===== PAGE 1 ===== IDEAS ON LIBERTY SEPTEMBER 1962 Defining Freedom . . . . . . . . Edmund A. Opitz 3 The OldRegime . . . . . . . . . SamuelB. Pettengill 7 A Healthy Skepticism . . . . . . . Paull. Poirot 13 Individual Liberty in the Crucible of History 5. The Road to Collectivism . . . . Clarence B. Carson 17 Can Opera Be Grand if Socialized? . . . Leonard E. Read 31 Getting the Country Moving . . . . . H.P.B. Jenkins 37 The Spiritual Strength of the American System. . . . . . . . Herrell DeGraff 38 Government by Credit Card . . . . . Maurice H. Stans 49 Friend Battles Friend . . . . . . . the Ingersolletter 52 No Special Favors . . . . . . . . Martin Van Buren 54 Books: Rich Nations and the Poor. . . . . . John Chamberlain 56 Other Books . . . . . . . . . . 60 THE FOUNDATION FOR ECONOMIC EDUCATION, INC, Irvington-on-Hudson, New York ===== PAGE 2 ===== OUTSTANDING ADVANTAGES FOR SAVERS | | COAST FEDERAL SAVINGS JOIN the more than 100,000 savers who hold individual, joint, trust, or corporation savings accounts at Coast Federal and get these | important advantages: : SAFETY —Assets over half a billion dollars—third largest associa- tion in the U.S. Strong reserves and high ratio of cash and govern- lg ment bonds to assure withdrawal of savings immediately on request. | HIGHEST EARNINGS consistent with safety. Accounts opened by the 10th of the month earn from the first. | SAVE-BY-MAIL CONVENIENCE — Airmail | postage paid both ways. Prompt, efficient ! service on all transactions. | MEMBER — Federal Savings and Loan Insur- | ance Corporation, Federal Home Loan Bank. B Bp Pred 7 a LL _— — | COAST FEDERAL SAVINGS JOE CRAIL, PRESIDENT Coast Faderal Savings, Department ""H"’ 9th & Hill Los Angeles 14, Calif. (Please check-mark as desired.) 1. OJ I enclose [] check, [J money order, to open a 2. J Please send Information savings account In the following name or names: on Coast Federal Savings and Loan Assoclation. Name Address City. Zono Stato ===== PAGE 3 ===== BEPRINTS OF RECENT ARTICLES The following articles from recent issues of THE FREEMAN are available as reprints: Date of Issue Author Title Price per copy 1961 January MORLEY CASSIDY it Isn't Insurance 2¢ " BENJAMIN A. ROGGE Who's to Blame? 2¢ February LEONARD E. READ The Measure of Virtue 1¢ " KENNETH W. SOLLITT Four Foundations of Freedom 5¢ " JOHN C. SPARKS Your Turn at Bat 1¢ March LEONARD E. READ Conscience of the Majority 10¢ April WILLIS H. HALL “I'm for Free Enterprise — But!” 1¢ September JOE HOCHDERFFER The Case for Saying No 2¢ " LEONARD E. READ Miracle of the Market 10¢ October JOHN C. SPARKS The Urban Renewal Fallacy 10¢ November RICHARD S. EMRICH Men Are Not Naturally Good 1¢ " W. A. PATON The Tale of the Little Red Hen 1¢ 1962 January LUDWIG VON MISES The Elite Under Capitalism 10¢ February LEONARD E. READ Violence as a Way of Life 10¢ March CECIL V. GROVE A Short History of Inflation 2¢ ” J. G. McDANIEL, M.D. Whose Bread | Eat 2¢ " JOHN C. SPARKS Production Unlimited 10¢ April SAMUEL B. PETTENGILL A Boundless Field of Power 10¢ ” LEONARD E. READ Genesis of Extremism 2¢ May JACK MORANO One Big Housing Project 3¢ " SUDHA R. SHENOY Statism and the Free Market 2¢ June JOHN E. SWEARINGEN Regulation of American Business 5¢ ” JOHN CHAMBERLAIN Problems of Democracy 2¢ July LEWIS LOVE A King of Long Ago 2¢ September ~~ SAMUEL B. PETTENGILL The Old Regime 5¢ ===== PAGE 4 ===== J] THE Teomdil A MONTHLY JOURNAL OF IDEAS ON LIBERTY SEPTEMBER 1962 Vol. 12, No. 9 LEONARD E. READ President, Foundation for Economic Education PAuL L. PoIrROT 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 coples, postpaid, to one address: Single copy, 50 cents; 3 for $1.00; 25 or more, 20 cents each, Permission is hereby granted to anyone to reprint any articie In whole or in part, providing customary credit is given, except ‘The Spiritual FYE Strength of the American System’ and “Government by Credit Card.” Any current article will be supplied In reprint form If there are enough inquiries to justify the cost of the printing. ===== PAGE 5 ===== x x * * DEFINING FREEDOM * x * x * EDMUND A. OPITZ FREEDOM cannot be successfully of Gresham’s Law at work in the defended in practice by a people intellectual sphere: Over-simpli- who are uncertain about the fied explanations tend to drive out theory of freedom. Freedom's first the complex and gain popular ac- line of defense is correct under- ceptance for themselves. Nature standing, and an important part always seeks out the hidden flaw, of understanding — whatever the and a bad definition is a crack subject matter — is proper defini- through which good ideas may tion. Attacks on freedom by its leak away. enemies are promptly recognized, Freedom is a complicated sub- and tend to rally freedom’s friends ject. How, otherwise, can we ac- to its defense. Defective defini- count for the fact that human be- tions of freedom by its friends, ings have enjoyed so little of it on the other hand, may do the in the course of their checkered cause infinite damage; their history upon this planet? In try- faulty explanations of freedom ing to explain the limited amount may succeed only in explaining it of freedom they have enjoyed, away. men have concocted scores of mu- Rigorous definition is never tually inconsistent definitions of simple or easy, and there is a sort it. The most popular definition of The Reverend Mr. Opitz is a member of the ireedom, the one that comes first staff of the Foundation for Economic Educa- H : tion. to mind, is, as we would expect, 3 ===== PAGE 6 ===== 4 THE FREEMAN September also the simplest: “Freedom is Some of us would want to raise the absence of restraint.” Noth- a few questions about the so- ing, at first glance, sounds more called freedom of the man whose straightforward, but analysis re- spontaneous impulse results in veals that the freedom so defined this kind of conduct—even is equally compatible with un- though it was his own bottle freedom. ‘“Unrestraint” is the ab- heaved into his own chandelier in sence of restraint, unquestionably, an otherwise empty room. A man but is mere “unrestraint” {0 be who is incapable of resisting his equated with human freedom? own impulses, who is under the sway of “the dark gods of the blood,” whose higher faculties of reason and will are no longer in Restraints fall into two major control of the decision-making categories; outer or sociological, process does not conform to our and inner or psychological. It fol- picture of a free man, Quite the lows, then, that ideal “freedom” contrary! He is a man suffering (of the sort envisioned by the from an emotional derangement, above definition) is the course of a man who can only react, having conduct which results when a sud- lost the power to act. Initiative is den whim or caprice, meeting no out of his hands and he is a thing psychological checks within, is moved rather than a free agent. immediately obeyed and carried Political liberty he may have, if through to a conclusion without he inhabits a free society, but it external hindrances, A man is stretches a point to the breaking “free” — according to the above to regard him as a fully free man. definition — when his impulses are Inner restraints are those which given uninhibited expression. For a man imposes on himself. Ran- instance, a man is seized by an dom impulses, urges, compulsions, urge to heave a bottle of cham- twitches, and tics are sorted, pagne into the chandelier and does graded, and policed — so to speak so forthwith. When asked to ex- —by the will, the intelligence, and plain his actions, he replies: the higher sensibilities. When the “Well, it just seemed like a good intelligence fails, or the will caves thing to do at the time.” This is in, or judgment is lacking, the in- certainly unrestrained action, and dividual has lost control of him- in terms of the above definition, self; something else has taken the bottle thrower is the free man charge, and he is not free in any par excellence. intelligible meaning of that word. Inner Psychological vs. Outer Sociological Restraints ===== PAGE 7 ===== 1962 DEFINING FREEDOM b Consideration for Others impair the equal freedom of any Let’s leave the inner world to other man. This rule is based on the psychologists and move into the assumption that each person the outer world, back into the has prerogatives which no other room with our bottle thrower. may impair, such personal im- The definition we are analyzing munities being usually spoken of stipulates no conditions except as “rights.” Ethical behavior is “absence of restraint.” Suppose conduct which respects these now that the bottle thrower is not “rights”; and the law properly alone in his own home; he throws comes into play whenever these someone else’s bottle of cham- “rights” are violated. There can pagne, in another man’s house, be no genuine freedom unless men and in a roomful of people. He is generally recognize the limita- unrestrained, in other words, by tions placed on each man’s actions respect for the property and per- by consideration for the persons sons of other people. And if free- and property of other men.? dom is simply “absence of re- Such consideration is virtually straint” — as this definition holds an acknowledgment of a moral — then a man who is restrained by order. Men are swayed by instinct a due respect for the rights of and impulse, as are animals, but other men to their persons and in addition, they are equipped their property is not free! with the means of checking these Rather than freedom being the drives in order to permit a moral mere absence of restraints we be- imperative to come into play. gin to see that freedom is indeed “Ought” plays a role in human the acknowledgment of certain life which has no counterpart in kinds of restraints—or con- the animal world. “I want to do straints. Inwardly, a man is free this but I ought to do that,” when he is gelf-determined and voices a common phase of the self-controlling. Outwardly, a man decision-making process. The is free in society —enjoys politi- “ought” does not always win out, cal liberty — when the limitations because human motivation is ex- he accepts for his own actions are ceedingly complex. But duty and no greater than needed to meet ——— . . 1 “Liberty does not and cannot include the requirement that every other any action, regardless of sponsorship, individual have like liberty. which lessens the liberty of a single hu- The Classic Liberals sought a man being.” Leonard E. Read, Govern- . ment—An Ideal Concept (Irvington-on- Law of Equal Liberty: Each man Hudson, N. Y.: Foundation for Economic is free to do whatever does not Education, 1954), ===== PAGE 8 ===== 6 THE FREEMAN September obligation do exert a restraining terms, however much they might influence on impulse and interest, seem to cramp his style. Modern and individual liberty fares ill society is sustained by an intri- when men refuse to acknowledge cate network of contracts in the restraints imposed by the ex- which each of us is enmeshed. istence of a moral order. Their terms restrain us at a score of points; but unless we willingly Contract vs. Status embrace these restraints, we lend Then there are contracts. In the our weight to society’s slide back older societies of status, where into a condition of status. Con- each man had an assigned place tractual restraints are a condition in the hierarchy —the level on of individual liberty. which his ancestors had lived — The view which defines liberty the idea of individual liberty had as the mere “absence of restraint” rough going. It was only when may be well-meaning, but that is status gave way to contract that the best one can say about it. It men had the freedom to move up is a definition which permits, and or down the social ladder accord- even encourages, the substance of ing to ability, to seek that place liberty to leak away. It under- in society which accorded with mines the sanctity of person and their peers’ judgment of individ- property, it ignores the moral ual merit. A contract society and order, and it undercuts the system the system of liberty are, for all of contracts. The truly free man practical purposes, equivalent is not a captive of his impulses; terms. A contract is a give-and- he controls his own actions so as take arrangement, and so, while not to impair the equal rights of one side of the contract equation others to their persons and their may open up opportunities, the property; he is constrained by other imposes restraints. John moral considerations; and he is Doe borrows money today and meticulous about his contractual lives it up for the next six months. obligations. Such a pattern of His note comes due a year from conduct is not accurately de- today and he has a legal, as well scribed by the simple label, ‘“un- as a moral, obligation to meet its restrained.” @® ===== PAGE 9 ===== The Ofd “Regime SAMUEL B. PETTENGILL Though he had supported the Roosevelt campaign objectives in 1932, the Democratic Congressman from Indiana, Samuel B. Pettengill, found himself strongly opposed to many of the methods of the “New Deal.” In 1938 his book, Jefferson, The Forgotten Man (published by America’s Future, Inc. of New York), set forth the reasons for his opposition. The follow- ing excerpts, comparing the New Deal with the Old Regime of prerevolutionary France, seem especially worthy of repetition in 1962. METHODS AND FORMS were impor- with England took place because tant to Thomas Jefferson. He did the “form of Government” became not believe liberal ends could be “destructive of these ends.” attained by illiberal means, nor a democratic result by a dictatorial The Situation in France method. Let us consider conditions in So let us discuss “methods.” It France which preceded the Terror will be found that certain methods of the 1790's, the beginnings of urged today have their counter- which Jefferson saw with his own part in the past — a past that Jef- eyes during his five years’ resi- ferson rejected. dence there as Minister, 1784-1789. These precedents may be found Our authority is the great in the history of many centuries. Frenchman, Alexis de Tocqueville With them Jefferson had a pro- (author of the famous Democracy found acquaintance. Their develop- in America), in his book on his ment in England led to the great own country, The Old Regime and Declaration of 1776. Here the “ob- the Revolution. The following jective” was “Life, Liberty and the paragraphs in quotes are from pursuit of Happiness.” The break this notable book. Please observe 7 ===== PAGE 10 ===== 8 THE FREEMAN September that it was written in 1856. This plenty or want, entirely depend.” absolves it of any charge of bias “The government had a hand in or partisanship in today’s politics. the management of all the cities Nevertheless, these paragraphs in the kingdom, great and small. It seem like items from the daily was consulted on all subjects, and papers: gave decided opinions on all; it even regulated festivals. It was “The law obliged no man to take the government which gave orders care of the poor in the rural dis- for public rejoicing, fireworks, and tricts; the central government illuminations.” boldly assumed charge of them.” “Municipal officers were im- “Not content with aiding the pressed with a suitable conscious- peasantry in times of distress, the ness of their nonentity.” central government undertook to “The church, which a storm had teach them the art of growing unroofed, or the presbytery wall rich, by giving them good advice, which was falling to pieces, could and occasionally by resorting to not be repaired without a decree compulsory methods.” of Council. This rule applied with “Orders were passed prohibit- equal force to all parishes, however ing the cultivation of this or that distant from the capital. I have agricultural produce in lands seen a petition from a parish to which the Council considered un- the Council praying to be allowed suited to it. Others required that to spend twenty-five livres.” vines planted in what the Council “Under the old regime, as in our regarded as bad soil should be up- own day, neither city, nor borough, rooted. To such an extent had the nor village, nor hamlet, however government exchanged the duties small, nor hospital, nor church, of sovereign for those of guar- nor convent, nor college, could ex- dian.” ercise a free will in its private af- “Some reduction of the burdens fairs, or administer its property which weighed on agriculture as it thought best. Then, as now, would probably have proved more the administration was the guard- efficacious; but this was never con- ian of the whole French people; templated for a moment.” ingolence had not yet invented the “You have neither Parliament, name, but the thing was already nor estates, nor governors; noth- in existence.” ing but thirty masters of requests, “Ministers are overloaded with on whom, so far as the provinces business details. Everything is are concerned, welfare or misery, done by them or through them, and ===== PAGE 11 ===== 1962 THE OLD REGIME 9 if their information be not coex- It was disturbed by the formation tensive with their power, they are of any free society. It could brook forced to let their clerks act as they no association but such as it had please, and become the real masters arbitrarily formed, and over of the country.” (The bureaucracy which it presided. Even manufac- of the eighteenth century.) turing companies displeased it. In “Judges whose position was be- a word, it objected to people look- yond the king's reach, whom he ing over their own concerns, and could neither dismiss, nor displace, preferred general inertia to rival- nor promote, and over whom he ry.” (Competition.) had no hold either by ambition or “It seldom undertook, or soon by fear, soon proved inconven- abandoned projects of useful re- ient.” (As they did in 1937.) form which demanded persever- “A very extensive machinery ance and energy, but it was inces- was requisite before the govern- santly engaged in altering the ment could know every thing and laws. Repose was never known in manage every thing at Paris.” its domain. New rules followed (Just as at Washington!) “The each other with such bewildering amount of documents filed was rapidity that its agents never enormous, and the slowness with knew which to obey of the multi- which public business was trans- farious commands they received.” acted such that 1 have been un- “Nobody expected to succeed in able to discover any case in which any enterprise unless the state a village obtained permission to helped him. Farmers, who, as a raise its church steeple or repair class, are generally stubborn and its presbytery in less than a year. indocile, were led to believe that Generally speaking, two or three the backwardness of agriculture years elapsed before such petitions was due to the lack of advice and were granted.” (The modern name aid from the government.” (How is “red tape.”) familiar this sounds!) “A marked characteristic of the “Government having assumed French government, even in those the place of Providence, people days, was the hatred it bore to naturally invoked its aid for their every one, whether noble or not, private wants. Heaps of petitions who presumed to meddle with pub- were received from persons who lic affairs without its knowledge. wanted their petty private ends It took fright at the organization served, always for the public of the least public body which ven- good.” tured to exist without permission. “Sad reading, this: Farmers ===== PAGE 12 ===== 10 THE FREEMAN September begging to be reimbursed the Jefferson's Observations value of lost cattle or horses; men on the Situation in France in easy circumstances begging a Now let us turn to Jefferson, loan to enable them to work their who was in France immediately land to more advantage; manu- following our own Revolution of facturers begging for monopolies 1776 and just before the French to crush out competition; busi- Revolution broke out. What did nessmen confiding their pecuniary Jefferson think of all this as he embarrassments to the intendant, went from house to house observ- and begging for assistance or a ing the life of the rich and the loan. It would appear that the poor, looking in their kitchens public funds were liable to be used and kettles to see what they had in this way.” to eat and asking how much they “The local franchises of the ru- produced, what taxes they paid, ral districts were fading away, all what lives they lived. I quote what symptoms of independent vigor he said: were vanishing, provincial charac- “Never was there a country teristics were being effaced, the (France) where the practice of last flicker of the old national life governing too much had taken was dying out.” deeper root and done more mis- “France is nothing but Paris chief.” and a few distant provinces which “As for France and England Paris has not yet had time to swal- with all their pre-eminence in sci- low up.” ence, the one is a den of robbers, All this de Tocqueville wrote in the other of pirates.” 1856. He summed it up as follows: “Nor should we wonder at the “History, it is easily perceived, pressure (for a new constitution is a picture-gallery containing a in France in 1788-89) when we host of copies and very few origi- consider the monstrous abuses of nals.” power under which these people So much from the great French- were ground to powder, the enor- man writing of his own land un- mous expenses of the Queen, the der the Old Regime. Change Princes and the Court, the “Paris” to “Washington,” “prov- shackles on industry by guilds inces” to “states,” and “France” and corporations.” to “the United States,” and de “It is urged principally against Tocqueville has painted with mar- the King that his revenue is one velous precision our country in hundred and thirty millions more the year 1938 [or 1962]. than that of his predecessor and ===== PAGE 13 ===== 1962 THE OLD REGIME 11 yet he demands one hundred and to others as paternalism. It is twenty millions further.” often supposed that government “The consternation is as yet too was simple “in the good old days”; great to let us judge of the issue. that it was simple because no It will probably ripen the public other kind was necessary, and that mind to the necessity of a change centralization of control and bu- in their constitution and to the reaucratic regimentation at the substituting the collected wisdom nation’s capital has existed only of the whole in place of a single since, and only because of, the will by which they had been hith- “economic integration” of the net- erto governed. It is remarkable work of radios, railroads, tele- proof of the total incompetency of graphs, fast-moving transport, a single head to govern the nation and all the paraphernalia of mod- well, when, with a revenue of six ern science and technology. hundred millions they are led to a The contrary is the truth. The declared bankruptcy, and to stop itch to govern is an ancient and the wheels of government even in hereditary disease and laid its its essential movements, for want heavy hand on the simplest affairs of money.” of the smallest village two cen- “You have heard of the peril turies ago. into which the French Revolution “I have myself counted in a is brought by the flight of their provincial town of no great size in King. Such are the fruits of that ‘the year 1750, the names of 109 form of government which heaps persons engaged in administering importance on idiots and of which justice, and 126 more busy in exe- the tories of the present day are cuting their orders,” observed de trying to preach into our favor.” Tocqueville. Jefferson believed as a cardinal A free market is not an unregu- principle of government that it lated market, as those contend should be decentralized. He had who itch to rule the lives of other witnessed at firsthand both at men. Every market needs regula- home and in France the evils, the tion in the public interest. But in abuses, and the dangers of a con- a free market competition is the centrated government. great regulator. It prevents price gouging. It improves quality. It The Urge To Govern forbids quantity limitation. It Such was the regimentation of gives the consumer most and best the eighteenth century, known to for least. economists as “mercantilism,” and The only other regulator is the ===== PAGE 14 ===== 12 THE FREEMAN September policeman. He is personal. Compe- lected from the lesser businesses tition is impersonal. The one can of liquor, race tracks, dance halls, be “reached.” His judgments can red light districts, prize fighting, be controlled. We childishly say wrestling, slot machines, road “pass a law.” The Romans were building, municipal supplies, even wiser. They said, “Who will watch school books for our children, we the watchman?” hanker and yearn to place all busi- With the worst record in the ness, all trade, all agriculture, civilized world in dealing with transportation, banking, mining, crime we are still crazy enough to and so forth, under the rule of the want to turn over to more politi- politician! cians more and more power to con- The men who argue for this trol more and more men. In doing sort of “control,” instead of the so we set up more tribute-takers competition of the market place, and tollgatherers along more trade are the New Tories. They are not routes. We subsidize politics at liberals. They are not progress- the expense of business, produc- ives. They are taking us straight tion, employment. back to the Old Regime described After seeing enormous tolls col- by de Tocqueville and Jefferson. ® Reprints of this article are available at 5¢ each. ===== PAGE 15 ===== A HEALTHY SKEPTICISM PAUL L. POIROT EVEN THE EXPERTS may be wrong, was predicted that traveling at 30 and a May 1962 commentary from miles an hour would cause in- the Smith Kline & French Labora- sanity. tories cites these examples: “When Samuel Clegg proposed “For centuries men dreamed of to light the streets of a London flying. But experts were skepti- borough with gas, the borough cal. Baron Gottfried Wilhelm von council vetoed his plan. Expert Leibnitz, the German philosopher- scientific opinion maintained a mathematician, doubted that men filled ‘gasometer’ was hazardous. would ever fly: ‘Here God has, so Lighting a jet might cause all the to speak, put a bar across man’s gas in the tank to explode, reduc- path.” The French astronomer ing the city to ruins. Joseph Lalande demonstrated that “ ‘Impossible,’ said electrical en- flight was a scientific impossi- gineers when Alexander Graham bility. Bell began his experiments with “After George Stephenson’s lo- the telephone in 1874. ‘This is the comotives reached the speed of 30 triumph of folly.” Contemporaries miles an hour, the Munich College saw Bell not as a genius, but as of Physicians issued an earnest a troublesome youngster who neg- warning against railway travel. lected his professional duties to Trees and houses flashing past follow a will-o’-the-wisp.” the eyes would bring on head- The commentary then ques- aches and vertigo. In England it tioned the advisability of pro- 13 ===== PAGE 16 ===== 14 THE FREEMAN September posed legislation that would give from exploring the dark areas be- the Secretary of Health, Educa- yond our knowledge.”! tion, and Welfare the power to pass on the effectiveness of new A Device for Learning drugs. This might postpone in- While it is true that even the definitely vital contributions to experts may be wrong, this is not the health of our nation. to deny that a healthy skepticism is a desirable human trait. It is a Broader Implications device for learning, as well as a The point is well taken with protection against unwise schemes reference to drugs, but it has others would foist upon us. And broader implications involving without a good measure of en- many other facets of our lives. lightened skepticism, one stands The course of progress would be faint chance of becoming an ex- slow indeed if every innovation pert in any field. of man had first to be approved by Therein lies the greatest dam- the government. As B, E. Kline age from socialism or any other and N. H. Martin point out: “the compulsory government control of chief characteristic of the com- our lives. Such systems breed mand hierarchy, or any group in mediocrity and preclude the our society, is not knowledge but emergence or ascendancy of the ignorance. Consider that any one wise. The notion that no drug is person can know only a fraction fit for use until government has of what is going on around him. given its stamp of approval finds Much of what that person knows its corollary in the view that or believes will be false rather everything the government recom- than true. ... At any given time, mends is unquestionably safe and vastly more is not known than is acceptable. When eternal vigilance known, either by one person in a gives way to passive approval of command chain or by all the or- ‘the guaranteed life,” the bless- ganization. It seems possible, ings of liberty are lost — and with then, that in organizing ourselves them goes man’s best hope for into a hierarchy of authority for safety, security, and progress. the purpose of increasing effi- As Professor F. A. Hayek sug- ciency, we may really be institu- gests in The Constitution of tionalizing ignorance. While mak- Liberty (page 29): “ .. the case ing better use of what the few ———— . i . 1 “Freedom, Authority and Decentrali- know, we are making sure that zation,” Harvard Business Review the great majority are prevented XXXVI (1958), p. 70. ===== PAGE 17 ===== 1962 A HEALTHY SKEPTICISM 15 for individual freedom rests are nationalized, the scarcity of chiefly on the recognition of the everything consumers want as inevitable ignorance of all of us soon as government attempts to concerning a great many of the give “to each according to need.” factors on which the achievement Nor need we look abroad for ex- of our ends and welfare depends.” amples of the dismal failure of compulsory collectivism; plenty of Witness the Failures evidence is to be found in the Around the world is abundant United States of America. testimony to the failure of com- What security have farmers pulsory collectivism to yield the found in surrendering to govern- security and progress promised by ment the freedom to choose when political leaders. The more com- to sow and when to reap? What plex the five-year plans and regu- greater waste of natural re- lations and controls —the more sources, of capital and human highly institutionalized the ignor- effort, has ever occurred in any ance — the more anxious seem the land at any time than in the name “beneficiaries” to escape to the of agricultural conservation and comparative freedom outside the soil bank programs which leave curtains and walls. Witness those hanging over the market unman- who have risked their lives at the ageable stockpiles of wheat, corn, Berlin Wall, or those driven by cotton, peanuts, tobacco, and other starvation in Red China to refuge farm products? How many Ameri- in Hong Kong, or those fleeing can farmers today believe this to from Castro’s Cuba to Miami and be a safe way to earn a liveli- other havens. Witness the flight hood? And what safety or secur- of doctors from Britain’s Na- ity does agricultural price and pro- tional Health Service, the flight duction control afford the con- of private capital and managerial sumers of food and fiber? Or, talent and skilled personnel from those who pay the taxes? any nationalized industry or en- How safe is it to be in business terprise or profession. Witness in a tariff-protected industry, or the shortage of food that inevita- one favored by import quotas bly follows agrarian reform, the against competing foreign goods? shortage of housing in rent-con- How safe to be a franchised, regu- trolled Paris and other cities and lated, and controlled railroad or countries where government has airline or communications facility taken charge, the shortage of coal or any other “public utility” ? How in Newcastle when British mines safe to be a supplier or distribu- ===== PAGE 18 ===== 16 THE FREEMAN September tor of power and light, dependent Indeed, how safe is any promise on TVA or REA or some other or bond payable in dollars of con- government agency for the other stantly diminishing buying end of the service? power? How sound is a dollar, How safe is government-ap- anyway, under a deficit-spending proved fluoridation of the water government that pushes its obli- supply? Or mass innoculation gations through the controlled against smallpox or polio? Are fractional reserve banking system cigarettes with government-ap- to more or less continuously and proved advertising slogans safer arbitrarily expand the supply of than some other brand? Does the money and credit? And how safe government stamp of approval is a man’s life when his property truly relieve suppliers and con- may thus be diminished indirectly, sumers of foods and drugs of any if not taken directly, by a govern- further responsibility concerning ment that respects few if any of their use? its constitutional bounds? How How safe from exploitation are safe are we in using the force of workmen obliged by government government to get “our share” on regulation to join a union and grounds that “everyone else is do- abide by its rules to gain or hold ing it”? How safe can one be if a job? How safe are potential em- he abandons personal obligations ployees who can’t find employers and responsibilities and votes to willing or able to hire them at have the policeman take charge of the government-decreed minimum “life, liberty, and the pursuit of wage? How safe is the promise of happiness”? Since when is it safe unemployment compensation from to thus “institutionalize ignor- a government unable to balance its ance” and back it with guns? own budget? How safe the Even the experts may be promise of old age benefits solely wrong; and the price of freedom contingent upon the willingness of is a healthy skepticism about younger taxpayers to forever foot turning over to them the political the bill? power to rule one’s life. ® IDEAS ON LIBERTY Self-Reliance THE GREATER a man’s freedom, the more does he become dependent on himself, and well-disposed toward others. WILHELM VON HUMBOLDT ===== PAGE 19 ===== S, AMERICANS came upon the road to collectivism by diverse ways and from many paths. The signs that pointed toward this broad road INDIVIDU Al filled seeker’s hearts with hope by such disarming labels as “General Welfare,” “Social Justice,” “Eco- nomic Security,” and “Freedom LIE ERTY from Want.” Some came in large groups which had been organized to advance special interests, while . others came as individual strag- th : glers. There were those drawn mM H . from the path of liberty by the CST siren song of utopian reformers. Tender-hearted men turned toward 1T] 1K collectivism in the belief that it i offered the best hope of alleviating the suffering which they saw or Co read about. The obstacles in the of Ny path of liberty — the difficulties 3 in the way of achieving economic { independence, the hardships of the individual route to personal fulfillment — convinced many of = : the “necessity” for joint effort. ! Budding intellectuals discovered a _ A . new faith in the organic concep- tion of society, and the unsuccess- CLARENCE B. CARSON I. ful could excuse their failures as ) | Dr. Carson has recently transferred from Jack- \ sonville State College in Alabama to his new ) post as Professor of American History at Grove City College in Pennsylvania. This is the fifth of six articles in a series on Individual Liberty in the Crucible of History. The sixth and con- cluding one, “A Rebirth of Liberty,” appears next month. IHHlustration: Tower of Old North Church, Bos- ton. A. Devaney, Inc., New York. 9. The Road to Collectivism 17 ===== PAGE 20 ===== 18 THE FREEMAN September the fault of society. The destitute public interest. This last is the succumbed easily to the explana- face that collectivism presents in tion that they were victims of op- our day. pression. Some men may be hon- So stated, the development ap- estly convinced that they know pears logical and “inevitable.” Is what is best for all of us; at any there anything strange or irregu- rate, collectivism offered a mode lar about men grouping together for reformers and planners —men to advance common interests? caught in the grip of a compelling What could be more appropriate vision — to use government to em- than the harmonization of con- body their ideas in law and prac- flicting interests by action of the tice. By these and other paths did national government? Is not a Americans gather upon the road part of American freedom the to collectivism. freedom of men to associate for Historically, however, the shift common ends? Was not the re- to collectivism was made in the publican government of these following manner. Men organized United States erected to resolve themselves in interest groups for the conflicts among contending the pursuit of common goals. They parties and to “promote the gen- included such groupings as farmer eral welfare”? In short, have we alliances, labor unions, business not come to collectivism by a logi- associations, and professional or- cal extension of the very ideas ganizations. These organizations which informed the Constitution frequently sought privileged and have for all its days been a status at law, and to bring the part of the American tradition? force of government to bear upon Or, did we reach collectivism by Americans to make them accede to evading the Constitution and a their demands. When they suc- profound departure from the ceeded, they contested with one American tradition? another for superior position, and preyed upon both unorganized in- Transitional Movements dividuals and other groups as These questions are of such well. This neofeudal system moment for everyone —not just (strangely enough, many “liber- for historians - that they must be als” called it progress where labor answered very carefully. Let us unions were concerned) created a search out in our history those situation rife for the United transitional movements from in- States government to step in and dividualism to collectivism. By un- “adjust” these demands in the covering them, we should be able ===== PAGE 21 ===== 1962 THE ROAD TO COLLECTIVISM 19 to decide how we came to this have no special exemptions or pass within a proclaimed frame- privileges in law and cannot use work of constitutionalism and a the power of government to force never-announced departure from others to yield to them, individual liberty. What was done to effect liberty can prevail regardless of the change is important, if the the number and variety of groups information is to be useful in in our midst. finding our way back to liberty. By turning these last two points } around, it is possible to see what The Trouble with Groups collectivism is. It is the institu- The mere existence of groups tion of group force to attain the and organizations in a society is goals of groups within a society. no indication that collectivism That this is usually done in the prevails. Alexis de Tocqueville name of society should not mis- noted in the first half of the lead us, for where men are free nineteenth century that Ameri- there will be conflicts as to goals, cans were prone to the formation and no man’s interests are fully of all sorts of groups. Freedom to merged with that of society. It associate for common purposes is can be shown, of course, that a basic freedom which to prohibit every man should be interested in would be to circumsecribe severely protection from the use of force the liberty of the individual. The upon him, but beyond that men social and charitable functions of will have interests and interpreta- such groups can and have amelio- tions quite divergent from one an- rated the severities of individual other. For these reasons, collec- responsibility and helped the in- tivism must always be nothing dividual to undertake what he more than forcing the interests could not do alone. of some upon all. The thrust of Associations become a matter collectivism is to merge all men of public concern primarily when into a common mass. For it is only they use force or coercion in pur- by ignoring or lopping off all that suit of their ends. So long as the is unique in the individual and individual can join and quit a dealing with that which is com- group voluntarily, so long as the mon to all men that collectivism group is inhibited (by law and can be justified. fear of punishment) from forcing The difference between a collec- its way upon others, no great tivistic society and an individual- harm need result from its exist- istic one can be succinctly stated. ence. In practice, when groups Where individual liberty is the ===== PAGE 22 ===== 20 THE FREEMAN September goal, the government will exist, in affected the likelihood of its en- considerable part, to disarm col- actment. Madison believed that lectives. In a collectivist society, the danger to liberty and the gen- government will act to empower eral welfare lay in the factional groups. The shift for America, use of government for partisan then, came at those points when ends. governments ceased to disarm He went on to explore the pos- groups effectively and began to sibilities of preventing the parti- empower them. san use of government. It could be estopped by taking away the To Disarm Collectives liberty which gives rise to fac- That the Constitution of these tions or “by giving to every citi- United States was designed to zen the same opinions, the same disarm collectives and prevent passions, and interests.” Both of them from using the power of these alternatives are rejected: government to work their ends is the first because it is undesirable attested to by no less an authority and the second because it is im- than the Father of the Constitu- practical. The problem then be- tion, James Madison. This is the comes one of preventing the ef- burden of his argument in the fects rather than removing the justly famous “Federalist” Num- causes of faction. Madison held ber 10. The problem, as he defined that republican government — by it, had been to erect a government which he meant representative that would have a “tendency to government —would be the one break and control the violence of most likely to bring to nought the faction.” He explained further, effects of faction. Specifically, he “By a faction I understand a maintained that the Constitution number of citizens, whether as drawn would provide such a amounting to a majority or mi- government. By spreading repre- nority of the whole, who are sentation over large constituen- united and actuated by some com- cies, by having the houses of Con- mon impulse of passion, or of in- gress chosen in a different man- terest, adverse to the rights of ner, he thought it would be diffi- other citizens, or to the perman- cult for any collection of men to ent and aggregate interests of the attain its end. The separation of community.” It is well to note, powers would add to the difficul- too, that the question of whether ties of groups seeking special a majority or minority wanted the privileges and partisan goals. It action interested him only as it should be pointed out, though, ===== PAGE 23 ===== 1962 THE ROAD TO COLLECTIVISM 21 that developments in communica- bring government to bear in se- tion and transportation since curing special privileges. Labor Madison's day have swept away unions endanger both public inter- much of the importance of the est and individual liberty when vastness of the country in deter- they use coercion with the conni- ring concerted action by groups. vance and support of government. The point, however, is that the That Americans have largely purpose of the Constitution was left off thinking in terms of in- to disarm rather than empower dividual liberty and gone over to collectives. Madison saw clearly collectivism is mirrored in cur- that the great danger of popular rent language. One hears and government was its susceptibility reads regularly of minority rights, to use for partisan ends. He de- majority rights, the rights of or- sired a government which could ganized labor, the rights of busi- maintain the needed unity for ex- ness, the rights of children, the ternal defense and internal accord rights of women, the rights of the but which would be inhibited by farmer, the rights of the people its organization from taking (considered collectively), and even precipitate and arbitrary actions of the rights of governments. that would intrude upon the liber- ties of individuals. This wish he shared with many of those who When President Kennedy did and many who did not ap- brought the influence and indirect prove the Constitution as drawn coercive power of government to in 1787. bear upon steel companies to in- Let us follow Madison’s reason- duce them to forfeit an announced ing that it is not the existence of raise in prices, many of those factions (or collectives) which who objected did so on the really endangers liberty but their grounds that it was an attack on gaining sway. It is not, for ex- “business” But this is a tacit ample, the presence of lobbyists acknowledgment that ‘“business” that corrupts legislatures but the has special rights and privileges. bowing of legislators to their will. From an individualist point of Churches limit individual liberty view, the President was either when they can use the powers of attacking the rights of all Amer- the state to enact their morals or icans, or he was threatening the enforce their goals on society. rights of no Americans. The real Business associations and corpor- principle involved in the steel af- ations delimit liberty when they fair (so far as individual liberty Rights or Privileges ===== PAGE 24 ===== 22 THE FREEMAN September was concerned) was whether or States when contending factions not individuals and voluntary as- were not prominent. Manufac- sociations of men may act, with- turers early sought a protective out force, to raise or lower prices. tariff. Veterans of the Revolu- In short, are men free to offer tionary War pressed for special goods and services at whatever privileges. Land speculators and price they see fit, or are prices to farmers contended for different be determined by executive fiat? systems of dividing and pricing The matter of monopolies and public lands for sale. Representa- price fixing in an industry is im- tives from the East sought to portant to liberty, but it was hamper the westward movement, clearly not the issue here. The while Southerners and Westerners President wanted to fix the price sought to use the federal govern- in the name of the public interest. ment to acquire more and more If he succeeds in this aim, he will lands to the west. Even the most have achieved a greater restric- careful efforts of writers of the tion upon liberty than any mo- Constitution had not managed to nopoly could without the force of design a government that could government, for he acts with the not on occasion be used for par- force of government. tisan purposes. Indeed, the con- stitution-makers yielded to fac- Secondary Consequences tion in permitting the counting What we have, in our situation, of a proportion of slaves for de- is that government, having recog- termining congressional represen- nized and empowered various tation. The Whiskey Tax was al- group interests, then tries to har- most certainly legislation aimed monize them. It can only do so to penalize a particular group-— at the expense of the liberty of the small entrepreneurs of the all individuals, though some may back. country. The Bank of the believe themselves more than United States, as set up, may have adequately compensated for their forwarded special interests. Cer- loss by the greater power they tainly, the protective tariffs en- have at their disposal. The his- acted periodically from 1816 on torical task is to point up those provided special privileges for events and developments which manufacturers and were disad- marked turning points from in- vantageous to some shippers. dividualism to collectivism. Much as one may deplore these There has hardly been a time successes of groups and factions, in the history of these United however, they do not indicate ===== PAGE 25 ===== 1962 THE ROAD TO COLLECTIVISM 23 that America was from the begin- one kind of association — the cor- ning collectivistic. To think that poration. Congress made an they do is to confuse aberrations equally substantial break with the with central tendencies. For how- past by the passing of the Inter- ever much Congress, the Presi- state Commerce Act in 1887. dent, or the courts might have Legislation aimed at any particu- yielded to special interests on oc- lar group is dangerous to liberty,! casion, they had not yet formally but this act had even more direct acknowledged their existence. Jef- import. It provided for an Inter- ferson may have been moved by state Commerce Commission. As agrarian sentiments to acquire one history describes it, “The In- Louisiana, but it was not officially terstate Commerce Commission done for “agriculture.” Perhaps was the first permanent federal ad- Daniel Webster had questionable ministrative board to which Con- relations with “business,” but he gress delegated broad powers of spoke for the unity of America. a quasi-legislative, quasi-execu- tive, and quasi-judicial nature. Its establishment was a landmark in The turning point from individ- American constitutional history. ualism toward collectivism should . .. The Commission . . . repre- be located at the time when formal sented a fundamental departure recognition was given to groups, from the principle of the separa- when the federal government tion of powers.”2 Through the began to act in the name of fac- years other such bodies were tions, and when the constitutional added — Federal Trade Commis- inhibitions against such actions sion, Federal Communications began to break down. Until that The Turning Point point we are dealing with sus- 1 Government by law rather than by picions of motives rather than men requires that laws be of general ap- definite effects plicability. As F. A. Hayek says, “Law in . its ideal form might be described as a Several events occurred in the ‘once-and-for-all’ command that is direct- 1880's which suggest that the ed to unknown people and that is ab- stracted from all particular circum- turn should be located there- stances of time and place and refers only abouts. In 1886 the Supreme to such conditions as may occur any- 0 : : where and at any time.” The Constitu- Court decided, in the Santa tion of Liberty (Chicago: University of Clara Co. case, that a corporation Chicago Press, 1960), pp. 149-50. was a “person” in the meaning of 2 Alfred H. Kelly and Winfred A. Har- bison, The American Constitution: Its the Fourteenth Amendment. By Origin and Development (New York: so doing it gave special status to Norton, 1955), p. 549. ===== PAGE 26 ===== 24 THE FREEMAN September Commission, Securities and Ex- Fifteenth Amendment to the Con- change Commission, National stitution — forbidding the exclu- Labor Relations Board — which sion from voting privileges on the had the cumulative effect of bring- grounds of race, color, or previous ing to nought the means set up in condition of servitude — adopted in the Constitution for disarming 1870, may have given credence to groups. the budding notion that there are Another signal departure came minority rights, It was obviously in 1889 with the raising of the intended to enfranchise a mi- Department of Agriculture to nority. cabinet rank. This was the first such recognition of group or class Giving Them Power interests by the central govern- National groupings according ment, but not the last. Predictably, to economic interests made their of course, other factions vied for appearance in the latter part of similar recognition. A Depart- the nineteenth century. It should ment of Commerce and Labor was be kept in mind, however, that it created in 1903, and separate de- was not the existence of these or- partments for each were set up in ganizations that effected collec- 1913. Within a three-year period tivism but their empowerment by — 1886 to 1889 — the break with government. Accompanying the the tradition had been made in spread of large businesses operat- thé legislative, judicial, and execu- ing throughout the United States tive branches of our government. was the organization of nation- But the way was prepared be- wide labor unions. The National forehand for the break. The rise Labor Union was organized in of the Republican Party just be- 1866, but expired a few years fore the Civil War was a land- later. Much more important and mark of sectionalism, for it was influential was the Knights of the first party with so exclusively Labor which was organized in a sectional following to gain the the 1870’s. The first strike on Presidency. Its successful organ- anything like a national scale was ization spurred the formation of the Railway Strike of 1877. The even more factional parties in the American Federation of Labor South. The short-lived Freedmen’s was organized in 1886 under the Bureau, set up toward the end of leadership of Samuel Gompers. the Civil War, was a special Farmers, too, turned to organiza- agency of the federal government tion as a means of effecting their to look after the freed Negro. The ends. The Patrons of Husbandry ===== PAGE 27 ===== 1962 : THE ROAD TO COLLECTIVISM 25 (or National Grange) was founded coupled with court treatment of in 1867, and shortly began spon- corporations as persons, corpora- soring regulatory laws. Business- tions were extremely difficult to men formed the National Associa- reach by regular lawful means. tion of Manufacturers in 1895. The resulting confusion of indi- The American Anti-Boycott Asso- vidual liberty with corporate “lib- ciation (1902) and the Citizens erty” has not yet been disentan- Industrial Association (1903) gled. It created a situation ripe came into being to counter cer- for governmental limitation of in- tain kinds of union activity. dividual liberty in order to control The increase and growth of cor- corporate activity. It gave im- porations needs mention also. By petus, too, to the setting up of 1900 two-thirds of all manufac- arbitrary commissions to deal turing in the United States was with business activity. carried on by corporations. Incor- poration confers a special privi- lege — that of limited liability. In New political parties in the return for this privileged status, latter part of the nineteenth cen- corporations have long been reck- tury definitely appealed to econ- oned to have a public character omic interest groups. There was and to be subject to public limi- the Greenback Labor Party (or- tations on their activities. How- ganized 1878), the People’s Party ever, in the latter part of the of the U. S. A. (Populist Party, nineteenth century, due mainly to organized 1891), and the Socialist the fortuities of our federal sys- Labor Party (organized 1877 but tem of government, many corpora- only achieved national importance tions managed to hold their privi- in the 1890's). Those historians leged status and avoid onerous who attribute this rise of third limitations. Corporate charters parties to a feeling among farm- could be obtained in a single ers and laborers that their inter- state, but the resulting corpora- ests were not being looked after tion could operate in all states. by the major parties may be Some states — notably New Jersey ———— and Delaware — provided unusu- This is no attack on the corporation. ally generous terms of incorpora- valid and 8 valuable distinction between tion. When this condition was individual and corporate activity. When -_ this distinction is restored, it will make 3 George E. Mowry, The Era of Theo- possible both the extension of individual dore Roosevelt (New York: Harper, liberty and regular lawful means of lim- 1958), p. 12. iting the scope of corporate activity. New Parties for Political Favor ===== PAGE 28 ===== / 26 THE FREEMAN September right. Certainly protective tariffs, be that those historians who have land grants and subsidies to rail- lumped reformers together are roads, and monetary policies fre- "™ nearer the truth than those who quently provided advantages for have made rigorous distinctions financiers and industrial entre- among them. preneurs. But the important point is that factions organized them- Legislative Departures selves to secure political action in Progressive legislation does in- their favor. They had only a dicate that collectivism was mak- limited success in the nineteenth ing headway. The scope and au- century, however. thority of the Interstate Com- The progressive movement of merce Commission was broadened the early twentieth century occu- by several acts. The Pure Food pies an anomalous position in the and Drug Act and the Meat In- march of Americans toward col- spection Act, both of 1906, show lectivism. This is so mainly be- the federal government entering cause people of many different the arena of protecting the con- persuasions — socialists, national- sumer. The Mann Act of 1910 — ists, welfare staters, and free prohibiting the interstate trans- traders — adopted the rubric or portation of women for immoral have been called progressives by purposes — extends the principle historians. In their stated aims, to the protection of people from Woodrow Wilson and Eugene Debs themselves. Here was a clear limi- (the candidate of the Socialist tation upon liberty which deals Party) in 1912 were almost as far neither with the use of coercion apart as it would be possible to nor even the performance of an get. Yet they are both treated immoral act. It deals with motives under progressivism because they and restricts transportation. It is were reformers. The confusion is class legislation in that presum- compounded because all shades of ably men can be transported reformers did generally accept the across state lines for immoral organic conception of society. purposes without fear of penalty. They all wanted to use the United It is true that Woodrow Wilson, States government to achieve posi- in 1912, proclaimed the New tive social ends. Moreover, the Freedom and declared it to be his idea of progress and the belief in aim to restore liberty by breaking successive stages of the develop- up the trusts and removing spe- ment of society permeated reform cial privileges. Yet once in office thought. For these reasons, it may he approved the Clayton Anti- ===== PAGE 29 ===== 1962 THE ROAD TO COLLECTIVISM 27 trust Act which exempted labor were taken over and run by the from its provisions and provided government.’ the opening wedge for the crea- The constitutional amendments tion of a privileged status for or- adopted under the impetus of pro- ganized labor. The Underwood gressivism provided some of the Tariff Act did free trade to some legal foundations for collective ac- extent, but the Federal Trade tion. The Sixteenth Amendment Commission and Federal Reserve (income tax) paved the way for a Board — whatever their purposes redistribution of wealth and for — were agencies beyond the sepa- tax policies that could be (and ration-of-powers principle. The have been) used for the advance- Adamson Act provided for an ment of class interests. The eight-hour day and time-and-a- Seventeenth Amendment (direct half for overtime on interstate election of Senators) altered the railroads, an undeniable use of republican character of the gov- government power for a faction. ernment somewhat and may have weakened the inhibitory powers The Shifting Role of Government which Senators would exercise on Once the United States entered legislation. The Eighteenth World War I, Wilson swiftly Amendment (prohibition )empow- abandoned such relics of the New ered the Congress to legislate in Freedom as he had held on to matters of morals and to send out and turned to what might more federal agents over the land to aptly be styled the New Tyranny. inquire into the activities of The government turned from at- Americans. The Nineteenth tempting to enforce competition Amendment (woman’s suffrage) to the co-ordination of the econ- gave color, though not substance, omy. Boards and commissions to the notion that groups have were created to deal with the vari- rights. ous economic interests — War In- The reaction to restrictive ac- dustry Board, War Labor Board, tion by government was hardy Food Commission, and so forth. and vigorous, though frequently The Presidency supported the di- ——— rect use of propaganda by way of 5 There are two very good reasons why the Committee on Public Informa- 1 do no ake a ee ear tion. The Sedition Act of 1918 re- for the war effort. In the first place, I stricted liberties in a manner that don’t know—nor do all those historians had not been done since the days who say that it was, In the second place, ) necessity does not alter the effects of of John Adams. The railroads actions, which is my concern. ===== PAGE 30 ===== 28 THE FREEMAN September misdirected, in the 1920's, Rail- country with collectivism as a fait roads were returned to private accompli. All the steps toward it ownership, but the act that re- thus far had been but background turned them empowered the Inter- and prelude. The central pieces of state Commerce Commission to legislation were the Agricultural foster mergers. The Tariff Act of Adjustment Act and the National 1922 not only raised rates —pro- Industrial Recovery Act. By the tecting American industries as Agricultural Adjustment Act Con- well as making it virtually impos- gress acknowledged itself as care- sible for European countries to taker of the needs of farmers, and pay debts, but also it carried a proceeded to provide for them by provision against the importation regulation, subsidies, and parity of obscene books, a provision payments. Industries were invited which was sometimes interpreted to control themselves by fair trade to exclude works now recognized codes under the NIRA. Labor was as classics. Founders of patriotic provided for by the section of the organizations were probably right Act which guaranteed labor's in believing there were threats to right “to organize and bargain Americanism, but their indis- collectively through representa- criminate activities were hardly tives of their own choosing.” A calculated to preserve it. Commu- National Labor Board was created nists were driven under ground to enforce this provision. While by the Palmer raids, but constitu- these actions marked a climax of tional liberties were ignored in the empowering of factions, their the effort. So confused had the aim has been fully pointed out by American tradition become that Rexford G. Tugwell, one of the many writers and artists attribu- architects of these acts. “NRA ted violations of civil liberties to could have been administered so an American tradition of mob rule that a great collectivism might and lynch law. gradually have come out of it, so that all the enormous American Roosevelt's Hundred Days energies might have been disci- The culmination of the trend plined and channeled into one na- toward the empowering of groups tional effort to establish a secure came with dramatic swiftness. In basis for well-being.”¢ the “Hundred Days” following his Although the surge into collec- inauguration in 1933, Franklin D. PP Quoted in Arthur M. Schlesinger, Roosevelt pushed through Con- Jr., The Politice of Upheaval (Boston: gress bills which presented the Houghton Mifflin, 1960), p. 214. ===== PAGE 31 ===== 1962 THE ROAD TO COLLECTIVISM 29 tivism came with almost lightning tion, and periodic threats of in- quickness, the way had been pre- vestigation and dismemberment. pared for it. The Depression of- Meanwhile, Roosevelt and his con- fered the occasion, but it was not gressional followers turned to the efficient cause. For over fifty providing protection and benefits years the numbers of dependent for the “underprivileged” and farmers and workers had been in- “unfortunate.” (The argot of the creasing. The impotence of the in- New Dealers implied that all dividual was accentuated by the wealth and station resulted from increase in size and complexity of special privileges and good luck.) institutions and organizations in The Social Security Act was class America. A new ethos —the col- legislation to provide benefits for lectivist curvature of the mind — wage workers. Massive relief was provided the mental bent for col- provided from 1935 to 1939. The lective action. Actions taken dur- National Labor Relations Act of ing World War I provided the pat- 1935 gave organized labor in- tern for governmental action. The creased status and included pro- voluntary trade associations of hibitions of employer activity the twenties made NRA appear against unions. The Revenue Act to be a natural next step. Never- of 1935 increased the surtax rate ending protective tariffs had ac- on individual incomes, raised rates customed Americans to collective on large corporations, and estate action for particular interests. and gift taxes were increased. In Organized labor's special status 1937 the Farm Security Adminis- had already been recognized by tration was set up to aid tenant the Norris-La Guardia Anti-in- farmers, and in 1938 a new Agri- junction Act of 1932. cultural Adjustment Act was The NIRA and AAA were nulli- passed, reinacting the protected fied by the Supreme Court, but position of farmers. these decisions did not stem the tide of collectivism. Even before Recent Developments the courts nullified these laws, Over the years since, organized Roosevelt had launched upon a labor has consolidated its privi- different course. Business lost leged position. Farmers have be- much of its privileged status when come accustomed to subsidies and NRA succumbed, and the adminis- crop controls. Government aid has tration cast it into that limbo in been extended to more and more which it has usually existed since of the population by way of ex- —subjected to harassment, regula- tension of Social Security and ===== PAGE 32 ===== 30 THE FREEMAN September through such devices as FHA out. It was made possible for us loans. Many businesses became ac- to come upon this road by ignor- customed to cost-plus contracts ing and evading the Constitution. during and after World War II, Groups were empowered rather and have managed by manipula- than disarmed as they gained rec- tion to acquire privileged posi- ognition and privileges from gov- tions. Minimum wages and hours ernments. Once this has happened, coupled with wage bargaining by it can be made to appear that the industry has tended to make completion of the circle is inevita- prices inflexible and to stifle com- ble. If farmers can use govern- petition. Amidst the pulling and ment to raise food prices, if or- hauling of privileged groups for ganized labor can use force aided a greater share of the “national and abetted by government to income,” the cry increases for drive up wages, if corporations government to act to harmonize can operate with only arbitrary these interests. Some want laws limitations, who is to protect the prohibiting labor unions from public interest? The obvious an- striking; others want wage, price, swer is that the United States and rent controls. Governmental government must act to resolve action during World War II set conflicts and protect the general further precedents for control welfare. But it is not the only an- which have not yet been extended swer. If liberty be accepted once to peacetime use. One more good more as the goal, if government emergency should provide the set- will once again disarm groups, we ting for wiping out the remaining can return to liberty. By marking vestiges of liberty in America, out the trails by which we have since we have both the practice come to collectivism, I have also and the beliefs for it. uncovered the signs which we may The road we have taken toward follow to recover the path of collectivism has now been pointed liberty. @® EE @09 A 0BEBTY Win or Lose YoU CAN WIN an election and still lose your liberty. ... You do not waste your vote when you lose an election; but, you certainly do waste your vote when you lose your principles. JOSEPH A. GALAMBOS ===== PAGE 33 ===== LEONARD E. READ AN AMERICAN MEZZO-SOPRANO calls attention to an inconsistency and one of the great international on the part of the U.S.A. politi- opera stars of our time laments cian: the plight of aspiring American singers.! Has he ever bothered to explain After concluding that “the how the majority of Europe's war- destroyed opera houses were rebuilt with American money and placed on an operating basis through large subsidies? problem cannot be blamed away: more fundamental treatment is in order,” she has this to say: If we are interested in the cause of the shameful conditions for the young American singer we must look elsewhere: the jet plane, our out- moded manner of dealing with the arts on a national level, a false pride of helping others before ourselves and, above all, a childish fear of government aid. Having delivered that coup de . grace, she makes this point: I feel the taxpayer has every right to demand that his own community be blessed with a new auditorium which houses its own opera com- pany, symphony orchestra, ballet troupe, and theater ensemble. It’s not Seeking to justify the subsidy a dream. Such theaters exist all she has in mind, our opera star over middle Europe, in towns with E—— no more than 50,000 inhabitants. 1 “7 's No Pl at H f el ge . See here’s No Place a ome for (All italics mine.) Young American Singers’ by Rise Stevens. New York Herald Tribune, April 29, 1962. Were I to try my hand at opera 31 ===== PAGE 34 ===== 32 THE FREEMAN September this star would rollick in laughter Others of us have been free to at my incompetency; indeed, she stay at home and to spend the is conscious of flaws among the fruits of our labor on necessities best opera singers. And I, in my and luxuries of our own choice. turn, am sensitive to socialistic But, be it noted, this freedom of flaws even when skillfully writ- choice, in socialistic parlance, is ten. The article under question is “outmoded.” What is the new, the really skillful; it is almost unbe- modern, the up-to-date scheme? lievable that an opera star of the Nationalize the arts! A music de- first magnitude, with all the at- votee or not, you pay! And like tention and concentration her art anything else, once it is nation- demands, could write such clever, alized, the penalty for all-out non- statist rationale. compliance is the loss of life it- While socialized opera is no self. Violence is the new way; more to be deplored than social- freedom the “outmoded manner.” ized anything else, there is rea- True enough, our politicians in son as we shall see later for giv- spending over $100 billion on for- ing it special treatment. eign aid in recent years have re- built Europe's war-destroyed “Our Outmoded Manner..." opera houses and put them on As a starter, what are we to “an operating basis,” with dollars infer from “our outmoded man- forcibly collected from American ner of dealing with the arts on citizens, millions of whom have no a national level”? Until now in interest in their own, let alone this country the arts have, for the foreigners’, opera. Where, we most part, been dealt with pri- must ask, is the moral sanction vately and locally. It has been The for the coercive extortion of the New York Metropolitan Opera livelihood of Joe Doakes, an Company or The Boston Sym- American who is concerned more phony or The Los Angeles Phil- with the education of his own harmonic or whatever. Further- children than with opera, that more, these have been privately European music devotees may sate financed.? The music patrons their aesthetic desires? Accord- have been the music payers. ing to libertarian philosophy, this is legalized evil. Even worse is 2 Much of the private financing has —— been in the nature of substantial gifts 3 If the reader has any doubt about from wealthy persons. See “Met's Golden this point, read my “Violence as a Way Angels Make Opera Heaven,” World Teles of Life,” The Freeman, February 1962, gram and Sun. May 12, 1962, Reprint on request. ===== PAGE 35 ===== 1962 CAN OPERA BE GRAND IF SOCIALIZED? 33 to use this wrong action as an Political Urge to Nationalize excuse to apply the same social- Our opera star is not alone in istic principle at home — recom- suggesting the nationalization of mending a second wrong to right her art; it has been given a sub- the first one. stantial political impetus and for Then follows this point: “I feel reasons easy to recognize. For ex- the taxpayer has every right to ample, if government intervention demand that his own community and control of railroads continues be blessed with a new auditorium as in the past, we shall, sooner or which houses its own opera com- later, see them nationalized. As- pany . ..” Which taxpayer has a suming present trends, the same right to what? Does the opera-go- fate is in store for the airlines. ing taxpayer have a right to subsi- Having railroads and airlines to dize his fancy at the expense of the preside over is important politi- unmusical taxpayer ? Does it never cally to a paternalistic state. occur to these people who would The closing of the Metropolitan nationalize the arts that the latter Opera was announced. Front page has a right to the fruits of his news all over the nation! The own labor? Or, do the socializers highest officials in Washington hold that everyone's fancy be so- took immediate action. Why? Of- cialized, that all citizens have a ficialdom cannot risk the reasons right to the fruits of the labor coming to light: The more gov- of all other citizens? For in- ernment interference — inflation, stance, 1/50,000th of us in New taxation, and control in any York’s metropolitan area are sphere of economic activities, the ardent curlers. This sport is ex- less opportunity for devotees of pensive, as is opera. Should the opera to independently support other 49,999/50,000th part of our their favorite art. Included among local population be compelled to the interventions, and most di- subsidize us? Better yet, to use rectly affecting the opera, are (1) the opera argument, should not high taxes on real estate (the curling be nationalized? Then the opera house), (2) union restric- San Francisco dock worker could tions and requirements for not help pay for my curling! Anyone only the stars but all the stage who cannot see through this thin hands and crews (with govern- argument of the socializers or na- ment approval and encourage- tionalizers will not be aided by ment), and (3) luxury taxes on more explanation, regardless of tickets. how simply spelled out. It is governmental overexten- ===== PAGE 36 ===== 34 THE FREEMAN September sion that makes private opera im- which forcibly took from another possible all over Europe and is in order that one might curl or making it impossible in the U.S.A. attend the opera flew in the face And so we are urged to solve the of the moral code. It was evil. All problem by turning it over to the through the vast works of Bastiat malefactor! is to be found an adherence to the principles he deemed to be the right ones. Disagree with this statesman, if you wish, but try to find where he deviated from his concept of right principle. Re- gardless of laws or popular opin- ions, he stood with his principles —except in one instance. In an essay, “Justice and Fraternity,” he made a concession to the so- cialists, one that few Americans today would find faulty: A Common Fault Actually, though, little is ac- complished by berating the social- ization of opera. It is but an out- growth of a fault which is com- mon to nearly everyone, even the stoutest libertarian idealists: the inability to adhere steadfastly to principle. To descend to the ver- nacular, we all leak a little at the seams now and then, Frederic Bastiat came about as near to being a libertarian ideal- If the Socialists wish to say that, in ist as anyone I know or have ever extraordinary circumstances and for read — my ideological hero, so to urgent cases, the State should pre- speak. He laid down for himself pare certain reserves, relieve cer- solid criteria for his thinking and tain unfortunate persons, manage actions. For instance: certain transitions, great heavens! We are in agreement with them. It is being done and we wish it were better done. Sce if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law bene- fits one citizen at the expense of an- other by doing what the citizen him- self cannot do without committing a crime.t The above is an absolute con- tradiction of, a defection from, the whole Bastiat thesis. [I cite this man who held so steadfastly to principles merely to indicate h hi h | that even the strictest perfection- these things, that law was on ist now and then “leaks at the Bastiat’s black list. Thus a law seams.” 4 See The Law by Frederic Bastiat. While most of us libertarian Foundation for Economic Education, . . . . Irvington, N. Y. 76 pp. $1.00 paper; $1.75 idealists, in our own imperfec- cloth, tions, can forgive Bastiat for this Whenever a law did any of ===== PAGE 37 ===== 1962 CAN OPERA BE GRAND IF SOCIALIZED? 35 one inconsistency, we must not “need” is felt for exercise: curl- overlook how this single excep- ing, for instance. There is a tion makes the case for socialism. “need” for cheap power and light For, if it be true that the state or a high standard of living for is morally warranted in building farmers and wage earners, for its reserves from what belongs to “free” school lunches and, so we some persons and giving to those are told, for opera. The point is to whom it does not belong, there this: We cannot grant that any then is no principle which points need, beyond the need for com- out the stopping place. If Marx mon defense, should be met by was right in advocating ‘from the use of state compulsion with- each according to ability, to each out logically conceding the use of according to need,” it follows state compulsion for all needs. that the state, which does the Employ violence to gather funds taking and the giving, must de- (state action) to alleviate starva- cide on what is ability and what tion and the case is made for the is need. Ability, of course, is dis- use of violence to subsidize opera posed of in a hurry: the state goers. Thus, any person who con- taxes everybody for the sake of dones or advocates legalized coer- the needy. But what constitutes cion as a means to productive or need and who are the needy? creative ends, that is, who sup- Plainly, this is a matter for arbi- ports compulsion for other than trary decision only; no principle the defensive function, regardless can be called upon nor can any of how desirable he thinks the law give precise instruction. end is and no matter how minor People hunger not only for his exception to this principle, food, clothing, and protection cannot, in logic and justice, con- from heat and cold. Human appe- demn the opera star for her de- tite knows no bounds. Need is a mand that opera be socialized. judgment subjectively determined Every defection from libertarian and it extends over the whole idealism is an affirmation that so- spectrum of human desires. A cialism is right. 5 Perhaps rowing insi government AL Rid or Let Government Do It dependent of what it takes from the A friend of mine who resides citizenry. Any time anyone is “aided” we 11 a European capitol remarked, can be certain that other citizens have “We can no longer finance our been forced to supply the financial where- : . withal. A government has nothing but opera privately, so we have turned the power to collect from us. it over to government.” 1 told ===== PAGE 38 ===== 36 THE FREEMAN September him that if their opera could not poses, on the level of a cat eating be privately financed that his city the canary — instinctual and sub- should have no opera. “But what rational. Such action at this level about our culture?’ he asked. cannot be condoned but at least Let us grant that culture is ad- it can be understood. vanced by opera. But I insist that Needs can be listed on an as- culture is degraded where state cending scale, ranging from the compulsion is used to take the purely physical all the way to the fruits of the labor of any in- highly spiritual. Philosophy, reli- dividual to gratify the desires of gion, poetry, and art, including opera devotees. Here's a town of opera, are in the latter category 50,000 population, among whom and genuine practitioners are are 500 opera goers. But the 500 characterized by spirituality; they cannot privately finance an audi- are of a higher breed of creation torium, an opera company, sym- or humanity. phony orchestra, ballet troupe, Any attempt to promote these and theater ensemble. Should vio- higher forms of consciousness by lence be used to coerce the other primal means, by violence, by the 49,600 into the local program? physical force of the state, is to Does this procedure aid and abet reduce the arts to the level of the development of culture? Num- banality. To claim that culture bers have nothing whatsoever to can prosper by the employment of do with the principle. Culture anticultural means is to express a would be degraded if violence contradiction. One could as logi- were applied to only one individual cally resort to state compulsion as to force him into a program a means of assuring immortal agreeable to 49,999 of the popu- bliss. lation. Our opera star refers to If men’s rights to life, liberty, “a childish fear of government and happiness are endowments of aid.” This implies that no such the Creator, a spiritual concept, fear exists among mature adults. then every individual must be ac- Perhaps not, in which case I cast corded as much freedom of choice my lot with the children. as any other. This is the minimum While there is no moral sanc- requirement for advancement in tion for the theft of a loaf of the spiritual life (culture). There bread to keep one’s children from can be no culture — no art — with- starving or for having the state out justice or without freedom. do this for one, we must concede Opera will not remain grand, but that such acts are for primal pur- only be degraded, if socialized. @ ===== PAGE 39 ===== MOVING Or — FEATHERBEDDING ON THE NEW FRONTIER ~ The leaves were dying on the trees And turning red and gold. Old Kaspar sniffed the evening air And felt the coming cold, While Peterkin and Wilhelmine Looked at the allegoric screen. They saw a hill where groups of men Were milling round and round In search of gaps between the rocks That littered up the ground; While others loitered in the shade Where rows of feather beds were laid. The few who seemed to find a way Among the rocky tracks Were forced to carry other men Who perched upon their backs, Till burdened far beyond their size They'd fall to earth and fail to rise. “Now tell us what it’s all about!” The little children cried. “It’s Movement on the New Frontier,” Old Kaspar soon replied. “They’re off to gain the higher ground Where joy and affluence abound.” “Why aren’t some,” asked Peterkin, “Allowed to reach the top?” “They're free to climb,” Old Kaspar sighed, “Or try until they drop. Of course, it’s hard to climb the tracks With people riding on their backs.” “Why couldn't some just lead the way And let the others walk?” “A few would like it,” Kaspar said, “But all the rest would balk At any chance they might be thrown On no resources but their own.” H. P. B. JENKINS Economist, Fayetteville, Arkansas 37 ===== PAGE 40 ===== THE SPIRITUAL STRENGT OF THE AMERICAN SYSTEM HERRELL DEGRAFF THE POPULAR IMAGE of the busi- med; similarly, the Reformation nessman seldom casts him in the and Counter Reformation within role of a spiritual being. Nor in the Christian Church; and finally, my acquaintanceship with him I must list the current deadly have I found that the business- serious ideological upheaval be- man, more than rarely, regards tween the West and atheistic com- himself in this light. munism. A generalization of history in- I submit that we who are one dicates that the articulate world side of this struggle —a struggle seems always to have been in- not of our choosing — face such a volved in greater or lesser de- time as comes rarely to men when grees of ideological controversy. they must reassess and reaffirm On several occasions this has their own philosophical and spir- reached the intensity and propor- itual values. tions of Great Reformations, a The ultimate tribute to West- word that, in this sense, carries ern philosophy and institutions is no connotation of either good or the dedication of our ideological bad. Examples include the life and opposition to destroy them. This teachings of Christ, and the im- determination alone suggests that pact on the world over all the cen- there must be, within our philoso- turies since; in like but lesser phy of society and what we have manner, of the life of Moham- built from it, a sum of values and —_— attainments too great for an op- Dr. DeGraff, formerly Babcock Professor of posing philosophy to tolerate as a Food Economics at Cornell University, recently . . . joined the executive staff of the American yardstick against itself. Meat Institute in Chicago. This article is re- I am indebted to Professor printed by permission from a symposium on The Spiritual and Moral Significance of Free Gerhart Niemeyer of Notre Dame Enterprise, sponsored by the National Associ- ation of Manufacturers, December 6, 1961. for a most lucid analysis of the 38 ===== PAGE 41 ===== 1962 THE SPIRITUAL STRENGTH OF THE AMERICAN SYSTEM 39 differences in the way the com- A Guilt Complex munists and the West regard the So often those who have more present struggle. The West tends recently arrived among us can see to treat it basically as a clash of and interpret our circumstances interests between two great pow- more clearly than we do ourselves. ers. Such a concept leads to an ex- Listen for a moment to another pectation — futile in this case — great intellect. He is Dr. Charles that skillful negotiation by diplo- Malik, Professor of Philosophy at mats can settle the differences. the American University in Beirut It is a futile approach because in his native Lebanon, onetime to the opposition this is by no President of the United Nations means a mere balance-of-power General Assembly, and now teach- affair. Rather they believe in, and ing at American University in it is their purpose to bring about, Washington. Writing in the De- what they consider a new age in cember issue of The Rotarian, he human society, the emergence of says: which requires only the destruc- “Morally and spiritually the tion of the philosophy and institu- communists put free men on the tions of the prevailing social or- defensive; they make us feel der. guilty; they talk in terms of To this end they are engaged in ‘capitalism,’ ‘imperialism,’ ‘coloni- a total, unceasing struggle on alism,” ‘monopolies,’ ‘profits,’ ‘ex- many fronts and by many meth- ploitation,” ‘means of production’ ods — with success a long-range ... And how do we take up the objective, and with strategic re- debate? We usually answer that treat whenever necessary to pro- the exploiting capitalism of the gress toward ultimate victory. nineteenth centurynolongerexists, Their strategy is not so much the that imperialism has been liqui- acquisition of territory as it isthe dated, that monopolies are now weakening of the philosophical ce- owned by the people, and that, as ment that holds together the es- to profits, everybody now shares tablished order of the Western them. There is about this response World. Their aim is people, in- a pathetic air of apology, a sickly dividuals and groups, stripped of note of timidity, and those who old-order purposes and thus de- make it suffer from a guilty con- livered by the default of any science. When we thus accept to higher spiritual values into the be drawn into debate with the “new light” of atheistic authori- communists on their own terms, tarianism. we confirm them in the feeling ===== PAGE 42 ===== 40 THE FREEMAN September that they are right. It is as is just as pertinent. We are yet a though we were telling them: young nation, as time is measured ‘You are right in your attack; we in national history. But have we are sorry for our past ways; but, come so far and changed so much behold, we have now corrected that we no longer hold in full them.’ measure the humanistic and spir- “This will not do. The commu- itual values that the opposing nists should be answered, not forces would destroy? Have we apologetically, not as though they weakened the philosophical foun- were right, but in . . . human, dations of our own society? And moral, and spiritual terms.” if we have, with what do we now Every businessman should read oppose the ideology that rises the whole of Dr. Malik's chal- against us? lenging article. Let me quote one How much are we devoted to more sentence: “The present mo- individual freedom of action? ment in history requires, more How inviolate is the institution of than any other moment in the private property? How much do past, that those who know and be- we respect the market as the de- lieve in man, freedom, truth, and terminant of production and dis- God, pass to the offensive on every tribution? How much do we be- front.” lieve in preserving competition— Dr. Malik calls for a spiritual or have we switched to a status- awakening in the West. Nor is quo concept of preserving competi- his by any means a lone voice. The tors? How much do we understand struggle is only incidentally in and how much are we devoted to military terms. It is warfare in the profit system — or, more ac- our time, and perhaps in our chil- curately, the profit and loss sys- dren’s children’s time, on philo- tem? How readily do we accept sophical, moral, and spiritual the responsibilities without which grounds. the rights of citizenship in a dem- How did we get to be a world ocratic society become a mere li- power? How did we attain the cense to be a predator on other capacity for such great material citizens? output? From whence did we de- velop such a potent philosophical A Significant Breakthrough and spiritual force that the now The United States was the first opposing ideology feels compelled nation, at least in modern times, to destroy it? to establish a form of government, And perhaps another question and legal, social, and economic in- ===== PAGE 43 ===== 1962 THE SPIRITUAL STRENGTH OF THE AMERICAN SYSTEM 41 stitutions, solely of its own choos- pression of the Will of God, ing. No heavy hand of history against which it was impious to stood in the way. No dead weight rebel. The individual thus was of institutional rubble blocked the called upon to be resigned to his erection of a wholly new struc- lot, and the trials of this life were ture. held to be of no significance Most writings of American his- against salvation in the next. (2) tory have been wholly inadequate St. Ignatius must be credited with in treating the timing of our na- a fundamental change. He taught tional origins. America was dis- that proper individual action is to covered (more accurately, redis- pray to God as though everything covered) in the period of explora- depends entirely upon God — and tion that coincided with the weak- then to work and strive as though ening and downfall of European everything depends upon oneself. feudalism. The fourteenth century This modified the “Will of God” renaissance of learning stirred a concept to include Reason and In- great yeast pot that by the mid- tellect. Responsibility came to rest sixteenth century led to marked upon the individual, for the glory changes in religious philosophy, of God, to develop his talents, and and most notably in Christian to follow the dictates of his en- ethics. In earlier monastic ideal- lightened conscience. Rather than ism, the Christian man was almost live in monastic withdrawal, the called upon to retire from the individual became materially re- workaday world. The sixteenth sponsible to himself and morally century changes led to the rise of responsible to God. capitalism in the West. The Add to this a second illustra- Protestant Reformation usually tion: (1) The earlier teaching of has been credited with the moti- the Church had been that buying vating force — but this has not and selling, production for eco- seemed to me a full or adequate nomic gain, trading in material explanation. I believe it impor- goods —all this was avarice, and tantly overlooks the teachings of avarice is sin. (2) In the contrast- St. Ignatius. ing ethics taught by St. Ignatius, man became obligated to God to Individual Responsibility develop his capacities, to partici- Let me illustrate: (1) The ear- pate in the affairs of the world, lier teaching of the Church had and to strive as though his entire been that the position in society well-being depended on his own into which one is born is an ex- efforts. ===== PAGE 44 ===== 42 THE FREEMAN September Self-Development tioned and philosophically recast. The parallel of this with the Again, the emerging nation here ethical teachings of Calvin is com- in America directly received the plete. Calvin taught that man is benefit. responsible to God for his self- development; that rather than live Philosophers of Enlightenment unquestioningly in the position in It is always difficult to pin down society to which he might be born, precisely the origins of ideas. The he has an obligation to choose his time we are discussing commonly own calling, where he may exer- is called The Period of Enlighten- cise his talents. This he must do ment — a time when the philosoph- with a sense of religious responsi- ical justifications of the Absolutist bility — and he must then live (monolithic) State and the Divine piously and frugally, and morally Right of Kings were so effectively respongible to God. undermined as to weaken them Thus, whether we see the six- for all time in Western thinking. teenth century as either Protes- The philosophers of The En- tant or post-Ignatius Catholic, the lightenment were many, and for economic consequences are the the most part deeply religious same. One could not abide by these men, They polished brilliantly the revitalized ethical dictates with- concept of the equality of all men out accumulating a bank account before God ~ together with the — in other words without becom- corollary of Reason and Con- ing a capitalist. It was immedi- science which God had given to ately after these concepts had per- men for their guidance. They vaded European thought that the studied the natural universe and Colonists moved into Anglo- inferred Natural Law from the America. And here they lived behavior and responsibilities of these concepts, pursuing them mankind. In and through this with almost religious fervor, and Natural Law they developed the in a manner that did not distin- concepts of individual human guish one nationality background rights, and of the freedoms and from another. the responsibility of man, through And in like manner to the six- his thought and his conduct, to teenth century re-evaluation of bring the institutions by which the Christian ethic, the eighteenth man lives into harmony with century in Europe was a time God’s Natural Universe. when the character and form of Speaking in terms representa- government was equally ques- tive of his time and his group, ===== PAGE 45 ===== 1962 THE SPIRITUAL STRENGTH OF THE AMERICAN SYSTEM 43 Locke argued that all men being tended to function in a society ac- equal and independent before God, tively responsive to the moral it followed that no person has any principles of the revitalized Chris- right to harm another in his life, tian ethic. his liberty, his welfare, or his pos- sessions. And liberty could not de- Look at the Record generate into mere license because If this, then, is the background of each man’s recognized responsi- of our social organization, of our bility to God for his actions. institutions, indeed of those values This, I submit, is the exalted, that a wholly opposed ideology the optimistic, the spiritual, the now would destroy, what has been perfectionist concept of man as the performance of these values an individual being that blossomed and institutions in practice? The from the seeds of the Renaissance, United States is 173 years old, the revitalization of Christianity, figured from the adoption of its and the notable period of The En- Constitution. At its birth date, lightenment. This is the philos- the population was under 4 mil- ophy of human rights and respon- lions. It is today 185 millions — sibilities familiar to, and accepted living with material comforts and by, that extraordinary group of conveniences, both in total and in men who drafted a Declaration of general distribution, that could Independence and a Constitution not have been conceived by even for a new nation, at precisely the the kings of earlier times. One flowering time of these concepts need not dwell on material attain- in European philosophical ment. The more significant matter thought. is how it was attained. Most notably from Locke and There were, of course, vast re- from Montesquieu, the founding sources; there was “the continent fathers derived the concept of to open”; there was the “manifest limited and divided governmental destiny” that America should ex- authority, of checks and balances pand from ocean to ocean. But among the various divisions of the development certainly was not government, of governmental ac- based alone on resources and tion only with the consent of the space. Other areas, other peoples, governed, and of freedom of in- have had these and still have re- dividual action retained by the mained economically dormant, The citizen. And though the point distinctive difference is in our hardly needs repeating, their in- free economic institutions. stitutions of government were in- Stripped of everything else that ===== PAGE 46 ===== 44 THE FREEMAN September fails to explain the blossoming of mote an end that is not part of his America as an economic giant, intention. Nor is it the worse for how can we finally discount the in- society that this is so. By pursu- stitution of private property; the ing his own interest he promotes freedom of individual choice and that of society more effectively action; the free movement of than he intends to promote it. I trade within our boundaries; the have never known much good to right of the individual to strive be done by those who affected to and to enjoy the fruits of his trade for the public good.” labor? Smith, with the other philoso- . } phers of his time, believed in priv- Adam Smith’s Contribution ate property, in its use by the It was more than new concepts private holder, and in the reten- of government that this young na- tion of gain from its use by those tion acquired from the philoso- who hold it. The sequence of logic phers of The Enlightenment. The based on Natural Law is that man year 1776 witnessed not only the has a right to life; therefore, the Declaration of Independence but right to sustain it; therefore, the also the publication of Adam right to the fruits of his labor in- Smith's Wealth of Nations, often cluding the property derived called the most important treatise therefrom. And never elsewhere on economics ever published. have these rights, combined with Listen again to this famous ‘“in- freedom of action and with re- visible hand” passage from his source potentials, so greatly un- book: locked the productive genius of “As every individual endeavors mankind — for the benefit of both as much as he can to employ his individuals and society, and in capital in the support of industry precisely the manner set forth by and so to direct that industry that Adam Smith in his “invisible its products may be of the great- hand” passage. est value, every individual neces- The beginnings were modest, sarily labors to render the annual but material production in the revenue of society as great as he American economy has risen at can. He generally, indeed, neither an increasing rate. Stimulated by intends to promote the public in- private property, by the reward terest or knows how much he is of economic gain and the fear of promoting it . . . He intends only loss, American producers have his own gain, and he is in this... been the greatest appliers of led by an invisible hand to pro- science and innovators of tech- ===== PAGE 47 ===== 1962 THE SPIRITUAL STRENGTH OF THE AMERICAN SYSTEM 45 nology to be found in history. We cent agrarian. We are today 90 borrowed science from all over the per cent urban in our way of life world and directed it toward an- Our society is now vastly more swering production problems. complex. Interdependence among Only recently have we turned sig- the millions of divergent special- nificant attention to our own re- ized producers has displaced the search potential in pure science, relative independence of an ear- so that more knowledge may be lier agrarianism. Numberless cir- available to apply to still more cumstances that affect individual production problems. welfare are far less under individ- oo ual control than in a simpler day. Market Place Directives Still further, the degree and the We have, for the most part, speed of technological change have kept the direction of our economic progressed so rapidly that resul- production and consumption in the tant social and economic changes market place — which is the surest have been endlessly pressed to of all ways of directing scarce re- keep pace. sources into the uses that con- All these changing circum- tribute the most to satisfying hu- stances in our economy and society man wants. The market place is have been proceeding for decades. where the total society, operating It is the degree of change, and the as a committee of the whole, ex- speed, and the breadth of its im- presses its aggregate wants in pact that now focus attention and terms of relative marginal utili- concern on these matters far more ties. It is likewise where all supply than in earlier times. That is why flows, constantly changing and ad- individuals of like interests have justing, to serve the most pressing been grouping themselves to- and the most rewarding of human gether as never before, to pro- wants. Thus have our economic mote and protect their mutual con- activities been directed, not by cerns. We have become more a the dictate of some arbitrary groupistic than a truly individual- power, not by the authority of a istic society. This fact does not central committee, but strictly ac- clash with free institutions as cording to the reward to be gained long as group membership is vol- for anticipating and satisfying untary and as long as the groups human needs and desires. do not arrogate to themselves com- To be sure, our society has pulsory powers over individuals. changed. The America of Wash- And it is these same circum- ington and Jefferson was 90 per stances of change that have led to ===== PAGE 48 ===== 46 THE FREEMAN September demands for what is broadly called to institutionalize the whole social legislation. This is not be- gamut of welfare activities. Ob- cause Americans fail to appreciate viously, institutionalized, tax-sup- the capacity and productivity of ported welfare greatly reduces the their economy — but rather, and ability of the voluntary giver to do especially since the 1930's, because what he otherwise would do. More- they fear the instability that re- over, institutionalized welfare re- putedly characterizes any highly duces the personal responsibility advanced industrial economy both of those who give and of based on free competition. This those who receive. concern over instability is in part Second, a very substantial bur- justified, but in far greater part den of welfare cost can be borne is a carefully nurtured and end- by a productive economy, and can lessly expounded view of persons be carried indefinitely, if, in order who do not believe in free eco- to meet the burden, our funda- nomic institutions and whose de- mental free economic institutions sire is to change them. are not changed —and most spe- cifically if the direction of the economy is left in the market Welfare, social legislation, the place. If, to meet welfare demands, care of those who have less by the economic activities of the na- those who have more —all have tion are centralized under public become battle cries in our con- control, the capacity for economic temporary public debate. Where progress — including the support do they fit in a society that would of welfare — is inevitably lessened. retain the free institutions that Third, there is the question of have served it so well? The an- how far the welfare activities swers are neither simple nor should be extended. Those who do single. Let me make three points. not produce must be carried by First, it appears that a prosper- those who do. If the load of wel- ous and spiritually awakened peo- fare activities becomes sufficiently ple become generous toward the great on those who must carry less fortunate about in proportion the burden, a rational person to the improvement and assurance might well conclude that “poverty of their own well-being. This is is the best policy.” We must re- borne out by the enormous total member that all the other de- of charitable contributions by the mands on the public purse must American people, In consequence also be carried entirely by those I am far from sure that it is wise who do produce. And a free so- Welfare Activities ===== PAGE 49 ===== 1962 THE SPIRITUAL STRENGTH OF THE AMERICAN SYSTEM 47 ciety cannot be maintained if enterprise must not be denied its many citizens have been forced essential reward for service per- to conclude that productive effort formed, or the capital that is is not worthwhile, saved will not be borrowed and It is within the framework of allocated to productive expansion. these three points that I believe A market-directed economy, if we our present complex welfare ques- will preserve it, is the surest first tions must be answered. step in answering all these needs. } Perhaps much of the lack of un- The Importance of Capital derstanding of competitive enter- Looking forward, as a thought- prise, its loss of prestige as indi- ful people must always do— and cated by Dr. Malik, the very ane- desiring continued vitality and mia from which our free economic drive in our economic advance — institutions seem to be suffering, some other factors seem clear. is all traceable to the common Most notable of these is that capi- tendency to criticize business tal must be accumulated and in- profits. Most would agree that a vested at risk in a truly enormous businessman’s first responsibility total quantity. is to protect and preserve the en- The labor forces continue to terprise that is in his stewardship. grow. This requires new jobs, new But if that is his first job, his capital, new businesses, new en- parallel responsibility is to make terprise risks. Technology is mak- a profit — in fact, the biggest profit ing our industrial equipment ob- possible in a competitive environ- solescent even more rapidly than ment. it is wearing out. A new tool to Reconsider the origin of a profit displace an old one, a new tech- in business. First, it must be de- nique better than one now in use, rived from a good or a service that a new plant engineered to tomor- is wanted in the market place — row’s needs — all these are vastly otherwise there will be no custom- more costly than depreciation al- ers. Second, it must come from lowances will cover. combining cost factors, skillfully New capital arises only from enough to leave a margin between earnings plowed back or from the a competitively determined selling current savings of the public. Sav- price and competitively determined ing must be made attractive, and costs for the production factors. the future value of savings must Resources to satisfy human be assured, or the capital we need wants are scarce. Service to so- will not be forthcoming. Business ciety dictates that they be used ===== PAGE 50 ===== 48 THE FREEMAN September efficiently, and for turning out the among us. It is one thing to take most desired goods. The skill to a relatively primitive economy use resources — that is, the skill to and direct its efforts toward a few organize and to manage—is a types of output — say steel, or scarce talent. The more skillfully submarines, or rocketry. It is the management function is per- quite another thing to direct a formed in fulfilling the wants of more developed and vastly more society as expressed in the market complex economy, the purpose of place, the more profitable a busi- which is to satisfy the whole ness will be. infinite range of human goals and wants. The profit system, working Need I say that a profit is diffi- through free institutions, is the cult to come by? Need I empha- sparkplug of this second type of size that in a free and competitive economic system — a sparkplug so market, the size of the profit de- dependable and effective that the rived is in direct proportion to the ideological opposition we now face competitive service offered to so- will do everything in their power ciety? Need then a businessman to disparage it, to undermine it, ever apologize for a profit? The to turn us away from it if they question is rhetorical. can, and to destroy it as com- Profit is the life blood of a free pletely as possible. economy. The opportunity to make a profit — or the corollary, the spur All Progress Stems from of ever possible loss —is the “in- the Profits of Enterprise visible hand” that provides our Just one more point. Every job essentials and our comfort, com- and every home in the length and pletely automatically, and in an breadth of our nation is main- economic system so vast and com- tained because the business proc- plex that no person can even de- ess has functioned and made a scribe it, to say nothing of fully profit — either a profit in the past understanding or being able to or a profit now or the reasonable direct it. In guiding the economy hope of a profit in the future. And to the satisfaction of society’s re- any school has the same origin, quirements, the profit system does or any church, or any charity, or what no central authority is ca- any welfare payment — or, indeed, pable of doing — even granting any government function. All of that the authority might be these— our personal welfare, our staffed by the most able managers public welfare, our future welfare The Profit and Loss System ===== PAGE 51 ===== 1962 THE SPIRITUAL STRENGTH OF THE AMERICAN SYSTEM 49 — stand on a single support: the There is no group in our coun- profits of enterprise. try upon whom this responsibility The distinction between our rests more squarely than on the economy and the communist type managers of enterprise and of our is the profit system versus the capital assets. In efficient produc- Central Authority; the institution tion, and in the further advance of of private property versus owner- widely distributed social benefits, ship by the state, the freedom of we have the surest basis to cancel individual choice and action ver- out an absolutist and atheistic sus the denial of these rights. ideology that would destroy us. Let us keep these distinctions We cannot do this by slavish, clear. Let us be proud of our inept imitation of that alien code. heritage and of the stewardship The task demands the best we have with which we carry it forward to give, pursued with nothing in a free society. short of spiritual dedication. OF EXCESSES MAURICE H. STANS 1 AM DEEPLY concerned about our last 30 years, the proud philos- national course of events. As a ophy and sturdy character of our result of new doctrines that have country are fast deteriorating. We been allowed to develop over the are gradually surrendering our American spirit, based on initia- Mr. Stans was Director of the Budget under : : : President Eisenhower and is now President of tive and self-reliance, for a social Western Bancorporation and Vice-Chairman, 3 United California Bank. This article is from and economic mess of pottage. We his address before the Second General Session are fast eroding our historic per- of the Chamber of Commerce of the United . States, Washington, D. C., May 1, 1962. sonal freedoms under the guise of ===== PAGE 52 ===== 50 THE FREEMAN September an all-encompassing governmental 2. The federal government con- benevolence. We are destroying tinues to grow, as new agencies, the sovereignty of our states and programs, and personnel are handing over our locally-based in- added in proliferation. Civilian stitutions to an all-powerful cen- employees have increased more tral bureaucracy. And, by our con- than fourfold from 592,000 in tinued experimentation with eco- 1930 to 2,638,000 at the end of nomic panaceas, we are risking the next budget year. the loss of the sinews that hold 3. The interest-bearing national our democracy together. debt has grown in peace and war If these apprehensions are right from $16 billion in 1930 to $300 and the natural consequences fol- billion now, and it is certain to low, we may be in the sad posture continue upward. Interest on this of watching the slow destruction debt is now nearly $10 billion a of democracy and the American year, more than the entire budget way of life by the inept acts of in 1940 and equal to 10¢ out of its own beneficiaries. . . . every dollar of taxes collected. ‘ This persistent growth in debt is A Sorry Record . a direct reversal of the philosophy Here is some boiled-down statis- of our government in the first 140 tical evidence: years of its existence, when the 1. The entire budget of the goal was to become debt-free. United States was $3 billion in 4. We have mortgaged the fu- 1930, including interest on the ture to an incredible degree. If debt and the cost of national de- you add to the interest-bearing fense. By decades it has grown to debt (a) our unfunded liabilities $9 billion in 1940, to $40 billion for past services of government in 1950, to $80 billion in 1960, and employees and war veterans,. (b) it is headed toward another mas- our legislated contracts and com- sive increase by 1970. The next mitments for future spending be- administrative budget will ap- yond current costs of defense, proach $100 billion, and the total welfare, and government, and (c¢) of spending in the budget and the actuarial deficiency in our so- trust funds will be close to $125 cial security system that must be billion next year. Government collected through future tax in- spending is compulsory spending, creases already scheduled in the and the more it increases, the less law, the total of our government's is left in freedom of choice for liabilities and commitments is the individual. well over $1 trillion. This “gov- ===== PAGE 53 ===== 1962 GOVERNMENT BY CREDIT CARD 51 ernment-by-credit card” has im- than our income from other coun- posed a present mortgage on the tries. Our gold is now down from future of our people equal to $22,- $24 billion to $1614 billion, of 000 per family of four. which all but $4 billion is needed 5. Despite new fancy theories to back our currency. Short-term of balancing the budget over the foreign claims that can be as- cycles, we have gone in the red serted against this $4 billion are 26 times in the last 32 years and now $18 billion. And the balance have paid our bills without bor- of payments continues to run ad- rowing only six times. The poli- verse at between $21% and $4 bil- cies of the present administration, lion a year. As banker to the unless abruptly changed, are likely world, we are not running a good to produce four consecutive bank. deficits. 8. National wage policies have 6. A large part of the increase recognized a political balance of in federal spending and debt is power in favor of labor. For some the result of a massive assump- years wage increases have outrun tion of responsibility by the gov- increases in productivity. Indus- ernment for cradle-to-grave wel- try has been at fault, too; in some fare, in many cases, without a test cases it has failed to exert the of need and at the disdain of the efforts needed to reduce costs and virtues of personal thrift and self- hold down prices. The result of reliance. This has created an ac- both has been a price structure celerating centralization of power that has contributed to a cost-push in Washington, a lessening of con- inflation and to our difficulties of: trol and influence back home, and meeting competition in world a decline in personal responsibility markets. and morality. And the. course has 9. Qur cost of living has ad- not been run, because more and vanced significantly, as inflation- more ideas for government inter- ary policies in both the public and vention in our lives sprout daily. private sectors have exacted their 7. Our gold supply has been price. It is still moving upward, heavily depleted in recent years slowly at the moment, and our dol- and is still under threat. The cause lar of 1940 is now worth 47 cents. is our unfavorable balance of pay- It would be a fatal mistake to be- ments: our overseas outgo for im- lieve that drastic inflation ports, services, travel, invest- couldn’t happen here. Our fiscal ments, foreign aid, and military policies are an open invitation to purposes regularly run higher a crisis for the dollar. ® ===== PAGE 54 ===== No NA BS FRIEND BATTLES rind The following editorial from the INGERSOLLetter of June 1962, published by The Ingersoll Milling Machine Company of Rockford, Illinois, refers to a local situation. But it might happen anywhere. “ THINK of a good friend of yours — certain specified conditions of em- one you might ride to work with, ployment. Your friend wants to eat lunch with, go fishing with. work. You don’t. What would it take to get you to Would you just stay home and fire a shotgun through his front let your friend make his own free window? Or to sneak into his ga- choice? You very well might, un- rage after he has gone to bed and less it so happened that a third dump paint all over his new car? party had come between you — You may think you couldn’t someone who specializes in stir- treat a good friend this way, yet ring up trouble and turning friend others have actually come to act against friend. This is the kind of toward their friends in this situation in which sufficient en- strange and uncivilized manner. couragement by such specialists You certainly wouldn't believe can easily lead to violence and you could be led to do such things wanton destruction of private because you and your friend dis- property. agreed over the terms and condi- If you think, “It could never tions of your employment. Most happen to me; I wouldn't be that people wouldn’t think of that as a kind,” you're probably right . .. reason for abandoning friendship. but then, you might be surprised. Let’s say, nevertheless, that you Of course, just the two of you — disagree with your friend as to you and your friend — could settle whether you both should go to almost any kind of difference that work at a particular place under might come along, with no need 62 ===== PAGE 55 ===== 1962 FRIEND BATTLES FRIEND 53 for violence. But with a little punctured with nails strewn in “help” from the outside, from the road; cars with the rear view these specialists, it’s surprising mirrors torn off, or with paint how friend can be turned against scratched from end to end by friend and made to do the most nails held in the hands of men awful things. standing at the parking lot gate. Not far from The Ingersoll Mill- All these shocking acts are on ing Machine Company, not far the record. They have been per- from the place where you sit down petrated here in our own com- with this friend of yours and eat munity, by friend against friend, your sandwich, not far from the by neighbor against neighbor. roads where the two of you drive They have demonstrated the star- back and forth to work together, tling extent of men’s capacity for there are men who are commit- inhumanity toward other men. ting the most wanton acts of vio- The record itself is a sorry one, lence and destruction against their but more shocking than all these friends. acts of violence is the fact that The place is the Mattison Ma- with these things going on right chine Works, here in our own city, the Rockford The people are men just like community as a whole approves of you and your friend, and the them by its silence. things friend has done to friend If a group of boys on the way include crimes more like what home from a weekend at the lakes you'd expect in a Cuban revolu- fired a rifle into a school or store tion. window, the story would be all Paint bombs have been thrown, over the front page and everyone windows shot out of automobiles would be talking about juvenile with a rifle. A window was blasted delinquency and what to do about by a shotgun with sufficient force the teen-age problem. Yet, when to cause portions of the glass to the offenders are adults involved slice the scalp of a woman sitting in a disagreement over employ- in her home. ment conditions, most leaders of Four men called on a woman 60 the community say nothing. years old who had suffered a heart Clergymen who wax eloquent on attack and frightened her so bad- the subject of man’s inhumanity ly that it was no longer possible to man in Laos or Cambodia sweep for her son to leave her to con- this disgrace of our own commu- tinue working to make their liv- nity under the rug of silence, al- ing. Tires slashed with knives, or though there has been complete ===== PAGE 56 ===== 54 THE FREEMAN September disregard for the private property work today, and I will do anything and safety of other people—the within my power to prevent you, basis on which our society was including endangering your life founded. and the lives of your loved ones. It is no excuse to say, “This is a True, most of us would never job for the police,” for the police reach this state of mind alone. We are doing their best. But the po- would need encouragement and lice are always hard put to enforce constant prodding by professional any law when its violation seems antagonizers. to have community approval. But it has happened, is happen- And what is the issue that ing, in our town, among people we causes some men to treat others know; and the best way to avoid this way? It’s a very simple dis- it is to avoid the people who traf- agreement. One man says, I want fic in destroying friendships . . to go to work today. His friend the only people who have anything says, I don’t want you to go to to gain by it. ® ii Oputil Juss MARTIN VAN BUREN THOSE who look to the action of it was created and the powers with this Government for specific aid which it is clothed. It was estab- to the citizen to relieve embarrass- lished to give security to us all in ments arising from losses by re- our lawful and honorable pur- vulsions in commerce and credit suits, under the lasting safeguard lose sight of the ends for which of republican institutions. It was —_— not intended to confer special fa- This is an excerpt from President Van Buren’s . . special message to Congress of September 4, vors on individuals or on any 1837. He had called a special session of Con- gress in consequence of the Panic of that year classes of them, to create systems and the subsequent business depression. He of agriculture, manufactures, or was urged to enter upon government regulation and control in view of the “emergency.” His trade, or to engage in them either reply speaks eloquently for itself. Excerpt taken . . . from James D. Richardson, Messages and separately or in connection with To aren: Presidents (New York, 1897), individual citizens or organized ===== PAGE 57 ===== 1962 NO SPECIAL FAVORS 55 associations. If its operations the objects of its establishment, were to be directed for the benefit and to leave every citizen and of any one class, equivalent favors every interest to reap under its must in justice be extended to the benign protection the rewards of rest, and the attempt to bestow virtue, industry, and prudence. such favors with an equal hand, I can not doubt that on this as or even to select those who should on all similar occasions the Fed- most deserve them, would never be eral Government will find its successful. agency most conducive to the se- All communities are apt to look curity and happiness of the peo- to government for too much. Even ple when limited to the exercise of in our own country, where its its conceded powers. In never as- powers and duties are so strictly suming, even for a well-meant ob- limited, we are prone to do so, ject, such powers as were not de- especially at periods of sudden em- signed to be conferred upon it, we barrassment and distress. But this shall in reality do most for the ought not to be. The framers of general welfare. To avoid every our excellent Constitution and the unnecessary interference with the people who approved it with calm pursuits of the citizen will result and sagacious deliberation acted in more benefit than to adopt at the time on a sounder principle. measures which could only assist They wisely judged that the less limited interests, and are eagerly, government interferes with pri- but perhaps naturally, sought for vate pursuits the better for the under the pressure of temporary general prosperity. It is not its circumstances. If, therefore, I re- legitimate object to make men frain from suggesting to Con- rich or to repair by direct grants gress any specific plan for regu- of money or legislation in favor lating the exchanges of the coun- of particular pursuits losses not try, relieving mercantile embar- incurred in the public service. rassments, or interfering with the This would be substantially to use ordinary operations of foreign or the property of some for the bene- domestic commerce, it is from a fit of others. But its real duty — conviction that such measures are that duty the performance of not within the constitutional prov- which makes a good government ince of the General Government, the most precious of human bless- and that their adoption would not ings —is to enact and enforce a promote the real and permanent system of general laws commen- welfare of those they might be de- surate with, but not exceeding, signed to aid. @® ===== PAGE 58 ===== A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN ACH NATIONS AND THE POOR | SU BARBARA WARD, of The Economist nations” to the “take-off place” of London, is a personable young presumably leading to the crea- lady who commands a pleasant tion of at least a minimum of abun- prose style. But whenever she dance, Miss Ward does, of course, tackles an economic subject, she talk a lot about the appeal to persists in putting the cart before “mind and spirit” and “resources the horse. of faith and vision.” But she Her latest book, The Rich Na- prefaces her succession of Portia- tions and the Poor Nations (Nor- like speeches with the statement ton, $3.75), is eloquent and, up to that “to me, one of the most vivid a point, quite persuasive. Though proofs that there is a moral gov- she tinctures her writing with the ernance in the universe is the fact spirit of Shakespeare's Portia that when men or governments (“the quality of mercy is not work intelligently and far-sight- strained’), her primary appeal is edly for the good of others, they to the self-interest of the “rich achieve their own prosperity, too.” nations” which cluster around the Well, how can you be against North Atlantic Ocean. Her argu- Portia when, to the “quality of ment is that the wealthier coun- mercy,” the lady also adds the ap- tries must do something for the peal of the profit motive? All this “proletarian” nations of the Ori- and 6 per cent, too! The answer, ent and the African and Ameri- in the particular instance of Bar- can tropics if only to keep the bara Ward, is that she doesn’t communists from exploiting the really know what it takes to work envious anger of those who look ‘far-sightedly for the good of upon themselves as the down-trod- others.” She knows the words den. without really knowing the tune. In asking the “West” to put up Miss Ward's main trouble is “one per cent of national income” that she leaves out of account the as a fund for bringing the “poor concept of the inalienable rights 56 ===== PAGE 59 ===== 1962 RICH NATIONS AND THE POOR 57 of the individual. On page 155 of or affluent society.” And she in- her book, four pages from the end, sists that the proletarian nations she does finally get around to men- of Asia, Africa, and the American tioning “freedom.” But this comes tropics will turn to communism to as an afterthought, as applied to achieve the “mutation” if the individuals in the ‘proletarian” West does not help them to get it. nations. ’ One of Miss Ward's earlier A Question of Privilege books was titled Five Ideas That Before offering her own blue- Change the World. In The Rich print for aid, Miss Ward gives us Nations and the Poor Nations, a good deal of back history, both still addicted to the numbers of the development of the commu- game, Miss Ward speaks of the nist idea and of the Western re- “four revolutions” that are alter- treat from colonialism. Though ing our environment and the way much of this history is unexcep- we live. The “first revolution” is tionable, her phraseology, for all that of “equality” — “equality. of of its graciousness, occasionally men and equality of nations.” The sets the teeth on edge. She uses “second revolution” concerns “the the latter-day economic gabble idea of progress,” an emphasis on about “take-off” and “infrastruc- the “here and now,” the “this- ture,” which are the clichés of the worldiness” of wanting goods and new “sophistication.” And she opportunities. (Adlai Stevenson’s talks of the North Atlantic cluster phrase for it is “the revolution of as the “privileged nations,” which rising expectations.”) The “third must mean, if it means anything, revolution” is the “biological rev- that such things as the steam en- olution,” sometimes called the pop- gine and the Bessemer process ulation explosion, a two-edged and the atomic pile and the dis- phenomenon that can create both covery of antibiotics are to be markets and misery. And, finally, classified as gifts from a rich there is the “fourth revolution” uncle, not as the end-products of deriving from the “application of decades and even centuries of pa- science and saving —or capital — tient experimentation and work. to all the economic processes of The truth is that the West life.” scrabbled for every inch of its suc- Miss Ward argues that the four cess as Miss Ward herself recog- revolutions, taken together, have nizes on page 39 of her book when produced “the mutation of a quite she remarks that “for over a new kind of society: the wealthy thousand years, one of the great ===== PAGE 60 ===== b8 THE FREEMAN September drives in the Western economy and the “wealthy or affluent so- was to open trade with the wealth- ciety” came into being. ter East.” (The italics are ours — What has happened in recent and in the margin of Miss Ward’s years is that the newly emergent book we note our own scribbled no- nations see the end results of the tation, “the ‘privileged’ West, my revolution of the individual with- foot!”) As Miss Ward says, “one out grasping the importance of of the problems facing [East- the unique dynamism that origi- West] trade was the West's in- nally set everything in motion. A ability to provide very much in Castro, a Mao Tse-tung, thinking return.” So it seems that it was that the results can be had with- the East that was “privileged” — out ascertaining the true cause, and that the West had to work plunge blindly ahead, confiscating like the devil to make things that individual capital, telling scien- were worthy of barter before it tists that they are wards of the could trade at all. superstate, and treating personal . Lo. “equality” as the right to an equal Discovery of the Individual share in misery, not as title to In its effort to transcend the equal respect for one’s inalienable conditions of life in the “cold and rights before the law. And in- uncomfortable” regions around stead of breaking out of the circle the North Atlantic, the West got of the “have-nots,” Cuba and nowhere until it discovered the China become far more miserable primacy of the individual. This is than they had ever been under what Miss Ward leaves totally out “colonial” and “bourgeois” and of account for 155 pages of her “imperial” dispensations. 159-page book. The revolution of As for Communist Russia itself, the individual and the accompany- it has had to liquidate three mil- ing development of the philosophy lion kulaks, accept four years of of freedom created the aspiration lend-lease from the West, and con- to “equality” and gave rise to the fiscate the rocket technology of idea of the possibility of progress. the Germans in order to create the It also set men to tinkering and to basis for its contemporary mili- scientific research. Assured by the tary might. This military might new Lockean revolution that the looms large to Poles, Hungarians, rights to property would be re- Chinese —and to many in the still spected by governments, men ‘“uncommitted’’ and “neutral” started to save. And, sparked by countries. But to feed the men in savings, capitalism flourished — the Russian munitions industry ===== PAGE 61 ===== 1962 RICH NATIONS AND THE POOR 59 and in the armed forces, half the nonsense that economic “input” Russian population must remain might just as well be left to the chained to the hoe and the plow. hands of a government bureauc- Such a waste of manpower is racy. hardly a happy augury for sus- Strangely enough, the antidote tained offensive effort in any long to Miss Ward's way of thinking is war with nations that feed them- to be found in John Kenneth Gal- selves by giving a mere 8 or 10 braith’s most recent book, Eco- per cent of their human energy to nomic Development in Perspective the raising of crops. (Harvard, $2.50). Before going out to India as President Kenne- The Conditions for Progress dy’s Ambassador, Professor Gal- Must Come First braith was known as a proponent In a backhanded way Miss Ward of such things as price-fixing and knows that behind the affluent so- the glorification of the “public ciety there is considerably more sector” of the economy. But to the than the idea of “equality” and Indians Galbraith has urged the the development of science and the virtues of letting the corporation constructive augmentation of the grow “under conditions of lib- birthrate to expand local markets. erty.” The “corporate personal- She speaks of the British gift to ity,” says Galbraith, is “damaged India as including “the develop- by both well-intentioned and ill- ment of modern commercial law, intentioned intervention. There 1s the notion of contract, a new sense little to choose between the two.” of security for property, a new (The italics are ours, occasioned belief that if the merchant sets to by our extreme surprise to find work to develop, accumulate, and such a sentence in a Galbraith invest, his wealth should be se- book.) cure.” As for aid to “undeveloped” na- Exactly! But this, like the casu- tions, Galbraith argues that it is al introduction of the idea of in- useless to pump capital into re- dividual freedom, comes as an af- gions that lack honest standards terthought. Instead of preaching of government and literate popu- to the “proletarian” nations the lations. India herself, as a result need to develop a middle class that of administrative and entrepre- doesn’t have to kowtow to a state neurial talent inherited from the which owns the “commanding period of British “oppression,” heights” of industry, Miss Ward may be ready to use capital. Even acquiesces in all the old Fabian so, Galbraith warns the Indians ===== PAGE 62 ===== 60 THE FREEMAN September that the danger of accepting capi- they dislike unsettling evidence. tal from abroad is that it “can be Dart’s evidence is unsettling, and a substitute for earning from not to anthropologists alone, but abroad.” Galbraith concludes this to political scientists and econo- portion of his lecture by urging mists as well — to all who are try- the Indians to emulate the early ing to figure out what it means to twentieth century Japanese in be a human being. Ardrey is a building an export industry for champion of Dart’s work and as- selling goods to “high-cost, high- gembles the evidence so as to make living” nations. out a cogent case —at least in a All of this represents a ‘new layman's eyes. Galbraith.” What we now need is Secondly, and by derivation, a “new Barbara Ward.” @® this book is an attack on The Ro- mantic Fallacy, written with evan- » AFRICAN GENESIS, by Robert gelistic zeal. The Romantic Fal- Ardrey. New York: Atheneum lacy is the set of assumptions com- Publishers. 380 pp. $6.95. mon to virtually the whole spec- Reviewed by Edmund A. Opitz. trum of social thought since the eighteenth century, from Classic THIS BOOK IS, first of all, an in- Liberalism to Marxism. The as- teresting yarn which, before the sumption is that man is an inno- story is told, has undermined the cent, benevolent, and rational ani- major premises of collectivism and mal who has been corrupted by utopianism. The author, a drama- his institutions. All that needs do- tist, has spent some years and ing, therefore, is external and so- traveled thousands of miles trying cial. Change man’s environment to unravel the mysteries of our and, as his circumstances improve, creaturehood in terms of the new a nobler race will emerge, shed- field knowledge of animal behavior ding the relics of the ages of bar- and especially in the light of re- barism. Men will be as gods on cent African archeological finds of Olympus; no more war, no more Raymond A. Dart and others. crime, no more poverty — onward Were Dart’s discoveries and re- and upward forever! Ardrey de- searches to be accepted by his fel- stroys this thesis and, in so doing, low scientists, revisions of cur- restores Original Sin with a ven- rently cherished scientific theories geance. In his hands, however, the would be in order. But scientists concept has no religious overtones. are human, after all, and once This book surveys recent studies they have made up their minds, of bird and animal behavior in the ===== PAGE 63 ===== 1962 OTHER BOOKS 61 wild, and finds — as might have hostility for the territorial neigh- been anticipated — that studies of bor . . .” Pushing the evidence these same creatures in zoo and pretty hard, Ardrey concludes that laboratory convey misleading im- we are children of Cain, murder- pressions. Deeply rooted patterns ous by original nature and in- of behavior include a pecking or- clined to bellicosity by latent in- der among birds and a leadership stincts. Man is “a predator with spectrum among animals. Birds an instinct to kill and a genetic and animals have a strongly de- cultural affinity for the weapon,” veloped sense of territory, of ex- the weapon is mankind's “most ercising domain over a given spot significant cultural endowment,” of the earth’s surface; and they are typical reiterated statements. have a rudimentary sense of own- It is combat that has made us, ership as it pertains to things. asserts Mr. Ardrey, and “no con- They are pugnacious in defending ditioning force can eradicate our their society and their own place genetic affinity for the weapon.” therein. Not war, but the elimination of Urging that man is linked to warfare would undo us, opening lower forms of life and has the up “a nightmare of unpredict- same basic instincts deep within ables.” We may mouth the phrases him, Ardrey argues that neither of peace, “yet war has been the human beings nor their societies most natural mode of human ex- can depart far from the basic pat- pression since the beginning of tern of all life. The ineradicable human history, and the improve- pattern of human society will be a ment of the weapon has been social structure characterized by man’s principle preoccupation hierarchy, nationalism, and prop- since Bed Two in the Olduvia erty; the basic virtues will be Gorge. What happens to a species martial. Cooperative and ethical denied in the future its principal behavior stem from “our innate means of expression, and its only necessity for society as a means means, in the last appeal, of re- of primitive survival,” but ethics solving differences? What will and cooperation halt at the na- happen to a species that has dedi- tional boundary; war is the natu- cated its chief energy to the im- ral mode of expression when deal- provement and contest of the ing with those beyond. “The pri- weapon, and that now arrives at mate has instincts demanding the the end of the road where further maintenance and defence of terri- improvement and contest is im- tories; an attitude of perpetual possible?” As Mr. Ardrey sees the ===== PAGE 64 ===== 62 THE FREEMAN September matter, without involvement in ineradicable in man. If so, man is warfare, man will go to seed. not just a murderous ape, but an One gets the impression that immensely adaptable creature with Mr. Ardrey feels he must shout to a wide range of possible ‘“natu- gain attention, and overstate his ral” behaviors. He loves to bam- case in order to clinch it. This is boozle and swindle himself, now unfortunate, for it may tend to by calling up visions of himself as obscure the many merits of the little lower than the angels, and book, both scientific and socio- now by posing as a pretty tough logical. Mr. Ardrey attacks The hombre. Primitive men were pret- Romantic Fallacy with such vigor ty tough, and so were our ances- that he overshoots the mark and tors on the frontier a scant cen- falls into another error, The Ge- tury ago. Real history is not for netic Fallacy. the squeamish. But primitive man The Genetic Fallacy is the as- was also— and this is important sumption that the final flowering if we wish to keep the picture in of a thing may be fully accounted focus —an artist, a worshiper, an for in terms of its first manifesta- inventor, and the domesticator of tion; that there is nothing in the the only animals and plants com- fruits which wasn’t in the roots; monly seen today. He had to be that the mature form is discred- handy with a club in order to sur- ited by its embryonic origins; vive, but the house dog and cat that the lesser explains the great- were not retrieved from their wild er; that a thing is understood state with a club, but by using when it is broken down into its kindness and patience and a kind constituent parts. Ardrey assumes of empathy we seem to lack. that man’s immediate ancestor Finally, as to the book’s paean was a murderous ape, and then to Mars, it is true that there is an further assumes that twentieth innate bellicosity in man, and a century men, egged on by our kin- will to power which never sleeps. ship with all life, have an irre- But modern war is about as far sistible itch in the blood to behave from this as the rudimentary in like fashion. number sense of the savage is If the origins of contemporary from differential calculus. There behavior run this deep, then, by is a connection, but it requires im- the same reasoning, the wide- mense labor and sophistication to spread acceptance of The Roman- hook it up. And, then, having ar- tic Fallacy argues that it, too, cor- rived at war, it is wrong to as- responds to something deep and sume that war is merely war, ===== PAGE 65 ===== 1962 OTHER BOOKS 63 period. War is an instrument with methods of tampering with the in- certain characteristics. It is an tegrity of the monetary unit? The apt instrument, one may plausibly late Lord Keynes has said, “not argue, for attaining such ends as one man in a million.” land and loot, or to defend terri- Good books on money are scarce. tory. But war for the sake of ends Money and Man is not the perfect unattainable by its means is mad- book on money. It is, however, a ness of the worst sort; that is to far better book than hosts of more say, war to make the world safe popular ones on the subject. Dr. for democracy, or to establish Groseclose has put his finger on brotherhood, or to eliminate ag- the monetary debauchery that gressor nations, or to achieve “full threatens to send our civilization employment.” Ardrey’s attack on back to the days of barter. His pacifism would be more cogent if proposed solution may be moot, he had spent more time with such but he has spotlighted the cancer military theorists as J. F. C. that has long been developing Fuller, Hoffman Nickerson, and within our market system at an B. H. Liddell-Hart. ever accelerating rate. He sounds the danger signals, yet how many P MONEY AND MAN, by Elgin will read or listen? Groseclose. New York: Frederick As the author writes, no new Ungar Publishing Co.307 pp. $5.00 1aw will save the situation, “so cloth, $1.75 paper. long as the attitude of the great Reviewed by Percy L. Greaves, Jr. mass of the people toward money remains as it is.” Our difficulties THE HIGH living standards of a lie in the general acceptance of modern society require a reason- such economic fallacies as: (1) ably sound money to facilitate the “An abundant currency would of millions of transactions needed to itself bring prosperity.” (2) With bring myriads of goods and serv- increasing production, more mon- ices to the great masses of con- ey is needed for “maintaining a sumers. : stable price level.” (3) “A state Adulterate the money supply of must have a certain quantity of such a society and, sooner or later, money proportioned to the num- its industries will grind to a halt ber of its people.” (4) “You can — until the impurities in the mon- alleviate the burdens of a people ey supply are reduced, concealed, ... by ‘pumping’ credit into the or removed. This is elementary. banking structure by way of the Yet, how many can detect modern Federal Reserve System.” (5) In- ===== PAGE 66 ===== 64 THE FREEMAN September ternational “economy in the use of of money, as well as its use and gold” can be achieved by the “gold value, are all results of man’s men- exchange standard,” whereby “an tal understanding. As such, they actual gold reserve of less than are subject to instant and con- $50,000 in the Federal Reserve stant change. There is nothing Bank of New York” can be built mechanical about the workings of by foreign commercial banks into the human mind. New ideas and “a deposit structure of $10,000,- information could soon change the 000 to $12,000,000.” present creation of money, as well The resulting attempts to ex- as its use and value in the market pand the money supply and make place. credit easier and cheaper are “like Dr. Groseclosc has properly ex- relieving anemia by the medieval posed the perils of basing a money process of bloodletting.” They on the fluctuating market values might kill the patient. of paper titles to various forms Dr. Groseclose traces the his- of wealth, However, he has let his tory of illusory monetary solutions antipathy to a manipulated credit to man’s ever-present demands expansion extend to all debts, for more wealth. Too many of the even those that shift savings to early pages are devoted to the persons who can use them more days of antiquity and the Middle profitably. He fears the need for Ages, Those pages are not im- money to pay interest. The book portant to our present-day prob- also reflects an aversion to specu- lems and make for dull reading lation, the very essence of all hu- that may keep some readers from man action and even life itself. reaching the meat of the book. The book does blast the basic However, when he deals with “The monetary boners of our age, so Emergence of Credit,” “The Rise perhaps we may overlook its in- of Bank Money,” and “The Infla- cidental faults. The author has tionary Age,” he is performing a seen through much of the fog valuable service for the present that beclouds our civilization, so generation. perhaps we can also forgive his The author constantly refers to reference to socialists as “schol- what he calls “the money mech- ars and statesmen’ and his men- anism.” This is unfortunate, for tion of interventionists as a there is nothing mechanical about “school of economists.” Readers money, unless it is the printing of this book should gain a better presses that can reduce its value understanding of our economic to that of wallpaper. The creation problem number one - MONEY. ===== PAGE 67 ===== The Law By FREDERIC BASTIAT (1801-1850) “BUT HOW is legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.” For DEAN RUSSELL's 706-page modern translation of Bastiat's classic explanation of limited government, send coupon below. SY CE GE — — CE Ge A CE — — ER GEER SENS Gi WEES WE EES SE— ED SE GED SEE GEE TRAD GA CEE END CH CE TE ES W— — THE FOUNDATION FOR ECONOMIC EDUCATION | IRVINGTON-ON-HUDSON, NEW YORK | Please send me Bastiat's THE LAW. | MY NAME ___copies paper @ $1.00 | —copies cloth @ $1.75 STREET © _Study Guides @ 25¢ CITY AND ZONE AMOUNT ENCLOSED $ STATE PLEASE BILL MRE O i ===== PAGE 68 ===== - o 3 [2] 3 pid pr SR 588k BaZa