accompany certain periods in the life of every student, that it is not surprising that the communist party, as a business proposition, and the many inconspicuous individuals who are satisfied that they should be leaders and have no better means of attaining notoriety, have grasped the opportunities offered, as the Socialists did before them. Many are really capitalists, while others are plain parasites.

It is safe to say that no institution of learning in the country has been so thoroughly saturated with the “liberal” activity as Harvard University. This institution has stimulated such a spirit of democracy among the student of the past generation that the radicals have had a more fertile field in which to work at Harvard than in a less liberal establishment. The professors themselves have not been inactive in the encouragement of the movement, and the names of several of them appear prominently in the roster roll of American liberals and are known in the “illegal” circles of the Communist party of America. These professors, as well as the professors of many other colleges, number known Communists among their personal friends, and are frequently found speaking from the same platform even with members of the Central Executive Committee of the Communist party of America. It is impossible that men of their intelligence should not know that they are advocating what the Communist party desires but cannot use in public propaganda because their own words would be discounted. Prominent radical speakers have been brought to speak at meetings of the Harvard liberals from all sorts of organizations, among them men who are actually paid agents of the Communist party.

Prominent in the organization of the Intercollegiate Liberal League were men notorious as radicals, as well as men whose patriotism, and Americanism, cannot be questioned.(16)

In turning down the application of the Harvard Liberal Club and the Intercollegiate Liberal League for membership in the Associated Harvard Clubs the reason for rejection read in part:

It would appear that the Harvard Liberal Club, Harvard Students’ Liberal Club and the Intercollegiate Liberal League may be the means devised and about to be used as propaganda agencies by radical movements not yet disclosed. The Russian theory of instilling sympathetic ideas in the younger generation while they are still in school is well known, and after a brief examination . . . it appears more than likely that the system is being put into execution among college students in this country. Such a plan of radical activity is most patently dangerous, as the students at that age, while mentally keen, active and alert, have not yet formed their permanent characters and are at a formative period in their mental development, during which they are particularly susceptible to the influence of older minds, especially those of their masters whom they are accustomed to look up to as fountains of authority, wisdom and guidance. Under those circumstances, with men like Felix Frankfurter, Roger Baldwin and others behind such a movement, its potentialities for evil at once appear to be tremendous.(17)

Thus 40 years ago Harvard spawned left-wing bureaucrats, socialist-Marxists and socialist-Fabians (Keynesians) who acted as “transmission belts” for communist penetration of the nation.(18) The interlocking left-wing directorate spreading from Harvard into other universities, the government, and the whole social fabric of America is so great that it would take a score of volumes merely to classify the ramifications.

This work can only present the broad outlines of this leftist process and illuminate it with the more important highlights.


1  Joseph A. Schumpeter, Capitalism, Socialism and Democracy, Harper, N.Y., 1950, Third edition, p. 134.

The perfectly bureaucratized giant industrial unit not only ousts the small or medium-sized firm and “expropriates” its owners, but in the end it also ousts the entrepreneur and expropriates the bourgeoisie as a class which in the process stands to lose not only its income but also what is infinitely more important, its function. The true pacemakers of socialism were not the intellectuals or agitators who preached it but the Vanderbilts, Carnegies and Rockefellers.

2  See Norman Thomas, A Socialist’s Faith, W.W. Norton, N.Y., 1951, ch. IV, passim.

3  Adolph Hitler, Mein Kampf, Reynal & Hitchcock, N.Y., 1940, chaps. II, III, and IX, vol. I. Also chaps. I and II, vol. II, passim.

4  Arthur Smithies, (Harvard University Professor) “Memorial: Joseph Alois Schumpeter,” in Schumpeter, Social Scientist, Harvard University Press, Cambridge, Mass., 1951, p. 15.

5  R.F. Harrod, The Life of John Maynard Keynes, London, Macmillan, 1951, p. 538. An interesting note appears in the preface to this book. It states:

I am grateful also to the Rockefeller Foundation for having provided me with a timely supply of dollars . . . p. xiii.

This is particularly interesting in view of the accusation that has been made that the Rockefeller Foundation was heavily infiltrated by Keynesian socialists.

6  James Burnham, The Web of Subversion, New York, John Day. 1954, pp. 150-158.

7  Paul M. Sweezy, “Schumpeter On ‘Imperialism And Social Classes’” reprinted in, Schumpeter, Social Scientist, edited by Seymour E. Harris, p. 124.

8  Henry Hazlitt, Failure of the “New Economics,” D. Van Nostrand, Princeton 1959, p. 55.

9  Joseph Alois Schumpeter, History of Economic Analysis, Oxford University Press, 1954, p. 41.

10  Web of Subversion, pp. 162-169.

11  Harry F. Ward, is known chiefly for his role of injecting socialist and communist policies into the Federal Council of Churches. (Now called the National Council of the Churches of Christ in the U.S. of A.).

12  Some Harvard personalities mentioned in connection with espionage testimony before Government bodies were: Robert Oppenheimer (Class of 1926), Lawrence Duggan (’27), Harry Dexter White (’27), Alger Hiss (’29), Lee Pressman (’29), Harold Glasser (’30), and Owen Lattimore (’31). See Web of Subversion, passim.

13  From letter of Theodore Roosevelt to Felix Frankfurter written from Oyster Bay, Long Island on December 19, 1917.

14  The American Civil Liberties Union was originated by a group who were all extremists. Fabian socialists predominated. Sitting with Frankfurter on the National Committee were people who became prominent leaders of the Communist Party. Some of them were: William Z. Foster, Elizabeth Gurley Flynn, Louis F. Budenz and Scott Nearing. Also sitting with Frankfurter was Harold J. Laski, British Fabian leader who at the time was Frankfurter’s faculty colleague at Harvard. (Ref: Report of the New York State Joint Legislative Committee Investigating Seditious Activities, April 23, 1920, part I, vol. I, pp. 1101-02).

*  This data obtained from Alliance, Inc., N.Y.C.

15  Web of Subversion, p. 80.

16  R.M. Whitney, Reds in America, Beckwith Press, N.Y., 1924, pp. 58-59

This study was described as: “Status of the Revolutionary Movement in the United States based on documents seized by the authorities in the raid upon the Convention of the Communist Party at Bridgman, Michigan, August 22, 1922, together with descriptions of numerous connections and associations of the Communists among the Radicals, Progressives and Pinks.” (Frontispiece declaration).

17  Ibid., p. 60.

18  The term “transmission belt” was coined by Stalin in his Leninism, International Publishers, 1928, passim.

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Chapter II – FABIAN SOCIALISM