Reflections on Reagan the Intellectual

This article appeared in the August 2007 issue of Globe Asia.
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A true intellectual conveys to the public new ideason a wide range of subjects, unearthing these notions longbefore most people do. That is the essence of Nobel laureateFriedrich von Hayek's definition of an intellectual. Inhis 1949 University of Chicago Law Review essay "The Intellectuals andSocialism," Hayek also underlined that for better or worse, intellectualsare more important than most people think. After all, they shape publicopinion.

Austrian economist Hayek was one of Ronald Reagan's favoritethinkers. And Reagan, by Hayek's definition, wasan intellectual. Reagan the intellectual? The bookReagan, In His Own Hand (2001) answers thatquestion. This volume, with an illuminating prefaceby George Shultz, contains 259 essays Reaganwrote in his own hand, mainly scripts for his fiveminute,five-day-a-week syndicated radio broadcastsin the late 1970s. They are awe-inspiring intheir breadth of subject matter. And they laid outthe philosophical framework for his presidency.

It is worth mentioning that The Reagan Diaries(2007) have just been published. With the exceptionof the time Reagan was hospitalized aftera failed assassination attempt, he produced a diaryentry each day. These were roughly a page in length and written clearlyin Reagan's own hand. Like Reagan, In His Own Hand, The Reagan Diariesare Reagan's own handy work, not material written by his staff.

No wonder Reagan always appeared to be relaxed and in control. Hehad thought things through. As someone who was a senior economiston the President's Council of Economic Advisors during 1981–82, I sawhis intellectual acumen firsthand.

One of my early assignments was to analyze the federal government'slandholdings and make recommendations about what to do with them.This was a big job. These lands are vast, covering an area six times thatof France.

These so-called public lands represent a huge socialist anomaly inAmerica's capitalist system. As is the case with all socialist enterprises,they are mismanaged by politicians and bureaucrats dancing to the tunesof narrow interest groups. Indeed, the US nationalized lands representassets that are worth trillions of dollars, yet they generate negative netcash flows for the government. I presented my recommendations to theannual Public Lands Council meeting in Reno, Nevada in September1981. The title of my speech: "Privatize Those Lands."

My Reno speech caused a stir. James Watt, the Secretary of Interior,was furious because he wanted to hand over the lands to the state governments—exchanging one form of socialism for another. Needless tosay, I thought I was in deep trouble. Hoping to avoid political immolation,I rapidly sent my analysis to the President.

Much to my surprise, Reagan instantly responded, taking my side.Better, he swiftly made my proposals the Administration's policy.He went public in his budget message for fiscal year 1983 when heendorsed privatizing public lands: "Some of thisproperty is not in use and would be of greater valueto society if transferred to the private sector. In thenext three years we would save $9 billion by sheddingthese unnecessary properties while fully protectingand preserving our national parks, forests,wilderness and scenic areas."

It turned out that Reagan had already thoughtabout this issue. Reagan, In His Own Hand containsseveral essays on the subject that clearly foreshadowedhis policy statement. His 1970s musingson public lands echo the writings of another finethinker, Adam Smith. While Reagan never citedSmith, their reasoning was similar.

Smith concluded in The Wealth of Nations (1776) that "no two charactersseem more inconsistent than those of the trader and the sovereign,"since people are more prodigal with the wealth of others than withtheir own. In that vein, he estimated that lands owned by the state wereonly about 25% as productive as comparable private holdings. Smith believedEurope's great tracts of crown lands to be "a mere waste and loss ofcountry in respect both of produce and population."

Political opposition stopped Reagan from privatizing. Consequently,US nationalized lands remain ill-used. But Reagan the intellectual had itright long ago.

(For a full treatment of this public lands privatization episode, see:S.H. Hanke, "The Privatization Debate: An Insider's View", Cato Journal,Vol. 2, No. 3, Winter 1982; www.cato.org.)

Steve H. Hanke

Steve H. Hanke is a Professor of Applied Economics at The Johns Hopkins University in Baltimore and a Senior Fellow at the Cato Institute.