===== PAGE 1 =====

IDEAS ON LIBERTY

JANUARY 1962

The Elite under Capitalism . . . . . Ludwig von Mises 3
Welfare Statism in England . . . . . Reginald Jebb 12
" Subsidies for Everyone —

A New Wayoflife . . . . . . . Lawrence Fertig 14
Subsidies Work! . . . . . . . . . Paull. Poirot 17
Legal but Immoral . . . . . . . . Dean Russell 19
Importance of the Premise . . . . . Leonard E. Read 22
An International Order. . . . . . . Henry Hazlitt 30
When Republics Decay . . . . . . . Merryle Stanley Rukeyser 32
What Is “Freedom”? . . . . . . . W,E Sprague 38
The Economics of Risen Expectations . . H. P. B. Jenkins 41
Tocqueville and the Bland Leviathan . . Robert Schuettinger 42
The Web of Materialism . . . . . . Charles H. Malik 53
Telephonic Centralization . . . , . . Farmand 56

Books:

Urban Utopianism . . . . . . . . John Chamberlain 58
Other Books . . . . . . . . . . 62

iy A THE FOUNDATION
FeE FOR ECONOMIC EDUCATION, INC,

Irvington-on-Hudson, New York



===== PAGE 2 =====

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===== PAGE 3 =====

IDININIGE
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from January 1956 through December 1960*

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===== PAGE 4 =====

nn THE

Teemdi | A MONTHLY JOURNAL OF IDEAS ON LIBERTY

JANUARY 1962 Vol. 12, No. 1

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.

Copyright, 1962, The Foundation for Economic Education, inc. Printed
in U.S.A.

Additional copies, postpald, 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 ‘‘An Interna-
tional Order,” '‘Tocqueville and the Bland Leviathan,” ‘The Web of

FUE Materialism,” and “‘Telephonic Centralization."

Any current article will be supplied in reprint form If there are enough
Inquiries to justify the cost of the printing.


===== PAGE 5 =====

ems en em

A LONG LINE of eminent authors,
| beginning with Adam Ferguson,

THE tried to grasp the characteristic

|
feature that distinguishes the
| modern capitalistic society, the
’ market economy, from the older
, Y i systems of the arrangement of so-
| cial cooperation. They distin-
|

t guished between warlike nations
! + and commercial nations, between
| | societies of a militant structure
and those of individual freedom,
between the society based on
status and that based on contract.
The appreciation of each of the
two ‘“‘ideal types’ was, of course,
different with the various authors.
But they all agreed in establishing
the contrast between the two
types of social cooperation as well

as in the cognition that no third
principle of the arrangement of
social affairs is thinkable and

i feasible.l One may disagree with
some of the characteristics that
they ascribed to each of the two
+ types, but one must admit that

| | the classification as such makes us
| comprehend essential facts of his-

| tory as well as of contemporary

U N DER | social conflicts.
| There are several reasons that
CAPITALISM | prevent a full understanding of

1 See Ludwig von Mises, Human Action
! (New Haven, Conn.: Yale University

LUDWIG VON MISES : Press, 1949), pp. 196-199.

Dr. Mises is Visiting Professor of Economics
| at New York University and part-time adviser,
consultant, and staff member of the Founda-

a tion for Economic Education.


===== PAGE 6 =====

4 THE FREEMAN January

the significance of the distinction of individual endowment and
between these two types of so- therefore productive capacity
ciety. There is in the first place (Leistungsfihigkeit) as natural
the popular repugnance to assign privileges” and was fully aware
to the inborn inequality of vari- of the fact that men ‘“would not
ous individuals itsdue importance. be different individuals if they
There is furthermore the failure were not unequal.”

to realize the fundamental differ- In the precapitalistic ages the
ence that exists between the better endowed, the “superior”
meaning and the effects of private people, took advantage of their
ownership of the means of pro- superiority by seizing power and
duction in the precapitalistic and enthralling the masses of weaker,
in the capitalistic society. Finally, i.e, “inferior” men. Victorious
there is serious confusion brought warriors appropriated to them-
about by the ambiguous employ- selves all the land available for
ment of the term “economic hunting and fishing, cattle raising

power.” and tilling. Nothing was left to
the rest of the people than to
Inborn Inequality serve the princes and their ret-

The doctrine that ascribed all inue., They were serfs and slaves,
differences between individuals to landless and penniless underlings.
postnatal influences is untenable. Such was by and large the state
The fact that human beings are of affairs in most parts of the
born unequal in regard to physical world in the ages in which the
and mental capacities is not de- ‘heroes’? were supreme and ‘“com-
nied by any reasonable man, cer- mercialism” was absent. But then,
tainly also not by pediatrists. in a process that, although again
Some individuals surpass their and again frustrated by a renas-
fellow men in health and vigor, in cence of the spirit of violence,
brain power and aptitude for went on for centuries and is still
various performances, in energy going on, the spirit of business,
and resolution. Some people are i.e., of peaceful cooperation under
better fit for the pursuit of the principle of the division of
earthly affairs, some less. From labor, undermined the mentality of
this point of view we may — with- 72 Critique of the Socinl-Democratic
out indulging in any judgment of Program of Gotha (Letter to Bracke,
value — distinguish between su- M&y 5 1876). }

. . . 3 Werner Sombart, Hindler und
perior and inferior men. Karl Helden (Heroes and Hucksters) (Mu-
Marx referred to “the inequality nich, 1915).


===== PAGE 7 =====

1962 THE ELITE UNDER CAPITALISM 5)

the “good old days.” Capitalism — to the changing whims and fancies
the market economy — radically of the masses, its masters. The
transformed the economic and po- fundamental principle of capital-
litical organization of mankind. ism is mass production to supply
In the precapitalistic society the the masses. It is the patronage of
superior men knew no other meth- the masses that makes enterprises
od of utilizing their own superior- grow into bigness. The common
ity than to subdue the masses of man is supreme in the market
inferior people. But under capi- economy. He is the customer
talism the more able and more ‘‘who is always right.”
gifted men can profit from their In the political sphere repre-
superiority only by serving to the sentative government is the corol-
best of their abilities the wishes lary of the supremacy of the con-
and wants of the majority of less sumers in the market. The office-
gifted men. In the market econ- holders depend on the voters in a
omy the consumers are supreme. way similar to that in which the
They determine, by their buying entrepreneurs and investors de-
or abstention from buying, what pend on the consumers. The same
should be produced, by whom and historical process that substituted
how, of what quality and in what the capitalistic mode of produc-
quantity. The entrepreneurs, capi- tion for precapitalistic methods
talists, and landowners who fail to substituted popular government —
satisfy in the best possible and democracy — for royal absolutism
cheapest way the most urgent of and other forms of government
the not yet satisfied wishes of the by the few. And wherever the
consumers are forced to go out of market economy is superseded by
business and forfeit their pre- socialism, autocracy makes a
ferred position. In business offices comeback. It does not matter
and in laboratories the keenest whether the socialist or commu-
minds are busy fructifying the nist despotism is camouflaged by
most complex achievements of sci- the use of aliases such as “dicta-
entific research for the production torship of the proletariat” or
of ever better implements and “people’s democracy” or “Fiihrer
gadgets for people who have no principle.” It always amounts to
inkling of the scientific theories a subjection of the many to the
that make the fabrication of such few.
things possible. The bigger an en- It is hardly possible to miscon-
terprise is, the more it is forced strue more improperly the state
to adjust its production activities of affairs prevailing in the capi-


===== PAGE 8 =====

6 THE FREEMAN January

talistic society than by dubbing much greater part of all products
the capitalists and entrepreneurs did not reach the market. They
a “ruling” class intent upon ‘“ex- were consumed without having
ploiting” the masses of decent been sold and bought. Under such
men, We do not have to raise the conditions there was no essential
question how the men who under difference between private owner-
capitalism are businessmen would ship of producers’ goods and that
have tried to take advantage of of consumers’ goods. In each case
their superior talents in any other property served the owner exclu-
thinkable organization of produc- sively. To own something, whether
tion activities. Under capitalism a producers’ good or a consumers’
they are vying with one another good, meant to have it for oneself
in serving the masses of less alone and to deal with it for one’s
gifted men. All their thoughts own satisfaction.

aim at perfecting the methods of But it is different in the frame
supplying the consumers. Every of a market economy. The owner
year, every month, every week of producer’s goods, the capitalist,
something unheard of before ap- can derive advantage from his
pears on the market and is very ownership only by employing them
soon made accessible to the many. for the best possible satisfaction
Precisely because they are pro- of the wants of the consumers. In
ducing for profit, the businessmen the market economy property in
are producing for the use of the the means of production is ac-

consumers. quired and preserved by serving
the public and is lost if the public
Confusion Concerning Property becomes dissatisfied with the way

The second deficiency of the in which it is served. Private
customary treatment of the prob- property of the material factors
lems of society’s economic organi- of production is a public mandate,
zation is the confusion produced as it were, which is withdrawn
by the indiscriminate employment as soon as the consumers think
of juridical concepts, first of all that other people would employ
the concept of private property. the capital goods more efficiently

In the precapitalistic ages there for their, viz, the consumers’,
prevailed by and large economic benefit, By the instrumentality of
self-sufficiency, first of every the profit and loss system the
household, later — with the grad- capitalists are forced to deal with
ual progress toward commercial- “their” property as if it were
ism — of small regional units. The other peoples’ property entrusted


===== PAGE 9 =====

1962 THE ELITE UNDER CAPITALISM 7

to them under the obligation to the consumers enriches not only
utilize it for the best possible the owners but all of the people,
provision of the virtual benefici- on the one hand by raising the
aries, the consumers. This real marginal productivity of labor
meaning of private ownership of and thereby wages, and on the
the material factors of production other hand by increasing the
under capitalism could be ignored quantity of goods produced and
and misinterpreted because all brought to the market. The peo-
people — economists, lawyers, and ples of the economically backward
laymen — had been led astray by countries are poorer than the
the fact that the legal concept of Americans because their countries
property as developed by the juri- lack a sufficient number of suc-
dical practices and doctrines of cessful capitalists and entrepre-
precapitalistic ages has been re- neurs.
tained unchanged or only slightly A tendency toward an improve-
altered while its effective mean- ment of the standard of living of
ing has been radically trans- the masses can prevail only when
formed.4 and where the accumulation of
In the feudal society the eco- new capital outruns the increase
nomic situation of every individ- in population figures.
ual was determined by the share The formation of capital is a
allotted to him by the powers that process performed with the co-
be. The poor man was poor be- operation of the consumers: only
cause little land or no land at all those entrepreneurs can earn sur-
had been given to him. He could pluses whose activities satisfy
with good reason think — to say it best the public. And the utiliza-
openly would have been too dan- tion of the once accumulated capi-
gerous —: I am poor because other tal is directed by the anticipa-
people have more than a fair tion of the most urgent of the not
share. But in the frame of a capi- yet fully satisfied wishes of the
talistic society the accumulation consumers, Thus capital comes in-
of additional capital by those who to existence and is employed ac-
succeeded in utilizing their funds cording to the wishes of the con-
for the best possible provision of sumers.

4 It was the great Roman poet, Quin-
tus Horatius Flaccus, who first alluded

to this characteristic feature of prop- When in dealing with market

erty of producers’ goods in a market h 1 h
economy. See Mises, Socialism, new edi- Phenomena we apply the term
” we must be fully aware

tion, p. 42 n, “power,

Two Kinds of Power


===== PAGE 10 =====

8 THE FREEMAN January

of the fact that we are employing this way because they think that
it with a connotation that is en- in the long run they serve better
tirely different from the tradi- their own interests by being loyal
tional connotation attached to it to their government than by over-
in dealing with issues of govern- turning it. But this does not alter
ment and affairs of state. the fact that governmental power
Governmental power is the fac- means the exclusive faculty to
ulty to beat into submission all frustrate any disobedience by the
those who would dare to disobey recourse to violence. As human na-
the orders issued by the authori- ture is, the institution of govern-
ties. Nobody would call govern- ment is an indispensable means
ment an entity that lacks this to make civilized life possible. The
faculty. Every governmental ac- alternative is anarchy and the law
tion is backed by constables, pris- of the stronger. But the fact re-
on guards, and executioners. mains that government is the
However beneficial a governmental power to imprison and to kill.
action may appear, it is ultimately The concept of economic power
made possible only by the govern- as applied by the socialist authors
ment’s power to compel its sub- means something entirely differ-
jects to do what many of them ent. The fact to which it refers
would not do if they were not is the capacity to influence other
threatened by the police and the peoples’ behavior by offering
penal courts. A government sup- them something the acquisition
ported hospital serves charitable of which they consider as more
purposes. But the taxes collected desirable than the avoidance of
that enable the authorities to the sacrifice they have to make
spend money for the upkeep of the for it. In plain words: it means
hospital are not paid voluntarily. the invitation to enter into a bar-
The citizens pay taxes because gain, an act of exchange. I will
not to pay them would bring them give you a if you give me b. There
into prison and physical resistance is no question of any compulsion
to the revenue agents to the gal- nor of any threats. The buyer

lows. does not “rule” the seller and the
It is true that the majority of seller does not “rule” the buyer.
the people willy-nilly acquiesce in Of course, in the market econ-

this state of affairs and, as David omy everybody’s style of life is ad-
Hume put it, “resign their own justed to the division of labor,
sentiments and passions to those and a return to self-sufficiency is
of their rulers.” They proceed in out of the question. Everybody's


===== PAGE 11 =====

1962 THE ELITE UNDER CAPITALISM 9

bare survival would be jeopard- that people are getting drunk be-
ized if suddenly he would be cause the distillers have “econ-
forced to experience the autarky omic power.” If one calls economic
of ages gone by. But in the regu- power the capacity to choose — or,
lar course of market transactions as the socialists prefer to say, to
there is no danger of such a re- ‘determine” — the product, one
lapse into the conditions of the must establish the fact that this
primeval household economy. A power is fully vested in the buy-
faint image of the effects of any ers and consumers.
disturbance in the usual course of “Modern civilization, nearly all
market exchanges is provided civilization,” said the great Brit-
when labor union violence, benev- ish economist, Edwin Cannan, “is
olently tolerated or even openly based on the principle of making
encouraged and aided by the gov- things pleasant for those who
ment, stops the activities of vital please the market and unpleasant
branches of business. for those who fail to do so0.””¢ The
In the market economy every market, that means the buyers;
specialist — and there are no other the consumers, that means all of
people than specialists — depends the people. To the contrary, under
on all other specialists. This mu- planning or socialism the goals of
tuality is the characteristic fea- production are determined by the
ture of interpersonal relations supreme planning authority; the
under capitalism. The socialists individual gets what the authority
ignore the fact of mutuality and thinks he ought to get. All this
speak of economic power. For ex- empty talk about the economic
ample, as they see it, “the capacity power of business aims at ob-
to determine product” is one of literating this fundamental dis-
the powers of the entrepreneur.’ tinction between freedom and
One can hardly misconstrue more bondage,
radically the essential features of
the market economy. It is not
business, but the consumers who People refer to economic power
ultimately determine what should also in describing the internal
be produced. It is a silly fable conditions prevailing within the
that nations go to war because various enterprises. The owner of
there is a munitions industry and a private firm or the president of

The “Power’’ of the Employer

5 Cf. for instance, A. A. Berle, Jr. 6 Edwin Cannan, An Economist's
Power without Property (New York: Protest (London: P.S, King & Son, Ltd.,
Harcourt, Brace, Inc.), 1959, p. 82. 1928), pp. VIL.


===== PAGE 12 =====

10 THE FREEMAN January

a corporation, it is said, enjoys with every employee exclusively
within his outfit absolute power. from the point of view of the serv-
He is free to indulge in his whims ices he renders to the satisfaction
and fancies. All employees depend of the consumers,

on his arbitrariness. They must What curbs in all market trans-
stoop and obey or else face dis- actions the temptation of indul-
missal and starvation, ging in malice and venom is pre-

Such observations, too, ascribe cisely the costs involved in such
to the employer powers that are behavior. The consumer is free to
vested in the consumers. The re- boycott for some reasons, popu-
quirement to outstrip its competi- larly called noneconomic or irra-
tors by serving the public in the tional, the purveyor who would in
cheapest and best possible way en- the best and cheapest way satisfy
joins upon every enterprise the his wants. But then he has to bear
necessity to employ the personnel the consequences; he will either
best fitted for the performance of be less perfectly served or he will
the various functions entrusted to have to pay a higher price. Civil
them. The individual enterprise government enforces its com-
must try to outdo its competitors mandments by recourse to vio-
not only by the employment of the lence or the threat of violence. The
most suitable methods of produc- market does not need any recourse
tion and the purchase of the best to violence because neglect of its
fitted materials, but also by hiring rationality penalizes itself.
the right type of workers. It is The critics of capitalism fully
true that the head of an enter- acknowledge this fact in pointing
prise has the faculty to give vent out that for private enterprise
to his sympathies or antipathies. nothing counts but the striving
He is free to prefer an inferior after profit. Profit can be made
man to a better man; he may fire only by satisfying the consumers
a valuable assistant and in his better or cheaper or better and
place employ an incompetent and cheaper than others do. The con-
inefficient substitute. But all the sumer has in his capacity as cus-
faults he commits in this regard tomer the right to be full of whim
affect the profitability of his en- and fancies. The businessman qua
terprise. He has to pay for them producer has only one aim: to pro-
in full. It is the very supremacy vide for the consumer. If one de-
of the market that penalizes such plores the businessman’s unfeel-
capricious behavior. The market ing preoccupation with profit-
forces the entrepreneurs to deal seeking, one has to realize two


===== PAGE 13 =====

1962 THE ELITE UNDER CAPITALISM 11

things. First, that this attitude is other means to avoid the evils re-
prescribed to the entrepreneur by sulting from one’s fellows’ bad
the consumers who are not pre- judgment than to induce them to
pared to accept any excuse for alter their ways of life volun-
poor service. Secondly, that it is tarily. Where there is freedom,
precisely this neglect of “the hu- this is the task incumbent upon
man angle” that prevents arbi- the elite,

trariness and partiality from af- Men are unequal and the in-
fecting the employer-employee herent inferiority of the many
nexus. manifests itself also in the man-

ner in which they enjoy the afflu-

A Duty of the Elite ence capitalism bestows upon
To establish these facts does them. It would be a boon for man-
not amount either to a commenda- kind, say many authors, if the
tion or to a condemnation of the common man would spend less
market economy or its political time and money for the satisfac-
corollary, government by the peo- tion of vulgar appetites and more
ple (representative government, for higher and nobler gratifica-
democracy). Science is neutral tions. But should not the distin-
with regard to any judgments of guished critics rather blame them-
value. It neither approves nor selves than the masses? Why did
condemns; it just describes and they, whom fate and nature have
analyzes what is. blessed with moral and intellec-
Stressing the fact that under tual eminence, not better succeed
unhampered capitalism the con- in persuading the masses of in-
sumers are cupreme in determin- ferior people to drop their vulgar
ing the goals of production does tastes and habits? If something is
not imply any opinion about the wrong with the behavior of the
moral and intellectual capacities many, the fault rests no more with
of these individuals. The individ- the inferiority of the masses than
uals qua consumers as well as with the inability or unwillingness
qua voters are mortal men liable of the elite to induce all other peo-
to error and may very often ple to accept their own higher
choose what in the long run will standards of value. The serious
harm them. Philosophers may be crisis of our civilization is caused
right in severely criticizing the not only by the shortcomings of the
conduct of their fellow citizens. masses. It is no less the effect of
But there is, in a free society, no a failure of the elite, @®


===== PAGE 14 =====

REGINALD JEBB

Welfare Statism in England

THE GREAT social drift in England this sense — was under constant
during the past forty years has attack by Socialists. The result of
been toward a kind of totalitarian- this onslaught, Belloc foresaw,
ism. This fact is all the more de- would not be the Cooperative Com-
pressing when it is realized that monwealth of socialist fantasy; it
outstanding books written by would be a state in which the mass
widely read authors have appeared of men were reduced to servility.
here during this period, showing Both Belloc and Huxley antici-
in somberest colors the conse- pated a generally accepted serfdom,
quences of the trend. The drift, Freedom would not be exchanged
nevertheless, has accelerated. for tyranny in the harsh sense.
Three books come to mind, two of There would be plenty of bread
them works of fiction: Hilaire and circuses. Even in Orwell's hor-
Belloc’s The Servile State (1912), rific picture of the future, the
Aldous Huxley's Brave New majority were adequately fed and
World (1932), and George Or- cared for, and those outside the
well’s 1984 (1949). state’s detailed supervision were
Belloc’s book was critical of too weak and degenerate to cause
“capitalism,” which word he used the rulers any trouble. They
in a special sense, not as an equiv- simply did not count.
alent to “the free market economy” It is this ready acceptance by
but as descriptive of the kind of in- the people of the loss of freedom
terventionist state which existed that is the most alarming feature
in his England. “Capitalism” —in of these three books, for even
Mr. Jobb is a British educator, editor, and though the hero of 198) veluls
journalist. against the intolerably subservient

12


===== PAGE 15 =====

1962 WELFARE STATISM IN ENGLAND 13

conditions imposed on him, his and effect is increased by the
rebellion ends in a mad ecstasy of propaganda both of governments
submission. in power and the political parties
Why is it that these three re- of the Left. Governments invaria-
markable books have had little or bly seek to enlarge the area of
no influence on the course of their influence, for the appetite
events? They are not mere guesses for power, once acquired, is in-
at the future, brilliant but founded satiable. But the propaganda of
on nothing more solid than the the Left is more sinister and
imagination of their authors. The nauseous. It sets out to assume a
Servile State reads more like the high moral purpose — protection of
solution of an algebraic problem the weak against the heartlessness
than a prophecy, and Huxley can of the Right — and on this plea it
point, in his recent revision of proceeds to press for centralized
Brave New World, to developments control, so as to be able to dis-
that bear out his original thesis. tribute wealth as it thinks fit. This
All three books are confirmed by is a useful vote-catching device
events, and at the same time tightens the
Perhaps the answer to the ques- bonds restraining individual free-
tion of their small influence is to dom. Yet it would be difficult to
be found in the appearance of the find a single politician who con-
Welfare State. The lure of irre- demns the principle underlying
sponsible ease and a rise in the so- the Welfare State as it is organ-
called standard of living have ized in England.
blotted out from the minds of a England is wealthier today than
big proportion of the population it was a generation ago. Motor
the price to be paid for govern- cars, television sets, washing ma-
mental ordering of their lives. Be- chines, refrigerators, and a host of
cause a large measure of freedom other modern inventions have come
is still left to them and because into the possession of millions who
the immediate prospects appear to never dreamed of such amenities
be pleasant, they do not trouble to before. There is a superficial pros-
look at the hard logic of common perity in many parts of the coun-
sense. Neither the gloomy forebod- try. People have been led to attri-
ings of thinking men nor the ac- bute this progress to the Welfare
tual financial crises that the coun- State, ignoring the advance of
try has been undergoing affect technology, the aid given by the
them. United States, the mortgaging of
This insensitiveness to cause the future, and so on. But they do


===== PAGE 16 =====

14 THE FREEMAN January

not realize —or at all events do those receiving benefits with a
not admit — either the insecurity dread of their impermanence, but
of what has been built up or the also encourages irresponsibility
loss of vigor and human satisfac- which grabs at what it can while
tion that the system involves. the going is good. That adds to
If we leave the display window the general economic insecurity,
and penetrate into the store, the weakens human morality and,
picture is very different. Here we hence, increases crime and govern-
find anxiety, discontent issuing in mental restrictions to combat it.
litigation and strikes, the growth
of a wholly materialistic outlook Clearly with this burning of the
combined with an almost total ab- candle at both ends — state subsi-
sence of thrift. We find, too, the dies at the one end and lack of
professions, notably the medical personal effort at the other — the
profession, becoming bureaucra- system is bound to break down,
tized, business interfered with and and our three prophets will have
slowed up by red tape, taxation been vindicated. The longer it
increasing, and prices rising. All lasts, the less virility will remain
this not only clouds the minds of to effect a recovery. @®

Subsidies for Everyone —
#==> A New Way of Life

LAWRENCE FERTIG

YOU'VE probably heard the old asked how they got along without
story about the inhabitants of a work, he was told the answer was
fabled island who did not seem to very simple. “We make a living
be engaged in producing goods of by taking in each other's wash-
any kind. When a puzzled visitor ing.” To some extent, at least, the
Mr. Fertig is economic columnist for the New handing out of subsidies to in-
York World Telegram and Sun and other djviduals by the U. S. government

Scripps-Howard newspapers, in which this ar.

ticle first appeared October 9, 1961. He also reminds one of this fabled island.
is the author of the new book, Prosperity .
Through Freedom. Of course, if everybody were


===== PAGE 17 =====

1962 SUBSIDIES FOR EVERYONE — A NEW WAY OF LIFE 15

subsidized equally, no one would buy cotton that much cheaper
profit and subsidies would have than American producers, which
no special value. The game then then makes a high tariff on manu-
would be up. But this is far from factured textile imports necessary
the case today. Now, some groups in order to protect American man-
have their hands deep in the pub- ufacturers.
lic trough receiving substantial But the end is not in sight —
subventions while millions of not by a long shot. Whenever a
hard-working taxpayers must pay new problem arises, someone
the bill and work all the harder rushes forward with a ready solu-
to pay the taxes which pay the tion —a new subsidy. The most
subsidies. recent recommendation of this
Undoubtedly the largest single kind came from the Interstate
subsidy in the country goes to Commerce Commission which has
agriculture. The Department of authority to regulate railroads.
Agriculture spends over $6 billion The Commission suggested a $52
a year, of which nearly $4 billion million payment to railroads to
pays for farm subsidies in the subsidize commuter traffic. This,
form of price supports for crops. of course, would only be a starter.
But while the farmer is heavily The subsidy would grow.
favored, he is certainly not alone Everyone knows that the rail-
in getting government money. roads are in dire straits because
The extent of subsidies can be of high costs. Yet, curiously
judged by the report of the Joint enough, the subsidy suggestion
Economic Committee of Congress came to Congress within a few
at the end of 1960. It takes seven days of a demand by rail unions
solid pages of type in this report for another wage increase of 25
to describe all the subsidies which cents an hour, plus provisions for
are provided today —ranging from a six-month notice of layoff to:
subsidies to shipbuilding and ship- rail workers. Railroad officials es-
operating companies through do- timate this demand will cost the
mestic sugar producers, consumers industry more than $274 million
of electric power, and dwellers in and, if applied (which it would
public housing, to veterans. be in time) to nonunion rail work-
The irrationality of subsidies ers as well, the total cost would
reaches its height in the payment be $462 million. About a third of
of 8.5 cents a pound to exporters Class 1 railroads didn’t even earn
of raw cotton, with the result that their fixed charges in the first
foreign producers of textiles can. seven months of 1961. Now, costs


===== PAGE 18 =====

16 THE FREEMAN January

-

will go up — and, of course, more zenith recently when the New
subsidies will probably be offered York Times editorially approved
as a solution. subsidies for the Metropolitan

This column has frequently told Opera Company because new
about the plight of American rail- union demands made the conduct
roads. They have been overtaxed, of opera practically impossible.
and overregulated, and crippled “If the Met is subsidized, of
by government action. In 1959 course all other operas should be
railroads paid $422 million in aided too,” said Don Francisco in
miscellaneous taxes to state and a letter to the New York Times.
local governments while truck ‘Next in line with crutches and
lines, air carriers, and bus lines cup would come the ballet, closely
paid less than 10 per cent of that followed by musical concerts,
sum. Airlines can recover their in- light opera, and other forms of en-
vestment in new airplanes in as tertainment. . . . In due course
little as five years, bus lines in logic would suggest aid to good
seven years, but railroads have an movies and TV and radio stations

average depreciation schedule of if in distress. . . . And some of
28 years, and their buildings our newspapers and magazines
about 100 years. aren't doing so well financially.

We can hardly be accused of be- How about a little assist for
ing callous to the interests of the them? Their contents are art.
railroad industry since we have And it is important that the pub-
written in support of their de- lic be kept abreast of current
mand for the four freedoms — events and world-wide prob-
“freedom from discriminatory lems... .”
regulation, from discriminatory
taxation, from subsidized com- Of course, all this is said with
petition, and freedom to diver- tongue-in-cheek, and may sound
sify.” But just where do we stop fantastic now. But who knows
with subsidies? The present gov- what demands will be made for
ernment formula seems to be to federal government support if we
overburden and practically destroy continue to follow our present
an industry; and then, instead of course? The idea seems to be to
trying to remove the obvious load industry down with uneco-
cause of the trouble, a proposal nomic restrictions and taxes and
is made to disguise the weakness then try to patch up the resulting
by a government handout. mess with a government sub-

The subsidy racket reached its sidy. ®


===== PAGE 19 =====

OPPONENTS OF federal aid and how and why this works in the
other forms of subsidy often base market place.
their objections on “the fact that And if a person will carry on
subsidies won’t work.” Unfortu- that thought, he'll see that sub-
nately for their argument, subsi- sidies work in somewhat the same
dies do work, and that is a major way. For instance, it is fairly ob-
reason why they are objectionable. vious, after years of experience in
Maybe the best way to get at the United States, that a subsidy
this matter is to consider our com- for wheat will encourage the pro-
mon experiences as buyers and duction of wheat until it overflows
sellers in the market place. If we the granaries and “Liberty Ships”
happen to offer an item for sale and figuratively “runs out of our
and it “goes like hot cakes,” we ears.” Subsidized surpluses of
are likely to conclude that the cus- corn, cotton, tobacco, peanuts, but-
tomers want more and that we ter, cheese, eggs — anything at all
ought to produce and offer more of — accumulate in the same way.
the item. Or, as buyers of an item Surpluses of coal miners, auto
especially to our liking, we do our workers, steel workers, or spe-
best to make sure the seller keeps cialists at any service are practi-
it in good supply. The function of cally guaranteed if the price of
pricing in a free market is to see the service is held high enough
that ‘the price is right” to keep and a subsidy is offered to the un-
the supply of anything in reason- employed. There is no surer way
able balance with the demand for to have a high level of unemploy-
it. A “high” price encourages pro- ment in an economy than to pay
duction and discourages consump- people for not working.
tion; a “low” price encourages At first blush, one might suspect
consumption and discourages pro- that subsidized housing would lead
duction. Most anyone can under- to a surplus of dwellings, but ac-
stand, after a moment’s reflection, tually it is the dwellers who are

17


===== PAGE 20 =====

18 THE FREEMAN January

subsidized, not the dwellings. Thus, Since subsidies are so decep-
the inevitable consequence of sub- tively dangerous — taking from
sidized housing is an increase in some without their consent or
the number of families seeking to knowledge and giving to others in
occupy subsidized space. a way that seems to aggravate
Likewise, food subsidies in- rather than cure what ails them —
crease the numbers of those quali- it behooves us to seek other solu-
fying for free food; transporta- tions to our problems.
tion subsidies increase the num- We mentioned earlier that buy-
bers of free riders; education sub- ers and sellers, voluntarily offering
sidies increase the numbers of and risking in a free market only
those who need education; cloth- what is their own, seem to gain
ing subsidies increase the numbers phenomenal results if the “Ameri-
of the ill-clad; medical-care sub- can Common Market” (the United
sidies increase the numbers of States without welfarism) may be
those who seem to be sick; old-age taken as an example. Competitive
subsidies increase the numbers of enterprise, regulated by consumer
the aged indigent; subsidies to the choice as reflected in the ups and
poor assure endless and growing downs of price in a free market,
poverty. tends to reward according to merit
Opponents of Welfare State im- — as our peers judge merit. And
plementation of the gospel of Karl what is the measure of a man’s
Marx — to each according to need success in a free market? The ex-
—are wrong in declaring that sub- tent to which he effectively serves
sidies won't work! Subsidies al- others as these others want to be
ways work to increase the supply served! Wealth accumulates in the
— create a surplus -— of the thing hands of those who most econom-
or the group that is being subsi- ically and abundantly produce the
dized. Now, it well may be that things which alleviate poverty, and
those who advocated the subsidies thus people are stimulated to
in the first place did not under- emerge and climb and help them-
stand what the inevitable conse- selves. Multiplying wealth is by
quences would be; perhaps they ac- far the fastest way to help the
tually believed that subsidies would poor. Dividing wealth and subsi-
work backwards and that it is pos- dizing poverty is the fastest way
sible to diminish poverty by sub- to starve everyone.
sidizing it. Whatever their inten-
tions, subsidies do work, and Let's be careful what we subsi-
ought not to be trifled with. dize, because subsidies work!


===== PAGE 21 =====

MEASURES ARE TOO OFTEN DECIDED, NOT AC-
CORDING TO THE RULES OF JUSTICE AND THE
RIGHTS OF THE MINOR PARTY, BUT BY THE SU-
PERIOR FORCE OF AN INTERESTED AND OVER-
BEARING MA JORITY.

LEGAL—BUT IMMORAL

DEAN RUSSELL

ALL OF US, at one time or another, in old New England (and in other
have repeated the phrase, “Might places at other times) endorsed
doesn’t make right.” But like any that frightful campaign to search
other idea that, from constant rep- out and to burn witches, that
etition, degenerates into a mere didn’t make it right. Everyone
cliché, we forget the meaning be- can now see that. But when I point
hind the words. That’s why so few out that price controls and sub-
of us see the contradiction in the sidies to farmers are also morally
phrases, “Might does not make and economically wrong, observe
right,” but “The way to determine what happens. The farmers who
whether Social Security is right get the subsidies (and the politi-
or wrong is to vote on it.” cians who get the votes) immedi-

In reality, who or what gets the ately accuse me of not believing in
most votes in an election is totally democracy — “The people voted for
unrelated to who or to what is it in a democratic election,” they
right. say, “so that makes it right.” I

When the majority of the people say flatly, it does not.
Dr. Russell is Professor of Economics at Rock- When the maj ority of the Amer-
ford College and Chairman of the Department ican people endorsed the Eight-
of Economics and Business Administration. .
This article is from his weekly editorial col- €enth Amendment to our Consti-

umn in the Sunday edition of the Rockford . . . .
(Illinois) Morning Star, September 10, 1961. tution, that did not make drinking

19


===== PAGE 22 =====

20 THE FREEMAN January

wrong; it merely made it illegal. however, offer a useful procedure
Drinking is right or wrong on its for determining which is which.
own merits. And it did not sud- Ask yourself whether human
denly become right again when slavery is right or wrong. Was it
the American people repealed the right a hundred years ago? (Re-
“prohibition amendment”; at that member, the American people had
point, the drinking of whisky approved of slavery and had voted
merely became legal once more. for it.) After you have answered
Of course, the law and morality that rhetorical question as best
are frequently together on a given you can (and have listed your rea-
issue. For example, it is both im- sons), you will discover that what
moral and illegal to murder and to the law says, or what your duly
steal. We are fortunate in such elected congressman says, are not
cases, for then we do not have to included in your sources and
choose between law and morality. guides for determining right from
But since there is no positive re- wrong, Nor did it even enter your
lationship of any description be- mind to call your neighbors to-
tween legalities and moralities, it gether for a vote on the issue.
is a mere coincidence when they I am confident that those same
correspond. The criteria for right standards, guides, principles, and
and wrong come from a source (in sources (whatever they may be)
fact, from several sources) that are more likely than any others to
are outside of government. They give you the correct solution to the
existed before any current govern- many vital questions that we must
ment was ever formalized. And, answer as individuals and as a
of course, they continue to exist people. Hold fast to them and you
during and after a revolution and are not likely to be pulled off-side
the formation of a new govern- by the childish notion that voting
ment. The government does not, is the proper way to determine
and cannot, bring them into ex- right from wrong. You will also

istence. then be in a far better position to
use your vote intelligently to help
Is It Right or Wrong? determine what we should make

I shall not here be so presump- legal and what we should make il-
tuous and arrogant as to tell you legal, based on something more
what is right and what is wrong substantial than current and popu-
in all the relationships of man- lar emotions.
kind. In many areas and on many Mechanically, I have no objec-
issues, I just don’t know. I can, tion whatever to the democratic


===== PAGE 23 =====

1962 LEGAL BUT IMMORAL 21

process — the mechanism — that we forbidden to do — we could use it
use to select our officials and to to settle the religious question
decide various issues that are of once and for all. We could vote
equal concern to all of the people. democratically to decide which re-
I can’t think of any other practi- ligion we shall all be compelled to
cal way to do it. But I become dis- follow. (It always amuses me to
couraged indeed when people con- observe how some of the most
fuse the mechanism itself with the rabid of the social democrats back
rightness and wrongness of the away from that one; and on occa-
resulting actions. The “liquida- sion, I have been known to resort
tion” of millions of persons in to the low trick of taunting the
Communist Russia under Stalin worst of them with this question:
was wrong; it would have been “What's the matter — don’t you
equally wrong even if the over- believe in democracy and the right
whelming majority of the Russian to vote anymore?)

people had voted for it in a demo- Perhaps James Madison, in the
cratic election. It is a fact that tenth Federalist Paper, best an-
Hitler was elected more democrat- swered this general question on
ically than were most of the Presi- voting and democracy. “Measures
dents of the United States. But are too often decided, not accord-
that fact is, of course, totally un- ing to the rules of justice and the
related to the rightness or wrong- rights of the minor party, but by
ness of the proposals and acts of the superior force of an interested
the leaders of the two nations. In and overbearing majority.”

the final analysis, the only issue

that can be decided by govern- That’s why our Founding
mental voting is to determine what Fathers deliberately established a
the minority shall be forced to do Republic with heavy checks and
by the majority. That dangerous balances against popular and hasty
weapon should be used sparingly actions, instead of a Democracy in

indeed. which the people are encouraged
to believe that they have the
When To Vote? “right” to vote on anything and

If voting could really be used to everything. It’s too bad that their
determine right from wrong — and plan is being so constantly eroded
what we should all be forced or away. @


===== PAGE 24 =====

IMPORTANCE OF THE

PREMISE

LEONARD E. READ

ONE OF THE GREAT DEBATES of our mony achieved. Force, rather than
time concerns the role of govern- personal freedom of choice and
ment in human affairs — govern- action, mounts the driver's seat.
ment limited to defense of life and Why this unhappy state of affairs?
property versus government regu- The reason may be nearer to
lation and control of every aspect home than most of us suspect.
of our lives. Not that this is a new Few libertarian proponents of
problem, for the proper role of strictly limited government are
government in society has engaged sharply conscious of why they be-
the attention of the ablest minds lieve as they do. Nor have most
since the time of Plato. At pres- authoritarians bothered to exam-
ent, however, the debate bogs ine the why of their positions.
down. The more the matter is Much less does either pretend to
discussed nowadays, the more con- know or really care what is in the
fused become people’s beliefs and other's mind, or why. Obviously,
the further they seem to move persons with no fundamental
from any common understanding premises of their own are unlikely
of the problem or agreement on to have anything fundamental in
the answer. common with each other. So, let
Never in all history has the dis- us first examine the why of our
cussion been on such a scale as own beliefs.
now, never such airing of views — The reason we do not know why
with practically everyone seem- we believe and act as we do is be-
ingly bent on setting all others cause we are not aware of our basic
straight, But the more that some premise or prime value or funda-
people contend with each other mental point of reference. With
over the issues, the more is dis- our lives anchored to nothing, we
cord promoted, the less is har- tend to believe and act aimlessly;

22


===== PAGE 25 =====

1962 IMPORTANCE OF THE PREMISE 23

that is, we obey emotional compul- agree.” For it is fruitless to dis-
sions instead of adhering strictly cuss economic, political, social,
to the disciplines imposed by some and moral subjects without first
transcendental premise or value understanding our own premises
or principle personally thought as well as the premises of others.
out and accepted. People swayed Otherwise, no party to the discus-
by a variety of emotional compul- sion can possibly know how to
sions — acting outside the realm of evaluate another’s statements.
reason and with no knowledge of
what moves them or others —can Man's Purpose
find no common ground, regard- “What is your object in life?
less of how much they talk or What is it you hope to achieve by
fight, They lack a common your earthly existence? What, in
premise; individually, they lack a your view, is your purpose
conscious premise. here?” These would be appropri-

Covetousness is an example of ate questions to ask anyone who
an emotional trait, as is fear of sees fit to argue about man’s re-
disapproval or desire for approba- lationship to man.
tion. Suppose one person covets Many people have never raised
only political power and another these questions with themselves,
only material wealth. With such much less reflected on the answers.
diverse motivations, how could dis- In this unthoughtful state, they
cussion lead them to agreement or do not qualify as instructors on
even common understanding on, questions of what's right and
let us say, the TVA idea? The what's wrong in social, political,
former would sense an advantage; and economic affairs.
the latter would think his ambi- To arrive at a basic premise,
tions thwarted. And the more logi- one must ask and answer a funda-
cally they argue from such non- mental human question: What is
reasoned premises — from their the goal of man’s earthly striving;
emotional compulsions — the more that is, what is life’s highest
widely would they diverge. value?

Marcus Aurelius remarked, “If Is man’s purpose here longevity,
you would discuss with me, first to extend creatural existence,
define your terms.” Good! But stretch his life span?

much more important and useful Is it to accumulate wealth, pile
would be to say, “First, let us at up material possessions, get rich?
least understand each other's Should man aim to achieve su-

premise, even though we may not premacy over his fellow men, gain


===== PAGE 26 =====

24 THE FREEMAN January

personal power, make others be- Second, and by the very nature of
have as he sees fit? these verbal brawls, the incentive
Ought man to expend his life’s is not to shed light but rather to
energies in trying to remake out-clever one's adversary. And
others in his own likeness; that is, third — by far the most important
become the ultimate arbiter of reason for the puerile nature of
humanity ? these insincere shows — is that no
With the questions put in this participant has the slightest no-
stark form, most people, even tion what the other fellow’s premi-
without prior reflection, would ses are, and may not know his
acknowledge that man is made for own!
other things than these; he should To demonstrate further the fu-
have higher values. Yet, things tility and the aimlessness of dis-
such as these, in infinite variation, cussions where premises are in the
have served as motivations for the dark, merely reflect on person-
countless actions, including those al experiences with friends and as-
of ‘“statecraft.” Lust for power, sociates. Note how often attempts
glory, fame, title, notice, adula- to “talk it out” lead to nothing
tion, pomp, riches — all for a mo- but sharpened awareness of dis-
mentary show-off before earth. parity in viewpoints. Failure to
lings — is about as much of a life understand each other’s basic
goal as many people have, Try to point of reference or prime value
discuss sensibly with people thus is more apt to yield bad feelings
motivated a subject such as the than harmonious conclusions.
scope of government! Consider again those two per-
Consider, briefly, the current sons, one whose chief aim is polit-
rash of public discussions, debates, ical power and another whose ma-
and “interviews”— radio, TV, and jor purpose in life is the accumu-
grand ballroom variety — and re- lation of material wealth. They
flect on the why of their inanity. decide to discuss or debate the ef-
Of course, in the first place, they ficacy of the TVA idea. In all
are designed mostly for entertain- probability, neither is fully aware
ment. As the educational director of his own motivation, and it is
(this was his title) of a national almost certain that neither is con-
network said to seven of us prior scious of the other’s basic point
to going on the air, “While we of reference. Should each argue
prefer that you not use profanity, logically from his own major ob-
don’t let anything stand in the ject in life, the former would have
way of making this a hot scrap.” to judge the TVA idea — govern-


===== PAGE 27 =====

1962 IMPORTANCE OF THE PREMISE 25

ment control and ownership of the glory, militarily or otherwise. They
means of production — to be con- have sought adventure; they have
sistent with his life’s pattern; even -—so anthropologists tell us —
and the latter, seeking opportunity sometimes believed that a large col-
for private investment, would lection of dried human heads was
ude the idea to be i ’ (stent the thing in all the world most worth
judge the oa o be inconsisten having.”

with his life’s pattern. The longer These comments are important
they he logically rom thelr and relevant. First, reflect on the
Hove foam gree " rs senselessness of two individuals,

agreement con

: discussing social, political, eco-
TVA. It cannot be otherwise. nomic, and moral matters, the life
How much better if each were

to st b . . hi object of one being only dried hu-
08 art y examining JMS OWD pian heads and the sole object of
premise and explaining it to the the other being riches. Arguing
other! The first would confess, “I logically from such shallow premi-
have no object or life value above ses, one would condone murder and
that of political POWer. The sec- the other would see nothing wrong
ond, “I have no object beyond that in buying thousands of acres of
of great wealth. At this point land and having the government
they could conclude in unison, “It take money from other people to
is useless for us to discuss the ef- pay him for not growing wheat
ficacy of the TVA idea. We on it. There is no need to belabor
should, instead, confine ourselves the futility of such argument. It
to a } discussion of our varying 18 quite evident that all philosophi-
premises. For, unless we can find cal argument which does mot pro-
a common or near-cCommon  ...q from a conscious premise 1s,
premise, our reasoning and argu-

t will onlv lead t d perforce, a nonconscious argument
men wi only lead us astray an _ idle nonsense.
apart.

Second, while there is no pros-
pect of any substantial number of
people thinking through and
adopting a common premise, we
can recognize a fairly general but
vague search for such motivation-
al background. Merely observe the

Variable Objectives

The variation in our respective
life-values is enormous. Some men
want power; some riches; a few
seek justice.

[1

Men have sought all sorts of 1 See “Life, Liberty and the Pursuit
other things — they have sought God, of Welfare” by Joseph Wood Krutch in
they have sought beauty, they have the Adventures of the Mind series, Sat-
sought truth or they have sought urdey Evening Post, July 15, 1961,


===== PAGE 28 =====

26 THE FREEMAN January

attempt of people to “pigeonhole” the equivalent of mere good inten-
others. Are they Republicans? tions or general friendliness. The
Democrats? Socialists? Leftists? exercise of good will, according to
Rightists? Pinks? Reds? Physio- Kant, is an affirmation of man’s
crats? Benthamites? Liberals? Re- moral freedom by which he partic-
actionaries? New Dealers? Con- ipates in the world of things as
servatives? Libertarians? These they really are, and acts in terms
are fuzzy questions to which noth- of his own nature. He wrote:
ing better than fuzzy answers can “Everything in nature works ac-
be expected; nonetheless, they do cording to laws. Only a rational be-
demonstrate that many of us like ng has the capacity of acting ac-
to know what is at the root of peo- cording to the conception of laws,
ple’s actions and positions. If an i.e. according to principles. This
individual’s standard doesn’t capacity is will. Since reason is re-
measure up to our own, we cross quired for the derivation of actions
him off our list as unworthy of in- from laws, will is nothing else than
structing us. Who would want practical reason.”
advice from one bent only on col- Kant’s good was measured by
lecting human heads? Or political whether he could answer yes to
plunder? Or coercive power over the question, “Can I will that my
others? maxim become a universal law?”
Third, basic premises or life- No rational being could will that
values are on a scale of their own. lying or stealing or killing should
They range from bad to good, be universally practiced; there-
from hellish to heavenly, from fore, lying, stealing, and killing
evil to virtuous, from senseless to must perforce be rejected as
sound, from immoral to amoral to maxims for personal conduct. They
moral. In short, it does matter are bad!
what one’s major premise is — in- Kant argued that any discussion
deed, it may matter more than which makes no reference to fun-
anything else in this earthly ex- damental principles (basic

perience. premise) produces a disgusting
., i jumble of patched-up observations
A “Good Will" Guide and half-reasoned principles.

A most admirable premise was “Shallow-pates enjoy this, for it
developed and set forth by Im- ——
manuel Kant. His premise was 2 See Foundations of the Metaphysics
ery e . of Morals by Immanuel Kant (New
that good will is the highest good, york: The Liberal Arts Press, 1959), p.
but he did not use the phrase as 29.


===== PAGE 29 =====

1962 IMPORTANCE OF THE PREMISE 27

is very useful in everyday chit- the purpose of man’s earthly ex-
chat.”s istence?”

On the positive side Kant con- Admittedly, the answer to this
tended that a basic premise was question has to be highly personal.
indispensable “because morals It will vary according to one’s fun-
themselves remain subject to all damental assumptions. To me, it is
kinds of corruption so long as the self-evident that man did not cre-
guide and supreme norm for their ate himself, for man knows almost
correct estimation is lacking.”* nothing about himself. Man is the
Each individual must, of course, creature of God, or, if you prefer,
determine his own basic premise of Infinite Principle or Conscious-
or supreme norm, deriving as ness or Intelligence. And there's
much instruction as possible from more to life than the five senses
others who have seen fit to devise reveal. Thus, these assumptions
and accept basic premises for can be summarized as follows:

themselves.’ a. A belief in the primacy or su-

f Infinite Conscious-
The Emerging Individual premacy of an Infinite Conscious

ness;

While having only admiration b. A conviction that the individual
for Kant’s system of reasoning, human consciousness is expans-
my own adopted premise, though ible; and

not inconsistent with his, is stated ¢- A faith in the immortality of the
quite differently — certainly less human spirit.
profoundly — and is set forth for For anyone with assumptions
such reflection as anyone may wish such as these, the answer to the
to give it. My supreme norm or question, “What is the purpose of
premise or fundamental point of man’s earthly existence?” comes
reference has its origin in my clear: It is for each individual to
answer to the question, “What is come as near as he can to the reali-
zation of those creative powers
+ Ibid. p. 6. which are peculiarly and distinc-
5 C. E. M. Joad’s Decadence, particu- tively included in his own poten-
larly the first eight chapters, is a bril- tialities. Man's purpose here is to
liant explanation of what follows the grow, to emerge, to hatch, to evolve
“dropping of the object,” that is, the . .
disastrous results of not having high in consciousness, partaking as
principles as premises. This book, pub- much as he can of Infinite Con-

lished by Faber and Faber, Ltd., London  geiousness.

(430 pp.), can be obtained from Humani- .
ties Press, Inc., 303 Fourth Avenue, New If the above is accepted as the

York 10, N. Y. $2.75. highest purpose of earthly life, it

3 Ibid., p. 26.


===== PAGE 30 =====

28 THE FREEMAN January

follows that any force — psycho- individual is assumed to be an
logical or sociological — which end in himself. Anyone who ac-
binds or retards or in any way re- knowledges an Infinite Conscious-
strains the individual human ness cannot help respecting fel-
spirit in its emergence must be low human beings as the aper-
thought of as an immoral and evil tures through whom Infinite Con-
force. Conversely, the absence of sciousness flows and manifests it-
such retarding and restraining self. Can man — any of us— pre-
forces — the personal practice of dict which individuals will be
freedom —is moral, good, virtu- most graced in this respect? In-

ous. deed not! Throughout recorded
history the breakthroughs have
A Point of Reference occurred in the most unlikely in-

With this as a supreme norm dividuals. Thus, it is the height of
or fundamental point of refer- egotistical arrogance to doubt
ence, it is easy enough to stand that each person — regardless of
any and all proposals and propo- status, station, education, or what-
sitions up against it and to form ever—is an end in himself. It
fairly accurate judgments as to would seem that no premise could
whether they inhibit or promote qualify as good or moral or liber-
a movement toward this ideal. tarian which fails to meet this
Not only does this establish a qualification. Reason clearly dic-
basis for consistent action but it tates that “we treat humanity,
also permits others to judge whether in our own person or in
whether one’s moral, social, eco- that of another, always as an end
nomic, and political positions are and never as a means only.”?
logical deductions from the ac- In deciding on a supreme norm
knowledged premise. Others may or fundamental premise for one-
disagree with the premise, which self it is advisable to select one
is their privilege.’ In this case that is unattainable; such, for in-
the only discourse that makes stance, as the expansion of one’s
sense must have to do with the own consciousness — — the more
varying premises. But, if the 6 “If a man does not keep pace with
premise be adjudged satisfactory, his companions, perhaps it is because he
then all issues can be intelligently hears a different drummer. Let him step
discussed with enlightenment to to the music which he hears, however

. measured or far away.” Henry David
the parties concerned. Thoreau. Walden. Ch. XVIII.

Be it noted that in the above 7 Foundations of the Metaphysics of

premise, as well as in Kant’s, each Morals, p. 47.


===== PAGE 31 =====

1962 IMPORTANCE OF THE PREMISE 29

one advances, the more there is attainable variety, one that calls
to be conscious of. It is a road of for perpetual striving, leading
individual progress that has no the individual on an endlessly
end. emerging road.

Consider this: A person has his Reduced to the workaday world
eye set on scaling the world’s of practical affairs, a philosophy
highest mountain. This is his which concedes that each indi-
life’s ambition, his only goal. Re- vidual is an end in himself is a
peatedly he fails, but the chal- philosophy that precludes the
lenge will not down. Finally, he practice of the few using the
succeeds and triumphantly stands many as means. This philosophy
in the rarefied air of his accom- is diametrically opposed to the so-
plishment — his mission achieved! cialistic scheme under which most
No other object lies before him. of us unwillingly serve as means

Reflect on the planning, the to the nefarious ends of those ex-
physical training —the growing in ercising unprincipled political
strength — that accrued to him so power.
long as the object was before him. A high-principled premise for
Now, contemplate what happens each rational human being is
in the way of fading, weakness, seen to be of the utmost impor-
atrophy, when life’s deed is done, tance. Lacking it, there can be no
when there is no further object. sensible discussion of moral ques-

People arrive in a new land tions, and without such discussion
confronted with a wilderness. there can be no foundation for a
Clearing the forests and over- free society. The adoption and
coming all the obstacles nature of- strict observation of high-prin-
fers is their lot. Observe their de- cipled premises will, on the other
velopment. Now, let them succeed, hand, result in as straight think-
become affluent —their object real- ing and as consistently sound ac-
ized, no other goal before them. tion as rational individuals are
Their moral fiber becomes soft, capable of. How well men and
flabby; they become sloppy women do this determines the ex-

thinkers. tent of freedom in society.
“Nothing fails like success,”
Dean Inge used to say; that is, Yes, freedom depends on you.

no one can set himself an attain- The individual is both its means
able object and, after its achieve- and its end — the only foundation
ment, continue to grow. Thus, of freedom, and also its crowning
one’s object ought to be of the un- object. @®


===== PAGE 32 =====

HENRY HAZLITT

TURIN — Economists dnd political change controls that then existed,
scientists from eight nations against the drift into socialism,
met (Sept. 3 to 9) in this Italian collectivism, national planning,
city to discuss some of the world’s and the welfare state, that seemed
political and economic ptrablems. so irresistible in Europe and so
They are members of the Mont fashionable in the U.S.
Pelerin Society, named after the The group that met in 1947 felt
place where it first met in Switzer- isolated. Those especially who
land fourteen years agd\ The came from Continental Europe
original meeting was attenddd by thought of themselves as “lib-
only 47 persons from little \more erals,” and called themselves that;
than half a dozen countries +-\the but their principles —of tradi-
U. S., Britain, France, Italy, tional liberalism — were regarded
Switzerland, Belgium, Holland, as reactionary, outmoded, and un-
and Norway. Chiefly under the real by their socialist and welfare-
leadership of F. A. Hayek, author statist colleagues in the academic
of The Road to Serfdom, who be- world, For the great majority of
came the society’s first president, those who met were university
the group was united by a common professors.
belief in libertarian principles —
in limited government, in free, Men of Influence
private, competitive enterprise, in In the following decade, how-
the lowering or abolition of the ever, the Mont Pelerin Society met
barriers to international trade, in with more success than its original
the restoration of a world mone- members had dared to hope for.
tary order, in the restoration of a Its membership now exceeds 200,
Rule of Law, internally and ex- from more than twenty countries,
ternally. They were against the including non-European countries
network of price controls and ex- such as Japan, India, Argentina,

30


===== PAGE 33 =====

1962 AN INTERNATIONAL ORDER 31

and Peru. And its membership, the responsibilities of the Western
though still dominantly made up countries to the underdeveloped
of professors and scholars, in- areas, the status of Communism,
cludes men who occupy or have oc- particularly in Italy, France, and
cupied positions of great influence South America, and the possibility
or power in their own countries — of a return to an international
Sen. Luigi Einaudi, former Presi- monetary order.
dent of Italy, Dr. Ludwig Erhard, Again, in the shadow of the
Economics Minister of West Ger- Berlin crisis and the threats and
many, Jacques Rueff, author of the actions of Khrushchev, many
Rueff economic program in members expressed the deepest
France, Pedro Beltran, the Pre- misgivings about the outlook for
mier of Peru, to name a few, economic order and freedom. Yet
The original members of the there was a surprising area of
society have lived to see stifling agreement among the recommen-
economic controls, internal and ex- dations of individual speakers for
ternal, lifted in a score of coun- national and international cur-
tries, currencies stabilized, infla- rency reform. What was remark-
tions in many countries brought able was the almost unanimous
to a comparative halt, and a wide conclusion that the only alterna-
disenchantment with socialist tive to inflation and continued
panaceas. Some of the members monetary chaos was a restoration
have been influential in bringing of the international gold standard.
about these reforms. But they
have acted always as individuals. There was, to be sure, some dis-
The society is in no sense a prop- sent from this view. There was
aganda organization; it has no even more disagreement among
platform, program, or declared individual speakers concerning the
statement of principles. It meets exact method of returning to a
purely for the exchange of ideas, full gold standard and of adopting
and though it is pervaded by a new currency unit values in terms
libertarian philosophy and spirit, of gold. But not a single speaker
there are differences of opinion on expressed satisfaction with the

details, present International Monetary
Fund system. Several, indeed, dis-
Global Topics missed it as a pseudo-gold stand-

At the meeting the members dis- ard, a “gilded” standard with a
cussed such topics as the relation- built-in world inflationary bias. ®
ship of democracy and liberalism, Newsweek, September 25, 1961


===== PAGE 34 =====

When
Republics
Decay

MERRYLE STANLEY RUKEYSER

A THOUGHTFUL DESIGN for nation- his conclusion that free peoples
al survival and progress must em- want peace at any price.

brace matters of the spirit and of The vagaries of survival in these
philosophy as well as physical tools tense times cannot prudently rest
and military hardware. on a foundation of sweet talk and

Courage and adherence to high wishful thinking. The intelligent
principle cannot be relegated to answer to Khrushchev's vulgar
automatic machines, but must re- threat, “We will bury you,” re-
main in the domain of human dis- quires a balanced program. It
cretion. The adventure of being should never be overlooked that
free entails risk. the function of the expensive mili-

A people corrupted by fear and tary hardware, in the world of
demagoguery can lack the char- power politics, is to preserve for
acter to utilize the military hard- us the right of decision-making
ware which they have provided. in matters pertaining to our inter-
Former Secretary of State John ests. It would indeed be a subtle
Foster Dulles knew that we would tragedy if science and industrial
be putty in the hands of the dic- skills provided the requisite tools
tators unless we should determine and yet we declined as a society
to approach the very brink of war. as a result of inner decay.

Nikita S. Khrushchev is forever The diagnostic test of whether
probing character weakness in the national greatness can endure is
West, and his key to power lies in how much we care about principles
_— and about the institutions which
Mr. Rukeyser is a business consultant, lec- implement individual free choice.

turer, and writer of the nationally syndicated . _. .
column, “Everybody's Money.” id The national suicide squad is led

32


===== PAGE 35 =====

1962 WHEN REPUBLICS DECAY 33

— no doubt inadvertently — by so- to be wrong, survival depends on
called practical men who don’t a satisfactory batting average in
want to buck the trend — no matter being prudent. This goal in turn
how irrational it may be. hinges on an uninterrupted flow
The national wrecker subordin- of objective data to the decision-
ates hard realities to the pressures makers. Instead of getting a false
from the wishful thinkers. Un- sense of security from leaning on
scrupulous politicians seek person- old clichés, we should realize that,
al aggrandizement through the to a growing extent, “spot news”
poisonous device of building up is subject to manipulation. It is at
alliances of minorities. The phrase- times inspired, and its timing is
makers seek to hide the nature of determined by the public relations
the process of semantic manipula- hirelings of special interests. If
tion.” The latter-day “liberals” the press plays such news straight,
mask their backward steps by us- it can be a party to pollution of
ing seductive labels. As we ex- the wells from which public opin-
amine the true inwardness of the ion flows.
progressive spirit, we rediscover The late President Franklin D.
that the Founding Fathers, aware Roosevelt accelerated influences
of the perfidy of exploiters, were which weaken the process of de-
progressive innovators in setting cision-making and expression of
up the American constitutional sound principles. F. D. R. gave
system of checks and balances. great impetus to subtle forces that
They provided a blueprint for in an invisible manner have been
progress and development. The changing our form of government.
living constitution was a conscious I can testify at firsthand that when
effort to protect men not only from new ideas and proposals were
foreign and domestic dictators, taken to the White House, Mr.
but also even from the tyranny of Roosevelt would say: “Who's be-
majorities. hind them?” It would have been
In this highly propagandized better if he had set up as criteria
second half of the twentieth cen- such tests as “Are they prudent?”
tury, when there is increased em- and “Are they in the national in-
phasis on the “image” instead of terest?” If the suggestions sound-
on the reality, there must be new ed good, the President would sug-
awareness of the disguised tyran- gest that you get organizations to
nies stemming in part from or- back them and put steam behind
ganized minorities. the demand for legislative action.
While freedom includes the right Thus, with the prestige of high


===== PAGE 36 =====

34 THE FREEMAN January

office, F. D. R. gave great accelera- markets depend on individualistic
tion to the expansion and develop- thinking and they abhor conform-
ment of pressure groups as an ex- ity.

tra-legal fourth branch of govern- The present danger from mili-
ment. tant and imperialistic communism

leaves no time for dilettante nice-
Business Leadership ties. Men must pick sides. You

Those who have not uncritically cannot be for the competitive sys-
joined this band wagon have been tem, yet at the same time be
subject to criticism. Thus, through against the personalities which
the years, I have the argument ad make it work. The point can be
nauseam that businessmen were illustrated by the key role of in-
not as effectively organized in vestment ir this broad struggle
petitioning Congress as the for survival. The domestic ‘‘do
unions, the farmers, the temper- gooders” who sneer at financial
ance lobby, and others. But I have institutions and private property
always felt that as an elite minor- are — perhaps unwittingly — hack-
ity those in positions of leader- ing away at the foundations of na-
ship in the business world had an tional strength.
obligation to speak responsibly —
not cynically to act as a counter- The Role of Investment
vailing force to organized intel- In the final test of power in
lectual recklessness. Furthermore, competitive co-existence, the ques-
under a competitive system in a tion is whether a free society
free society, it is fantastic to try through voluntary discipline can
to promote a monolithic expres- save out of each year’s production
sion of the business viewpoint. enough seed corn for the future.
There can be no regimented soli- In dictatorships, little commissars
darity among competitive enter- in big jobs arbitrarily make such
prises, for even in time of boom, allocations.
some, once respected, are falling Certainly antibodies are at work
by the wayside while others are in the United States. Investment is
growing. In the realm of finance, appealing to an ever broadening
diversity is the life of trade. If base, and new financial packages
there were unanimity of opinion of convenience, such as mutual
and thought control, the stock funds, closed end investment com-
ticker would become paralyzed. panies, and common trust funds
Transactions depend on differences operated by banks and trust com-
between buyers and sellers. Free panies, are making it feasible for


===== PAGE 37 =====

1962 WHEN REPUBLICS DECAY 35

the untutored to develop financial up in the noblest terms. They glib-
independence for themselves and, ly suggest that they are on the
in so doing, to provide tools (capi- side of the angels. Yet they strike
tal goods) for the nation. against the very survival of a free
The point, however, is that it is society, in tending to alter our
futile to be for freedom and capi- basic governmental structure, by
talism, and to be against the capi- substituting their pressures for
talists. the voluntary decisions of respon-
If we are to frustrate Khrush- sible governmental and private
chev’s hope of an American de- policy makers.
cline, those who merchandise
stocks to a wider following should Business Weakness
be recognized for their important The impact of such hidden ma-
social contribution. Those who nipulation by pressure groups is
widen the demand for securities not only to be observed on nation-
are accelerating what the late al, state, and local governmental
Thomas N. Carver, Harvard econo- levels but also in voluntary busi-
mist, once described as “the pres- ness affairs. Thus, during the psy-
ent economic revolution in the choses of the depression of the
United States.” Thus, the invest- nineteen thirties, minority groups
ment banker, the mutual fund dis- of small stockholders sometimes
tributor, the creator of common frightened chief executives by ask-
trusts, and other financial and cor- ing publicly what their salaries
porate executives provide the were, The implication was that no
mechanism by which adequate sav- one should earn more than a con-
ings can be channeled into the gressman. The president of one
productive machinery essential for company displayed lack of integ-

economic growth. rity by offering under fire to cut
Any insidious assault on the in- his salary.
stitutions which make it feasible Instead of folding up under

for free men to be self-disciplined demagoguery, a mature corporate
weakens our society. Thus there official would have shown that his
should be a defense mechanism of emoluments were an infinitesimal
strict standards against such or- fraction of total expenses. At the
ganized pressure groups as exploit same time sheer common sense
emotionalism and economic fallacy. points to the fact that the quality
The danger is all the more insidi- of management is the key to cor-
ous since these paper organiza- porate success or frustration.

tions invariably wrap themselves A conspicuous exception to the


===== PAGE 38 =====

36 THE FREEMAN January

trend at that time was the late willing to pay a price in reversals
George Washington Hill, president for adherence to sound principles.
of American Tobacco Company. In the profile of a great society in
When a dissident small stockholder the future, it is essential to ferret
group made a frontal attack on out an elite of dedicated public
Hill’s liberal salary and bonus plan servants who put principle above
for officers, Hill laid it right on passing popularity. The true lead-
the line. He defended his plan as er has sufficient integrity to reject
in the interest of the stockhold- the poisonous view that it is fool-
ers, and announced, in the spirit ish to buck the trend.

of a parliamentary Prime Minis- In these times, domestic dema-
ter, that unless the stockholders goguery — taking the easiest way
voted overwhelmingly for his pro- to win votes — has been paralleled
posal, he would construe the atti- by international demagoguery. In-
tude as showing ‘no confidence” stead of trying to stay in charac-
in the leadership, and he would ter and behave in accordance with
forthwith resign, The stockholders our traditions and ideals, in our
responded to courage, and Hill won neighborly relations with other na-

a decisive victory. tions, we have developed a new
cult of modifying our policies to
International Frustration conform to some abstraction

In times of crisis, it is folly to known as “world opinion’ and we
fall for seductive labels. Certainly have particularly slanted expres-
every dictator in history has at- sions to the impact on the “un-
tempted to justify his brand of committed nations.” It is time we
tyranny as social reform. Even the began to merchandise our true
brutal Soviet system seductively character and our authentic prin-
labels itself the “People’s Govern- ciples, instead of trying to be slick
ment,” though it has undertaken in appearing to be something dif-
to outlaw individual free choice. ferent from what we are.

The arch cynic, Huey Long, when If, internationally, we forsake
once asked whether we would ever principle and morality for popu-
have Fascism in this country, re- larity with newer nations, we face
plied in the affirmative, adding: frustration. A fraudulent facade
“Of course, it'll be described as a over the long run will be self-de-
movement to fight Fascism.” feating. Through the years, this

National greatness requires Republic will be judged by what
more than a high “Trendex’” rat- it is and what it stands for — not
ing. The authentic statesman is by unprincipled “image making.”


===== PAGE 39 =====

1962 WHEN REPUBLICS DECAY 37

The world, you may be sure, will Survival Qualities
say of this Republic: “What you Survival hinges on the vitality
are speaks so loudly, I cannot hear and creativity of the individual
what you say.” personality. This constructive ap-
We go downhill when we corrupt proach includes willingness in the
our virtues in order to oring them spirit of public service to buck de-
in line with other people’s miscon- bilitating pressures, no matter
ceptions. On the other hand, we how disguised in semantic sym-
can perpetuate national greatness bols of “peace and progress.” For-
if we care enough to preserve the ward motion depends on tenacious
reality of progressive human in- ability to see through ‘political
stitutions which give optimum blue sky” and misleading “labels.”
freedom of choice to the individ- It hangs on mature realism which
ual man. A constructive attitude can penetrate phony labels such as
should be expressed in everyday ‘People’s Republic” in Russia and
life in private as well as in public China, which are fronts for vi-

affairs. ciously reactionary police state
In business, this means a reluc- dictatorships.
tance to make short cuts by cyn- The American of the future

ically settling lawsuits against needs the vision to see through
racketeers, instead of showing the the essential backwardness in-
patience to castigate evil. In gov- volved in imposing governmental
ernmental affairs it signifies un- compulsion in areas hitherto re-
willingness to make appointments served for individual free choice.
except on merit and a refusal to The Republic will be strengthened
use public office as a device for when it becomes fashionable to
paying off personal and party implementbasicprinciples—rather
debts. than be satisfied with lip service.

Khrushchev’s vulgar threat, The dynamic citizen is unafraid
“We will bury you,” will remain in conserving the virtues, moral-
idle rhetoric unless we cooperate ity, and philosophic principles
from within through corruption, which make for continuing na-
indifference, and lack of intestinal tional greatness. The free man
fortitude. rates liberty at the highest prior-

It is morally debilitating to im- ity, and is unsympathetic to ten-
pair standards by such cynical at- dencies to put material security
titudes as “business is business” ahead of spiritual and intellectual
and “politics is politics.” independence. @®


===== PAGE 40 =====

What is “Freedom”?

J
J
/

W. E. SPRAGUE

DEFINITIONS of “freedom,” both as ~ In Orwell’s 1984, the minions of
a word and as an actuality, are al- Big Brother have seduced it thus:
ways a priority target for those “Freedom is slavery...” The citi-
who support any concept of The zens of Huxley's Brave New World
State Supreme. Any governmental are untroubled by concepts of
system that aims at controlling freedom since their wants and
the welfare or destiny of its citi- needs are uniform indeed — made
zens — contrary arguments not- so by state-controlled genetics.
withstanding — must logically as- And in the real world about us, as
sume that the needs, wants, and opposed to these fictional worlds,
desires of its citizens will be uni- the meaning of freedom seems no
form or can be made so. Freedom, longer clear to many, Whether by
therefore, either as a word or as accident of history or design of
an actuality, is a dangerous enemy statism’s adherents, or both, tra-
since it assumes differences among ditional ideas of liberty and free-
needs and wants, and further in- dom have run afoul of what might
volves some concept of individual well be termed the “Philosophy of
choice. Hence, freedom must either Determinism.”
be destroyed or suppressed, or its From one quarter, we are as-
meaning must be seduced to serve sailed by a growing cult of ‘“Sci-
the aims of the apostles of The entism” that holds all human be-
State. havior as being determined, as
Mr. Sprague is a free-lance writer with a though man were some sort of au-
background of some fifteen years in sales, tomaton swirled and buffeted by
credit, and insurance. He now specializes in

; ' rents streaming randomly about

living.’

38


===== PAGE 41 =====

1962 WHAT IS FREEDOM ? 39

him. To some, this idea seems re- a nebulous, spiritual term.” They
echoed from another quarter, psy- will not use it for fear of drown-
chology and psychiatry. Here the ing in deep metaphysical waters.
scene is even darker; we glimpse Yet freedom, if it is to have any
the soul lost within itself, the self meaning at all, not only does but
torn by endless conflict. In still must involve ideas of free choice;
other quarters, we are classed as it must be predicated upon what
“inner-directed,” as ‘“other-di- has long been called “free will.”
rected,” as victims of ‘hidden If free will is a myth, and with
persuaders,” as gravitating blind- it freedom — if man has no power
ly to symbols of prestige and of choice, no volitional controls,
status. Freedom, in this view, is then we are as the communists
a myth and a farce. Man's cry say we are, “fools resisting the
that he is free is a cry and noth- inevitable.” If freedom finds no
ing more. He is bound by count- link with fact through free will,
less shackles of determinism, all then the logic of “cradle to grave”
to the pleasure of the Marxist is inevitable and irrefutable, Let
who said all along that man’s des- us then open wide our arms and
tiny is materialistically deter- embrace the Almighty State.
mined, that the “classless society”
(by merit of the Super State) The Power To Choose
will ultimately be, no matter what, But freedom has a meaning.
and that man has no choice but to Man has the power to choose. And
work for that “inevitable future.” the “Philosophy of Determinism”
The Philosophy of Determin- is a philosophy of ignorance, born
ism, then, seems to stand in oppo- of both deliberate and unwitting
sition to “freedom’ because it ex- distortions of the valued things of
cludes the possibility of individual science.
choice. It will not, or cannot, hear Man has indeed free will, and
the voice that says: “Man is en- hence freedom has meaning —
dowed with free will.” And there when that free will, that power
is something ominous in the grow- to choose, is exercised. Let those
ing number of Americans who are who doubt or deny ask the scien-
embarrassed by that term, “free tists they distort. Man has the
will.” They will not use it, for as ability to observe, measure, test,
surely as they do, they will be evaluate, and select from among
challenged by some disciple of the alternatives that face him;
“determinism” to explain what this, essentially, is all that free
they could possibly mean “by such will simply means, or all that it


===== PAGE 42 =====

40 THE FREEMAN January

has ever meant. Insist, if you guised persuasion and follows
wish, that there is more to it status symbols (if he truly does
than that. Fine! But this is the at all) only as he fails to use his
basic meaning: when man ob- freedom. Man is free to learn from
serves, measures, tests, evaluates, his mistakes and from his tri-
and then selects, he is using his umphs; he is free to build a world
“free will’; he is fulfilling the upon this learning, if he will, and
meaning of freedom. build it freely through voluntary
Man’s freedom may be limited cooperation, free exchange of
in many ways; he cannot perhaps labor and ideas, and through bal-
do whatever he has a mind to. It ancing — not leveling — the differ-
may, indeed is, limited by his own ences in individual wants and
biology, his cultural heritage, and needs.
by the world about him. And those Above all else, man is not the
who argue that these limitations helpless victim of some imagined
are somehow a proof, that what- “inevitable verdict of history’; he
ever man chooses, his choice is, by is not destined irretrievably for
such limitations, still determined some State Supreme. His destiny,
for him, argue a reductio ad absur- personally and collectively, is in
dum; argue a point that is with- his hands, awaiting his decision.
out meaning, consequence, or sig- Let those who challenge freedom
nificance. They fail to see, or re- and free will be answered thus:
fuse to see, that the “determi- “I have free will. If you prefer
nants” of his choice are the very to call it something else, some-
observations, testings, measure- thing not quite so ‘spiritual and
ments, and evaluations that he nebulous,’ then call it ‘logic’ or
makes. ‘reason’ or simply ‘the power to
Man is free, and freedom thus choose.” Or if you prefer some-
has meaning, when he will use the thing with the sound of science,
power of choice that he possesses. try ‘evaluative selection’ or per-
He is not chained by the distorted haps ‘algebraic evaluation.’
views of “scientism’’; he is a soul “Call it anything you like; it’s
lost within itself and a self torn more than a word, it’s an actual-
by conflict only when he is unable ity. I have it, and so do you. And
or unwilling to awaken to his true when you use it, you know what
strength; he is a victim of dis- freedom is!” @®


===== PAGE 43 =====

TOQUEVILLE

AND THE BLAND LEVIATHAN

ROBERT SCHUETTINGER

ALEXIS DE TOCQUEVILLE was an statistician; he was interested in
aristocrat who was at the same something more than in what the
time the most perceptive critic and “scientific” historians called wie
the truest friend that democracy es gewesem (what actually hap-
ever had; he loved liberty, as he pened). What he wanted to do was
himself said, with “a holy pas- to understand why institutions
sion,” and his greatest fear was grew up and why events came
that in the new Age of the Com- about. Describing America he re-
mon Man the ideal of equality garded as much less important
would become the means by which than the task of analyzing democ-
freedom would be extinguished. racy.

His two books, Democracy in He read little and was indebted
America and The Old Regime and to few predecessors. Those few,
the French Revolution, earned for however, included Plato, Aristotle,
Tocqueville a lasting reputation and Burke, and these he mastered.
primarily because he did not think His limited reading was not due
that the historian’s role should be to any lack of bookishness but
confined to relating facts or that rather to a conscious desire to
the sociologist should be merely a think his own thoughts; because
mE of this resolve, his works are

1 Alexis de Tocqueville, Democracy in packed with original ideas. The
dmerse 1 ox. he Vintage Books, yeader of Tocqueville is forced to

proceed at a slow pace since he
Mr. Schuettinger is a graduate student under SOON notices that almost every

Prof. F. A. Hayek of the Committee on Social :

Thought at the University of Chicago. He is paragraph is the germ of another
associate editor of the New Individualist Re- book.

view (P.O. Box 4309, Chicago 80). This ar-

ticle has been slightly expanded from the origi- He has been called “the prophet
nal version first published in the Summer 1961 ’s
issue of that journal. of the mass age,” because he fore-

43


===== PAGE 44 =====

44 THE FREEMAN January

saw, in 1835, what were to become more to be desired than the first;
the two great movements of our as Justice Brandeis has remarked,
time: the increasing centralization ‘Experience should teach us to be
of government power and the ir- most on our guard to protect lib-
reversible trend toward equality. erty when the government’s pur-
The first movement he condemned poses are beneficent.”?

without any hesitation; the sec-
ond, he welcomed, with reserva-
tions. He knew that democracy, Tocqueville saw that the real
while inevitable, could come to threat to a democratic society in
any country in either one of two our age would not be what the
forms: a free variety or an unfree. Tories dreaded, anarchy, nor
By a free democracy, Tocqueville would it be the absolute dictator-
meant what we now call nine- ship feared by the Old Liberals;
teenth-century liberalism: a dem- rather, it would be the mild
ocratically elected government in tyranny of mediocrity, a standard-
which the rights of the individual ization of mind and spirit, a gray
are supreme and are safeguarded uniformity enforced by a central
by a constitution putting definite government in the name of ‘“hu-
limits on the power of the state. manity’”’ and “social justice.”
Unfree democracy, according to In setting out to understand the
Tocqueville, can again be divided present nature and future course
into two types. The first of these of democratic society, Tocqueville
is the totalitarian state which is was determined to be interested
based on the belief that one man in the truth and in nothing else.
(Fuehrer-prinzip) or group of History has confirmed so many of
men (dictatorship of the vanguard his predictions primarily because
of the proletariat) effectively rep- he divested himself of as many
resents the will of the people and of his prejudices as he possibly
is mandated by them to eliminate could. This strength of character
all opposition. The second type is has earned for him an almost
usually spoken of today as the unique reputation among political
Welfare State; it is what I have theorists for fairness and impar-
called in the title of this essay ~ 2 Justice Brandeis, in his dissenting
“the Bland Leviathan,” a despot- opinion in Olmatead v. United States
. . . went on to warn that “the greatest dan-
ism different from the first in that gers to liberty lurk in insidious encroach-
it is gentle and benevolent. This ment by men of zeal, well meaning but
does not mean, however, that the without understanding.” Quoted in F. A.

; . Hayek’s The Constitution of Liberty
second form of despotism is any (Chicago, 1960) p. 253.

Tyranny of Mediocrity


===== PAGE 45 =====

1962 TOCQUEVILLE AND THE BLAND LEVIATHAN 45

tiality. More often than any other and his more distant ancestors
commentator, before or since, he were included in the rolls of the
has been called ‘always just, al- Norman conquerors. He never
ways right.” used his title, however, and de-

Politically, he was a critic of termined to make a career for him-
both parties and a member of self as a lawyer and writer. In
none. ‘“Intellectually,” he once 1831, with his friend, Gustave de
wrote, “I have an inclination for Beaumont, he toured the United
democratic institutions, but I am States; upon his return he began

an aristocrat by instinct . . . I to write Democracy in America,
have a passionate love for liberty, the book which placed him second
law, and respect for rights ....I only to Montesquieu among

am neither of the revolutionary French political theorists. Shortly
party nor of the conservative. after its publication, he was
Nevertheless, when all is said, I elected to the presidency of the
hold more by the latter than the Academie des Sciences Morales and
former. For I differ from the Politiques. In 1839, he was elected
latter more as to means than as to the Chamber, serving as deputy
to end, while I differ from the from Valognes and, briefly, as for-
former both as to means and end.” eign minister for the Second Re-
Tocqueville could not be a revolu- public. His political career was
tionary because, as he once noted, terminated abruptly by Louis
their “spirit combines very well Napoleon's coup d’état in 1851;
with a love for absolute govern- after spending two days in a
ment”; nor could he ever feel en- make-shift jail, Tocqueville re-
tirely comfortable with Tories tired to his estate to write history
since time and again their “in- instead of making it. He died in
sane fear of socialism” would Cannes in 1859, his life cut short
“throw them into the arms of by a disease of the lungs.
despotism.” Clearly, as he himself In his history of the Old Re-
said, he was “a liberal of a new gime, Tocqueville applauded the
kind.” men who had overthrown the
tyranny of the Bourbons. In his
A Full Life own time, he ranked himself with
Tocqueville was born in 1805 at those who were dedicated to de-
a time when a people’s emperor stroying the power of privileged
ruled France; his grandfather, the groups still hostile to liberty and
Comte de Tocqueville, had been equality. He saw, however, that
imprisoned during the Revolution as the old goals of equality before


===== PAGE 46 =====

46 THE FREEMAN January

the law and equality of oppor- natural law, an ideal of justice
tunity were reached, more and against which all men’s actions
more men began to advocate the must be measured.
only possible means by which Tocqueville was not at all in-
equality could be further ex- terested in the outward forms that
tended: systematic regimentation state power assumed. As he once
directed by a centralized govern- remarked, “When I see that the
ment. These men, who wanted eco- . . . means of absolute command
nomic equality even at the expense are conferred on a people or a
of liberty, were the socialists. As king, upon an aristocracy or a
Tocqueville wrote, “They had democracy, a monarchy or a repub-
sought to be free in order to make lie, I recognize the germ of
themselves equal; but in propor- tyranny, and I journey onwards
tion as equality was more estab- towards a land of more hopeful in-
lished by the aid of freedom, free- stitutions.” What he was inter-
dom itself was thereby rendered ested in was freedom.
more difficult of attainment.”

By raising up the absolute sov- The Nature of Freedom
ereignty of the people to replace But how did Tocqueville charac-
the old divine right of kings, men terize the nature .of freedom? If
found that they had only ex- we are to distinguish between a
changed one master for another, genuinely free democracy and its
and erected a new despotism upon perversion, this is the crucial ques-
the ruins of the old. The idea that tion. In essence, he would have de-
right is simply what the majority fined freedom as the right to do
of the people want, Tocqueville what you want to do, limited by
dismissed “as the language of a natural obstacles but by no man-
slave.” In place of the notion that made restraints except the law
the supreme good is “the greatest that no man has a right to inter-
happiness for the greatest num- fere in another’s rights.
ber,””? Tocqueville believed in a Beyond this, however, Tocque-
"3 In disagreeing with the utilitarian. "111¢ }00ked upon the spiritual na-
ism of Bentham and J. S. Mill, Tocque- ture of freedom as much more im-
ville avoided the intellectual trap in portant than any of its material
communism did provide the most hap- long run, freedom brings pros-
pines for the most Jeosle, i would Je perity to those who know how to
See J. S. Mill, Principles of Political Keep it, but he admitted that there
Economy (New York, 1883) vol. I, p. 269. are times when it interferes with


===== PAGE 47 =====

1962 TOCQUEVILLE AND THE BLAND LEVIATHAN 47

material comfort; there are times, are really quarreling about is their
in fact, when despotism alone can opinion of their fellow men. The
insure wealth or even subsistence. more contempt men feel for those
He knew that there would be many around them, the greater will be
times in the future when the wide- their admiration for a strong cen-
spread craving for material well- tral government which will show
being, for “security,” would lead them how they ought to live.

men straight to servitude. In Tocqueville’s own time, as in
ours, there was never any short-
Liberty To Grow age of what Wilhelm Roepke calls

The chief value of liberty, he ‘the power-thirsty, cocksure, and
thought, was that it gave men the arrogant planners and organ-
opportunity to be what human izers.” In a speech to the 1848
beings ought to be. This is why Constituent Assembly, Tocque-
he wrote: “That which at all times ville pointed out the one charac-
has so strongly attached the affec- teristic which unites these social
tion of certain men is the attrac- engineers of all schools: “a pro-
tion of freedom herself, her na- found opposition to personal
tive charms independent of her liberty.” What the socialists
gifts . . . apart from all ‘practical wanted —a complete reorganiza-
considerations’. . . the pleasure of tion of society along “rational”
speaking, acting, and breathing lines —he saw could never be ac-
without restraint, under no master complished without instituting a
but God and the law. The man new system of serfdom.’

who asks of freedom anything Unlike most of his opponents on
other than itself is born to be a both the Left and the Right,
slave.”4 Tocqueville had a strong faith in

Tocqueville saw that no men, the democratic instincts of the
including confirmed tyrants, dis- majority of the people. Because he
puted the merits of freedom; in knew that nations accustomed to
the case of despots, however, they freedom would never voluntarily
wished to keep it for themselves, submit to totalitarian rule, Tocque-
on the theory that lesser men were —
unworthy of it. He was aware that 5 In using the word “serfdom,” Tocque-

ville was being precise. The British
the value of freedom per se has Labour Government, in 1947, passed an
never been at issue; what men Act giving itself the power to assign any
——— British worker to any job that it saw. fit

4 Alexis de Tocqueville, The Old Re- —for any length of time. See F. A, Hayek,
gime and the French Revolution. (New The Road to Serfdom (Chicago, Phoenix
York: Anchor Books, 1955), p. 169. Books, 1957), p. xiii,


===== PAGE 48 =====

48 THE FREEMAN January

ville was able to predict ac- ceived what many men of good
curately that “hot” socialism minds and liberal education have
would eventually be abandoned by difficulty in seeing even today. He
almost all serious Leftists in understood that the time would
Western Europe and the United come when a “new thing” which
States.’ He saw that democracies he could not name would have a
would instead be corrupted slowly power that is “absolute, minute,
and almost unnoticeably by ‘a regular, provident, and mild.” Its
servitude of a regular, quiet, and authority would be like that of a
gentle kind.” He foresaw further parent, he wrote, except that a
that this “new despotism” would parent prepares his children for
combine with some of the outward adulthood, while this power seeks,
forms of freedom? and that it on the contrary, to keep its
would establish itself under the charges in perpetual childhood.
guise of the sovereignty of the This government willingly labors

people. for the happiness of its subjects,
“but it chooses to be the sole agent
A True Prophet and only arbiter of that happi-

Three decades before the Wohl- ness; it provides for their secur-
fahrstaat of Bismarck and a full ity, foresees and supplies their
century before the Second New

Deal, Tocqueville correctly per- that they are socialists or authoritarians
—_— and, in most cases, they sincerely believe
6 Sce R. H, S. Crossman, Socialism and that their innovations would not seri-
the New Despotism. Fabian Tract Num- ously impair our freedoms. Prof. F, A.
ber 298, London, 1956. On page one of Hayek, in his latest book, The Constitu-
this pamphlet, one of the Labour Party's tion of Liberty (p. 269) explains, in one
leading intellectuals writes that “more succinct paragraph, what Tocqueville's
and more , . . people are having second prophecy has come to mean:
thoughts about what once seemed to them “We shall see that some of the aims
the obvious advantages of central plan-  ,f the welfare state,” he writes, “can be
ning and the extension of State owner-  reqglized without detriment to individual

ship.” He points out that ‘‘the discovery jperty, though not necessarily by the
that the Labour Government’s ‘Socialism’ | ,athods which seem the most obvious

meant the establishment of vast bureau- pnd are therefore the most popular; that
cratic corporations,” of “a vast central- thers can be similarly achieved to a
ized State bureaucracy [which] consti- great extent, though only at a cost much
tutes a grave potential threat to demoe-  gsreater than people imagine or would be
racy,” had made it apparent that “the willing to bear, or only slowly or gradu-

main task of socialists today is to con- ally as wealth increases; and that, fi-
vince the nation that its liberties are nally, there are others — and they are
threatened by this new feudalism.” those particularly dear to the hearts of

7 This point is of crucial importance, the socialists — that cannot be realized
for it is the distinctive characteristic of in a society that wants to preserve per-
the Welfare State; its proponents deny sonal freedom.”


===== PAGE 49 =====

1962 TOCQUEVILLE AND THE BLAND LEVIATHAN 49

necessities, facilitates their pleas- in fact, that the equalitarian op-
ures, manages their principal con- pression which was aimed at so-
cerns, directs their industry, ciety’s most independent thinkers
regulates the descent of property, would result in a general deaden-
and subdivides their inheritances: ing of civilization. “Man will
what remains but to spare them all waste his strength in bootless and
the care of thinking and all the solitary trifling,” he wrote, “and

trouble of living ?"’8 swing backwards and forwards
forever without getting fresh

Our Condition Foreseen ideas.”?
This then, as Tocqueville fore- Ironically, it is many of our best

saw it, is the approximate condi- and most creative minds that are
tion of society in the United States bringing us to a point where our
today. We live in the shadow of a medical profession, most of our
“Bland Leviathan,” an overpower- educational system, and the
ing influence predicated on the greater part of our scientists will
root assumption that the needs of be slowly absorbed under the all-
society, as determined by the plan- protecting power of the federal
ners, should take precedence over government. Beguiled as they are
the liberties of individuals. He by the humanitarian visions of the
saw that this leviathan was im- Welfare State, these men have for-
placably opposed to individuality gotten what, upon reflection, they
and free growth, to all the great must admit: that no man or group
moments of Western civilization, of men can hope to direct the crea-
and, indeed, to human nature it- tive energies of a nation without
self. The three necessities of a those energies being diverted into
higher civilization — progress, ex- the safe and traditional patterns
cellence, and freedom — have al- 80 congenial to administrators,
ways been its natural enemies. Be- Progress has been defined as
cause it is bland and because it that which the rules and regula-
lacks a definite purpose, it does not tions do not foresee. Admiral
attempt to kill these enemies out- Quoted in Russell Kirk's The Con-
ples, or slowly suffocates them. describes the modern bureaucrat’s fond-
Any limitation on freedom, ness for paperwork and for using words
tably restrict progress. He feared, accomplishments. Examples come readily
- te mind: “coordination,” “stability,”

8 Alexis de Tocqueville, Democracy in “continuing effort,” “the situation is
America. Vol, II, p, 336. under analysis,” etc.


===== PAGE 50 =====

50 THE FREEMAN January

Hyman Rickover, among many and productivity, it is not difficult
others, has recently borne witness to see where the road we are on
to the difficulties in any system will end.

where professional administrators Next to freedom itself, the rul-
are assigned to supervise intellec- ing passion of Tocqueville's life
tuals.’® The instincts of the two was a hostility to mediocrity in
groups are almost completely op- all its forms. He was certain that
posed. The creative man wants when the average, the norm, are
plenty of room and time to follow consistently held up as standards
his own hunches; he often harbors to be identified with, individuality

a disinterest in, or even a con- — and with it a free society — must
tempt for, the other “members of soon perish.
the team.” The bureaucrat is After progress and excellence

trained to shun innovations; he is have been relegated to the dust-
suspicious of reform; his life is bin of history, freedom will be the
dedicated to following precedents; last victim of the Welfare State

in his world there is no place for — as it makes the transition to a
initiative. totalitarian regime. As govern-

ment gets bigger and bigger, there
Smothered Equally is an increasing tendency for the

Just as no society based on the democratically elected legislature
principles of the Welfare State to delegate wider and wider
can encourage progress, neither powers to administrative agencies.
can it long endure the existence of These agencies are always super-
excellence — except as a strictly vised by nonelected officials who
private possession to be nurtured are practically independent of the
after hours or in retirement. It is President, the Congress, or the
becoming increasingly clear that courts.!! Lord Ewart, in his im-
in all but a few parts of the “pub- portant book, The New Despotism,
lic sector” and in large areas of cites as one example of this trend
the private, all talent above the the Rating and Valuation Act of
average is being quietly smothered "1 Numerous examples of the harass-
in the name of “equality’’ and “de- ment of private citizens by petty officials

mocracy.” Since above-average of che pera! agencies L1G, LAB,
ove . . . , etc.) are given in Lowe ason's
ability in the right places 18, of The Language of Dissent (New York,
course, a necessity for progress 1959). The author enunciates “Mason's
—_— Law” which holds that bureaucracy, out
10 Vice-Admiral Hyman G. Rickover, of view of the public eye, will arrogate
“Don't Hamstring the Talented,” Satur- to itself all power available under a stat-
day Evening Post, February 13, 1960. ute, despite constitutional limitations.


===== PAGE 51 =====

1962 TOCQUEVILLE AND THE BLAND LEVIATHAN 51

1925 in which it is provided that that free institutions could not be
.. . “[the Minister] may modify preserved except on a basis of
the provisions of this Act so far equality. “Far from finding fault
as may appear to the Minister with equality because it inspires
necessary or expedient for car- a spirit of independence,” he
rying [his orders] into effect”? wrote, “I praise it primarily for
The planners, it has been said, that very reason.” By making all
start by wanting to control things, men conscious of their rights, he
but they end by controlling people. thought, “equality would prepare
Evidence such as this, which the remedy for the ills which it
points to the inherent dangers in engenders.”
an expanding government, has, by Tocqueville clearly showed the
1961, become overwhelming. De- way in which modern society
spite all these examples, however, could, if it chooses, escape from
we are still being solemnly as- ‘the new despotism.” A proper
sured by people who will insist concept of equality is the first
that they are democrats, that we necessity; everywhere we must
should not be afraid of state strengthen the position of private
power. After all, they will say, we individuals —at all levels of so-
ourselves are the government. Ex- ciety —in their own rights and
cept for a few minor cases, this property. Almost as important, we
platitude was never true, and in must strengthen those intermedi-
this century, there is far less basis ate powers which stand between
for the idea than there ever was. the government and ourselves, that
is, our churches, labor unions,
Encourage Individuality newspapers, political parties, busi-
The proper solution to the prob- ness organizations, fraternal or-
lems posed by democracy, accord- ders, and so on. It is difficult, in
ing to Tocqueville, was not a re- a mass society, for one person to
version to aristocracy, but rather make himself heard, but it can be
a renewed determination to har- done if he uses the amplifier pro-
ness the many virtues of the dem- vided by his like-minded associ-
ocratic process in order to insure ates. Following the same princi-
that the rights of individuals ple, we must maintain all the pe-
would not be sacrificed to the de- culiar rights and duties of each of
mands of the state, He believed our independent governing bodies:
- the courts, Congress, the Presi-
12 Lord Ewart, The New Despotism dency, the states, and the local
(London, 1929), p. 10. administrations. At the same time


===== PAGE 52 =====

52 THE FREEMAN January

we must be alert to promptly limit lem, as on many others, he ex-
any or all of these bodies when pressed what needed to be said
they exceed their authorized when he wrote:

powers, It would seem as if the rulers

We must also beware of slogans of our time sought only to use
such as “national interest” or ‘“na- men to make things great; I
tional purpose.” The words ‘“na- wish that they would try a little
tional interest,” especially in a more to make great men; that
time of war or emergency, often they would set less value on the
do mean something, but just as work and more on the workman ;
often they serve merely as a con- that they would never forget
venient device for justifying au- that a nation cannot long re-
thoritarianism. The notion behind main strong when every man be-
the idea of a national purpose, of longing to it is individually
course, is a dangerous one. It is weak; and that no form or com-
based on the assumption that there bination of social policy has yet
is a collective interest which is been devised to make an ener-
separate and different from the in- getic people out of a community
terests of all the people who of pusillanimous and enfeebled
compose the society. In this coun- citizens.!s

try, until recently, we have always
had individual hopes, ambitions,
purposes; we have left the “na-
tional purposes” to the totalitarian
states with their stadiums full of
troops and flags,

As we have seen, no man better
understood this conflict between _ _
the individual and the collective 13 Alexis de Tocqueville, Democracy in
than did Tocqueville. On this prob- America. Vol. II, p. 347.

This is not an ideal to appeal
to many politicians — who love
power — but it should appeal to all
those who love the ideas that
Tocqueville worked so hard to pre-
serve: progress, excellence, and
freedom. @®

| IDEAS @M LIBERTY The Greatest Boon of All

THE PROFIT SYSTEM is the only one compatible with our political,
moral and economic traditions. Only under the profit system has
man attained those ends by which we set so much store: in-
dependence, ownership of property, savings, a sense of respon-
sibility, a rational planning of one’s own life, and, that greatest
boon of all, the freedom of choice and the courage to make it.

ROGER M. sLoucl, Chairman of the Board,
United States Steel Corporation


===== PAGE 53 =====

CHARLES H. MALIK

THE WORLD has become physically world get physically closer to-
one, as a result of fast transporta- gether, namely, the more they see
tion and instantaneous communi- and rub shoulders with and know
cation. On the other hand, here one another, the more they tena-
are these one hundred nations of ciously hold to and consciously be-
which the United Nations is com- come jealous and proud of their
posed: they display so many sov- distinctive cultural heritages.

ereignties, a dozen religions, a The mind then is bewildered: it
score of cultures, hundreds of wants unity —that is indeed its
languages, a score of social orders, innate tendency — but it finds only
many different forms of govern- physical unity, the most super-
ment, and a dozen or more stages ficial and the most external of all
of economic development. Despite unities. This silly unity (that we
the fact that the world has been are all now physically neighbors of
physically brought closer together, one another, that we inhabit the
it is obvious that in these several same planet, etc.) does not satisfy
realms there is no unity about the it — and no wonder. Goaded by its
world at all. In fact, the more the unabating quest for unity, the
diverse peoples and cultures of the mind then hits on the next best
Tllustration: A. Devaney, Inc., N. Y. thing: all these human beings are,

53


===== PAGE 54 =====

54 THE FREEMAN January

after all, animals; they all need here is a materialist brotherhood;
food, clothing, and shelter, and a in this all-embracing sea of mat-
minimum standard of material ex- ter all men — and therefore he, the
istence; here then is an obvious timid or lonely or frightened or
principle of unity — man is an eco- rebellious one — can safely swim
nomic animal, without discrimination and with-
In this way the whole of human- out scandal or offense. Any other
ity is neatly leveled down onto principle of unity will either leave
this one single plane — the plane of him out or leave large segments
the levels of economic develop- of humanity out (and, as a ‘hu-
ment. Everything else is viewed as manitarian,” he wants to include
derivative from and dependent on everybody, the whole of the “hu-
this. Culture is a function of the man race”) or bring upon his
economy, religion is a function of head the persecution of the world.
the economy, morality is a func- Nothing then is safer, more equal-
tion of the economy, the system of izing, more comfortable, and more
government is a function of the “needed,” than the seamless sea of
economy, etc. And when the think- matter. As fish in this sea we are
er or statesman who is thus en- all “brothers.”
gaged in this unifying or simpli-
fying or leveling-down process What Is Materialism?
happens also to be one who does Philosophically, precisely what
not have fundamental convictions is materialism? Materialism is not
of his own, or who had them once just a belief in the existence of
but has “outgrown” them since, or matter, namely, of something ac-
who has them but is ashamed of cessible to our senses; in this
confessing them, or who has them sense, everybody, including the
but is afraid that they prove too most outspoken idealists, is a ma-
“divisive,” or who dreads being terialist. Nor is it just the doc-
“persecuted” on account of them, trine that there is a substratum,
or who belongs to a racial or re- whether or not we sense it, and
ligious or some other kind of mi- whether or not in every case it is
nority, then he clings all the more the same kind of substratum, out
firmly to this wholesale materiali- of which everything is composed
zation of man as his ark of salva- — say, the hard, round balls, the
tion. atoms, of the classical atomic
At last a principle has been theory, or the “probability waves”
found which will equalize all men of the recent versions of that
and he will not have to stand out; theory; again, in the sense that


===== PAGE 55 =====

1962 THE WEB OF MATERIALISM 55

everything is composed of some principles are denied an absolutely
kind of substratum, everybody, in- original potency — that is material-
cluding the saints and the theolo- ism. When nothing that is fixed
gians, is a materialist, for God, and firm and given and complete
under any theory, has some sub- and perfect and full of being is al-
stratum. Nor is it just the belief lowed, when everything is dis-
that man cannot exist without food solved into the fluency and flux of
and drink and air, and this body elements and things — that is ma-
which is composed of flesh and terialism. When man is inter-
blood and bones, and a general ma- preted as made up only of insati-
terial solid support, say the earth, able and uncontrollable desire —
on which he can lean; again, in that is materialism. When quality
this sense, everybody, including is overwhelmed by sheer quantity

the most radical ascetics, such as — that is materialism. When, sur-
the hermits of the desert, is a ma- veying the majestic orderly evolu-
terialist, tion of the past, the mind derives,

Materialism rather is the denial as by magic, the higher integrally
that there is a higher and a lower from the lower, the more perfect
in existence and that the higher integrally from the less perfect,
is completely independent of the the more advanced integrally from
lower and can never be reduced to the more primitive, the different
it. The precise metaphysical for- integrally from the same — that is
mulation and refutation of this materialism. When the whole of
doctrine, including a survey of its human life is viewed as inherent-
historical development, is outside ly without rest, without repose,
the scope of this lecture. But when without peace, without grace,
the whole — any whole — is looked without fullness of satisfaction —
upon as only the sum total of its that is materialism.
parts — that is materialism. When
the highest and most distinctive Seed Bed for Communism
in man — his mind, his spirit, the Now as these things constitute
fact that he can be touched and the very warp and woof of modern
transformed by something that is civilization, is it any wonder that
holy and divine — when all this materialistic communism, with its
wonderful side of man is reduced, exaltation of human desire, with
as an epiphenomenon and without its derivation of all ideas and all
any remainder, to his bodily func- norms and all valuations from the
tionings — that is materialism. sheer economic struggle, with its
When mind, spirit, truth, ideas, interpretation of history as the


===== PAGE 56 =====

56 THE FREEMAN January

product only of conflicting class in this spiritual climate of modern
interests, interests that can never civilization a perfect soil for its
be reconciled except through vio- development? ®
lence and the destruction of one
class by another, with its inciting

of all that is primitive and ele- Dr. Malik is University Professor, The

. American University, Washington, D.C.

mental and unformed to rise up He also has been Frosident of he

: . eneral Assembly of the United Na-

against all that is more perfect, tions and was Ambassador of Lebanon

: to the United States.

more developed, more sure of it- \ Tho above article in an excerpt from

1 3 1 3 is address, “The Individual in Modern

self, with its doctrine that in the Society,” delivered at the second Cor-

end there is nothing, nothing, ning Conference, May 18, 1961. Copies

. . . of the full address in booklet form may

nothing, save atoms in motion — be obtained by writing The Director,

PE Corning Glass Works Foundation, Cor-
is it any wonder, I say, that ma- ning, New York.

terialistic communism has found

TELEPHONIC CENTRALIZATION

IT HAS ADMITTEDLY taken a long the state’s abuse of control of
time for the state to swallow up telephone communications; the
all the private companies in Nor- telephone queue has remained the
way, but we are nearing the end of same for 10 years. The latest fig-
the road. There are only three pri- ures show 44,000 on the waiting
vate exchanges and a handful of list, but the list is really longer:
private city phones left. Of 738,000 people have given up trying. In
telephones in the whole country, the “Plans for Development” the
only 35,000, or 5 per cent, are now situation is described as follows:
private. “A number of applicants for the
We are beginning to note the Oslo Exchange have unfortunately
consequences. In the Depart- been onthe waiting list for a very
ment’s plan for future develop- long time. Of those on the list on
ment, one can read in detail about December 31, 1960, 837 are appli-
—_— cants from 1952 or earlier.”
This article has been translated and condensed “Earlier”! That is as far back as

from the Norwegian weekly, Farmand, pub- . .
lished and edited by Dr. Trygve J. B. Hofl. 1940! In other words, in the nine-


===== PAGE 57 =====

1962 THE WEB OF MATERIALISM 57

teenth century it took only three planned tempo will not satisfy
years from the first patenting of needs within our generation, even
the telephone in the United States if it is kept up. The Telegraph
to the opening of the first private Works consoles itself by saying
telephone exchange in Norway. that we are only 14 years behind
But under the Labour Party gov- Sweden. This optimistic viewpoint
ernment, 80 years later, people comes from a complete misinter-
are on the waiting list for 10 to pretation of its own statistics.

20 years without getting a tele- It is true that Sweden’s tele-
phone at all; and tens of thousands phone density 14 years ago had
of others cannot even be bothered reached the same level as Nor-
applying, because they know it is way’s today; but in the interven-
no use. ing years Sweden has provided

In the meantime, the govern- slightly over one new telephone
ment is not lacking in plans. In per 100 inhabitants, against .6
the years 1958-61, 34,000 new here. If we proceed at the present
phones were to be put into opera- rate, it will take us another 25
tion in the Oslo area. We know years —in 1985-86; such a goal
now that the number will fall will obviously be made out-of-date
short by 19,000. by further development.

The “plan” for the whole country This scandalous situation in
was to increase the quota for new Norway is a classic example of the
phones from 20,000 a year to 30,- results of state control. Under
000. Instead, the government will genuinely private enterprise, a
now “postpone” its good inten- phone would be available at a day's
tions to the next Four Year Plan, notice.
in the period 1962-65. The theory The fault, without doubt, lies in
is that if the plans are successful, the so-called “planned economy.”
the waiting list would then be The government has no objection
reduced by 7,500 per year. to increased incomes; but it is

But all this does not amount to determined to control what peo-
much. Theoretically, one should ple spend their money on. When
get rid of the waiting queue in 6 people ask for telephones, the
years. But the telephone density state replies that they must spend
is barely 20 per 100 inhabitants their money on something else. It
in Norway, as against 35 in Swe- is all tied up in the socialists’ de-
den; and Norway needs 500,000 sire to direct consumption, along
new phones to catch up with Swe- lines determined by the bureauc-
den. So it is obvious that the racy at the top. @®


===== PAGE 58 =====

A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN

urean ||

IT WAS CONSIDERED a great tragedy Lorin Peterson’s The Day of the
when the center of England’s Cov- Mugwump (Random House, $6.00)
entry was bombed out by the Nazi doesn’t mind very much when area
luftwaffe in the early days of “planners” who have no stake in
World War II. But when the center the ownership of a region gain an
of New Haven, Connecticut, which opportunity to remake its con-
happens to be the small metropolis tours. The Mumford-Peterson ar-
of the area in which I live, is demol- gument is that the “planner,” un-
ished by federal grants from impeded by fractious individuals,
Washington, it is considered a tri- may endow a new city center with
umph for “planning” even when esthetic harmony. He may also for-
the void refuses to be refilled. get crass considerations of profit-
Having looked at Coventry in ability. But this is to assume that
1946 and New Haven in 1961, I re- the planner has some decent es-
main quite unable to grasp the dis- thetic standards in the first place.
tinction between war and political- It also assumes that the test of
ly directed “urban renewal” in profitability is wrong, which is not
their physical effects on the city. necessarily true.
In either case useful buildings are The late Mayor La Guardia of
demolished along with some which New York once said that “When I
have undoubtedly seen their best make a mistake, it’s a beaut.” When
days. In either case the possibility politically empowered city planners
of voluntary renewal on the human make mistakes, they beat La Guar-
scale that results from spontaneity dia all hollow. Just why this should
and meaningful individual or small be so is the concern of Jane Jacobs’
group calculation is rudely set remarkable attack on the conven-
aside. tional city planning, The Death and
The school of thought that is Life of Great American Cities
represented by Lewis Mumford’s (Random House, $5.95). Mrs. Ja-
The City in History (Harcourt, cobs, who lives in the Greenwich
Brace and World, $11.50) and by Village section of New York, likes

58


===== PAGE 59 =====

1962 URBAN UTOPIANISM 59

big city life, for it gives her the There must be markets for many
benefit of other people’s diversity talents. There must be room for
and it allows her to live for her- many recreations. Moreover, the
self and her family without being markets and the opportunities for
subjected to prying eyes. recreation must be close together.
The economics of the situation de-
The Reasons for a City mands a mingling of new and old
Knowing what a big city is for, buildings for the obvious reason
Mrs. Jacobs has devoted her book that there are many desirable ca-
to isolating the sources of diver- reers which are only compatible
sity and privacy. It is her convic- with cheap rents. The impecuni-
tion that a city, to be vital, must be ous artist looking for a good north
the sum of thousands of individ- light may need an abandoned loft
ual and small-group plans and at a low price. The maker of keys
that, as such, it cannot in itself be will need a hole-in-the-wall, as will
a work of art—i.e., a conscious the seller of sheet music or old
selection from life by a single or- prints. Such people must for ob-
ganizing intelligence. If and when vious economic reasons be ex-
a city achieves beauty (which is cluded from the planned ‘rede-
sometimes the case), it is because velopment” —and when they are
the standards of taste of its pushed away, one big reason for
dwellers are individually high. preferring city life to suburban
The eighteenth century town that or village life simply evaporates.
looks so neat (see Williamsburg
in Virginia, or any New Hamp- Projects and Problems
shire village) resulted from a Mrs. Jacobs dislikes “project”
shared consciousness of style, not building for many reasons. As a
from architectural fiat. Even cities true democrat (small “d”) she re-
whose sites were planned (as in sents the fact that “newness,” im-
Washington, D. C.) have not been posed by the planner’s ruthless
able to escape the necessity for impartiality, requires extreme in-
spontaneity on the part of the in- come-grouping. Like is herded to-
habitants. Where spontaneity has gether with like. A “development”
resulted in ordered beauty, it is must be financed according to
because of consensus in taste, across-the-board standards: one
which is something different from must be able to “pay the freight”
“planning.” to live or work in a “planned”
Diversity is necessary to a city area. True, the freight can be sub-
for a thousand-and-one reasons. sidized, or partially subsidized.


===== PAGE 60 =====

60 THE FREEMAN January

But when low-income housing is tends that the uses of the open
donated to people by political Mer- space in a city must be under-
lins, the “development” is prompt- stood. When an open space is di-
ly filled up by the hopeless and the vorced from overlapping uses, it
apathetic — by people, in short, quickly becomes a source of evil.
who have no “plans” of their own. The worst gang rumbles in New
They promptly proceed, by their York take place in parks that have
attitudes, to turn the low-income gone “dead.” A park, to be safe
development into a slum that has and useful, must be part of a re-
all the disadvantages of the old gion that remains active almost
slum and none of the possibilities around the clock. When people are
for random renewal at a few appearing on the streets at all
points that might create a conta- times, there is self-policing. But
gion for a wider upgrading. when everybody deserts the streets
One big trouble with the impar- at once to go inside (as happens
tial imposition of “newness” on in a “developed” area save during
any large area of a city is that it rush hours in the morning and the
insures a uniform rate of decay. late afternoon), there will be
The fashionable development of deadness wherever there is an iso-
today is the frowsy lower middle lated stretch of green. In conse-
class haven of tomorrow. And, in- quence, those who try to cross a
evitably, it is the slum of the day- green belt or to enjoy a big park
after-tomorrow. On the other at night will be easy prey for the
hand, a region that consists of a footpad or the degenerate.
mingling of the new and the old
will make for individual challenge Pittsburgh in a Hurry
at all times. In the Rittenhouse In The Day of the Mugwump
Square region of Philadelphia, or Mr. Lorin Peterson praises what
the Washington Square region of city planners, sparked by political
New York, the older buildings are mugwumps, have been able to do
either reconditioned or weeded for downtown Pittsburgh, for ex-
out as the inhabitants and owners ample. But downtown Pittsburgh
strive to keep pace with the best was “saved” largely because Rich-
that is around them, ard K. Mellon had the money to
The conventional “planner” has carry through big-scale change
a passion for open spaces that without begging from Washing-
runs to mania. For her part, Mrs. ton. Even so, Mrs. Jacobs thinks
Jacobs is not against parks or the remade Pittsburgh has its
strips of greenery, but she con- drawbacks.


===== PAGE 61 =====

1962 URBAN UTOPIANISM 61

For example, the Pittsburgh Rockefeller Center, without polit-
Parking Authority’s downtown ga- ical compulsion or reliance on
rages are operating only at 10 to the official planning mind.

20 per cent of capacity at eight in In her introduction Mrs. Jacobs
the evening. But three miles from notes her dissent from the plan-
downtown, in the Oakland sec- ning ideas that are uppermost in
tion which contains the Pittsburgh Lewis Mumford’s gigantic The
symphony, the civic light opera, City in History. The dissent is
the little-theatre group, the most well taken, for Mr. Mumford,
fashionable restaurant, two ma- though he is a man of generous
jor clubs, and the Pittsburgh Ath- emotions, has never succeeded in
letic Association, the parking analyzing state power for what
problem at night is terrific. Good it is, a killer of spontaneity in
“planning,” so Mrs. Jacobs im- the citizen. Nevertheless, Mr.
plies, would have distributed the Mumford’s huge book has many
functions of the Oakland and the virtues as well as a few tran-
downtown Golden Triangle sec- scendent defects. Taken purely as
tions of Pittsburgh in a different a chronological unfolding of its
pattern, providing for overlapping subject, The City in History is
use as between night and day. masterly. Its shortcomings derive

But even with Mr. Mellon’s from Mr. Mumford’s feeling that
money could there have been the city should be a “work of art”
“good” planning in such a cata- in the true sense —i.e., it should
clysmic burst? On Mrs. Jacobs’ be a selection from life shaped
own showing, the official planning and imposed by a master mind.
mind is a “witless” murderer of
diversity; it proceeds “by deliber- But, to return to Mrs. Jacobs, a
ate policies” to sort out “leisure city is not a canvas, to be filled by
uses from work uses, under the a Renoir; it is a collection of peo-
misapprehension that this is or- ple who have their own individual
derly city planning.” Mr. Mellon canvases to fill. In applying the
might have done better for Pitts- artist's test to city planning as a
burgh if he had made haste more whole, Mr. Mumford is an unwit-
slowly, without depending too ting advocate of political tyranny.
greatly on political alliances. The Mrs. Jacobs is quite correct in
most tasteful —and diversified — preferring “chaos” to the central
planning on New York's Man- planning that does not allow for
hattan Island, for example, has the spontaneous eruptions of men
been done by the Rockefellers at with plans of their own. @®


===== PAGE 62 =====

62 THE FREEMAN January

) FREEDOM AND THE LAW by Oliver Twist, for example, referred
Bruno Leoni. Princeton: D. Van to the law as an “ass” and an
Nostrand Co., Inc. 204 pp. $6.00. “idiot.” Frederic Bastiat, a con-

temporary of Dickens, saw that

the law oftentimes descended into

EVER SINCE the Pharaohs of Egypt what he called “legalized plunder.”

and the theocracies of the Greek H. L. Mencken, the caustic soda of

city-states, Everyman has had a the twentieth century, was out-
pronounced tendency to view the gpokenly unawed by the law, law-
law as a mystique, a magnificent yers, or lawmakers. Scholars of
fount of splendor and power and the mark of a Friedrich Hayek and
justice and wisdom, practically a a Roscoe Pound, sccking the re-
divine spark —as is seen in the institution of the Rule of Law,
theory of the divine right of kings have called attention to the dan-
and the deistic charisma of Der gers in the rise of administrative

Fiihrer, Il Duce, and “Comrades” law. And now comes another hard

Lenin, Stalin, and Khrushchev. look at the law by the eminent
The aura of greatness surround- scholar, Bruno Leoni, Professor of

ing the law — and certainly the Legal Theory and the Theory of

respect for it — have doubtlessly the State at the University of
been enhanced by the implementa- Pavia, Italy, and European Sec-
tion techniques of law, techniques retary of the Mont Pelerin So-
imbued with persuasiveness —the ciety. Freedom and the Law is an
armed sheriff, the constabulary, outgrowth of a series of lectures
the black-robed and sometimes be- delivered by Professor Leoni at
wigged judges, the jail, the des- the Fifth Institute on Freedom
tructive might of armed forces and Competitive Enterprise at
from the age of the battering ram Claremont Men’s College, Califor-

to the age of the nuclear war head. nia, in June of 1958.

And whenever this power is in- Professor Leoni sees the bloated

voked, the law is invoked, much in lawbooks as a threat to individual

the way that two opposing armies freedom, He sees the proliferation
enter a battle after invoking the of the law into virtually every
help of the same God. At any rate, field of human endeavor as an in-
legal might is sometimes mistaken vasion of human freedom. Inflated
for legal right, Who is not awed legislation and voluminous admini-
by the “majesty of law’? strative rulings, he argues, are

But not all men have been over- overriding common law, custom,
awed. Mr. Bumble in Dickens’ convention, the tacit rules of so-

Reviewed by William H. Peterson


===== PAGE 63 =====

1962 OTHER BOOKS 63

ciety, private arbitration, and the created by the Sixteenth Amend-
spontaneous adjustments of indi- ment. And the income tax is but
viduals and groups. The area of one phase of modern law: One has
individual choice is being nar- only to dwell on the fact that Con-
rowed; the area of legalized coer- gress in a typical session passes
cion expanded. not dozens, not scores, but liter-
The law, in other words, has ally hundreds of laws to realize
been perverted into a weapon in that through the multiplication of
the hands of victorious parties and statutes the state is expanding
interests, a weapon of the majority and the individual shrinking.
against the minority, and of a That this inflation of legisla-
coalition of minorities against the tion is producing not order but
majority. It has become a manip- chaos is the conclusion of Profes-
ulative pawn in the parliamentary sor Leoni. To document his case he
maneuvers of logrolling and vote calls as expert witnesses such
trading. It has departed from the legal authorities, living and dead,
Golden Rule of doing unto others as Coke, Dicey, Montesquieu, and
what you would have others do the afore-mentioned Roscoe
unto you, and the consequence is Pound, and such economic author-
what Mises calls omnipotent gov- ities, past and present, as Pareto,
ernment, The law now undertakes Marshall, Kelf-Cohen, and the
all sorts of unprincipled schemata, afore-mentioned Ludwig von
progressive income taxation, “land Mises. He marshals historical evi-
reform,” managed currency, and dence from the Greek, Roman,
economic planning. The law now English, Continental, and Ameri-
offers special privileges and dis- can legal systems, correlating the
pensations to unions, veterans, laws of different nations and dif-
farmers, underdeveloped peoples, ferent times as movements toward
and other selected minorities and or away from freedom.
pressure groups — the idea of one For example, he spots the connec-
law common to all being passé. tion between the Norris-LaGuar-
So bad law, in the Leonian dia Act of 1932 in America and its
sense, feeds on itself and grows counterpart in England, the Trade
and grows and grows. One only Union Act of 1906. Both laws re-
has to look at the yards of case- strict the power of the courts to
books and other necessary mate- issue injunctions against unions
rials lining the shelves in the of- in labor disputes. The extension
fices of tax attorneys and account- of this privilege broke with the
ants to realize the legalistic maze important legal theory of “equal-


===== PAGE 64 =====

64 THE FREEMAN January

ity before the law.” To this ex- public schools an alternate choice
tent the law injected a degree of for the education of their children
chaos into the labor relations of — and almost three quarters of a
Britain and America. In sum, million American parents so
what the world needs is not more choose today.
law but less law, more quality and Freedom to select the children
less quantity. Everyman should most likely to respond to its pro-
praise his legislators, not for the gram, opportunity to choose its
laws they pass but for the laws faculty with regard to competence
they repeal. rather than state regulation, and
This book is an important con- small classes with individual at-
tribution of the literature on hu- tention are only a few of the ad-
man freedom. It merits the atten- vantages offered by a private
tion of all those concerned with school.
the proper relationship of men to If interest leads you and your
the State. As Bruno Leoni puts it: friends to think about starting a
“My earnest suggestion is that school, A Handbook for Independ-
those who value individual free- ent School Operation edited by
dom should reassess the place of William Johnson will get you off
the individual within the legal to a good start. Leaders in private
system as a whole.” @® and independent school work have
written pertinent sections on ad-
Pp A HANDBOOK FOR INDE- ministration, curriculum, faculty,
PENDENT SCHOOL OPERA- business management, public rela-
TION edited by William Johnson. tions, financing, and related topics.
Princeton: D. Van Nostrand Com- Successful procedures and mini-
pany, Inc. $5.85. mum standards necessary for a
Reviewed by Frank B. Keith superior educational environment

Co are carefully outlined by the au-
MosT PEOPLE have a definite idea {yrs This book is a valuable

about how children should be edu-  g,ide and an excellent source of
cated. Private schools offer j formation. ®
parents who disagree with the

10d " Mr. Keith teaches at Keith Country Day
policies and procedures of the gi “Rockford. Tiinois.

For a complete list of FEE's available publications,
write for catalogue — A LITERATURE OF FREEDOM.

THE FOUNDATION FOR ECONOMIC EDUCATION, INC.,
IRVINGTON-ON-HUDSON, NEW YORK


===== PAGE 65 =====

ESSAYS “1 _-
ON LIBERTY +

VOLUME VIII, just published (448 pp., indexed),

contains selected writings from THE FREEMAN and

NOTES FROM FEE, from June 1960 through June 1961.

Cloth, $3.00 Paper, $2.00

Ho Sot — all 8 volumes Cloth, $19.90

Paper, $13.00

Consider these volumes, either singly or in the set, as
gifts to friends or for your own library.

ORDER FROM;

THE FOUNDATION FOR ECONOMIC EDUCATION, Inc.

Irvington-on-Hudson, New York



===== PAGE 66 =====

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