The abysmal failure of Red
Atlantis
by Andrei Znamenski
Imagine a country that has a corrupt authoritarian government. In that
country no one knows about checks and balances or an independent court system.
Private property is not recognized in that country either. Neither can one buy
or sell land. And businesses are reluctant to bring investments into this
country. Those who have jobs usually work for the public sector. Those who
don’t have jobs subsist on entitlements that provide basic food. At the same
time, this country sports a free health care system and free access to
education. Can you guess what country it is? It could be the former Soviet
Union, Cuba, or any other socialist country of the past.
Yet, I want to assure you that such a country exists right here in the
United States. And its name is Indian Country. Indian Country is a generic
metaphor that writers and scholars use to refer to the archipelago of 310
Native American reservations, which occupy 2 percent of the U.S. soil.
Scattered all over the United States, these sheltered land enclaves are held in
trust by the federal government. So legally, many of these land enclaves are a
federal property. So there you cannot freely buy and sell land or use it as
collateral. On top of this, since the Indian tribes are wards of the federal
government, one cannot sue them for breach of contract. Indian reservations are
communally used by Indian groups and subsidized by the BIA (the Bureau of
Indian Affairs, Department of the Interior) with a current annual budget of
about $3 billion dollars. Besides being a major financial resource that
sustains the reservation system, BIA’s goal is also to safeguard indigenous
communities, or, in other words, to make sure that they would never fail when
dealing with the “outside” society. People in the government and many Native
American leaders naively believe that it is good for the well-being of the
Indians to be segregated and sheltered from the rest of American society.
This peculiar trust status of Indian Country, where private property rights
are insecure, scares away businesses and investors.[1] They
consider these forbidden grounds high risk areas. So, in Indian Country, we
have an extreme case of what Robert Higgs famously labeled “regime uncertainty”
that retards economic development.[2] In fact,
this “regime uncertainty” borders on socialism. James Watt, Secretary of the
Interior in the first Reagan administration, was the first to publicly state
this. In 1983, he said (and then dearly paid for this), “If you want an example
of the failure of socialism, don't go to Russia, come to America and go to the
Indian reservations.”[3]
In the 1990s, I had a chance to travel through several reservations. Each
time when I crossed their borders I was stunned by the contrast between the
human landscapes outside and those within Indian reservations. As soon as I
found myself within a reservation, I frequently had a taste of a world that, in
appearance, reminded me of the countryside in Russia, my former homeland: the
same bumpy and poorly maintained roads, worn-out shacks, rotting fences,
furniture, and car carcasses, the same grim suspicious looks directed at an
intruder, and frequently intoxicated individuals hanging around. So I guess my
assessment of the reservation system will be a biased view from a former Soviet
citizen who feels that he enters his past when crossing into Native America.
I am going to make a brief excursion into the intellectual sources of this
“socialist archipelago.” Since the 1960s, the whole theme of Native America had
been hijacked by Marxist scholarship and by so-called identity studies, which
shaped a mainstream perception that you should treat Native Americans not as individuals
but as a collection of cultural groups, eternal victims of capitalist
oppression. I want to challenge this view and address this topic from a
standpoint of methodological individualism. In my view, the enduring poverty on
reservations is an effect of the “heavy blanket” of collectivism and state
paternalism. Endorsed by the federal government in the 1930s, collectivism and
state paternalism were eventually internalized by both local Native American
elites and by federal bureaucrats who administer the Indians. The historical
outcome of this situation was the emergence of “culture of poverty” that looks
down on individual enterprise and private property. Moreover, such an attitude
is frequently glorified as some ancient Indian wisdom — a life-style that is
morally superior to the so-called Euro-American tradition.
Before we proceed, I will give you some statistics. Native Americans
receive more federal subsides than anybody else in the United States. This
includes subsidized housing, health, education, and direct food aid. Yet,
despite the uninterrupted flow of federal funds, they are the poorest group in
the country. The poverty level on many reservations ranges between 38 and 63
percent (up to 82 percent on some reservations),[4] and half of
all the jobs are usually in the public sector.[5] This is
before the crisis of 2008! You don’t have to have a Ph.D. in economics to
figure out that one of the major sources of this situation is a systemic
failure of the federal Indian policies.
These policies were set in motion during the New Deal by John Collier, a
Columbia-educated social worker, community organizer, and utopian dreamer who
was in charge of the Native American administration during FDR’s entire
administration. English Fabian socialism, the anarchism of Peter Kropotkin,
communal village reforms conducted by the Mexican socialist government, and the
romantic vision of Indian cultures were the chief sources of his intellectual
inspiration. Collier dreamed about building up what he called Red Atlantis, an
idyllic Native American commonwealth that would bring together modernization
and tribal collectivism. He expected that this experiment in collective living
would not only benefit the Native Americans but would also become a social
laboratory for the rest of the world. The backbone of his experiment was
setting up so-called tribal governments on reservations, which received the
status of public corporations. Collier envisioned them as Indian autonomies
that would distribute funds, sponsor public works, and set up cooperatives. In
reality, financed by the BIA, these local governments began to act as local
extensions of its bureaucracy.
It is interesting that these so-called native autonomies received peculiar
jack-of-all-trades functions: legislative, executive, judicial and economic — a
practice that is totally unfamiliar in America. For example, in the rest of the
United States, municipalities and counties do not own restaurants, resorts,
motels, casinos, and factories. In Indian Country, by contrast, it became
standard practice since the New Deal. By their status, these tribal governments
are more interested in distributing jobs and funds than in making a profit. As
a result, many enterprises set up on reservations have been subsidized by the
government for decades. Under normal circumstances, these ventures would have
gone bankrupt. This system that was set up in the 1930s represents a financial “black
hole” that sucks in and wastes tremendous resources in the name of Native
American sovereignty. This situation resembles the negative effect of foreign
aid on Third-World regimes that similarly use the tribalism and national
sovereignty excuse as a license to practice corruption, nepotism, and
authoritarian rule.
My major argument is that Collier’s utopian project (restoration of tribal
collectivism) was not a strange out-of-touch-with-reality scheme but rather a
natural offshoot of the social engineering mindset of New Dealers. Moreover,
the Indian New Deal was a manifestation of standard policy solutions popular
among policy makers in the 1930s, both in Europe and North America. These
solutions were driven by three key concepts: state, science, and collectivism.
Recent insightful research done by German-American historian Wolfgang
Schivelbusch into the economics and cultures of three “new deals” (National
Socialist Germany, Mussolini’s Italy, and FDR’s United States) shows that in
the interwar period, governments in these three countries (and in other
countries, too) pursued extensive state-sponsored modernization. But,
simultaneously, to better mobilize their populations and ease the pressure of
modernization on the people, they cultivated a sense of community, the organic
unity with land and folk cultures.[6]
For example, in 1930s Germany, along with the grand autobahn building
project and genetic experimentation, there existed a strong back-to-land
movement and attempts to revive Nordic paganism. In the United States, in
addition to the National Recovery Administration, Tennessee Valley Authority
and similar giant projects, there flourished the community-binding Civilian
Conservation Corps (CCC), the Federal Art Project that produced “heroic”
community murals as well as thousands of craft items for civic, state, and
federal organizations. Furthermore, as “one of the noblest and most absurd
undertakings ever attempted by a state” (W. H. Auden), Federal Writers’ Project
(also part of WPA) employed thousands of intellectuals who were directed to
collect regional folklore and ethnographies, and promote the heritage of local
communities. Last but not least, there were projects like the Arthurdale
settlement (West Virginia) — a federally sponsored scheme to place unemployed
industrial workers on land and mold them into new wholesome American citizens.[7] Even
Stalin’s Soviet Union, which was going wild with its aggressive modernization
and industrialization, somewhat muted the cosmopolitan message of Communism and
became more “organic” in the 1930s, trying to root itself in Russian history,
mythology, and folklore — pursuits that became known as National Bolshevism.[8]
Another common sentiment shared by social engineers from California to the
Ural Mountains was an unconditional faith in science. We can call it science
worship. At that time, policy makers assumed that by using science and
expert-scholars government could plan and engineer a perfectly ordered
crisis-proof society. F. A. Hayek was the first to draw attention to this
aspect of modernity in his seminal book The Counter-Revolution of
Science (1955).[9]
The Indian New Deal fits perfectly into those policy trends. In fact, as
early as 1928, federal bureaucrats began suggesting that the Indians be
organized as public corporations — a fancy innovation that they copied from
Europe. Collier, a middle-level New Deal bureaucrat, personified sentiments of
modernism I mentioned above. On one hand, he praised Indian tribalism that
would help not only the Native Americans but would also help anchor Americans
in land and nourish a sense of community among them. Yet, on the other hand,
like a mantra, Collier repeated that only a scientific approach would resolve
the problems communities faced in the modern world. A recurrent message
throughout his essays and articles is a demand that Indian communities be used
as laboratories for sociological experimentation. In one of his speeches —
which by the way is labeled “United States Administration as a Laboratory of Ethnic
Relations” — Collier gave himself an unrestricted political license to
experiment with Indian Country. In this speech, he stressed that if a
government tried to impose something on an ethic group it would be harmful.
Yet, if government intervention was backed up by science and supplemented by
generous financial injections to local communities, then the interference would
be very benign.[10]
Where did Collier get his “scientific” ideas about segregating Native
Americans into cultural groups? The answer is simple: from contemporary
anthropological scholarship. At that time, American anthropologists were very
much preoccupied with traditional culture. They were on a mission to retrieve
ethnographically authentic Indian customs and artifacts. Driven by this
romantic notion, anthropologists downplayed the heavy influence of Euro-Americans
and African-Americans on indigenous communities. As a result, they totally
ignored such segments of Indian population as cowboys, iron, cannery and
agricultural workers, and individual farmers. They considered them non-Indian
and non-traditional. So, before Collier emerged on the scene in 1933, American
anthropology had already invented its own Red Atlantis by classifying the
Indians into tribes and relegating them into particular cultural areas.
Pressured by the federal government and lured by an offer of easy credit, a
majority of Indians approved of Collier’s plan to restore “tribes” and
organized themselves into public corporations. Still, a large minority — more
than 30 percent of the Indians — rejected the Indian New Deal. Many of them informed
Collier that, in fact, although they were Indians, they had nothing against
private property and did not want be segregated from the rest of Americans into
tribes under federal supervision. They stressed that they could not stomach his
communism and socialism, and wanted instead to be treated as individuals.
Collier was very much surprised and angered by these dissidents, who organized
themselves and founded the American Indian Federation (AIF) to oppose him. In a
bizarre motion, he dismissed them as fake Indians. To him, the true Indian was
expected to be a spiritually-charged die-hard collectivist. Historian Graham
Taylor, who explored in detail Collier’s attempts to railroad tribalism in
Indian Country, stressed, “His basic orientation was toward groups and
communities, not individuals, as building blocks of society.”[11] Later,
Collier even resorted to nasty tricks labeling his Indian opponents as Nazi
collaborators, and had one of them investigated by the FBI. Eventually,
government squashed AIF as part of a larger FDR effort to use the FBI to phase
out the “right-wing fifth column” elements in the United States.[12] D. H.
Lawrence, the famous British novelist, who rubbed shoulders with Collier as
early as 1920, had a chance to personally observe his aggressive zeal on behalf
of Indian culture. This British writer prophetically noted that Collier would
destroy the Indians by setting “the claws of his own white egoistic benevolent
volition into them.”[13]
To those dissident Native Americans who repeatedly challenged him about
going tribal, Collier explained that their individualism was obsolete. In his
view, state-sponsored tribalism was modern and progressive. In his address
given before the Haskell Institute, Collier instructed students to cast aside
“shallow and unsophisticated individualism.” He warned the Indian youngsters
that this useless trait of dominant culture would not be “the views of the
modern white world in the years to come.” Instead, he called on the new Indian
generation to come help “the tribe, the nation, and the race.” He invited them
to step into a radiant future that included such “necessities of modern life”
as municipal rule, public ownership, cooperatives, and corporations.[14]
The system set up by Collier is still in place and functioning. What are
its future prospects? As I mentioned, the Indian “socialist archipelago” is
relatively modest in its size. It occupies only 2 percent of U.S. soil and
shelters only 22 percent of 5 million Indians now living in the United States.
Unlike bailing out such bankrupt states as California, New York, and Illinois,
socializing subsidies to Indian Country is not too painful for a huge American
budget. So, potentially, this “socialist archipelago” can exist forever as long
as American taxpayers are ready to put up with its peculiar status, and unless,
of course, American welfare capitalism goes down under the burden of its
numerous entitlement obligations. So far, protected by the shield of trust
status and guaranteed financial injections, Indian Country is in pretty “good
shape,” unlike, for example, some current Third-World autocracies that are not
always sure if Western aid will continue to flow. All in all, like the Social
Security scheme, farmers’ subsidies, and many other “wonderful” products of the
New Deal alchemical lab, Red Atlantis is still with us alive and well.
Notes
[1] Fergus
Bordewich, Killing the White man’s Indian: Reinventing Native Americans
at the End of the Twentieth Century (New York: Doubleday, 1997),p.
126; John Koppisch, “Why Are Indian Reservations So Poor? A Look At The Bottom
1%,” Forbes, December 13 (2011), available athttp://www.forbes.com/sites/johnkoppisch/2011/12/13/why-are-indian-reservations-so-poor-a-look-at-the-bottom-1/
[2] Robert
Higgs, “Regime Uncertainty: Why the Great Depression Lasted So Long and Why
Prosperity Resumed after the War,” The Independent Review 1,
no. 4 (1997): 561-590.
[3] Watt Sees
Reservations As Failure of Socialism,” The New York Times, January
19, 1983, http://www.nytimes.com/1983/01/19/us/watt-sees-reservations-as-failure-of-socialism.html
[4] “Native
American Aid, Living Conditions,” available at
http://www.nrcprograms.org/site/PageServer?pagename=naa_livingconditions
[5] Rachel L.
Mathers, “The Failure of State-Led Economic Development on American Indian
Reservations,” The Independent Review 17, no. 1 (2012): 176.
[6] Wolfgang
Schivelbusch, Three New Deals: Reflections on Roosevelt’s America,
Mussolini’s Italy, and Hitler’s Germany, 1933-1939 (New York: Picador,
2007).
[7] For more
about the Arthurdale project, see C.J. Maloney, Back to the Land:
Arthurdale, FDR’s New Deal, and the Costs of Economic Planning (New
York: Wiley, 2011).
[8] David
Brandenberger, National Bolshevism: Stalinist Mass Culture and the
Formation of Modern Russian National Identity, 1931-1956 (Cambridge,
MA and London: Cambridge University Press, 2002).
[9] F. A.
Hayek, The Counter-Revolution of Science (New York: Free
Press, 1955).
[10] John
Collier, “United States Administration as a Laboratory of Ethnic
Relations,” Social Research 12, no. 3 (1945): 301.
[11] Graham
Taylor, The New Deal and American Indian Tribalism: The Administration of
the Indian Reorganization Act, 1934-45 (Lincoln: University of Nebraska
Press, 1980), p. 23.
[12] Marci Jean
Gracey, Attacking the Indian New Deal: The American Indian Federation and the
Quest to Protect Assimilation (Masters’ Thesis, Oklahoma State University,
2003), p. 47.
[13] Joel
Pfister, Individuality Incorporated: Indians and the Multicultural
Modern (Durham, NC: Duke University Press Books, 2004), p. 182.
[14] Kenneth
Philp, John Collier’s Crusade for Indian Reform, 1920-54 (Tucson:
University of Arizona Press, 1977), p. 161.
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