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In the Reaganaut Assault on the Economy, David Stockman Is Spreading the Word, but George Gilder Wrote the Book

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When Ronald Reagan took the oath of office as 40th President of the United States, his left hand lay foursquare on the Bible. Yet the ideological underpinnings of his fledgling administration are found not in Genesis but in Wealth and Poverty (Basic Books, $16.95), George Gilder’s capitalist testament. The 306-page work had a modest first printing of 8,000 copies just after the November election, and its subsequent performance is compelling evidence of the country’s swerve to the right. Budget Director David Stockman bought 30 copies for key Reagan aides, the President himself presented a complimentary volume to Senate Finance Committee Chairman Robert Dole and the book now has 135,000 copies in print.

Ironically, the first time Dole reviewed Gilder was in 1976, when the senator was campaigning as Gerald Ford’s vice-presidential running mate and the author was one of his speech writers. On one humiliating occasion, Dole laid out an entire Gilder speech on the floor, summoned its creator, and pointed to each page as if chastising an incontinent dog. “Bad, bad, bad,” he declared. Lately Gilder’s words have commanded more respect, while arousing passions on both the left and the right. In articulating the trendy theory of supply-side economics, Gilder argues that personal tax cuts to stimulate new enterprise should be enacted even at the price of short-term deficit spending. Moreover, Gilder, whose philosophy has been shaped by figures as diverse as David Rockefeller and Father Divine, even challenges Adam Smith’s historic assertion that rational self-interest is the dynamic that animates capitalism. “The crucial source of capitalism’s fantastic efflorescence,” insists Gilder, “is compulsive creativity, a willingness to take risks, faith in the future, and the glory of human adventure.”

Though even some fellow conservatives regard such views as fundamentally innocent, Gilder isn’t sounding retreat. “This is a cynical age,” says right-wing columnist Joseph Sobran, “but George is not a cynical person. He would never snub an idea because it wasn’t respectable.” In fact, Gilder’s optimism seems practically boundless. Thanks partly to supply-side policies like the removal of price controls, he believes the energy crisis will soon be a thing of the past. “Prices will begin going down in three or four years and will continue to go down for the rest of the century,” he says. “They’re finding natural gas wherever they look.” The so-called industrial productivity crisis, he continues, exists chiefly in the minds of economists who have failed to comprehend the impact of the computer revolution. He defends President Reagan’s proposed budget cuts, and contends that even if some are restored by a timid Congress, the economic portents are so favorable that the country will still muddle through.

“All the hard evidence we have says Gilder’s optimism isn’t warranted,” observes MIT Prof. Lester (The Zero-Sum Society) Thurow. “If the price of a fuel goes up, you may get a slightly larger supply, but the people who have done their homework on these questions aren’t nearly so hopeful. As for productivity, George and the Reagan administration say it’s going to increase three percent a year, starting in 1983. That’s impossible. Increases in productivity depend on the construction of new plants and factories. That takes five years.” Thurow dismisses as naive Gilder’s faith in the altruism of capitalist investors. “There are a lot of ways to make money without providing goods and services,” he maintains. “The Rockefellers didn’t create any new oil, but they did make lots of money. They formed a monopoly and raised the price. They were the OPEC of the 1890s.”

Undeterred by such nay saying, Gilder is convinced that the country’s rightward drift will prove beneficial. “Sure, there are a few excesses in the Moral Majority—crazy preachers here and there who want to burn books,” he admits, “but they don’t frighten me as much as the breakdown of families and the increase in violent crimes and sex offenses, particularly in the inner cities.” While liberal critics complain that the welfare system is unnecessarily demeaning to recipients, Gilder proposes it be made even less attractive—to encourage families to stick together and fend for themselves. He is equally intolerant of the conventional rhetoric and convictions of women’s liberation. “All the cliches about oppressed women are baloney,” he says. “Women have the opportunity of motherhood, time to be creative and be individuals, and less pressure to submit their lives to a wretched career. You read these feminist books and you’d think every man is a U.S. senator. The fact is most men work for other men.”

George’s father, a politically ambitious Harvard graduate whose grandfather was Louis Tiffany of the jewelry family, might one day have been an exception. But he was killed at 28 when his World War II bomber disappeared between Canada and Europe. To make ends meet, George’s mother taught music and rented out rooms to friends in her Manhattan home. Among the household help who took care of George were followers of Father Divine, the black religious cult leader whose faith, says Gilder, successfully moved “mountains of sloth.” Later his mother married one of her first husband’s cousins, Gilder Palmer, and moved to her family’s farm in Tyringham, Mass. “I was a fatherless child during my earliest years, and, rightly or wrongly, I ascribed a lot of my emotional turbulence to the absence of a father,” says George. “Then my stepfather came along and taught me how to work. I saw the contributions a father can make.”

Another influence was David Rockefeller, who roomed with Gilder’s father at Harvard and who had agreed to look after young George if the boy’s father failed to return from the war. George visited the Rockefeller family frequently, and eventually arrived at certain conclusions. “David Rockefeller violates all the impressions of the rich as being wasteful and hoarders,” says Gilder. “He has no need for further material wealth, but nonetheless submits to arduous discipline and firm moral values.”

Hardly as disciplined himself, Gilder flunked out of Harvard in 1958 and soon after joined the Marine Corps Reserve. “I wanted to get beaten into shape,” he explains. “It worked pretty well.” Returning to school in 1959, he helped launch a liberal Republican magazine called Advance. After graduation he wrote speeches for presidential aspirant George Romney in 1967, and worked for Nelson Rockefeller in 1964 and 1968. “He was the most talented politician I ever met,” Gilder says of Rocky. “Contrary to the belief that he succeeded chiefly because of his money, I think his career actually was undermined by guilt feelings about his wealth.”

By 1971 Gilder had returned to Harvard as a fellow at the Kennedy Institute of Politics, and he was editing the liberal Republican Ripon Forum when he wrote an editorial supporting President Nixon’s veto of the Mondale-Brademas day-care bill. The response was electric. “All these women in the Ripon Society got on the Today show with Barbara Walters to rail against me,” he recalls. “Since for much of the previous decade I had been preoccupied trying to arouse the passions of women, I thought I was onto something.” The upshot was an antifeminist book called Sexual Suicide. When Gilder appeared on the Dick Cavett Show to promote it, he says, “a bunch of militant women booed and rushed the stage. Cavett let them make a statement on the air and then actor Robert Shaw, who was also a guest, grabbed the book and started reading passages aloud and making fun of it. Under the circumstances, it was hard to be articulate.”

Still, Gilder gamely defended his thesis that single men are “the barbarians of our culture” and require the domesticating influence of traditional wives. His own 1976 marriage to Vassar graduate Nini Brooke has proved his point completely, he feels, even if his lifestyle as husband and father is hardly as chauvinistic as his most frenzied critics might like to assume. Though she is the mother of Gilder’s two daughters, Louisa, 2, and Mellie (short for Mary Ellen), 6 months, Nini still works part-time as a consultant on historical preservation projects, which some Reagan critics suggest will be threatened by Administration budget cuts. That prospect bothers her less, she says, than do women who ask her if she finds it demeaning being married to George. She does not, and on some issues, in fact, Nini and George are ideological soulmates. “While women can have careers, they shouldn’t be so willing to give up everything for them,” says Mrs. Gilder. “A lot of women are going to reach 40 and begin to ask, ‘What am I missing?’ It’s sad when women try to be uninterested in children because they feel it’s second-class.”

Though Gilder credits Nini with bringing him back into the fold of organized religion—they are Episcopalians—he is not yet cleanly shorn of his feckless bachelor habits. A passionate runner, but as absent-minded as any professor, he once drove to Philadelphia to watch a track meet, then flew home afterward and was utterly bewildered when he couldn’t find his car at the airport. Recently, his wife claims, he walked off and forgot Mellie in the luggage claim area at Dulles International Airport. Realizing his mistake as he approached the taxi stands, he rushed back, only to discover Mellie obliviously asleep by the baggage.

Before Wealth and Poverty, the Gilders had reluctantly weighed the possibility of moving from Tyringham to Washington, where Gilder planned to find work as a speechwriter. Instead, conservative intellectual Jeffrey Bell read the book in manuscript form and hired George for $50,000 a year as program director of the International Center for Economic Policy Studies, based in New York. That and the book’s unexpected climb on the best-seller lists have enabled the Gilders to keep their early-19th-century farmhouse and to pursue a way of life they have both come to love. They don’t own a television set (“The first time I saw 60 Minutes I was on it,” says George) and while away long evenings reading aloud to each other from classics like Middlemarch, War and Peace and Madame Bovary.

Gilder’s newfound prosperity has also whetted his interest—academically, at least—in the use of tax shelters to protect vulnerable capital. “People think that the progressive tax system redistributes income,” he says. “What it really does is redistribute taxpayers out of the productive economy and into offshore tax havens, as well as into every form of collectible, from boxcars to postage stamps.” In fact, Gilder feels he must shun the shelters other investors take for granted because he has written so much about them. His riskiest investment is the $30,000 he has sunk into the little Single Brook record company, of which he is chairman. The company’s principal resource is a little-known country-and-Western group called the Cobble Mountain Band, featuring George’s half brother Walter Palmer as lead singer. “It’s an edifying experience, but a very poorly designed tax shelter,” says Gilder. “You learn early on how the tax code favors physical against human capital.”

Given what he regards as the deleterious impact of so many such federal policies, doesn’t he sometimes feel hostile to government? Not at all, says Gilder. “Like sex,” he explains, “government is one of the precious things in life. But like sex, it should not be abused.”