===== PAGE 1 ===== IDEAS ON LIBERTY OL aie Laas mens = APRIL 1960 “And for Other Purposes” . . . . . Gordon B. Leitch 3 Socialized Medicine . . . . . . . Dan Smoot 9 The High Cost of Coercion. . . . . . Paull. Poirot 12 Success Without Subsidy . . . . . . George Winder 17 Middle-Income Housing. . . . . . . H.P.B. Jenkins 19 Scientific Free Enterprise . . . . . . Edward P. Coleson 20 The Tricky Four Freedoms . . . . . . Frederick A. Manchester 25 Are Antitrust Laws the Answer? . . . . Keith S. Wood 37 Answering Some Questions about The Remnant . . . . . .. . . . Edmund A Opitz 38 The ABC’s of Modern Economics . . . . Ralph Bradford 42 The Economic Foundations of Freedom . . Ludwig von Mises 44 Book Reviews: Americana on Rails. . . . . . . . John Chamberlain 53 Other Books . . . . . . . . . . 57 THE FOUNDATION FOR ECONOMIC EDUCATION, INC. Irvington-on-Hudson,” New York ===== PAGE 2 ===== Is this Common Sense?” SPENDING $10,000, 000, 000 TO LOSE 350,000,000 A YEAR? Doesn’t make sense, does it? Yet nation’s growing electric needs. They that is exactly what is being urged are financed by investors instead of on the U. S. by the lobbyists for taxpayers. They've proved they can more government-in-the-electric-bus- supply plenty of low-price power iness. And all taxpayers would have without using tax money to do it. to pay for this peculiar deal. WHAT YOU CAN DO ° AVOIDING SHARE OF TAXES The choice seems so easy you won- Here’s how it works. The advo- der why it’s necessary to talk about cates of federal electric power sys- it. But that $10 billion may be spent tems want the government to spend for more federal “public power” be- $10,000,000,000 more on top of about cause so few people know the facts. $5,500,000,000 of taxpayers’ money already spent. These so-called “public power” systems are exempt from all federal taxation, and largely from any state or local taxing. promptly, at no charge. On the other hand, $10,000,000,- 000 spent by independent electric A America’s Independent . companies would produce about Electric Light and Power Companies $350,000,000 yearly in federal, local and state taxes, at today’s rates. Will you help spread the word? The coupon below will bring you a new booklet with more facts and fig- ures about this. It will be mailed @ % 400 000s sees REEB Esser s EEE LTEEN sac sees sssssan POWER COMPANIES * Room 1112-Q . . 1211 Ave. of the Americas . TAXPAYERS PAY TWICE : New York 20, N. . : So the public power” proposal . Please send material checked below: boils down to hitting most taxpayers * [J The new, free booklet, “Who : ,- : : ) . Pays for Government-in-the-Elec- | twice: use their taxes to build gov : tle Business sr telling how © ernment power systems—and tap . my taxes are affected when the . . government gets into the electric them for the share of taxes that gov : business, and important facts ernment systems escape. . about the independent electric ’ : companies. : UNNECESSARY SPENDING : [J Names of companies that sponsor The tragic fact is that more spend- : - this advertisement. ELA Fo . - . * . Ns ~ -~ a - h . ing for such federal power programs - . : Name Pleas ro Fm -" 2 would be unnecessary. The hundreds ‘. Address. °° . : of independent electric companies are able and ready to provide for the .....% ETRE rEreE ===== PAGE 3 ===== Pree Ql CEE. 5 Sel ] da He Td el LT CT ey RE ug, ; iat 2 , nN = a N- To . - 5 - 2 , " LL ~e R To. Fa, CN kl vo Ce Coast Federal Savings and Loan Association E of Los ANGELES Ed 3 “ 1 re trea ees seem. error. rm. 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COAST FEDERAL SAVINGS JOE CRAIL, PRESIDENT MEMBER — FEDERAL HOME LOAN BANK — FEDERAL SAVINGS AND LOAN INSURANCE CORP. — —— — —— — — —— — — — —— — — TT — — — ——— ———— —— — GT — —— — — — —— —— WE— dirs WN w—— S——— — Coast Federal Savings, Department “H" 855 South Hill St. at 9th (Please check-mark as desired.) Los Angeles 14, Calif. 1. [J 1 enclose [J check, [] money order, to open 2. [J Please send me a copy of your a savings account in the following name or Booklet “Let's Get Acquainted’, names: Savings Account Information and latest financial statement. Name Address City Zone State ===== PAGE 4 ===== Tecmdn A MONTHLY JOURNAL OF IDEAS ON LIBERTY APRIL 1960 Vol. 10 No. 4 LEONARD E. READ President, Foundation for Economic Education PAuL L. PoIrOT Managing Editor THE FREEMAN is published monthly by the Foundation for Economic Education, Inc.,, a non- political, nonprofit educational champion of private property, the free market, the profit and loss system, and limited government, founded in 1946, with offices at Irvington-on-Hudson, New York. Any interested person may receive its publications for the asking. The costs of Foundation projects and services, in- cluding THE FREEMAN, are met through volun- tary donations. Total expenses average $12.00 a year per person on the mailing list. Donations are invited in any amount — $5.00 to $10,000 — as the means of maintaining and extending the Foundation’s work. Accepted as controlled circulation publication at Irvington, N. Y., with additional entry at New York, N. Y. Copyright, 1960, The Foundation for Economic Education, Inc. Printed in U.S.A. Additional copies, postpaid, to one address: Single copy, 50 cents; 3 for $1.00; 25 or more, 20 cents each. Permission is hereby granted to anyone to reprint any article in whole or in part, providing customary credit is given, except ‘'Socialized Medicine,” “Are Antitrust Laws the Answer?” and “The Economic Foundations of Freedom.” Fe E Any current article will be supplied in reprint form if there are enough inquiries to justify the cost of the printing. ===== PAGE 5 ===== A doctor explores the question of socialized medicine in the light of current legislative proposals. AND FOR OTHER PURPOSES” — GORDON B. LEITCH, M. D. ON DECEMBER 17, 1959, the Wall legislation already in the congres- Street Journal carried a special sional hopper (H. R. 4700 in the article by Paul Duke which stated: House, a companion bill in the “Suddenly and unexpectedly, Senate), Americans are con- chances are growing that 1960’s fronted, for the second time in less election year Congress will ap- than two decades, with deciding prove some form of compulsory whether to reject this latest social- health insurance plan for the aged ized medicine assault or to lose by under the Social Security pro- default another and most signifi- gram. The Eisenhower administra- cant segment of their freedom. tion, after long opposition to the Most Americans over the years idea, is debating whether to pro- have tended to regard socialized pose such a bitterly controversial medicine as something of a bogey. step.” It might happen, perhaps, given Thus, in accordance with poli- the general socialized trend and tics’ foremost axiom — that every the continued erosion of that free- event must be resolved into in- dom which has enabled America creased power for the political ap- to reach its position unique in the paratus — the Eisenhower admin- history of the world. But it would istration weighs the political ad- be a last phase Sort of thing, per- vantages, in an election year, in haps accompanying the national- advocating a course it long opposed ization of industry. for sound, logical reasons. And This judgment, however, failed thus, with the Forand Bill type of to recognize the significance of —_— the growing Social Security sys- Dr. Leitch is a practicing physitian and surgeon tem. A few courageous people in Portland, Oregon, and a former member of . . . the editorial staff of Northwest Medicine. pointed out from the beginning 3 ===== PAGE 6 ===== 4 THE FREEMAN April the political implications of the as constituted in the United mistakenly called Social Security States? Act with its assumption of govern- As physicians, they know things ment responsibility for individual about socialized medicine that welfare (not the general welfare most others do not; but there are specified in the Constitution) and two schools of thought on what to its device of compulsory “savings” do about it. The first holds that through payroll deductions. But physicians have neither the time the warnings went unheeded. nor the facilities to acquaint Meanwhile, many doctors had people with the unpleasant facts been warning that Social Security of government controlled medical carried the seeds of socialized care. Let people learn the hard medicine, requiring only a declara- way, they say, for the record tion of government responsibility shows that most Americans are for “health,” with a corresponding unwilling to learn from the experi- increase in forced ‘savings’ ence of others, but insist on find- through payroll taxes. Both steps ing out for themselves. Advocates are advocated in the current legis- of this position contend that it lation already cited. took eighteen years for people to learn about the evils of prohibi- tion, and that after several dec- It is common knowledge that ades of financial binge they re- physicians, almost to a man, are main unaware that they can’t tax- opposed to socialized medicine. But spend themselves rich. the reasons for their opposition The second school of thought go much deeper than the popular holds that the people at least but mistaken belief that doctors should be warned, whether or not are merely pursuing their own they choose to heed the warnings. selfish interests. What are some of the things As American citizens, they that doctors know about socialized question the moral, economic, polit- medicine ?? ical, and legal propriety of gov- — — ernment action to supply indi- 1 The chapter on “Political Medicine” marketable item, whether it be M. Mason, is the best account I have food, lodging, medical care, auto- seen of the inescapable shortcomings of mobiles, entertainment, or what socialized medicine. I am indebted to ’ ’ . these authors for permission to reprint not. In short, are such actions a or paraphrase generously from pertinent legitimate function of government passages. Why Doctors Oppose ===== PAGE 7 ===== 1960 “AND FOR OTHER PURPOSES” 5 The Patients Lose Most socialized medicine means votes First, they know the fallacy of simply because medical expenses the popular idea that doctors are are among the costs that people somehow “punished” under a sys- have trouble meeting. Medical tem of government medicine while costs are high for two reasons. patients are not. A good doctor can Many procedures necessary in .get ahead under any system of modern medical care are technical medicine; by his competency he and costly. And today’s prices are makes or arranges his own se- greatly inflated, primarily because curity. The poor doctor is better government — through unneces- off under government medicine sary taxes, spending programs, because his livelihood is assured and related policies — takes too him, and his working conditions large a proportion of people's are improved. When a socialized earnings. doctor puts in his 40-hour week, Doctors, aware that medical he is through; he can spend the costs can be reduced only by de- weekend with his family without flation and by increased medical giving a thought to patients. Fur- efficiency, know that socialized thermore, doctors retain the great medicine necessarily decreases advantage, no matter what the medical efficiency. Consequently, system of medicine, of assurance they know that political promises that diagnosis and care always will of reduced medical costs are be available to themselves and phoney. members of their immediate Doctors know, too, that since family. Because it is impossible to socialized medicine is neither socialize doctors without simul- medical nor scientific, but strictly taneously socializing patients, doc- political, demand for medical at- tors know that it is the patients tention of all types mounts under who get the worst of the “bar- such conditions. The system be- gain” in socialized medicine. comes loaded —and overloaded — so that the mechanism for deliver- A Political Affair ing medical care breaks down, thus Next, and most significantly, doubly assuring the poor quality doctors know that socialized medi- of such care. cine is neither a scientific nor a In private practice, a physician medical affair. It is strictly politi- might see as many as 20 or 25 cal. ~ "patients in the course of a full day. Other considerations vanish But once the system becomes af- when a politician scents votes; and flicted with politics, the unlimited ===== PAGE 8 ===== 6 THE FREEMAN April demand for “free” medical care (unless specifically exempted as would require that he see 120 or proposed for certain people in the more patients in the same period current Forand-type legislation), of time. To meet such quantitative whether or not they utilize the demand obviously must dilute the services. This is true regardless doctor’s time and skill if everyone of any “free” label or other effort is to receive his share of atten- to distort the fact. tion. Thus there occurs an inevit- The intrusion of government or able loss of quality, and medical coercion into any market place ac- care becomes mediocre. tivity always must be more costly But quantity is no substitute for than when the same venture is quality. Assembly-line medical at- conducted voluntarily. And the tention merely stimulates the pa- people will have to pay, both di- tients who are necessarily short- rectly and indirectly, and go on changed to demand the full paying more and more. treatment they think they need. People will pay first through in- Thus, demand for additional creased taxes which cannot be physician services and related avoided: increased withholding facilities continues to mount, add- taxes (the Forand-type legislation ing to the tax load and the total amends the Internal Revenue Code cost. So, there is initiated and per- to scale upward the Social Security petuated a vicious circle of “free” taxes over and above the increases medical care, increased utilization, already scheduled by law), in- breakdown of quality, demand for creased income taxes, and in- additional facilities, rising costs, creased hidden or other taxes. more “free” medical care, and so However, taxes are never high on, without visible termination. enough to cover the costs of some- thing-for-nothing. So people can Excessive Costs expect to pay, over and above in- Next, doctors know that in spite creased taxes, a supplemental of its mediocre quality, govern- ‘‘use” or ‘‘service” charge at the ment-supported medicine is any- time of incurring service or medi- thing but low in cost. cal attention, as Britishers found Under the prevailing market necessary, to their chagrin, with procedure, the patient pays only regard to prescriptions and appli- for the health services he chooses ances. to utilize. But with government Then there are the vagaries of controlled and politically domi- human nature which lead to furth- nated medicine, everyone must pay er costs. Whereas a person carry- ===== PAGE 9 ===== 1960 ‘““AND FOR OTHER PURPOSES” 7 ing fire insurance on his house will Finally, and in some respects rarely think of burning down the the most disturbing to physicians, structure simply “to get his money is their knowledge that the push back,” the same person has few for government controlled medi- qualms about periodically declar- cine in America comes, not from ing himself sick in order to “col- American sources, but from dedi- lect” on his contributions. Under cated collectivists abroad working the impression that medical serv- to attain world-wide socialism ices are “free,” he periodically through the International Labour feels obliged to get his share of Organization with headquarters this “something-for-nothing.”” All in Geneva, Switzerland. A hang- this burdens the system with extra over from the old League of Na- costs. tions, it is “affiliated” with, but . not a direct part of, the United Bureaucratic Overhead Nations. It conducts its affairs in- Finally, there is still another in- dependently, somewhat in the role escapable cost: the “brokerage” of a world supergovernment which cost of government, the handling turns its grandiose “plans” over charge, necessitated whenever to its own member nations, or to government builds a regulatory the United Nations, for implemen- fence around any segment of the tation. economy. . Physicians know that high qual- The Forand Bill ity medical care, such as Ameri- Against this general background cans now enjoy, is no accident. It let us examine specifically H. R. results only when two conditions 4700, the Forand Bill, typical of exist: the freedom of both patients efforts to fasten socialized medi- and doctors to accept or reject, cine on the United States as a part and the sacred and inviolate na- of the Social Security system. ture of a patient’s confidential dis- First, H. R. 4700 is a revenue closures to his doctor. measure, which amends the In- They also know that under any ternal Revenue (Income Tax) Code system of government-supported to levy increased taxes on em- medicine, both these essentials are ployees, employers, and the self- lost, all “safeguards” and ‘“reas- employed. surances” to the contrary notwith- Second, it is a clear-cut bid for standing. Socialized medicine can medical services supported and exist only when backed by compul- controlled by the federal govern- sion and regimentation. ment. That, initially, it is limited ===== PAGE 10 ===== 8 THE FREEMAN : April to so-called annuitants of the So- on the part of sponsors that Con- cial Security system, and that it gress would rather add to the So- A 0) TEL to subsidize only hospital, cial Security “Trust”, Fund's nursing home, and surgical serv- mounting deficits than to further ices for this small segment of old- increase the withholding tax in an sters, is immaterial. The important election year. point is that, stripped of semantic Confining the program to Social covering, this Forand-type legisla- Security annuitants, and offering Sr “13 tion spells out state medicine — restricted medical care only, are "medical care by grace of govern- likewise proposals “moderate” mental bureaucracy. enough to be politically realistic, Finally, with disarming hon- that is, not likely to arouse too esty, the Bill's preamble concludes much opposition. But the death with the significant phrase, “and blow to market-place medical care for other purposes,” that blank is there, nevertheless. check provision beloved of all bu- If the medical needs of a small reaucracies on the march. segment of older people (not all While this bill does not go the oldsters are under Social Security whole distance now, in keeping by any means) is properly a gov- with the grand strategy of the ernment responsibility, why not Geneva planners and their Ameri- the health of those below retire- can cohorts, no one reading the ment age? Say those aged 64 —or 700 pages of congressional hear- 60 —or 58 —or 50 —or 42-—or ings held on the bill during July. 35? Why not the health of every- 1959 can retain the slightest doubt body? of the eventual goal. In summary, physicians know ~ what ex-Governor Thomas E. Costs and Other Questions Dewey of New York stated when The one-step-at-a-time strategy summarizing the report of a com- is also followed in the matter of mission which he had named to raising taxes. No one, including study the - matter: “Socialized sponsors of the legislation, has any medicine is no good. It never was idea what the program would cost. any good. And it never will be any In his 1957 version, Representa- good.” tive Forand guessed it might re- The matter of government con- quire an increase of one per cent in trolled medicine, instead of pri- withholding taxes as a start. The vate practice in the market place, lower figure specified in the cur- is important in its own right as it rent bill is probably a judgment affects quality and costs. But even ===== PAGE 11 ===== 1960 “AND FOR OTHER PURPOSES” 9 more important is this: What hap- will he pass the buck to the im- pens to America? Where do we go personal forces of government? from here? Will he work to improve present medical, business, and government Freedom or Force? practices? Or will he scrap them At stake is the role of the indi- all and substitute a system which vidual in America. Is he willing, submerges his own identity to the as the Founding Fathers envis- status of a number in a gigantic aged, to accept some responsibility bureaucracy, in an impersonal, for his own future and that of his faceless society of conformists? family? Is he willing to take the The physical, economic, and initiative to solve his own prob- spiritual health of America, per- lems and join with others in solv- haps even of the world, depends ing those of mutual concern? Or upon the answer to this question. ‘SOCIALIZED MEDICINE DAN SMOOT 7) IN 1884, Prince Otto von Bis- use his own words. To use other marck, Chancellor of Germany, in- words: Bismarck was the first stituted the first modern program leader of a great nation to fight of socialized medicine. It was communism by adopting com- called compulsory national health munism. insurance. The German citizens paid more Bismarck hated communism. His for their national compulsory motive in introducing socialized health insurance than they had medicine in Germany was to buy paid for private insurance before the loyalty of the German masses Bismarck came along — and they as a means of keeping them from got less in return. becoming communists. Bismarck Bismarck’s scheme failed miser- adopted ‘nationalistic socialism to ably to provide better medical care end international socialism” —to for the people of Germany; but it ===== PAGE 12 ===== 10 THE FREEMAN April did become an important feature thousand hospital beds were out of the German militaristic state; of service because of a nurse it helped pave the way for Hitler shortage. The hospital shortage in a generation later; and it fur- Britain has become so acute that nished a pattern with which prac- many mentally deficient and help- tically every other nation in the less, aged people are unable to West — including America — has secure institutional care. The only experimented. effective means of easing the i» i shortage is to deny hospital admis- British Experience sion to the old and chronically ill England first started experi- who cannot be discharged once menting with socialized medicine they are admitted. in 1911. The experiments were a In industrial centers, some Brit- failure, as they always have been ish doctors have as many as 4,000 everywhere. registered patients each. Such doc- But government never re- tors can give each patient only trenches. When government seizes three minutes per call — three power and money from the people minutes over-all, for consultation, in order to promote their welfare diagnosis, prescription, filling out and then makes matters worse for official forms, and maintaining them, government always argues proper records for governmental that it didn’t have enough power inspectors. and money to do enough pro- Twelve per cent of all British moting. taxes go into the national health In England, for example, when program. Thus the wretchedly in- Lloyd George's rather moderate adequate “free” medical services experiment in the Bismarckian in Britain actually cost the average type of national health insurance Englishman considerably more was abandoned, the nation went than an American pays for the all the way into communized medi- most expensive private health in- cine. surance and hospitalization plan. The National Health Program Over and above what the British which became the law of England themselves have put into socialized in July 1948 is modeled on the medicine, one must consider also Soviet system created by Lenin. the billions of dollars which In less than two years, there America has pumped into the were more than a half a million British economy as loans and out- people on the waiting lists for right gifts. And still the thing is hospitalization, while some forty a failure. Why? ===== PAGE 13 ===== 1960 SOCIALIZED MEDICINE 11 Whenever government enters a ing out the unnecessary or unrea- field of private activity, that field sonable or dishonest demands becomes a political battleground. made upon the medical care serv- Whenever you mix politics with ices —no system, that is, except medicine, doctoring becomes a po- the one existing in a free society litical instead of a medical activity. where a person must pay his own doctor bill or is controlled by pro- “Something for Nothing" visions of an insurance policy But the primary reasons for the which he himself has bought. inevitable failure of socialized No compulsory health insurance medicine can be found in the pa- program has found :a means to tients themselves. When people are discourage racketeers or petty forced to pay for something, complainers who make useless whether they want it or not, they trips to the doctor and monopolize are inclined to use as much of it professional time that should be as they can in an effort to get their spent on people really needing money's worth. care. -~ There are endless stories about Englishmen who trade their gov- ernment-issued eyeglasses, wigs, EDITOR'S NOTE : The Dan Smoot Report and even false teeth, for beer. joie Pegs NAENTIE SRC AnOPNS There are housewives who trade Box9611, Lakewood Station, Dallas14, government-issued medicine for Texas, $10.00 a year. Mr. Smoot, a perfume and cigarettes. And there former FBI agent and later the radio are some who pick up extra money and television commentator for Facts : : Forum, has been publishing his own by selling the gold fillings out of Report since 1955, “using fundamen- their teeth — getting them replaced 1" American principles as a yard- by government dentists and then stick for measuring all important selling them again. issues.” Malingerers are people who pre- The above article is an excerpt CORT . from his issue of January 25, 1960, tend to be sick in order to get sick- which also includes a history of the pay, social security benefits, free {rend toward socialized medicine in hospitalization, or a rest at gov- America, a discussion of the Forand ernment expense. Hypochondriacs Bill, and a review of the sorry results are people who think they are sick, Of the medical plan un-er the compul- but arent. There are countless SOTY “Welfare program” of the United Mine Workers. Single copies of that thousands of such people. No sys- jg5ye may be obtained directly from tem has ever been devised for defi- Mr. Smoot or from THE FREEMAN for nitely identifying them, for weed- 25¢. ===== PAGE 14 ===== PAuL L. Poirot the HIGH COST of COERCION FOREIGN cars, cameras, tools, steel, as consumers, getting a bargain and other products are growing in from this new pattern of interna- favor with the American consumer. tional trade; or is the trend detri- An Italian-based firm recently mental to our interests? bought control of one of the oldest Current concern about interna- typewriter companies in the United tional trade brings to mind the States. A parallel trend is found appeals, so widespread in the depth in rising investment of American of the “Great Depression” a gen- capital abroad. eration ago, to shop at home — Concern about rising imports of patronize local merchants. The ar- goods and the flight of gold and gument was that shopping in chain savings from the United States stores or through mail-order prompts inquiry into the causes houses, or otherwise spending and. possible correctives for this money outside the community, shifting pattern of trade. As pro- would aggravate the conditions of ducers, why are we finding it in- local unemployment, slackness of creasingly difficult to compete for business activity, and hard times customers in the world market? generally. There is a fallacy in this Why are our exports of consumer “buy-locally” cure for depression: products and services giving way it is not possible to spend oneself more and more to exports of capi- rich. True, the local merchant tal goods —to American investments would like to sell more goods at his in foreign plants and production price, the local laborer would like facilities? Are we comparatively to sell his services at his price, the overcapitalized — too many tools farmer would like to sell all he can and facilities per laborer — in the produce at kis price, and so it goes United States? Are we in America, as far as all sellers are concerned. 12 ===== PAGE 15 ===== 1960 THE HIGH COST OF COERCION 13 But man does not live by selling tomers are motivated by bargains. alone. The other side of every sale Just as the customer is the key is a purchase. Selling one thing to community trade, so must the involves buying another — even if interests of consumers be consid- the thing bought is “only money.” ered in matters of international The customer is “the forgotten trade. But let’s further analyze man” in the “buy-locally” argu- some important aspects of trade at ment. For if the consumer says the local level before introducing that local prices are too high — international complications. whether for merchandise or the services of a laborer or whatever Jones of Jonesville — the result is “No Sale!” In Jonesville, let us say, Mr. Jones has found he can serve his The Customer Holds the Key interests very nicely by inventing The upshot of all this is that no- and operating a machine that body in a community gains, either turns out nails which he can trade as buyer or as seller, when there to others in the community for is no sale. And contrary to the im- anything he needs. Indeed, so plications of the buy-locally argu- pleased are the others that they ment, the community gains, rather reward Jones handsomely in trade than loses, if a customer can find until he has more than enough for what he wants at a price he’s will- his immediate requirements; he ing to pay, even though he has to has savings. go outside the community to find As his savings accumulate, Jones such a bargain. What did the com- risks them in part to improve his munity gain? Just what that cus- machine until it will turn out twice tomer gained in satisfaction from as many nails as before in a given his trade — and the community lost time; and his savings grow. Then nothing in the process. At least he begins casting about for other one person in the community made investment opportunities. He sees a sale and a purchase — traded that others in the community also something he wanted less for have been acquiring savings and something else he wanted more. If tools and skills to improve their he could have bought the same output. But it appears that his sav- thing at the same price locally, no ings are largest, so he concludes doubt he would have done so. Those that another nail-making machine who want customers to buy locally might be the best investment op- need only see to it that their ask- portunity at the time — if he can ing prices are right — for cus- hire an operator at a reasonable ===== PAGE 16 ===== 14 THE FREEMAN April wage. Upon checking, he discovers to the community at least as much that the most likely candidate for as — and generally more than — the new job is a young man who they draw from it. has not yet accumulated any tools A common argument is that a but who has the intelligence and community has only a limited sup- ability and desire to operate the ply of capital or tools; and if these new machine for Jones. They agree tools are spread thinner among upon a wage rate that is higher more workmen, the average pro- than the young man could earn ductivity must decline. But in a elsewhere, yet lower than Jones free market, it may happen other- would have to pay any other work- wise. When labor is available at man of comparable ability. reasonable wages, then capital and Though nail prices decline as tools are attracted. They come Jones expands his output, he con- forth out of idleness; they are di- tinues to profit because he knows verted from consumer uses; they how to cut production costs with may come from outside the com- new and better machines and hired munity as did the extra supply of help. He also is able to expand his labor. In other words, the supply sales territory as his costs —and of capital is flexible, too. And so is prices — decline. In other words, the supply of managerial talent. If the market area is enlarged, trade labor is available, some of the increases — to the advantage of laborers themselves will become everyone concerned. This would be employers, start new businesses, true, even were Jones to bring in and thus move up the industrial new workmen from the fringes of ladder. So, an increased labor sup- the market area, workmen willing ply means increased production and eager to work at wages that and lower prices for goods and might not attract others in the services, and each wage dollar has community. increased purchasing power. Furthermore, Jones cannot ar- If the Wage Is Earned bitrarily set wage rates. Other em- At first thought, it might seem ployers. in the community — or po- that bringing in cheap outside tential employers — also want hired labor would lower the level of help and will bid against Jones to wages in the community to the in- keep the going wage rate high jury of native workmen. Actually, enough to clear the market. This it does not, if the new workmen means that everyone who wants to earn their wages through produc- be employed, instead of working tion. In that case, they contribute for himself, can find a job. ===== PAGE 17 ===== 1960 THE HIGH COST OF COERCION 15 Also to be considered is that monopoly on grounds that compe- Jones, or anyone else with savings tition would injure him; and if he or capital, would be under strong were injured, the rest of Jonesville temptation to invest some of the would suffer accordingly! savings in new plants and new By that same rationalization, tools in any area that offers sales other producers in Jonesville could opportunities and a supply of argue for protection against com- available workmen. Thus it is that petition, and organized workmen capital moves from one location to could protest against any importa- another, as do workmen, within tion of “cheap foreign labor.” any market area, tending to spread and equalize job opportunities, Some Consequences of Intervention wage rates, industrial development, At this point, there is no need cultural advances, and a rising level for further speculation as to what of living. Nor does this process of might happen in some hypothetical competitive growth and trade im- Jonesville. We need only look about properly exploit or injure anyone us to see that these very things — unless he had expected to get have happened and are happening something for nothing. It assures every day. One after another, spe- everyone not only all he can earn cial interest groups have turned to but also the best possible oppor- government for some “fair advan- tunity to earn it — whether his goal tage” over competitors, both do- be material goods, services, cul- mestic and foreign. tural opportunities, self-improve- Farm prices have been propped ment, or just plain leisure. up to the disadvantage of domestic Now, suppose that Jones had consumers; exports are subsidized; been fully satisfied with his first acreage or marketing quotas have nail machine and had decided to been invoked to keep down poten- let it support him for the rest of tial competition in agricultural his life, In that case, he might production. have imagined that the Jonesville Labor unions have sought and market was his exclusively — that obtained legislation that, in effect, he had a right to all the money grants them monopoly powers and that community could afford to pay exempts them from common law for nails. Then he might urge the prosecution for acts of violence, Community Council to forbid any coercion, assault, and intimidation. other nail manufacturing in the Manufacturers and various pro- area and any importation of nails. ducer groups, often with active He would argue for such a nail support from organized labor, seek ===== PAGE 18 ===== 16 THE FREEMAN April and obtain tariffs and other pro- national defense, which becomes a tective measures against competi- growing problem as multiple pres- tion from “cheap foreign labor.” sure groups seek protection against Publishers, advertisers, ship- possible competition. This is what pers, and other groups get postal always happens when government subsidies. intervenes, first to establish a mo- Teachers, preachers, and various nopoly power, and then to defend proponents of “worthy causes” ex- the monopolist. pect tax exemption, federal aid, * and other special privileges. Multiplying the Problems Promoters demand subsidized - We in America, if we persist credit and artificially low rates of with the prevailing pattern of co- interest. ercive practices and departure There appears to be no end to from open competition in our do- the possible combinations of spe- mestic affairs, have no right to cial interests seeking something expect anything but trouble in our for nothing at the other fellow’s international relationships. It is expense. All of these developments, possible to get some production by it must be noted, are departures compulsory devices — if the .com- from the method of voluntary co- pulsion is not absolute; slavery operation and exchange in the open “works” after a fashion. But it is market. There are no willing tremendously inefficient and waste- buyers of nothing-for-something, ful of natural resources, not the which means that coercion or a least of which is the unimaginable reasonable facsimile must be in- ingenuity and creativity of which voked to get something-for-noth- individuals are capable if only they ing. And organized coercion tends could be free to pursue peacefully to gravitate toward and congeal in their own interests with their own the hands of government. The pow- property. Burdensome taxation, erful and burdensome bureaucracy culminating in runaway inflation, that now demands a third of the is the inevitable consequence of productive efforts of the American shunning competition and turning citizenry is but a reflection of our to coercion as a way of life. And departure from voluntary competi- this tax burden, otherwise mani- tive enterprise and a measure of fested as an international flight the force that is required to push from the U.S. dollar, is precisely or drag individuals into unattrac- why American goods and services tive projects. Much of the govern- are meeting increased customer re- ment spending is in the name of sistance in the markets of the ===== PAGE 19 ===== 1960 THE HIGH COST OF COERCION 17 world: coercion makes for costly reason for its being, its very life. production and distribution. No, the seriousness lies in the fact that supposedly stanch defenders Let no one suppose this to be a of competitive private enterprise trifling fact of merely academic are now using the term economic concern. Serious enough is the war to describe a competitive situ- threat to the soundness of the dol- ation. This is the new terminology lar and the credit of the U.S. gov- of the coercive way of life, de- ernment. But even that should not signed by and for those who do not be our major object of concern. choose to take their chances in The terrible seriousness of the open competition. And if this de- situation is hidden behind Khrush- fection from capitalism means that chev’s boast that “we will bury we are going to try to beat Khrush- you,” which American business chev and company at their own and professional and political game with their choice of weapons leaders are interpreting to mean — that we, too, are bound to rely that we are now ‘at economic war upon coercion and government con- with Russia.” Now, the reason why trols — then we are indeed at war, this is serious is not because not against Russia, but with Rus- Khrushchev has challenged capital- sia, against the ideals and prac- ism to compete in the markets of tices of freedom that once guided the world. Such competition is the American affairs at home and bread and butter of capitalism, the abroad. - UCCESS WITHOUT SUBSIDY GEORGE WINDER IN A WORLD in which many people example of a farmer who can suc- think controls and subsidies are ceed without them. necessary to preserve a prosperous Fisher chose to be a large-scale agriculture, forty-three-year-old chicken producer because this was Antony Fisher is an outstanding one of the few branches of farm- EEEE— } ing in Great Britain not sub- From the November-December 1959 issue of “ae « the London journal, Freedom. sidized by the government. “Sub- ===== PAGE 20 ===== 18 THE FREEMAN April sidies are humiliating and create which, with 200 employees, plucks more evils than they cure,” he and processes, ready for the oven, says. over 20,000 birds a day. This year He has certainly proved that he will reach an output of 30,000 they are unnecessary, for within birds a day. the last six years he has created a This modern system of produc- chicken producing business which tion used by Fisher has reduced is probably the largest of its kind the price of chicken in the shops in Europe. by about 30 per cent in five years. After the war, he settled down Prices are expected to fall steadily. with his family on his four- They have thus made possible the hundred-acre mixed farm near famous ambition of Henry of Framfield in Sussex. In 1952, dis- Navarre (Henry IV of France) aster came in the form of foot and that “every good fellow should mouth disease, which meant that have his chicken in the pot on his herd of Friesian cows had to Sundays.” be destroyed. This caused him to look around It was Fisher's firm belief in for some way of increasing his free enterprise which induced him turnover. He found what he to prefer the production of chick- wanted when he visited America ens to that of any planned or sub- to lecture on the evils of State sidized branch of agriculture. His Economic Planning. success has confirmed and On a broiler farm near Cornell strengthened that belief. He con- University, he saw 15,000 birds siders that if people would only in one house and at once realized study the technique of the classic that there was a very great open- economists, they would realize ing for similar large-scale produc- that the acceptance of the prin- tion in Great Britain. ciples of free enterprise are essen- After studying American de- tial for a nation which wishes to signs, Fisher established a modern attain both freedom and pros- plant on the conveyor belt system perity. PS The Function of Government THE OFFICE of government is not to confer happiness, but to give men opportunity to work out happiness for themselves. WILLIAM ELLERY CHANNING ===== PAGE 21 ===== MIDDLE-INCOME HOUSING or —RENT COLLECTION IN THE AFFLUENT SOCIETY It was a foggy afternoon At story-telling time. Old Kaspar puffed his last cigar And wished for rum-and-lime, While Peterkin and Wilhelmine Looked at the television screen. They saw a crowded city street, Where men with clubs and sacks Were rounding up the passers-by And sorting them in packs; While others sprang like beasts of prey On folks who tried to run away. “Now tell us what it’s all about!” The little children cried. “It is the Federal Housing Plan,” Old Kaspar soon replied. “It helps to pay the soaring rent, And keeps the building trades content.” “The cost of housing,” Kaspar said, “Has risen far too high For middle-income folks to pay, No matter how they try. So now we give them Federal Aid To cover rents they haven’t paid.” “When tax collectors find a bunch Of middle-income folks They search them all for hidden cash And empty all their pokes. That's how we get the cash, you see, To pay the Housing Subsidy.” “But what’s the use of getting Aid And paying for it, too?” “There are some answers,” Kaspar sighed, “I never really knew. But Planners set the greatest store By schemes that make the taxes soar.” H. P. B. JENKINS Economist at Fayetteville, Arkansas 19 ===== PAGE 22 ===== EpwARD P. COLESON A LOT of so-called liberals have the world even if everyone ap- talked about “scientific socialism” proved, and I found myself a lone- so long now that the world has some minority of one. At least this well-nigh fallen for the delusion has saved me the embarrassment that socialism is, indeed, scientific. that many a well-meaning indi- While certainly a number of scien- vidual has experienced who must tists, engineers, and technicians now make his painful way back have had a distressing affinity for from a bankrupt utopia, like the socialist and communist causes Prodigal Son returning from the along with a number of other swine pen of the Far Country. shortcomings - and vices which they share with the general popu- lation, it simply is not true that Actually, New Dealism, the pure science as such has a pro- bright hope of multiplied millions collectivist bias. In fact, when it of Americans in the 1930’s, had a seemed that everyone else was strangely familiar ring to one going “liberal” back in the New brought up on science and mathe- Deal days, it was the insights of matics. We used to have that science coupled with an elementary trouble in engineering, too. A num- course in economics which helped ber of craftsmen, long on mechani- to hold the writer steady when the cal skill but short on theory, have issues were not clear or well un- wasted their lives trying to rig derstood. Some things simply could ingenious machines that would not be true by the very nature of achieve perpetual motion, or sim- Dr. Coleson is Professor of Economics at ply, something for nothing. Taylor University, Upland, Indiana. Although there are doubtless as Economic Perpetual Motion 20 ===== PAGE 23 ===== 1960 SCIENTIFIC FREE ENTERPRISE 21 many schemes as individuals, the The motor and generator might be following example may suffice to coaxed to very nearly run each illustrate what is meant. Having other but, since there is friction, grown weary of buying gas for a little outside power would need the family car, we invent an elec- to be added to keep them both tric automcbile. It is all very sim- going. If any work is demanded of ple. We mount a generator and a the combination, there must be an motor side by side with each run- additional input of electricity com- ning the other as in Figure 1. We mensurate with the task to be per- assume, of course, that there will formed. be a considerable “unearned in- crement” of energy that can be Our Persistent Politicians used to drive the automobile down Most everyone in the sciences the road. We need a push to get it quit looking for something for started, but then the “multiplier” nothing quite a while ago, but the takes over, and we have an abun- politicians are still at it in full dance of power — and all for noth- force with no indications even yet ing — until we put on the brakes at that they sense even vaguely that the end of the way. It is a very the whole business is impossible. good scheme, except it won’t work. Our whole Operation Bootstraps 0 Wires taking © current © - tomotor ~~ SS | “Figure 1. PERPETUAL MOTION ELECTRIC AUTOMOBILE. The motor runs the generator i - and back wheel of the car. The generator produces current to keep the motor running. ===== PAGE 24 ===== 22 THE FREEMAN April ee ee ee eee i eevee — 3 ft. Figure 2. THE IRREDUCIBLE MINIMUM. The least amount of work, as- suming 100 per cent efficiency, will be the same, no matter how we do the job. Frictional losses may make it several times this necessary figure. ed L by which we tried to lift ourselves 38 x 450 or 1,350 foot pounds of out of the Great Depression under work to lift it up there. Given the the New Deal reeked with per- size of the task, nothing on earth petual motionism, as did certain can reduce the figure below 1,350 popular private schemes as the foot pounds. Since we can’t lift chain letter craze and the Town- 450 pounds directly, we may send Plan. They never worked and whittle the task down to size by business stagnated all during the pushing it up the ramp. In this 1930’s. Having learned nothing case we exert a lesser force over a and forgotten nothing in the in- longer distance, but nothing will tervening years, we are still trying reduce the minimum figure. If we those same outworn schemes. We use a jack screw, an electric hoist, have a principle in science, which or a stick of dynamite, the force is used to discourage such hopeless required is the same. If we ladle endeavor, called the Law of Con- the contents up with a teaspoon servation of Mass and Energy. In into another container and lift the plain English, it says you can’t get empty barrel up later, we have something for nothing. gotten out of nothing. Indeed, we most certainly have wasted a con- Frictional Losses Lead to Poverty siderable amount of additional Now there are better and worse effort to no purpose. ways of doing things. Suppose we The engineer of today has long want to lift a 450-pound barrel up since given up trying to get some- and set it on a shipping dock three thing for nothing: he is earnestly feet high as illustrated in Figure striving to get as close to 100 per 2. It will require a minimum of cent efficiency as possible — the ir- ===== PAGE 25 ===== 1960 SCIENTIFIC FREE ENTERPRISE 23 reducible minimum of effort neces- tional losses, and reduce the stand- sary to perform the task. Fric- ard of living. tional losses are still high; a steam A person who spends his life engine wastes 80 to 85 per cent of trying to invent and devise more its power input, and an automobile efficient ways of doing the world’s as much as 75 per cent. Diesels do work in industry, or striving to somewhat better and, recently, re- produce enough food on the farm action engines (rockets or jets) to at least meet mankind’s mini- have been developed which are mum needs, necessarily bitterly very nearly as efficient as our older resents deliberate efforts in the engines were wasteful. Still we opposite direction, disguised to aren’t getting something for noth- confuse the issue in the public ing. Indeed, we are only beginning mind. We are rapidly coming to to get our money’s worth. the state described by Thomas Jefferson a century and a half To Discipline the Mind ago: All of these calculations may seem irrelevant and uninteresting to the person not trained in science and mathematics. However, these . . RY . our comforts, in our labors and our rigorous disciplines do Something amusements . . . as the people of to one’s mind. It simply is not England are, our people; like them, possible to tell many of us that the pst come to labor sixteen hours in government can give without first the twenty-four, give the earnings of taking. It is sheer rubbish that fifteen of these to the government for there are all sorts of colossal tasks their debts and daily expenses; and — education, roads, housing, care the sixteenth being insufficient to of the poor and aged, besides sub- afford us bread, we must . . . be glad sidizing every group you can think to obtain subsistence by hiring our- of — jobs that the states simply selves (to the government) to rivet . their chains on the necks of our cannot do but which Uncle Sam fellow-suff . ellow-suilerers. can easily handle. Nor can you tell us that inefficiency adds up to pros- To several million American perity. John Maynard Keynes farmers who can scarcely make a might convince well-nigh the go of it when they work eight whole world that pyramid building hours a day in a shop in town and made ancient Egypt prosperous as many or more on the land, Jef- and two were twice as good as one, ferson’s words will seem ominously but make-work schemes are fric- prophetic. If we run into such debts, as that we must be taxed in our meat and in our drink, in our necessaries and ===== PAGE 26 ===== 24 THE FREEMAN April The Logic of Laissez Faire nigh took over the continent of The old laissez-faire! doctrine of Australia because of a lack of a self-regulating economy man- “checks and balances.” aged by the “invisible hand” is re- Professor Pavlov, the noted Rus- markably like the science of ecol- sian physiologist, also found in the ogy, which insists that Nature bal- workings of the body examples of ances the budget, gives everyone how artificial inhibitions wrought his due, and keeps the myriad havoc. These he compared with the forms of life in check as long as paralysis produced by the com- man does not upset the natural munist system of national plan- scheme of things. The disastrous ning. He should have known. results of human interference are Of course, it can be argued that well known, as for example, the such analogies drawn from mathe- story of how the timid rabbit well- matics, mechanics, and biology do —_— not prove that the free system is ! Laissez faire is here used, not in the appropriate in economics and that sense of doing as one wills regardless of the fantasti h f th how that might infringe upon the rights . e fantastic schemes of the na- of others, but in the classical sense of tional planners lead only to misery freedom to produce, exchange, travel, and ruin. But as Winston Smith and the like according to one’s own in- IN , Ce terest within the bounds of due respect says in Orwell's 1984: “If two and for the lives and property of others. two are four, the rest follows.” =» Criticism Founded on Fact OUR WORD “education” is a misnomer. We are not educating; we are domesticating. To educate is to develop latent capabili- ties so that one may be strong to overcome the hampering obstacles of prejudice and environment in reaching out for truth. To domesticate is to train one to accept the prejudices, and to obey the conventions, of his environment. To educate is to develop free activity. To domesticate is to train to a pre- scribed end for a prescribed purpose. The domesticated animal, whether a biped or a quadruped, believes what he is made to believe, and does what he is made to do. The educated being believes what appeals to his reason, and thinks for himself. To educate is to teach people how to think; to domesticate is to teach people what to think. The processes of domestication, toward which we are drifting, make for small, narrow, and prejudiced minds. THOMAS 8. CLARKE, from a Symposium in The Rotarian. ===== PAGE 27 ===== THE USPOSTACE USPOSTAGE TRICKY Zo FOUR FREEDOMS Eo BREED ort No RFLiCIO [ow ELICION ul ERO: WANT 0d Po 3 WANE ARK LAND FEAR | orl, DFrAR A 3 [Ban R ALLE FREDERICK A. MANCHESTER LogIc, it has been said, not with- tain from him criteria that will out point, is horse sense made prove of value in our special under- asinine. Certain it is that many a taking. In examining his ideas it man who never heard of it has is well to bear in mind that they done handsomely without it. are (he tells us) ‘anything but Nevertheless it sometimes has its new,” and that they were formu- uses, and since any success lated a century ago, in a quieter achieved in the discussion to follow time than ours—or so it seems— must depend above all on sound generations before the present reasoning, I suggest that we pay whirlwinds of glib opinion had a brief visit to a man who was come to trouble and confuse us. both a writer on logic and on other The ‘appropriate region of grounds an outstanding thinker. human liberty,” says Mill, com- It happens that John Stuart prises, first, “liberty of thought,” Miil, the authority to whom I re- including “the cognate liberty of fer, has considered the subject speaking and of writing”; second, of liberty at length, as everyone “liberty of tastes and pursuits’; knows, and has arrived at very third, “liberty .. . of combination definite conclusions regarding its among individuals” — freedom, nature. We shall learn from him that is, “to unite, for any purpose what these conclusions, in their not involving harm to others, the essence, are. In his society, more- persons combining being supposed over, we can flex our intellectual to be of full age, and not forced or muscles, and at the same time ob- deceived.” “No society,” he con- Dr. Manchester is an educator, formerly of the tinues, “in which these liberties D t t of English, Uni ity of Wi - Depar ment of Englis niversity o iscon are not, on the whole, respected, 25 ===== PAGE 28 ===== 26 THE FREEMAN April is free, whatever may be the form Each, again, is essentially an of government; and none is com- immaterial benefit, involving, as it pletely free in which they do not does, the human dignity and moral exist absolute and unqualified. The independence of the individual, to- only freedom which deserves the gether with his inner peace and name is that of pursuing our own satisfaction. The first of them good in our own way, so long as frees the workings of his mind, the we do not attempt to deprive second his tastes and pursuits, the others of theirs, or impede their third his choice of affiliations. efforts to obtain it.”? Each, again, is a benefit that the To one eminent philosopher, individual is incapable of achiev- then, the three freedoms differen- ing by his own exertions, that is tiated, neither more nor fewer, are his only through an act, implied or the great, the indispensable, actual, of the society in which he human freedoms, and as such, one lives — an act, moreover, which it is safe in adding, constitute basic is easily within the power of any political objectives which he thinks society, at any time, to give. It is proper to all mankind. What are society only which can inhibit his the characteristics, one is curious freedom of thought (including to inquire, that distinguish them? worship), his freedom of tastes and pursuits, including, neces- sarily, the ownership and control Each of the three freedoms property, and his freedom of and this is their first and most entering into groups with others; fundamental characteristic — rep- consequently it is society only resents the absence of restraint in hich in all these respects can relation to a particular activity. It eave him free. is a freedom to do something. In And each, finally, is a benefit one case it is a freedom to think which, when granted, costs the in- as one chooses; in another to like gjyidual’s fellow citizens nothing. or dislike, and to select one’s 71 requires only that in the re- course in life, as one chooses; in spects in question they keep their another to unite with one’s fellows p..4s off, let him alone, leave him as one chooses. Always, in one di- ty his own devices. rection or another, it is an exhila- Mill’s essential human freedoms, rating state of unshackledness, of then, are three —of thought, of freedom to go about, unhampered, {55te and of affiliation: and, let us the fulfillment of one’s desires. fix firmly in mind, they have in 10n Liberty, introductory chapter. common four characteristics: they Fundamental Characteristics ===== PAGE 29 ===== 1960 THE TRICKY FOUR FREEDOMS 27 are liberty to do something, they sion?” Or perhaps some not-yet- are of profound importance to the subdued isolationist may have well-being of the inner man, they gasped at the reckless terminal are benefits which an individual flourish. ‘ ‘Everywhere in the cannot by any act of his own con- world,’ did he say? A big order! A fer upon himself, and they are big order indeed!” benefits which, when conferred by The voice from the rostrum con- society, cost it nothing whatso- tinued: ever. The second is freedom of every Message to Congress person to worship God tn his own Opinions differ, even as to essen- way — everywhere in the world. tial human freedoms. On January If any auditor had previously 6, 1941, an American President, in taken to the edge of his chair in the course of an address to Con- the hope of novelty, he was ready gress, began a memorable passage by now to slide back to somnolence. thus: Freedom of speech, freedom of In the future days, which we worship: both were etched deep seek to make secure, we look in the mind of half a continent. forward to a world founded Both had been included a century upon four essential human free- ago in Mill’s first freedom. Both doms. were assured us all by the very The exordium probably caused first amendment to our once- no general thrill of expectation, reverenced Constitution. Freedom either in the auditorium proper or ‘to worship God in his own way” in the galleries. After all, freedoms had been the cry that made many are with us Americans an old, old 2 colonist brave the dangers of the story. The President went on: sea, the unknown perils of the New England forest, and the specter of . ) . possible starvation. Both freedoms and expression—everywhere in , the world. were freedoms close to men’s hearts; the second, at least, many Nothing here either to set the a man had been ready to suffer for, blood spinning, though perhaps on to fight for, and, if need were, to left or right a pre-Progressive die for. But listen: pedagogue turned Congressman may have muttered to himself, ‘“‘Speech and expression’: is speech, then, no longer expres- Then it was, on the instant, The first is freedom of speech The third is freedom from want . .. ===== PAGE 30 ===== 28 . THE FREEMAN April while the speaker read on unheard, second he made a logical jump so that extraordinary things began enormous as probably to be un- to happen. Men stared at each precedented in the annals of re- other astonished, incredulous. sponsible statesmanship, and to What was this? What was this? constitute, however void of injuri- Could they have heard correctly? ous intent, an affront to the intel- How could freedom from want get ligence of everyone within hearing admittance to this sacrosanct fel- —a logical jump which, by lowship? One man, a former diplo- analogy, would make a nonstop mat, shouted in bad French, leap from the pinnacle of the Em- “What the devil’s that doing in pire State Building to the pinnacle this galley 7” A murmur of shocked of the Eiffel Tower seem the disagreement arose in a remote merest bagatelle. One’s sense for corner of the chamber, spread logic is pained by its extravagance, rapidly in all directions, and grew - instinctively, before analysis has momently louder and more resent- had time to begin. But let analysis ful. Finally, a dozen of the more once have its turn, and President agitated got straight up on their Franklin D. Roosevelt's third free- feet and exclaimed “No, no!” ... dom is seen clearly for what it is.2 And now I too must exclaim It does not possess a single one “No, no!” No: things did not of the four characteristics which happen as I have described them Mill's three freedoms have in com- — or, if they did, the news never mon. It is not a freedom to do any- reached me. Yet I cannot but wish thing: on the contrary, as it might that something of the sort had in practice often work out, it is happened, contrary as it would rather a freedom not to do any- have been to our traditional man- thing. Again, it is not of profound ners (I have gathered that abroad importance to the well-being of the audiences are sometimes more pub- inner man: its enjoyment guaran- licly demonstrative: if that is the tees no such well-being, and such case, may it not be, in part at well-being is quite possible in its least, because they take ideas more absence — as the history of saints seriously?) —and if it had hap- =~ The shift in phrasing from “of” to pened I could now offer for the un- “from” is in itself a kind of warning— definite reasons. language that even a legitimate freedom The first is that when the might, however awkwardly, employ the . . same introductory word, as, for example, speaker proceeded to add his third in the case of Mill's first freedom, “free- essential freedom to his first and dom from control of thought.” ===== PAGE 31 ===== 1960 THE TRICKY FOUR FREEDOMS 29 unquestionably proves. St. Francis from the august company into of Assisi, probably one of the most which it was so illogically and so inwardly happy men who ever arbitrarily thrust. But there is a lived, made Lady Poverty, not second reason why such exclusion Lady Bountiful, his bride. Again, is of the greatest practical impor- instead of being a good which man tance. cannot secure by his own exertions, Which is that this miscalled it is normally by his own exertions freedom, once accepted as of the that he secures it; while at the same order as the immemorial same time it is a good which so- freedoms, contains within itself ciety may or may not be able to the potentiality of incalculable evil. confer upon him, since the sources It is as rights that we think of the in nature of man’s necessities are other, genuine freedoms; freedom not inexhaustible, and such as they of speech, freedom of worship, are are they are only partially under guaranteed in our Constitution as his control. And, finally, instead of a part of what we call our bill of being a good which costs society — rights. They are things we re- nothing whatsoever, its possession, gard as our inalienable posses- if it is to be constantly and uni- sjons. Whatever they may have versally obtained, must often in cost our ancestors to obtain, they greater or less degree be at so- cost us nothing. They are already ciety’s expense. Clearly there is ours. Suppose now that in a nation nothing important in common be- where universal suffrage prevails tween the strange intruder “free- a distinct majority should become dom from want” and the three firmly convinced that the good essential freedoms of John Stuart pews is indeed true, that freedom Mill — and Mill’s freedoms, it is from want — a concept subject to time to assert, are by no means easy abuse —is a freedom like personal or peculiar to their for- freedom of speech and freedom of mulator, but on the contrary are worship, and, independently of any substantially identical with the great effort on their part, a vested freedoms that freedom-loving men right: what then? Would not their everywhere have always struggled first step be to demand that their to attain. Indeed, what others are enjoyment of that right be real- there? ized in fact?? And to whom or “Freedom from want,” then, is what would they address that de- not properly a political freedom at "SCE. Felix Morley, Freedom and Feder- all. That is one fact that would ,j5m (Chicago, Henry Regnery Com- forever justify its sharp exclusion pany, 1959), pp. 135f, ===== PAGE 32 ===== 30 THE FREEMAN April mand but to their government, and Freedom from Fear how is that government to obtain It will be noticed that the pre- the means to satisfy it, in so far viously unquoted part of the first as it can satisfy it at all, save by of the above sentences in no way taxing, and ever more taxing, all alters the meaning of the expres- those who might be able, for a time sion “freedom from want.” Was at least, to pay whatever sum was the corresponding part of the levied? Down such a vista, ob- second sentence — “which, trans- viously, lies confiscation almost lated...” — intended to define and without limit. restrict the meaning of “freedom Surely such a possible develop- from fear”? For a good while I ment was latent in “freedom from assumed that it was so intended, want.” Apropos of it there is much and considered that to interpret more to be said — but that must the phrase without reference to wait, for already we have too long its context was to do injustice to left President Roosevelt suspended Roosevelt's good sense. I am now in the midst of his speech. Let us in doubt — or rather, I am suffi- now hear the whole of the inter- ciently convinced that “freedom rupted sentence, and along with it from fear,” probably never sub- the proclamation of the fourth jected by its author to careful freedom: scrutiny or analysis, is just as much to be taken by itself as is The third is freedom from ‘freedom from want.” Undoubt- want — which, translated into edly it has been so taken, and in- world terms, means economic deed that is probably how it has understandings which will se- been generally understood — cure to every mation a healthy “everywhere in the world.””* peacetime life for its inhabit- But, so taken, so understood, ants — everywhere in the world. what rational meaning can be at- The fourth is freedom from tached to it? Freedom from fear? fear — which, translated into How is such a thing conceivable, world terms, means a world- in a world where the everyday wide reduction of armaments to greeting “How are you?” betrays such a point and im such a ~~ ‘Even if the intention was to restrict thorough fashion that no nation freedom from fear to mean freedom from . . oy. . the fear of international aggression, the will be in a position to commit restriction would scarcely reach the popu- an act of physical aggression lar mind and imagination. Only the con- against any neighbor — any- cise, compact formula would be likely to ) go far, and, in that, fear is flatly co- where in the world. ordinated with want. ===== PAGE 33 ===== 1960 THE TRICKY FOUR FREEDOMS 31 a long-established conviction of or with the aid of freedom from uncertainty and peril; where the fear, a potent influence. objects of fear, physical and men- An “Economic Bill of Rights” tal, are infinite in number and in- announced by President Roosevelt finite in kind, darkening all the in his Message to Congress of long trail from yawning earth- January 11, 1944, was “squarely quakes and fierce lady-hurricanes based” upon it. It was the “start- (what misogynist ever thought up ing point” for highly significant that one!), through flood, accident, elements in the Charter of the disease — through frightful deeds United Nations, ratified by the of wicked men, and nameless hor- United States Senate on July 18, rors of disordered dreams — to the 1945. Its philosophy continued to ultimate terrors of old age and operate in the United States, in- death? And the fear of God, once dependently of the party in power, inculcated as a thing pre-eminently after President Roosevelt's death.5 to be fostered — are we to be freed The “Economic Bill of Rights” from that, too? referred to deserves examination. oo “We have accepted, so to speak, a Multiplication of Wants second Bill of Rights,” declared It would be as tedious as un- the President, “under which a new necessary to show in detail that basis of security and prosperity anything so hopelessly vague and can be established for all — regard- uncircumscribed as freedom from less of station, race or creed.”’® fear, and so largely unrelated to the Among these, he said, are the fol- problems of government, cannot lowing: properly be considered a political ® The right to a useful and re- freedom — let alone an essential juynerative job in the industries, freedom. As a matter of fact, apart “Morley, op. cit. pp. 133-138. Strictly perhaps from some association speaking, Morley attributes the influ- with freedom from want — with ence specified, directly or indirectly, to the meaning of freedom from fear the Te but re of destitution — it has had, so far traditional freedoms and stressing free- as I have learned, no significant dom from want, is doubtless correct. hist Articles 55 and 56 of the Charter of the story. . . United Nations, partly quoted below, are But not so, it seems, with free- quoted in full by Morley. dom from want — to which I now SThe text of the preceding sentence, b ’ Felix M g ) that of The Roosevelt Reader, edited and useful study by Felix Morley al- ith an introduction by Basil Rauch ready cited, has been, either alone (New York, Rinehart & Co., Inc., 1957). ===== PAGE 34 ===== 32 THE FREEMAN April or shops or farms or mines of the clear, organizing thought. Third nation; . — and it is this which is definitely e The right to earn enough to relevant to our immediate topic — provide adequate food and clothing they can obviously be summed up, and recreation; with two exceptions, as the small change of the President’s third freedom, assuming that “want” is understood in a generally charit- able fashion. The two exceptions are the provision for “a good edu- cation” and the provision for rec- reation. I confess I should find it difficult to think of the absence of a good education (whatever that ® The right of every farmer to raise and sell his products at a re- turn which will give him and his family a decent living; ® The right of every business man, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad; ) . ] may be) as the presence, in any ® The right of every family to Lc nable sense, of “want,” and a decent home; still more difficult to think of the ® The right to adequate medical apgence of recreation —or shall care and the opportunity to achieve say freedom from boredom (it and enjoy good health; being surely no less a “freedom” ® The right to adequate protec- than a “right”) —in a similar tion from the economic fears of manner. old age, sickness, accident and un- The “Economic Bill of Rights” employment; was designed, primarily at least, ® The right to a good education. for America. It was “definitely the ] responsibility of the Congress,” Rights? said President Roosevelt, “to ex- Several comments suggest them- plore the means” for its implemen- selves. First, the list is character- tation. Article 55 of the United ized by the President as “so to Nations charter proposed objec- speak, a second Bill of Rights” — tives for all the world in part as egregious a violation of sense highly similar to those of the “Eco- and logic as was his formulation nomic Bill of Rights.” The United of the Four Freedoms. What, pray, Nations “shall promote: (a) have rights to do with the pleasant higher standards of living, full and gratuitous assurances with employment, and conditions of which it abounds? Second, it is an- economic and social progress and noyingly diffuse and repetitious, development; (b) solutions of in- by no means the product of keen, ternational economic, social, ===== PAGE 35 ===== 1960 THE TRICKY FOUR FREEDOMS 33 health, and related problems; and international cultural and educa- tional co-operation; and (c¢) uni- versal respect for, and observance of, human rights and fundamental freedoms for all without distinc- tion as to race, sex, language or religion.” Article 56 pledges the members of the United Nations “to take joint and separate action in cooperation with the Organiza- tion for the achievement of the purposes set forth in Article 55.” And now, in America, after President Roosevelt’s death? “In farming,” says Mr. Morley, “hous- ing, health, education, road con- struction, old-age pensions and unemployment insurance, to men- tion only the more important serv- ices, centralized ‘aid’ . . . is now an established principle.”? The Formula Publicized For some time after their an- nouncement the Four Freedoms received considerable attention. Among entries in the Readers’ Guide to Pertodical Literature for the period July 1941 to April 1945 are the following (they will repay close scrutiny), some of which, judged by their titles, are ob- viously friendly and co-operative, none of them obviously the reverse — needless to say, I have not read them: “Cultivating the Four Free- doms,” F. Kingdon, Parents’ Maga- "Morley, op. cit., p. 136. zine (“Children must learn their meaning and value at home’); “Four Freedoms for Which We Fight,” with paintings by N. Rock- well, Saturday Evening Post; “Free World; Requirements for the Four Freedoms,” S. Welles, Vital Speeches; “Toward the Four Freedoms,” H. Kallen, Saturday Review of Literature; “United States Peace Aims: Summary of the Four Freedoms,” Catholic World; “Contributions of English to the Four Freedoms,” C. F. Stecher, Education; “Democracy and the Four Freedoms” (“panels painted by B. R. Woodworth for the children’s room, Ohio Uni- versity Library”); “Four Free- doms Are an Ideal,” Saturday Evening Post; “What Does Free- dom Mean? American Conception,” N. M. Butler, Vital Speeches; “Ed- ucation and the Two New Free- doms; Freedom from Want and Freedom from Fear,” W. C. Bagley, Education. The Four Freedoms, as evi- denced above, have been the sub- ject of at least two series of paintings. They were celebrated in a special United States postage stamp — and in this way promul- gated, one may suppose, through- out the civilized world. In the publicity accorded the Roosevelt formula was there no discordant note, no protest lodged against the travesty it represented ===== PAGE 36 ===== 34 THE FREEMAN April upon the immemorial freedoms? ical hopes.” “A generation ago,” Not so far as I happen to know; says the former Solicitor General and Felix Morley (quoted above), of the United States, “men spoke who has called the Four Freedoms rarely and only after the most “an inharmonious quartette” and careful deliberation, and their a “monstrosity,” and in so doing words were examined with micro- _ become the first person I have scopic nicety.” But by Beck’s day known to characterize them (as I things had changed. “In recent think) properly, appears to have years this meticulous attention to encountered little or nothing of declarations of policies has largely the kind. Few if any ‘political passed away. Leaders of public scientists,” he says, “have ever thought have given utterance to closely examined the monstrosity”; beliefs and policies which would and one naturally infers that he have damned any public man a has not found it closely examined generation ago.”? by others.® Indeed, his remark ap- Thus matters stood, according to pears to me to imply that logical Beck, in 1924. In the seventeen- analysis of the formula by other year interval between then and than professionals, say by mere Roosevelt’s announcement of his average citizens, was something it Four Freedoms, had the composite had not occurred to him to expect. American mind become sharper, However that may be, there was more alert, more impatient of in- a time, if we are to believe James tellectual monstrosities? It would M. Beck, when such a logical seem not. Is it so today? “monstrosity” would have been If it is not, if the Golden Age of likely to prove, by general con- American politics, when for a demnation — I adapt some terse statesman to say an absurd thing phrasing of James Madison’s — would be to end his career, lies short in its life and violent in its generations away, in an ever-re- death. In his book on the Constitu- ceding past, two problems present tion, published in 1924, Beck themselves that are great in in- observes that a candidate for terest and greater still in impor- President — this was before 1900 tance: What has happened to the — “defeated himself by the chance American Mind? and What can be expression that ‘the tariff was a local issue,” which covered him *The Constitution of the United States, with ridicule and blasted his polit- T*Vised And with Addiond’, material bv New York, Doubleday, Doran & Com- SIbid., p. 130. pany, Inc., 1941), p. 243. ===== PAGE 37 ===== 1960 THE TRICKY FOUR FREEDOMS i done to restore it to its original leave, unremarked on, to the state? reader: let him make his own in- But all that is another story. ferences on the point in question, In order here is a final word undisturbed. But perhaps I may regarding the Four Freedoms, or be permitted to call his attention rather regarding the third free- to what is scarcely separable from dom —freedom from want. the substance of the letter — - namely, its excellent style: simple, Lincoln vs. Roosevelt easy, direct, exact, orderly, and I will begin by reporting a strik- completely lucid. Salt of the earth, ing compliment to their inventor. one reflects, that has not lost its In a fairly recent book called Free- savor. With almost no benefit of dom: A New Analysis, the author, public schools, and none of federal Maurice Cranston, after quoting scholarships, Lincoln had somehow Abraham Lincoln, continues thus: managed (the Bible, Shakespeare, “Another, no less thoughtful Presi- and Euclid by his side) to train dent, Franklin D. Roosevelt . . .” his intellect — an achievement Let us stop there. Franklin D. which does not require display in a Roosevelt as thoughtful a Presi- great speech to make its presence dent as Abraham Lincoln? Extra- felt. And now the letter — it is ordinary judgment! Suppose now somewhat long, but I cannot bring we apply the test of political wis- myself to omit anything from it:10 dom ready to hand. What Roosevelt thought of his offspring “freedom Dear Johnston: Your request from want” we need not ask. What for eighty dollars I do not think would Lincoln think? There would it best to comply with now. At the be no use thumbing through his various times when I have helped collected works, or their indexes, you a little, you have said to me, in search of specific statements on “We can get along very well now,” the subject, since in his more but in a very short time I find you primitive time the idea that free- in the same difficulty again. Now dom from want, however much to this can only happen by some de- be desired, was either a “freedom” fect in your conduct. What that or a “right,” had not yet been defect is, I think I know. You are dreamed of. As a substitute I offer not lazy, and still you are an idler. a letter which Lincoln wrote in ———— December 1848 to his stepbrother The text is that of the original manu- John D. Johnston. Its substance, script, with some corrections in details ; of form. The changes made do not touch our main concern, I am happy to the essence of the style. ===== PAGE 38 ===== 36 THE FREEMAN April I doubt whether since I saw you, a month, from me you will get ten you have done a good whole day’s more, making twenty dollars a work, in any one day. You do not month for your work. In this, I do very much dislike to work; and not mean you shall go off to St. still you do not work much, merely Louis, or the lead mines, or the because it does mot seem to you gold mines in California, but I that you could get much for it. [mean for you to go at it for the This habit of meedlessly wasting best wages you] can get close to time, ts the whole difficulty; and it home in Coles County. Now if you 18 vastly important to you, and will do this, you will be soon out still more so to your children, that of debt, and what is better, you you should break this habit. It is will have a habit that will keep you more important to them, because from getting in debt again. But if they have longer to live, and can I should mow clear you out, next keep out of an idle habit before year you would be just as deep in they are in it, easier than they can as ever. You say you would almost get out after they are in. give your place in Heaven for $70 You are now in meed of some or $80. Then you value your place money; and what I propose is, that in Heaven very cheaply, for I am you shall go to work, “tooth and sure you can with the offer I make nails,” for somebody who will give you get the seventy or eighty dol- you money for it. Let father and lars for four or five months work. your boys take charge of things at You say if I furnish you the money home — prepare for a crop, and you will deed me the land, and, if make the crop; and you go to work you don’t pay the money back, you for the best money wages, or in will deliver possession. Nonsense! discharge of amy debt you owe, If you can’t now live with the land, that you can get. And to secure how will you then live without it? you a fair reward for your labor, I You have always been [kind] to now promise you that for every me, and I do not now mean to be dollar you will, between this and unkind to you. On the contrary, if the first of next May, get for your you will but follow my advice, you own labor, either in money, or on will find it worth more than eight your own indebtedness, I will then times eighty dollars to you. give you one other dollar. By this, Affectionately your brother, if you hire yourself at ten dollars A. Lincoln -> ===== PAGE 39 ===== ARE ANTITRUSZ/ KEITH S. WooD EDITOR: The Wall Street Journal: THERE have been a number of editorials in your paper about the need to apply antitrust regulations to the unions. However, 1 feel there is another side to this argument which needs to be explored. This is the fact that the anti- trust laws are not necessarily a good solution. It seems to me that the problem could be solved better by the enforcement of laws we already have. In particular, I mean the right of a company to continue to operate while its unionized employees are on strike. There is one reason — and only one — why companies close down their plants when a union goes on strike. This is the fact that management and employees who continue to work are threatened and abused by those who go on strike. This is illegal, but it is tolerated by most police departments and local governments. If this injustice were vigorously suppressed, no strike would be widely damaging to our economy. Then we wouldn’t need to try to define how big a union can be — just as it has been found difficult to define how big a business ought to be. As long as each individual and each organization of individuals is guaranteed equal justice under law, relative size is unimportant. ~ From ‘Letters to the Editor,” Wall Street Journal, January 18, 1960. Mr. Wood is a businessman from Oregon, Illinois. 37 ===== PAGE 40 ===== ANSWERING SOME QUESTIONS ABOUT the Remnant EDMUND A. OPITZ EDITOR'S NOTE: Each member of of Christianity. From this source the senior staff of FEE has certain we derive our convictions as to assigned chores, but otherwise he the meaning of life, the nature of 18 pretty much at liberty to deploy man, the moral order, and the his time and energy according to rights and responsibilities of in- his own inclinations and experi- dividuals. The American system ence. One member of the staff is which has nurtured us was, de- a clergyman with extensive con- spite its faults and contradictions, tacts among the ministry of the a projection of our religious herit- various denominations. Several age. The original American equa- years ago he helped launch a cleri- tion had a built-in religious cal fellowship, “nondenominational content, but that equation ceases in scope, scholarly in interest, and to balance as the religious factors country-wide.” A recent memo- are leached out of it. Their rehabil- randum sent to the members may itation is our major concern. be of interest to readers of THE The problem of relating religion FREEMAN. For further information and society was prematurely address The Remnant, 30 South settled in the minds of those who, Broadway, Irvington, New York. in recent generations embraced such slogans as: “Christianity is What is The Remnant? The Remnant the religion of which socialism is is a fellowship. of churchmen who the practice.” Now that socialism seek better ways of bringing their has backfired, this mentality de- religious convictions to bear upon clares that religion has no rele- the problems of contemporary so- vance to social problems — except ciety. Our institutions and our as the churches successfully enter way of life, we believe, are inti- the game of power politics. The mately related to the basic dogmas Remnant will be of little interest 38 » ===== PAGE 41 ===== 1960 ANSWERING SOME QUESTIONS 39 to those satisfied by this “answer.” and a few men from church or- But for those who are still asking ganizations. Also, there are several questions it seeks to work quietly, interested laymen. wherever there are lines of com- Members of The Remnant hold munication, for a healthier rela- a wide variety of economic and tionship between the inner life of political views. Most of them individuals and the structures of would feel that popular labels are public life. not enlightening, but if the matter were pressed, they would probably Who belongs? Ministers, mostly — admit to feeling less uncomfortable those who put a premium on with such labels as “conservative,” liberty. A man hears about The “libertarian,” or “right wing,” Remnant and expresses interest. than with any other. But then they A plate is cut and his name goes would go on to explain to the on the mailing list, numbering labeler that they are not much now about 250 names. This list is interested in merely promoting strictly private, as is the roster the orthodoxy he presumably con- of participants at any given func- jures up in his own mind by his tion. No one should be exposed to act of labeling. It’s understanding possibly unwanted personal or mail they're after, and to get this they contacts merely because he is one are willing to dig beneath labels. of The Remnant. The vocabulary we are forced to Members of the fellowship are use in the discussion of social not asked to subscribe to any plat- problems is loaded with charged form or take part in any action words and carries echoes of dead program. This is not a public or- controversies. Thus the necessity ganization, and members are as- of patient redefinition and exposi- sured that no one is authorized to tion. make pronouncements in their How does it operate? The Remnant name or on behalf of The Remnant. has held several three-day semi- Many shades of theological opinion nars and a number of luncheon are represented, as well as various meetings. Each has been built denominational attachments. Most around some outstanding scholar of the men are parish ministers; or scholars, men whose main con- some from big important churches, tribution is in such fields as politi- others from small important cal philosophy or economies but churches. There are seminary whose thinking has a religious di- deans and professors, college presi- mension. These meetings are by dents, editors of religious journals, invitation only; they are private, ===== PAGE 42 ===== 40 THE FREEMAN April off the record, tentative, and ex- ference along these lines in the ploratory. No resolutions are winter of 1957-58. To get help passed; no action is taken to com- with the cost of such a conference mit the group. We meet to work I turned to several foundations. A on ourselves. Occasionally, per- grant was made, and the meeting haps, we “work over” each other! held in Rye, New York, January Each participant at a meeting 6-9, 1958. Subsequent grants have receives an inscribed copy of one underwritten the costs of later of the lecturer’s books; and, from meetings. Future meetings will time to time, books and pamphlets similarly have to rely on whatever are offered to the mailing list. interest and support The Remnant The Remnant has no president, program may generate. no vice-president, no treasurer. It Since The Remnant is organized has a volunteer secretary. informally, with neither staff nor This is not the only way to run bank account, my employer, The a railroad, as the saying goes. For Foundation for Economic Educa- those who prefer them there are tion, has agreed to act as its fiscal numerous organizations struc- agent. In order that contributions tured along quite different lines; may be subject to an audit, the tightly knit, wired for sound, grants have been made to FEE geared for direct action. These are earmarked “The Remnant,” and not disparaged, but it is here disbursements have been made by urged that men may think and act Foundation checks. The money is significantly in other ways. used only to meet the actual ex- penses of a meeting. No salaries How is it supported? The future is, are paid and no one takes junkets of course, problematic. We are not around the country on Remnant endowed. The major costs of past money. Remnant meetings in the meetings have been met by grants mid- or far-west are scheduled from a Michigan foundation, with only when I happen to be in the an assist from a foundation in Illi- area under other auspices. nois. We would welcome support from other sources as well. What about the name? ‘‘“The In the initial phase, I drew up Remnant” was a rather hasty a plan for a clerical fellowship to choice. It is a little tongue-in- encourage a better understanding cheek, conveys a tiny note of good- of the contemporary social impli- natured belligerency, and recog- cations of Christianity. Then a . nizes that our convictions have proposal was made to hold a con- only a minority acceptance. The ===== PAGE 43 ===== 1960 ANSWERING SOME QUESTIONS 41 name has already gained a con- month to some forty-five thousand siderable measure of acceptance, persons in all parts of the globe; even outside the fellowship. more than nine thousand people — including the nationals of thirty Who operates it? The writer of these or so foreign countries — contrib- words sent out the original mem- ute financially to the support of orandum, October 11, 1957, over this work. his own name. Since that time the My background includes con- communications have been anony- siderable college work in economics mous, not to evade responsibility and political science, joined with a for their contents, but rather to degree of affinity for the thinkers reflect the stance proper to such a in the classic liberal tradition. I fellowship as that described in the retained an interest in these sub- above paragraphs. jects during my seminary course The Foundation for Economic and throughout nine years in the Education has principal claim on parish ministry. Before joining my time. I am the book review edi- the staff of the Foundation in tor of our monthly publication, 1955, I undertook a ministerial THE FREEMAN; besides which I do conference program over a period some writing and some speaking. of several years. The Foundation “works within the Long before I knew of the Foun- framework of the spiritual and dation for Economic Education, ethical understanding embodied in its president, Leonard E. Read, the heritage of Western Civiliza- had become keenly aware of the tion. Its conviction is that this ethical and religious dimensions heritage, in its social aspects, of the problem of human liberty. spells out into the philosophy of Thus, it is not difficult to under- limited government and free mar- stand why an ordained minister is ket economics. Political liberty and on the staff of this organization. economic freedom, in turn, are im- The Foundation assumes no re- portant in man’s quest for ma- sponsibility, financial or otherwise, terial sufficiency and spiritual for The Remnant. We use my growth.” Incidentally, THE FREE- office as our “headquarters,” I am MAN solicits original articles or permitted to take time off now and sermons from you along these then for our meetings, my secre- lines. If the manuscript has poten- tary volunteers her services for tial, editorial counsel is available. the group, and I am on my own THE FREEMAN and other Founda- when soliciting contributions for tion materials are sent out each our activities. - ===== PAGE 44 ===== RALPH BRADFORD 1 is for Industry, builded by means Of capital, management, men, and machines: Money and labor, mechanics and gumption — Useless and void without public consumption. J. for Juvenile, crazy and frantic. The teenager’s jargon, no less than his antic, Reflects the behavior of fathers and mothers Who want to subsist as dependents of others. K is for King, or the Kingdom he rules; And the looniest one is the Kingdom of Fools, Where everyone thinks that his children should pay For all that he votes himself, “gratis,” today. L is for Love, which is still the great leaven That brightens the Earth with the likeness of heaven. Whatever man does, or whatever he craves, "Tis love that enshrines, and ennobles, and saves. 42 ===== PAGE 45 ===== 1960 THE ABC'S OF MODERN ECONOMICS 43 M 1s for Man, nature’s noblest and worst: The self-conscious biped, the thinker; the first To aid his own growth and develop his mind — Supreme in destroying himself and his kind. N is for Noise, and of this a great deal Is labeled as music, and makes an appeal To juvenile minds — and another large chunk Of noise that we hear is political bunk. O. for Ostrich, a much-maligned bird, Which hides not its head in the sand, as you've heard; But assume this canard on the ostrich were true — How much would he differ from me and from you? P for Poison which, taken too quickly, Can speedily render you much more than sickly; But some kinds of poison, if taken discreetly, Will slowly benumb, and not kill you completely: Addictions to “benefits” spawned by the state Are never quite fatal until it’s too late! "(To be continued) ===== PAGE 46 ===== LUDWIG VON MISES EIRIEERNG | CONOMIC-FOUNDATIONS\ OF ANIMALS are driven by instinctive Freedom as a Postulate of Morality urges. They yield to the impulse All the teachings and precepts which prevails at the moment and of ethics, whether based upon a peremptorily asks for satisfaction. religious creed or whether based They are the puppets of their ap- upon a secular doctrine like that petites. of the Stoic philosophers, presup- Man’s eminence is to be seen in pose this moral autonomy of the the fact that he chooses between individual and therefore appeal to alternatives. He regulates his be- the individual’s conscience. They havior deliberatively. He can mas- presuppose that the individual is ter his impulses and desires; he free to choose among various has the power to suppress wishes modes of conduct and require him the satisfaction of which would to behave in compliance with defi- force him to renounce the attain- nite rules, the rules of morality. ment of more important goals. In Do the right things, shun the bad short: man acts; he purposively things. aims at ends chosen. This is what . It is obvious that the exhorta- we have in mind in stating that tions and admonishments of moral- man is a moral person, responsible ity make sense only when address- for his conduct. ing individuals who are free Dr. Mises is Visiting Professor of Economics at agents. They are vain when di- New York University and part-time advisor, pacted to slaves. It is useless to tell consultant, and staff member of the Foundation for Economic Education. This article first ap- a bondsman what is morally good Pe uitn thet» and what is morally bad. He is not permission. free to determine his comport- Further analysis of the ideas explored here may be found in Dr. Mises’ best known work, . : Human Action (Yale University Press, 1949), ment; he 15 forced to “obey the 889 pages, also available from the Foundation orders of his master. It is difficult for Economic Education, Irvington-on-Hudson, . . . . N. Y., for $12.50. to blame him if he prefers yielding 44 ===== PAGE 47 ===== 1960 THE ECONOMIC FOUNDATIONS OF FREEDOM 45 to the commands of his master to of totalitarianism try to smear by the most cruel punishment threat- calling it the bourgeois system. ening not only him but also the members of his family. The Supremacy of the Consumers This is why freedom is not only The economic foundation of this a political postulate, but no less a bourgeois system is the market postulate of every religious or economy in which the consumer is secular morality. sovereign. The consumer, i.e. ; everybody, determines by his The Struggle for Freedom buying or abstention from buying Yet for thousands of years a what should be produced, in what considerable part of mankind was quantity and of what quality. The either entirely or at least in many businessmen are forced by the in- regards deprived of the faculty to strumentality of profit and loss to choose between what is right and obey the orders of the consumers. what is wrong. In the status soci- Only those enterprises can flourish ety of days gone by the freedom to that supply in the best possible act according to their own choice and cheapest way those commodi- was, for the lower strata of soci- ties and services which the buyers ety, the great majority of the are most anxious to acquire. Those population, seriously restricted by who fail to satisfy the public suf- a rigid system of controls. An out- fer losses and are finally forced to spoken formulation of this princi- go out of business. ple was the statute of the Holy In the precapitalistic ages the Roman Empire that conferred rich were the owners of large upon the princes and counts of the landed estates. They or their an- Reich the power and the right to cestors had acquired their prop- determine the religious allegiance erty as gifts — feuds or fiefs — of their subjects. from the sovereign who — with The Orientals meekly acquiesced their aid — had conquered the in this state of affairs. But the countryandsubjugated its inhabit- Christian peoples of Europe and ants. These aristocratic landown- their scions that settled in over- ers were real lords as they did not seas territories never tired in their depend on the patronage of buyers. struggle for liberty. Step by step But the rich of a capitalistic in- they abolished all status and caste dustrial society are subject to the privileges and disabilities until supremacy of the market. They they finally succeeded in establish- acquire their wealth by serving ing the system that the harbingers the consumers better than other ===== PAGE 48 ===== 46 THE FREEMAN April people do and they forfeit their life according to his own plans. He wealth when other people satisfy is free to compete on the market the wishes of the consumers better for the most desirable jobs and on or cheaper than they do. In the the political scene for the highest free market economy the owners offices. He does not depend more of capital are forced to invest it on other peoples’ favor than these in those lines in which it best others depend on his favor. If he serves the public. Thus ownership wants to succeed, he has on the of capital goods is continually market to satisfy the consumers shifted into the hands of those and in public affairs to satisfy the who have best succeeded in serv- voters. This system has brought ing the consumers. In the market to the capitalistic countries of economy private property is in this Western Europe, America, and sense a public service imposing Australia an unprecedented in- upon the owners the responsibility crease in population figures and of employing it in the best inter- the highest standard of living ever ests of the sovereign consumers. known in history. The much This is what economists mean talked-about common man has at when they call the market econo- his disposal amenities of which the my a democracy in which every richest men in precapitalistic ages penny gives a right to vote. did not even dream. He is in a po- sition to enjoy the spiritual and intellectual achievements of sci- Representative government is ence, poetry, and art that in earlier the political corollary of the mar- days were accessible only to a ket economy. The same spiritual small elite of well-to-do people. movement that created modern And he is free to worship as his capitalism substituted elected of- conscience tells him. ficeholders for the authoritarian rule of absolute kings and heredi- The Socialist Misrepresentation tary aristocracies. It was this ©f the Market Economy much-decried bourgeois liberalism All the facts about the opera- that brought freedom of con- tion of the capitalistic system are science, of thought, of speech, and misrepresented and distorted by of the press and put an end to the the politicians and writers who ar- intolerant persecution of dis- rogated to themselves the label of senters. liberalism; of the school of thought A free country is one in which that in the nineteenth century has every citizen is free to fashion his crushed the arbitrary rule of mon- The Political Aspects of Freedom ===== PAGE 49 ===== 1960 THE ECONOMIC FOUNDATIONS OF FREEDOM 47 archs and aristocrats and paved are the main consumers of the the way for free trade and enter- goods turned out. If you look prise. As these advocates of a re- around in the household of an turn to despotism see it, all the average American wage-earner, evils that plague mankind are due you will see for whom the wheels to sinister machinations on the of the machines are turning. It is part of big business. What is big business that makes all the needed to bring about wealth and achievements of modern technol- happiness for all decent people is ogy accessible to the common man. to put the corporations under strict Everybody is benefited by the high government control. They admit, productivity of big scale produc- although only obliquely, that this tion. means the adoption of socialism, It is silly to speak of the the system of the Union of “power” of big business. The very Soviet Socialist Republics. But mark of capitalism is that su- they protest that socialism will be preme power in all economic mat- something entirely different in the ters is vested in the consumers. countries of Western civilization All big enterprises grew from from what it is in Russia. And modest beginnings into bigness be- anyway, they say, there is no other cause the patronage of the con- method to deprive the mammoth sumers made them grow. It would “corporations of the enormous be impossible for small or medium- power they have acquired and to size firms to turn out those prod- prevent them from further dam- ucts which no present-day Ameri- aging the interests of the people. can would like to do without. The Against all this fanatical propa- bigger a corporation is, the more ganda there is need to emphasize does it depend on the consumers’ again and again the truth that it readiness to buy its wares. It was is big business that brought about the wishes — or, as some say, the the unprecedented improvement of folly — of the consumers that drove the masses’ standard of living. the automobile industry into the Luxury goods for a comparatively production of ever bigger cars and small number of well-to-do can be force it today to manufacture produced by small-size enterprises. smaller cars. Chain stores and de- But the fundamental principle of partment stores are under the ne- capitalism is to produce for the cessity to adjust their operations satisfaction of the wants of the daily anew to the satisfaction of many. The same people who are the changing wants of their cus- employed by the big corporations tomers. The fundamental law of ===== PAGE 50 ===== 48 THE FREEMAN April the market is: the customer is al- ings of technology but the insuf- ways right. ficiency of their capital. One badly A man who criticizes the con- misjudges the problems facing the duct of business affairs and pre- underdeveloped countries if one as- tends to know better methods for serts that what they lack is tech- the provision of the consumers is nical knowledge, the ‘know how.” just an idle babbler. If he thinks Their businessmen and their en- that his own designs are better, gineers, most of them graduates why does he not try them himself? of the best schools of Europe and There are in this country always America, are well acquainted with capitalists in search of a profitable the state of contemporary applied investment of their funds who are science. What ties their hands is a ready to provide the capital re- shortage of capital. quired for any reasonable innova- A hundred years ago America tion. The public is always eager to was even poorer than these back- buy what is better or cheaper or ward nations. What made the better and cheaper. What counts United States become the most af- in the market is not fantastic rev- fluent country of the world was eries, but doing. It was not talk- the fact that the “rugged individ- ing that made the “tycoons” rich, ualism” of the years before the but service to the customers. New Deal did not place too serious . . obstacles in the way of enterpris- Capital Accumulation Benefits ing men. Businessmen became rich All of the People because they consumed only a It is fashionable nowadays to small part of their profits and pass over in silence the fact that ploughed the much greater part all economic betterment depends back into their businesses. Thus on saving and the accumulation of they enriched themselves and all capital. None of the marvelous of the people. For it was this ac- achievements of science and tech- cumulation of capital that raised nology could have been practically the marginal productivity of labor utilized if the capital required had and thereby wage rates. not previously been made avail- Under capitalism the acquisi- able. What prevents the econom- tiveness of the individual business- ically backward nations from tak- man benefits not only himself but ing full advantage of all the West- also all other people. There is a ern methods of production and reciprocal relation between his ac- thereby keeps their masses poor, quiring wealth by serving the con- is not unfamiliarity with the teach- sumers and accumulating capital ===== PAGE 51 ===== 1960 THE ECONOMIC FOUNDATIONS OF FREEDOM 49 and the improvement of the stand- unknown in the days of his youth ard of living of the wage-earners and many others which at that who form the majority of the con- time could be enjoyed only by a sumers. The masses are in their small minority are now standard capacity both as wage-earners and equipment of almost every house- as consumers interested in the hold. He is fully confident that this flowering of business. This is what trend will prevail also in the fu- the old liberals had in mind when ture. He simply calls it the ‘“Amer- they declared that in the mar- ican way of life” and does not give ket economy there prevails a har- serious thought to the question of mony of the true interests of all what made this continuous im- groups of the population. provement in the supply of ma- terial goods possible. He is not Welfare Threatened by Statism earnestly disturbed by the opera- It is in the moral and mental at- tion of factors that are bound not mosphere of this capitalistic sys- only to stop further accumulation tem that the American citizen of capital but may very soon bring lives and works. There are still in about capital decumulation. He some parts of his country condi- does not oppose the forces that — tions left which appear highly un- by frivolously increasing public satisfactory to the prosperous in- expenditure, by cutting down capi- habitants of the advanced districts tal accumulation, and even making which form the greater part of the for consumption of parts of the country. But the rapid progress of capital invested in business and industrialization would have long finally by inflation — are sapping since wiped out these pockets of the very foundations of his ma- backwardness if the unfortunate terial well-being. He is not con- policies of the New Deal had not cerned about the growth of stat- slowed down the accumulation of ism that wherever it has been capital, the irreplaceable tool of tried resulted in producing and economic betterment. Used to the preserving conditions which in his conditions of a capitalistic en- eyes are shockingly wretched. vironment, the average American takes it for granted that every No Personal Freedom Without year business makes something Economic F reedom new and better accessible to him. Unfortunately many of our con- Looking backward upon the years temporaries fail to realize what a of his own life, he realizes that radical change in the moral con- many implements that were totally ditions of man, the rise of statism, ===== PAGE 52 ===== 50 THE FREEMAN April the substitution of government observance or nonobservance of omnipotence for the market econ- religious commandments — to ab- omy, is bound to bring about. stain from certain activities alto- They are deluded by the idea that gether or on specific days, to assist there prevails a clear-cut dualism those in need, to build and to in the affairs of man, that there maintain houses of worship and is on the one side a sphere of eco- many others — is one of the fac- nomic activities and on the other tors that determines the supply of side a field of activities that are and the demand for various con- considered as noneconomic. Be- sumers’ goods and thereby prices tween these two fields there is, and the conduct of business. The they think, no close connection.The freedom that the market economy freedom that socialism abolishes grants to the individual is not is “only” the economic freedom, merely “economic” asdistinguished while freedom in all other matters from some other kind of freedom. remains unimpaired. It implies the freedom to deter- However, these two spheres are mine also all those issues which not independent of each other as are considered as moral, spiritual, this doctrine assumes. Human and intellectual. beings do not float in ethereal re- In exclusively controlling all the gions. Everything that a man does factors of production the socialist must necessarily in some way or regime controls also every individ- other affect the economic or mate- ual’s whole life. The government rial sphere and requires his power assigns to everybody a definite job. to interfere with this sphere. In It determines what books and order to subsist, he must toil and papers ought to be printed and have the opportunity to deal with read, who should enjoy the oppor- some material tangible goods. tunity to embark on writing, who The confusion manifests itself should be entitled to use public in the popular idea that what is assembly halls, to broadcast and to going on in the market refers use all other communication facili- merely to the economic side of ties. This means that those in human life and action. But in fact charge of the supreme conduct of the prices of the market reflect not government affairs ultimately de- only “material concerns” —like termine which ideas, teachings, getting food, shelter, and other and doctrines can be propagated amenities — but no less those con- and which not. Whatever a written cerns which are commonly called and promulgated constitution may spiritual or higher or nobler. The say about the freedom of con- ===== PAGE 53 ===== 1960 THE ECONOMIC FOUNDATIONS OF FREEDOM 51 science, thought, speech, and the The Meaning of the Effective press and about neutrality in reli- Right to Dissent gious matters must in a socialist The various groups that are ad- country remain a dead letter if the vocating socialism, no matter government does not provide the whether they call themselves com- material means for the exercise of munists, socialists, or merely so- ~ these rights. He who monopolizes cial reformers, agree in their es- all media of communication has sential economic program. They full power to keep a tight hand on all want to substitute state control the individuals’ minds and souls. — or, as some of them prefer to call it, social control — of produc- The Illusions of the Reformers tion activities for the market econ- What makes many people blind omy with its supremacy of the in- to the essential features of any so- dividual consumers. What sepa- cialist or totalitarian system is the rates them from one another is not illusion that this system will be op- issues of economic management, erated precisely in the way which but religious and ideological con- they themselves consider as desir- Vvictions. There are Christian so- able. In supporting socialism, they cialists — Catholic and Protestant take it for granted that the “state” of different denominations — and will always do what they them- there are atheist socialists. Each selves want it to do. They call only of these varieties of socialism that brand of totalitarianism takes it for granted that the so- “true,” “real,” or “good” socialism cialist commonwealth will be the rulers of which comply with guided by the precepts of their their own ideas. All other brands own faith or of their rejection of they decry as counterfeit. What any religious creed. They never they first of all expect from the give a thought to the possibility dictator is that he will suppress all that the socialist regime may be those ideas of which they them- directed by men hostile to their selves disapprove. In fact, all these own faith and moral principles supporters of socialism are, unbe- Who may consider it as their duty known to themselves, obsessed by to use all the tremendous power the dictatorial or authoritarian of the socialist apparatus for the complex. They want all opinions suppression of what in their eyes and plans with which they dis- is error, superstition, and idolatry. agree to be crushed by violent ac- The simple truth is that indi- tion on the part of the govern- viduals can be free to choose be- ment. tween what they consider as right ===== PAGE 54 ===== 52 THE FREEMAN April or wrong only where they are eco- what chances would the reformers nomically independent of the gov- have had, if all the printing ernment. A socialist government presses had been operated by the has the power to make dissent im- governments headed by Charles V possible by discriminating against of Germany and the Valois kings unwelcome religious and ideologi- of France? And, for that matter, cal groups and denying them all what chances would Marx have the material implements that are had under a system in which all required for the propagation and the means of communication had the practice of their convictions. been in the hands of the govern- The one-party system, the politi- ments? cal principle of socialist rule, im- Whoever wants freedom of plies also the one-religion and one- conscience must abhor socialism. morality system. A socialist gov- Of course, freedom enables a man ernment has at its disposal means not only to do the good things but that can be used for the attain- also to do the wrong things. But ment of rigorous conformity in no moral value can be ascribed to "every regard, “Gleichschaltung” as an action, however good, that has the Nazis called it. Historians have been performed under the pressure pointed out what an important of an omnipotent government. role in the Reformation was ______ played by the printing press. But Reprints available: 10 for $1.00. Hidden Taxes THE AVERAGE PERSON knows how much he shells out directly to the tax collector on his income every year. But hidden taxes are another thing, the Tax Foundation notes. Here are a couple of examples of how government silently reaches into the taxpayer’s pocket. Bread prices — reflecting .taxes on the land the grain is grown on, the seed that’s sown, the machinery that plows and harvests and mills the wheat, the fuel, the transporta- tion, the baker, the wrapper, and so on — contain 151 hidden taxes. Add some vitamins and you add more taxes. A man’s suit of clothes bears a price tag representing 116 hidden taxes. A house has at least 600 hidden taxes. There are at least 100 hidden taxes on eggs. This - silent siphoning of taxpayer's money by federal, state, and local governments boosts the tax bill of the average family with $7,500 annual income from $1,770 direct taxes to $2,600 total. : A January 11, 1960 news release of the Merchants and Manufacturers Association, Los Angeles. ===== PAGE 55 ===== A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN See ATTN [SEA - AMERICANA ON RAILS WALTER MILLIS, in writing about the Baltimore and Ohio Railroad the second half of the nineteenth in July of 1877 as a response to a century in America, once remarked wage cut and quickly fanned out that the period was one which few over the country. As Mr. Bruce people who came through it would works it out, the strike was a prel- care to live over again. Others ude to a lot of things. It gave have scorned the “brown decades,” labor the first inklings of its latent or the era of the “great barbecue.” power. It served notice on employ- So the historians have delivered ers that the industrial revolution their verdict on the post-Civil War could not be carried through if the years — and it cannot be said that rights of stockholders were to be the writers who provided some of regarded as having priority over the original raw material for the the rights of the workingman. historians were misinterpreted. And, finally, it struck the first After all, Mark Twain wrote dis- faint chords in what was to be- paragingly of the “gilded age,” come a grand requiem for the sup- William Dean Howells directed his posedly iniquitous laissez faire. later fiction to socialistic conclu- Since history itself has acted as sions, and Henry James spoke his if Mr. Bruce were correct in his mind on America by taking up res- moral evaluation of 1877, it is hard idence in England. to argue with him. The events of In his 1877: Year of Violence 1877 did have a dismaying effect (Bobbs-Merrill, 384 pp., $5.00), on a whole host of people. Looking Robert V. Bruce, an engineer back on his presidency, the Honor- turned historian, has sought to able Rutherford B. Hayes was not provide a dramatic overture to the at all sure that he had performed literature of denigration. His the whole of his duty in calling out theme is the rise and fall of the federal troops to keep the freights first big national railroad strike, and the mails rolling. Even when which started in West Virginia on he was still President he began 53 ===== PAGE 56 ===== 54 THE FREEMAN April playing with the idea of railroad dramatic and forceful book. But regulation. By the mid-eighties he certain things about Mr. Bruce’s was asking himself a strange ques- concluding chapter, the one called tion: “Shall the railroads govern ‘Shock Waves,” don’t add up. The the country, or shall the people depression of the eighteen seven- govern the railroads?” As for the ties came to an end with a bounti- railroad managements themselves, ful crop in 1877 that the American says Mr. Bruce, they “now realized farmer marketed at good prices. that labor policy could not be left The so-called Granger decisions, to lesser officials.” which went against the farmers in March of 1877, did not lead to wicked collusion between the rail- The Interstate Commerce Com- roads to milk the farmer of his mission, which came at the end of profits. For three years in the late “the eighties, was one result of the seventies the crops rode to market “shock waves” sent out by 1877. and made money for the producers. Mr. Bruce seems to be satisfied Moreover, the railroads rescinded that federal control was the in- some of the paycuts as soon as the strument which defeated the Marx- depression had lifted. Laissez faire ists who, for the first time in triumphed over the bad banking | American history, reared their practices of the Jay Cooke era. ! ugly heads in the year of the Great Strike. The Marxists were particu- !f Didn’t Happen That Way larly active in Cincinnati, Chicago, The “year of violence,” then, and St. Louis, towns which had turned out to be a pause in a gen- large German immigrant popula- eral forward movement. Yet it is tions in the seventies. But the undeniable that the American peo- American habit of caution had ple were themselves misled by the been learned by an immigrant great strike into nurturing all from London, Samuel Gompers, manner of fears for the future. who pushed his own cigar maker's Looking ahead, they could only see union, the parent of the A.F. of L., the monster trusts combining to into a program of step-by-step keepall save a handful of fortunate amelioration. It was Gompers who capitalists in complete misery. But defeated the Marxists. as Garet Garrett has so convinc- With Mr. Bruce’s assiduous fact- ingly set forth in his The Ameri- gathering the reader can have no can Story, it didn’t happen that legitimate quarrel. Nor can one way at all. The people were en- deny that Mr. Bruce has written a tirely wrong in their expectations. Interstate Commerce Commission ===== PAGE 57 ===== 1960 AMERICANA ON RAILS 55 Puzzled by Mr. Bruce's tone, I ly it is the productivity itself that went to that most useful of books, pays for the regulation. And there F. A. Harper's Why Wages Rise. is good reason to believe that there And there, on page eleven, was the might have been even more produc- graph which will long continue to tivity if there had been less fed- mock all the historians who have eral meddling with the movement specialized in slandering the late of money, men, and materials into nineteenth century. The graph increasing the per capita amount shows a yearly increase of 1.27 per of tools available to the individual cent in real wages for the period workingman. 1855-1895, a yearly increase of 0.55 per cent for 1896-1916, and a Questionable Economics yearly increase of 2.47 per cent for The economics -of Mr. Bruce's 1917-1955. Another graph, on page book are suspect — and the author 90, shows a steadily rising curve is half aware of this himself. Quite of productive capacity, with about early in his book he remarks that half its benefits taken as goods and farming, in 1877, was still the big- services and the other half taken gest business in America; in num- as leisure. The dip in the late ber of gainful workers it “out- seventies is hardly noticeable on stripped by a whisker all other either graph when projected classifications put together.” More- against the prevailing upward over, country folks still outnum- slopes of the lines. And the curi- bered city folks “better than two ous thing about it is that there is to one.” So it is doubtful that the no correlation between union ac- railroad strike really threatened tivity and wage increases. Between the foundations of society. More- real wages and productivity, how- over, there was a reason why the ever, there is a correlation. railroad managers cut wages dur- No doubt there would be a crude ing the depression of the seven- correlation between the rise in pro- ties: they had to bid high for the ductivity and the increase in fed- capital needed to push their lines eral regulation and control of the to the West and to buy the steadily business system. But, despite Mr. improving equipment. The “hunger Bruce, it would take more than for capital” was not expressed at mortal ingenuity to make out a the long-term expense of the Amer- convincing argument that the reg- ican workingman; on the contrary, ulation has caused the mounting it led directly to a vast prolifera- productivity; the brakes do not tion of jobs. Everywhere the rail- run the automobile. Quite obvious- roads went, production followed. ===== PAGE 58 ===== 56 THE FREEMAN April The “hunger for capital,” which counter in Margaret Leech’s In the took the form of paying high divi- Days of McKinley (Harper, 686 dends to get it, resulted in better pp., $7.50). livings for more people — and what In the nineties, before the elec- is this if it is not “social justice”? tion of McKinley, there was a de- If Mr. Bruce’s book is economi- pression that was fully as bad as cally suspect, the author is right that of 1877. But the nation showed about the shortsighted public re- enormous recuperative powers: un- lations aspects of the railroads’ der the placid surface of the eight- behavior in the seventies. The big een eighties, something had hap- trunk lines seemed to act as a unit pened. American productivity had in “ganging up to subjugate their established its base. And McKin- employees in detail.” By doing this ley profited by this despite his they invited united action by the foolishness about insisting on a trainmen. The “industry-wide” as- high tariff that the economics of pects of the railroad managements’ mass production was shortly to un- anti-union activities provoked an _ dercut. industry-wide response. An indus- Aside from the tariff, Miss try which had given an impression Leech makes McKinley out to have that it had been dependent on the been both an attractive and an en- federal bounty of land grants and lightened man — not at all the subsidies should have bent over fusty “reactionary” of popular backwards to avoid any suspicion portraiture. He was not as strong of concerted arrogance. as he might have been; after all, he allowed himself to be pushed The McKinley Era . into the Spanish-American War Even so, there is little point at against his personal judgment. But this late date in harping on the he and his political manager, Mark alleged “social Darwinism’ of the Hanna, were both quite sincere — railroad managers. In spouting the and quite right — in arguing that well-worn phrases of anticapitalist William Jennings Bryan's infla- literature, Mr. Bruce is bowing to tionism would have been “anti- an antiquated convention. This labor” in its actual effect. Far convention has yet to answer Mr. from being a Big Business party - Harper's two eloquent graphs. It in 1896 and 1900, the Republican also has to explain away the enor- Party was really and truly the mous difference between the United party of the “full dinner pail.” States of 1877 and the United And the Ohio workingman of 1896 States which the reader will en- knew McKinley as a friend, even ===== PAGE 59 ===== 1960 : AMERICANA ON RAILS 57 as this workingman’s grandchil- the gifted controversialist. During dren knew that another Ohioan, the height of Benn’s most notable Bob Taft, was really in their corner campaigns, Mr. Abel became a a half century later. close associate. His book is no con- Miss Leech’s book has a pleas- ventional biography. It is a por- ant, honest quality. And its dedi- trait of a mind and a personality. cation —to “those whose child- A preface by Benn’s eldest son hood knew the three-dimensional furnishes some personal data. stereopticon and the colorful veloc- Sir Ernest Benn was a young ity of the magic lantern; who re- man when he took over control of member the wonder of the known the family’s small publishing busi- voice pulsating over the telephone ness. Ever a firm believer in a wire, and the exhilaration of the philosophy of high-production- _ privileged pioneers of automotive high - wages - high - profits - and - power, speeding at twenty miles low-prices, he built up a trade an hour through a distracted coun- press empire as well as a book tryside” — shows how wrong the publishing concern. Arnold Ben- “literature of denigration” has nett and H. G. Wells were among been. Despite this denigration, we its authors. A “sixpenny” library have had a great history since pioneered in the twenties by Benn 1877. It is time for authors like could claim book sales running in- Mr. Bruce to reckon with F. A. to millions. These were the pre- Harper’s graphs. o cursors of the modern paperbacks. Benn relished the conduct of his p ERNEST BENN — COUNSEL business, yet found time for a pro- FOR LIBERTY digious amount of public work — By Deryck Abel. London: Ernest speaking, writing, broadcasting, Benn, Ltd. 192 pp. 21 shillings. and debating. As a Liberal of the (To obtain this book, send a check Manchester School, a crusader for for $3.00 directly to Ernest Benn, liberty and for the rights of the Ltd., Bouverie House, Fleet Street, ind ividual, he was well equipped London, EC4.) with the gifts of highmindedness ’ and practicality. He was a disciple BENN was an outstanding figure of Bastiat and possessed some- of his time. Business genius, un- thing of Bastiat’s wit. His ideals compromising fighter for liber- had been fashioned by Spencer, tarian ideas and sound economics, Cobden, and Mill; his views tested individualist and publicist, he re- and tempered by the ways of mained, until his death in 1954, Whitehall. ===== PAGE 60 ===== 58 THE FREEMAN April In 1921, he paid his first visit to York Herald Tribune commented, the United States where, inciden- “are vitally English, but this is tally, he was so impressed after a the kind of English character that day at Princeton that he sent his laid the foundation of the United eldest son there the following year. States.” “The whole force of public opinion Twice, in 1926 and again in in America,” he wrote on his re- 1941, Benn and many like-minded turn, “is directed to teaching its colleagues from all walks of life people how to push. Our public created the Individualist Book- opinion. ..seems to be concerned shop and the Society of Individual- with teaching our people how to ists as the media for their ever lean.” expanding movement. Successful Later years, certainly every meetings were held in leading year from 1944 until 1953, brought centers throughout Britain. And invitation after invitation to Benn for many years, regular lunches from Individualist leaders in the attracted hundreds of prominent States to undertake coast-to-coast guests, and speakers of the caliber lecture tours for the propagation of Lord Leverhulme, Chairman of of the libertarian cause. But as the Unilever empire; Lord Perry, Mr. Abel tells us, he steadfastly Chairman of Fords (in Britain) ; declined them all. “Benn refused Sir Carleton Allen, Warden of to enter America a pauper, de- Rhodes House, Oxford; F. W. pendent, as he put it, upon the Hirst, former editor of The Econ- charity of his hosts save for a £5 omist and biographer of Morley, note in his wallet vouchsafed him Jefferson, and Adam Smith; and by the administrators of exchange Greville Poke, periodical publisher. control.” Benn’s attitude, epitomized in Long before his individualist Tom Paine’s dictum that “govern- ideas were to find expression ment even at its best state is but through the movements that were a necessary evil,” often made him to follow, he found the perfect appear extremist and, to some, ec- outlet for his views in prolific con- centric. Yet as The Times put it: tributions to the press. Between “It was easy to mock his views, 1921 and 1926, he contributed for he knew no middle way and some 25,000 words to the corre- was often exaggerated in the em- spondence columns of The Times phasis of his warnings. ... He was alone — letters which the editor the spokesman of no interest but allowed him to publish in book of an idea — of one aspect of Lib- form; letters which, as the New eralism which not even a collectiv- ===== PAGE 61 ===== 1960 OTHER BOOKS 59 ist society, if it wishes to remain will commend itself to everyone free, dare ignore.” He foresaw who cherishes personal and civic and feared the prospect of the liberty and public economy, alike over-organized, over-regimented in Britain and the United States. society. The techniques and de- WILFRED ALTMAN vices of the new collectivist age infuriated him. p UNITED STATES AID AND Judge — the minister who is judge MENT in his own case — would have pro- By P. T. Bauer. Washington, D.C.: voked his fiery wrath. The modern American Enterprise Association. British practice of diverting land 119 pp. $1.00. compulsorily acquired for one pur- pose to a wholly different purpose COMMUNIST China excepted, no without as much as “by your country in the world offers so leave” would have provoked a hun- many contrasts and problems as dred of his famous “Murmerings.” India. She has a population of 400 He even refused to complete his million plus (greater than all of Census form. The Census regula- South America, Africa, and Aus- tion, he insisted, committed more tralia combined) and more than than one breach of the liberty of 700 dialects. The Indian nation is the subject. His campaign against as poor as it is populous. Its $60 the identity card —‘‘the English- per capital annual income is man’s badge of servitude’— car- among the lowest in the world, ried the libertarian cause to vie- about one-fortieth of that of the tory in the historic Willcock case United States, and is reflected in of 1951. its half a million beggars and 7 Mr. Deryck Abel has written a million unemployed. lively, scholarly narrative, distin- India today is the largest re- guished for its clarity of diction cipient of American economic aid, and elegance of style. Benn’s ideas having received from $1.5 to $2 on social and political questions billion, thereby raising an impor- may have seemed extremist to tant question: Will this aid benefit those who recoiled from going the the Indian citizen and at the same whole way with him, but he was time cause that nation to align it- pre-eminently the spokesman and self with the West? symbol of Western man’s love of Definitely not, says author P. T. liberty in all its contexts. The de- Bauer, British economist. Given tailed argumentation of this study the current direction of Indian ===== PAGE 62 ===== 60 THE FREEMAN April economic policy, increasing for- severely circumscribed . . . and in eign aid “would be much more which the state is all powerful.” likely to retard the rise of general What the author recommends is living standards in India than to that U.S. aid be withheld until the accelerate it, and to obstruct Indian government pursues “a rather than promote the emergence policy designed to raise living of a society resistant to totali- standards and to promote an anti- tarian appeal.” totalitarian society.” There are many reasons for “The shape and direction of the Bauer's conclusions, not the least aid program of the United States,” of them being socialist Prime Min- author Bauer writes, “will un- ister Nehru’s firm antipathy doubtedly be a major factor in in- toward capitalism. The principal fluencing the economic policy of goal of Indian economic planning the government of India. It is —formally accepted by the Indian much to be hoped that the re- Parliament in 1954, and reiterated sources of the United States will many times since — is “the adop- be harnessed to policies designed tion of the socialist pattern of so- to promote the welfare of the In- ciety.” This socialist system, with dian masses, rather than to poli- its Soviet-like five-year economic cies designed .to socialize or even plans, shows itself in massive ex- to sovietize the most populous penditures on heavy industry, country of the non-Communist small expenditures on agriculture, world.” EDWIN MCDOWELL limitations on consumer goods, and the countless other restrictions p THE ADAMS-JEFFERSON which symbolize a collectivist LETTERS. economy. Edited by Lester J.Cappon. Chapel Professor Bauer rejects aid to Hill: * The University of North India (as proposed in the Senate Carolina Press. Two Volumes, by the Kennedy-Cooper Resolu- $12.50. tion) not so much because of the IN HIS Memoirs of a Superfluous expense to the American taxpayer Man, Albert Jay Nock wrote that but because of the cost to India. the letters which passed between The U.S., pursuing such a policy, John Adams and Thomas Jeffer- “would make it .inevitable that son comprised “one of the truly [India] is pushed further in the great correspondences in literary direction ... of a completely social- history.” In his “biography” of Mr. ized economy...in which the Jefferson, written seventeen years range of choice of individuals is earlier in 1926, Mr. Nock wrote ===== PAGE 63 ===== 1960 OTHER BOOKS 61 optimistically: “Perhaps the re- liked the Popish way of living cent increase of interest in the but the Lutheran way of thinking. literature of that period will touch With an equal degree of truthful- the flinty heart of some publisher ness it can be stated of Jefferson and induce him to let the world that he liked the aristocratic way once more see, in accessible and of thinking and the democratic convenient form, the best that the way of living.” And, here is John period could do.” Well, at last Mr. Adams’ first impression of Jeffer- Nock can rest easy, for it has been son: done. This set, published for the Mr. Jefferson came into Congress Institute of Early American His- in June 1775, and brought with him tory and Culture at Williamsburg, a reputation of literature, science, Virginia, contains the complete and a happy talent of composition... correspondence between Thomas Though a silent member in Congress, Jefferson and Abigail and John he was so prompt, frank, explicit, Adams. and decisive upon committees and in For a few persons nothing more conversation ...that he soon seized need be said. They will hasten to UPon my heart. their library or bookstore for a Relatively little has been written copy, then read, “in accessible and about John Adams, in the words of convenient form,” the remarkable van Loon, “a person of tremendous correspondence between two of our usefulness during a period of un- Founding Fathers who were, at rest, a rock-ribbed, humorless, and once, so very much alike and so aloof personage, as indifferent to different in their ideas. For others, royal displeasure or popular ap- a few more words are necessary. proval as a chunk of Vermont mar- Much has been written about ble.” Consequently, he made many Thomas Jefferson, “author of the enemies and his admirers are few Declaration of American Independ- in number. But judging by Mr. ence, of the Statute of Virginia Adams’ contributions to the Revo- for religious freedom, and father Ilutionary cause, this poor treat- of the University of Virginia.” ment is hardly fair. James Street From any angle he was a great had this to say about the re- man. That delightful champion of nowned citizen of Quincy: tolerance, Hendrik Willem van We have never given John Adams Loon, offered this view of the sage js que. He was to win crowns that of Monticello: “Early in the siXx- other men would wear. He did a lot teenth century it was said of Eras- of the spadework for our Constitu- mus, the great humanist, that he tion, and yet that monument is to ===== PAGE 64 ===== 62 THE FREEMAN April the glory of James Madison who the likes of John Adams and shaped it and polished it. He was a Thomas Jefferson, a few words are conservatives conservative in an age just not enough; but one quotation of liberalism, an oligarchist at a time must suffice here — a quotation when democracy was pipping the ¢.,0, one of Mr. Jefferson's letters shell. He died an unpopular man. But we owe him much, this John to M r. Adams near the end of Adams who had respect for justice their lives in this world. The op- and who, like Franklin, really shoved timism of the writer is especially in his blue chips when the revolu- refreshing today, and it should be tionary game got going. kept in mind that Mr. Jefferson John Adams and Thomas Jeffer- was not an .idle dreamer, specu- son had been very close during the lating on humanity from the con- Revolution and immediately there- fines of an ivory tower. Also to be after, but toward the end of the remembered is the fact that he century political differences sepa- was wise enough to predict in 1821 rated them; probably it was the that “our government is now tak- fanatics in both parties who were ing so steady a course as to show responsible for this unfortunate by what road it will pass to de- separation. The period of coolness struction, to wit: by consolidation lasted a dozen or so years. Finally, first (i.e. centralization) and then Dr. Benjamin Rush was successful corruption, its necessary conse- in affecting a reconciliation be- quence.” tween the {0 eld men, an d their I will not believe our labors are correspondence resumed in 1812. 1 . . ers ost. I shall not die without a hope It began with John Adams writing that light and liberty are on a steady to Mr. Jefferson that he was send- 34vance. We have seen indeed, once ing him “two pieces of homespun.” within the record of history, the Mr. Jefferson immediately an- complete eclipse of the human mind swered and thanked him for the continuing for centuries. . . . Even homespun (not yet received) which should the cloud of barbarism and he thought was clothwork of some despotism again obscure the science sort. Actually it was, as Mr. Adams and liberties of Europe, this country told him in his next letter, two remains to preserve and restore . : . light and liberty to them. In short, volumes written by his son, John 0g 0 yindled on the 4th of July, Quincy Adams. The ice having 1776, have spread over too much of been broken, many letters passed globe to be extinguished by the between Monticello and Quincy feeble engines of despotism, on the from 1812 until 1826. contrary, they will consume these en- When writing about two men gines and all who work them. ===== PAGE 65 ===== 1960 OTHER BOOKS 63 John Adams and Thomas Jeffer- we may soon be the greatest suc- son both died on July 4, 1826, ex- cess since the dinosaur! actly fifty years after taking part Take advertising, as legitimate in one of the greatest events of an enterprise as any, but one world history. Both were great which lapses into extravagant dis- men. James Street once observed tortions to the extent that it mir- that “it has been a long time be- rors our society’s warped value tween Jeffersons.” The same may system. It is a trade which has be said of John Adams. been inflated into a position as in- ROBERT THORNTON fluential as that once occupied by church and school. The practi- p HUMAN NATURE AND THE tioners of this trade, which is now HUMAN CONDITION a “built in” factor in our economy, must be subservient to every whim of the consumer no matter how infantile. They engage in the de- WITH engaging urbanity Joseph liberate creation of new wants Wood Krutch surveys our present which are hardly necessary for a predicament. His are the insights well-balanced existence. This has and comments of an original, old led Dr. Krutch to formulate a Rich style humanist exploring our “age Richard's Almanack, a new com- of anxiety.” Far from being taken pendium which includes the motto, in by the dubious assumptions, “Waste or you will want.” This theories, and conjectures which naturally leads the author to con- motivate so many of our contem- siderations of expanding popula- poraries, Dr. Krutch applies the tions and diminishing natural re- searching skepticism of a civilized sources, problems now assuming and free man to what is currently major importance even in the pop- being foisted on us. His conclu- ular mind. sions are disturbing; and we Neatly coupled with our new should be disturbed, for we have motto is our present custom of too long assumed that this is the ever-expanding credit and borrow- “greatest and richest civilization” ing to keep the consumer buying ever heard of — hence the most things which he may not really successful. Dr. Krutch dissents. need, and for which he cannot pay. Unless we mend our ways and base Since we indulge in deficit finan- our activities and aspirations on cing with a vengeance in private human nature as revealed by re- life, it is no wonder that deficit corded history, the author implies financing in government is ac- By Joseph Wood Krutch. New York: Random House. 211 pp. $3.95. ===== PAGE 66 ===== 64 THE FREEMAN April cepted with so little opposition. right and wrong in men, a natural Dr. Krutch might have gone on devotion to justice and freedom, to say that the most exemplary and a native responsiveness to specimen of spending and wasting higher claims than a merely physi- is the national government. cally comfortable existence. He em- Our slovenly educational system phatically points out that litera- is viewed at length. This is a field ture and the fine arts give a truer in which Dr. Krutch, as an emi- picture of man than all the mut- nent professor, is at home. The tered and awkwardly phrased present trend to adapt everything treatises of sociologists, anthro- to a norm of mediocrity leads to pologists, and psychologists. In reflections on where our leadership making this point Dr. Krutch com- is to come from when the populace pares the present dim and bleak will have been “educated” as pain- picture of man portrayed by con- lessly as possible to not read, temporary writers and artists with think, or aspire. the pictures presented by the Similarly, Dr. Krutch claims, we great writers and artists of the have exhausted our “philosophical past. He stresses the urgent need and moral capital, and must re- for mature aspiration on the part place it if we are to survive. Re- of all courageous men to tran- jecting the present popular rela- scend the present precarious situa- tivist position and all the mechan- tion, and become their true selves. ist and Marxian conclusions that Once more the real spirit of Amer- environment alone makes the man, ica has spoken. he reaffirms an innate sense of FREDERICK WALKER Send for FREE Treatise! “TWO MORE YALTAS AND THE WORLD IS THEIRS” Though intrinsically weak and rotten to the core, Communism has,never- theless, spread itself over more than a third of the world — Why? Read “THUGS AND COMMUNISTS” by Louis Zoul $4.75 postpaid “THUGS AND | PUBLIC OPINION, Box 44-D, Long Island City 4, New York COMMUNISTS | [J Please send free treatise. | is avery | {J Enclosed find $4.75 for ‘‘Thugs and Communists.” impressive document’’ | Name | — HENRY HAZLITT | Address I ===== PAGE 67 ===== | #500 [oy y tht * This best describes the readers of The Free- man — of whom 45,000 are in the United States, 1,500 in other lands. No other description applies for they are teachers, wage earners, clergymen, captains of industry and finance, farmers, housewives, pro- fessional people. They are of varied creeds, races, and colors and range from the very poor to the very wealthy. ‘Their common interest is as students of liberty! A few of The Freeman pages are available each month for advertising messages to this select readership. Inquiries are invited. THE FOUNDATION FOR ECONOMIC EDUCATION, INC. TRVINGTON-ON-HUDSON, NEW YORK FeE ===== PAGE 68 ===== 528 zm oO oO 9 3° Z o 2» T= =e 3° =§38E§F2%S = 3 CL [d eg gs Et oO = S S 2 S53 3 >S2gs ~~ = 3g S oT 5 22 > 3 8 3s 3 ° - o3f33E Li: ° hd 3 e QQ = — oo » [+V] o S : 23dz52°5°¢ 3 5253333 = = 53 =< S = E358, 8 = 3 E - o © 5 = eo SR SZ FS -— Si3.23537¢ ~ Ss3gs0%8q¢8 = DL = g¥2:8253 > a oOo 32823 ¥ Sg - — = 5585383358 ® S 5 gs 3 a . 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