We celebrate in 1976 the bicentennial of two significant events, the signing of the American Declaration of Independence, and the publication of The Wealth of Nations by Adam Smith.

Smith had made a name for himself with an earlier volume entitled Theory of the Moral Sentiments, published in 1759, but he is now remembered mainly for his Wealth of Nations, on which he labored for ten years. The Wealth of Nations sold briskly in the American colonies, some 2,500 copies within five years of publication, even though our people were at war. This is a remarkable fact, for there were only three million people living on these shores two centuries ago, and about one-third of these were Loyalists. In England, as in the colonies, there were two opposed political factions—Whigs and Tories. The Tories favored the King and the old regime; the Whigs worked to increase freedom in society. Adam Smith was a Whig; the men we call Founding Fathers were Whigs. There was a Whig faction in the British Parliament and many Englishmen were bound to the American cause by strong intellectual and emotional ties.

Adam Smith’s book was warmly received here, not only because it was a great work of literature, but also because it provided a philosophical justification for individual freedom in the areas of manufacture and trade. The colonies, of course, were largely agricultural; but of necessity there were also artisans of all sorts. There had to be carpenters and cabinet makers, bricklayers and blacksmiths, weavers and tailors, gunsmiths and bootmakers. These colonial manufacturers and farmers had been practicing economic freedom all along; simply because the Crown was too busy with other matters to interfere seriously. There were numerous laws designed to regulate trade, but the laws were difficult to enforce, and so they were ignored.

Mercantilism

The nations of Europe at this time embraced a theory of economic organization called "Mercantilism." Mercantilism was based upon the idea of national rivalry, and each nation sought to get the better of other nations by exporting merchandise in exchange for gold and silver. The goal of Mercantilism was the enhancement of national prestige by accumulating the precious metals, but the goal was not nearly so significant as the means employed to reach it. Mercantilism was the planned economy par excellence; the nation was trussed up in a strait jacket ofregulations just about as severe as the controls imposed today upon the people of Russia or China. The modern authoritarian state, of course, has more efficient methods of surveillance and control than did the governments of the seventeenth and eighteenth centuries, but the basic idea is similar.

Take the theory of Mercantilism and boil it down. What do you get? You get political control over what you eat. Now, if someone holds the power of decision over you as to whether you eat or starve, he’s acquired considerable leverage over every aspect of your life; you do not bite the hand that feeds you! If someone controls your livelihood, you do his bidding, or people start talking about you in the past tense!

Mercantilism, in short, is the prototype of today’s totalitarian state, where government — by controlling the economy — exerts a commanding influence over people in every sector of their lives.

The major theme of The Wealth of Nations has to do with the interaction between government and the economic order. The theory of Mercantilism held that government must control and manage the economy, else production would be chaotic and the right people would not be properly rewarded. Present-day collectivists concur; they want a national plan which taxes away about 40 per cent of the peoples’ earnings in order to redistribute these billions of tax dollars to politically selected individuals and groups.

Questions of Political Power

The actions of the redistributive state — call it the welfare state if you prefer — are political actions. From ancient times to the present, every political theorist — except the Classical Liberals — tried to frame answers for three questions.

The first question was: Who shall wield power? Whether the structure took the form of a monarchy backed by divine right or a democracy based on the so-called will of the majority, it was essential that power be wielded by the small group thought most fit to exercise rule. The ruler’s job is to program our lives toward the achievement of national goals. But it was never power simply for power’s sake; it was political power for the sake of the economic advantage power bestows.

So the second question is: For whose benefit shall this power be wielded? The court at Versailles is a good example of what I mean. The French nobles favored by royalty lived rather well, although they’d rather be caught dead than working. In virtue of their privileged position in the political structure, they got something for nothing. I daresay that each of you can think of parallel instances operating today, even in our own country. Now, when someone in a society gets something for nothing through political channels, there are others in that society who are forced to accept nothing for something! And the third question, of course, is: At whose expense shall this power be wielded? Somebody must be sacrificed.

Let me repeat these three questions, for they provide an apt key to many political puzzles: Who shall wield power? For whose benefit? At whose expense? One might put this in a formula: Votes and taxes for all; subsidies and privileges for us, our friends, and whoever else happens at the moment to pack a lot of political clout. The American system was to be based upon a different idea. It took seriously the ideas of God, the moral order, and the rights of persons. It discarded the notion of using government to arbitrarily disadvantage a selected segment of society, and instead embraced the ideal of equality before the law. Government, in this scheme, functioned somewhat like an umpire on the baseball field. The umpire does not write the rules for baseball; these have emerged and been inscribed in rule books over the years and they lay down the norms as to how the game shall be played.

If any person is on the field it is to be presumed that he has freely chosen to be there, and in his thoughtful moments he knows that the game cannot go on unless there is an impartial arbiter on the field to interpret and enforce last-resort decisions — such as ball or strike, safe or out at first. Government, similarily, enforces the previously agreed upon rules.

This is the political theory of Classical Liberalism, and it marks a radical departure from all other political theories. It declared that the end of government is justice between persons, and maximum liberty for everyone in society. "Justice is the end of government," wrote Madison in the 51st Federalist Paper; "it is the end of civil society."

Government Is Force

The point to be stressed is that the essential nature of government — its license to resort to force at some point — is not changed by merely altering the warrant under which government acts. Divine right or popular sovereignty — it makes no difference to this point: Government is as government does.

Governmental action is what it is, no matter what sanction might be offered to justify what it does. The nature of goverment remains the same even though its sponsorship be changed from monarchial power to majority rule. Government always acts with power; in the last resort government uses force to back up its decrees. The government of a society is its police power, and the nature of government remains the same, even when office holders are elected by a vote of the people. And when the police power — government — is limited to keeping the peace of the community by curbing those who disturb the peace — criminals —then there is maximum liberty for peaceful citizens.

"The history of liberty," wrote Woodrow Wilson in 1912, "is the history of the limitations placed upon governmental power." The 18th century Whigs achieved a limited monarchy in England, and a constitutional republic for the thirteen colonies. This was a victory for freedom over tyranny. Such battles, however, do not stay won, and in our time many people have lost their freedom.

Twentieth century political despotism is much more extensive and severe than the monarchial rule of Smith’s day, which is why The Wealth of Nations is still a relevant book. Smith demonstrated that a country does not need an overall national plan enforced upon people in order to achieve social harmony. This is not to say that a peaceful, orderly society comes about by accident, or as the result of doing nothing. Certain requirements must be met if people are to live at peace with their neighbors. It is required, first of all, that there be widespread obedience to the moral commandments which forbid murder, theft, misrepresentation, and covetousness. The second requirement is for a legal system which secures equal justice before the law for every person. When these moral and legal requirements are met, then the people will be led into a system of social cooperation under the division of labor "as if by an invisible hand."

Adam Smith liked this metaphor of "an invisible hand" and used it in Theory of the Moral Sentiments as well as in The Wealth of Nations. Every person, Smith writes, employs his time, his talents, his capital, so as to direct "industry that its produce may be of the greatest value…. He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it…. He intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intentions." Smith concludes this passage by adding, sardonically, "I have never known much good done by those who affected to trade for the public good."

What is Adam Smith telling us? He is saying that if we operate within the proper moral and legal framework, employing our God-given talents to the limit of our powers, then we will find individual fulfillment directly and get the good society as an unexpected bonus.

Equality, Liberty, Justice

The Wealth of Nations is generally regarded as a work on economics, but Smith did not think of himself as an economist. Smith was a professor of Moral Philosophy at the University of Glasgow, where he lectured on ethics, rhetoric, jurisprudence, and political economy. Ask Adam Smith for a thumbnail description of the system of political economy he believed in, and he’d reply that he advocated "the liberal plan of equality, liberty and justice."

These three virtues together characterize the free society, and in fact they are but three facets of a single truth. Equality, as the term is used in the Declaration of Independence, and here by Adam Smith, means the abolition of privilege — one law for all men alike because all men are one in their essential humanity. Because all people are created equal, it is wrong for government to play favorites and bestow advantages on some at the expense of others. The goal is "equal and exact justice for all men, of whatever state or persuasion" — to quote from Jefferson’s First Inaugural. Justice is equality before the law, and this describes a society where each person may freely pursue his own goals, provided he does not infringe the equal right of all the others to pursue theirs.

You’re all familiar with the division of society into a public sector and a private sector; call the former the governmental, coercive sector, if you prefer, and the latter the voluntary sector. When the governmental sector expands, the voluntary sector contracts, and vice versa. The efforts of the old-fashioned Whigs and the Classical Liberals were directed toward the goal of a government limited to maintaining the peace of the community and assuring justice and fair play among people — the umpire role in society. This expanded the voluntary sector and gave us the ideals of freedom of speech, freedom of the press, and religious liberty. And in 1776, Adam Smith provided a rationale for freedom of economic action.

One of the large questions which every society has to face and resolve is: How shall the economic rewards be allocated? Food, clothing, shelter — as well as things like automobiles, television sets, refrigerators, concerts, and trips to Europe — are in limited supply. How shall we "divvy up" the available quantity of these goods? Who gets what?

We know how it was under the old regime: those who wielded political power used it for the economic advantage of themselves and their friends, at the expense of those who lacked political power. There were Haves and Have-nots, and the Haves obtained their wealth by seizing it.

But when men are free, economic rewards are parceled out in a different manner. The free society allocates rewards in the market place; the Haves get that way by pleasing the customers, at which game some are more successful than others.

Consumer Choice

Every one of us in a free society is rewarded in the marketplace by his peers, according to the value willing buyers attach to the goods and services he offers for exchange. This marketplace assessment is made by consumers who are ignorant, venal, biased, stupid; in short, by people very much like us! This does seem to be a clumsy way of deciding how much or how little of this world’s goods shall be put at this or that man’s disposal, and so people of every age look for an alternative.

There is an alternative, and it runs something like this: People are too dumb to know what is good for them, and they fall easy victims of Madison Avenue. Therefore, let’s invite the wise and good to come down from Olympus to sit as a council among men, and we’ll appear before them one by one, to be judged on personal merit and rewarded accordingly. Then we’ll be assured that those who make a million really deserve it, and those who are paupers belong at that level; and we’ll all be contented and happy. What lunacy! The genuinely wise and good would not accept such a role, and I quote the words of the highest authority declining it: "Who made me a judge over you?"

The Alternative Is Worse

The market-place decision that this man shall earn twenty-five thousand, this one ten, and so on, is not, of course, marked by supernal wisdom; no one claims this. But it is infinitely better than the alternative, which is to recast consumers into voters, who will elect a body of politicians, who will appoint bureaucrats, who will "divvy up" the wealth by governmental legerdemain. This mad scheme backs away from the imperfect and crashes into the impossible!

There are no perfect arrangements in human affairs, but the fairest distribution of material rewards attainable by imperfect men is to let a man’s customers decide how much he should earn; this method will distribute economic goods unequally, but nevertheless equitably. Parenthetically, it should be understood that the market does not measure the true worth of a man or a woman. If it did, we would have to rate all who make a lot of money as superior beings — rock music stars, producers of porno films, publishers of dirty books, television commentators, authors of best sellers — and they’re not superior. To the contrary! But such people constitute only a tiny sector of the free economy, and they are a very small price to pay for the blessings of liberty we enjoy.

In a free society, those who earn more than the national average are entitled to enjoy their possessions, for they’ve gained them in a system of voluntary exchange; the well-being the Haves enjoy is matched by the well-being they have bestowed upon other people —as these other people measure it. There is genuine reciprocity in the free society. But opponents of the market are blind to its built-in mutuality. The Left, therefore, will make a determined effort to instill a guilty conscience in everyone who lives above the poverty level. They use Karl Marx’s exploitation theory which alleges that the man who works for wages produces, over and above his wage, a "surplus value" which is garnisheed by his employer. To be employed — they tell us — is to be exploited, and the whole capitalist class should feel guilty for denying the working class its due!

"Surplus Value" Exposed

This naive and vicious notion was demolished even while Marx still lived, by the economist, Böhm-Bawerk — founder of the Austrian School. Bohm-Bawerk did it again in a second book, in 1896, with the result that the exploitation theory is not now promoted even by Communist theoreticians. But the "surplus value" idea does intensify feelings of envy and guilt, so it is still useful as propaganda.

The free economy sounds pretty good in theory, you might say, but what does it do for the poor? Well, it takes most of them out of that category! A free people becomes a properous people. To the extent that the free economy has been allowed to operate in a nation, in like measure has the free economy elevated more people further out of poverty, faster, than any other system.

It is easy to see why this is so. Poverty is a lack of certain things.

A man is poor whose supply of food, clothing, and shelter are meager; he has only one shabby suit, his diet is macaroni and cheese, and he lives in a sparsely furnished room. A man moves out of poverty only as he acquires better clothes, a more varied diet, and then expands into an apartment or a house. People are well off or less well off according as they command more or less of the things which are manufactured or grown. This is axiomatic, and it follows that poverty is overcome by increased productivity and in no other way. America is the world’s most properous nation because America has been the most productive nation; we have more wealth because we produce more wealth.

Who has the biggest stake in the free economy? Who has most to lose if the free economy lapses into the planned state? Not the rich; the poor! The corporate executive type; the shrewd, energetic, hard-driving, far-seeing, imaginative, nimble, smart, tough executive will make a bundle under any system. In Russia he’d be a commissar. It’s the not so smart, not so energetic, not so imaginative, plodder type who has the biggest stake in the free society. This description fits most of us, and there is a place for us in the free society, where we are rewarded quite handsomely. We’d be serfs, or worse, in most other societies — if we survived liquidation!

When people are free, there is no guarantee that they’ll use their freedom wisely. Freedom of speech does not assure witty conversation, eloquent preaching, or lofty utterance. Most talk, as a matter of fact, is banal and shallow and gossipy; but no one on this account suggests we put a political ban on free speech. We have freedom of the press, with the result that we are knee deep in triviality and garbage. But we support freedom of the press anyway, knowing that a governmentally controlled press would be far worse. Freedom of religion opens the door to all kinds of weird cults, as well as to exotic brands of superstition and magic; but no one advocates that we repeal the First Amendment and set up an American National Church!

That is what freedom is all about — putting up with things we don’t like, and living with a lot of people we can barely stand! We must support the processes of freedom even when we cannot endorse every one of the products of freedom. And that goes for freedom of economic enterprise as well —as Adam Smith advised 200 years ago.

Now, neither the free economy nor its business sector can guarantee to every person full realization of his potential talents; this is a matter for individual decision. All the free society can promise is maximum and equal opportunity —and this is all the guarantee we need.

Post from: LibertarianChristians.com

Adam Smith and the Invisible Hand

Every person of good will longs for peace on earth; he strives for justice and fair play in human affairs. Proclaiming such goals as these does not distinguish the Socialist from other men; rather, it is his means for attaining these ends that marks him out. The operational imperatives of a Socialist order demand a coercive arrangement of society, within which the lives of the many are planned and managed by the few who wield political power. Why do many otherwise idealistic and intelligent people find this scheme appealing? This is a recurring question. Everything about freedom seems so natural and so right to those who understand it that they can’t help but wonder why anyone rejects it in favor of Socialism or Communism. But millions do.

The twentieth century faces Left, and nation after nation succumbs to a "progressive" ideology. Marxism, of the Moscow or the Peking variety, is the official faith of hundreds of millions of people the world over. Countless others may reject Marxism, but they embrace a "liberal" ideology; they advocate national planning, state regulation of key industries, public works, welfarism. Add up these millions and you ask: Who else is there? Well, there are a few people in today’s world who are firmly grounded in the tradition of eighteenth century Whiggism, or Classical Liberalism; who acknowledge the political wisdom of The Federalist; who embrace the free market economic theories of the Manchester and Austrian Schools. There are able scholars in this camp whose writings demolish collectivist theory and marshall solid, carefully reasoned moral and intellectual arguments on behalf of the free economy/free society position.

The soundness of this freedom philosophy is attested even by its opponents, that is to say, by the triviality of Left-wing analysis and criticism of it. The Left rarely attempts to make the case against the philosophy of the free society by meeting its arguments on their own level. We may be sure that if the Left had such a case they’d use it. The Left opposes the free society position, of course, but seldom by argument, that is, intellectually. Opponents of the free economy position have several typical ways of dealing with it. The first tactic is to ignore it; don’t discuss; pretend it isn’t there. The second line of defense is: If you can’t ignore it, misstate the position; then knock the straw man down. Third, call names. Useful epithets are "reactionary," "eighteenth century idea," "capitalist," "outdated." Fourth, allege hardheartedness toward the plight of "the poor." This last is almost hilarious.

To the extent that the free economy has been allowed to function in a given nation, in like measure has the free economy elevated more poor people further out of poverty in less time than any other system! What amalgam of ignorance, stupidity and malice does it take to bring this charge against the free economy, that it neglects "the poor"? The record shows that the government handout system, by contrast, not only fails to help "the poor," it keeps them that way — and demeans them to boot!

Attacks Rooted in Envy

The system of liberty has solid intellectual and moral foundations; why, then, do not more people find the case persuasive? Why do so many people gravitate toward freedom’s opposite, jostling one another as they crowd the road to serfdom? Is there some human trait which, released from moral controls, is readily enlisted under the banners of Socialism? The answer is Yes; there is such a trait — envy. Envy, and its twin, covetousness, are unlovely facets of human nature, and only moral energy keeps them bottled up. But when envy and covetousness are uncorked they work against freedom and for Socialism.

Ask the man in the street what he understands by Socialism, and he’ll tell you that it’s a scheme for dividing up the wealth; "the equal division of unequal earnings," as someone put it; soaking the rich to pay "the poor." Spellbinders of the Left play upon the feelings of envy and covetousness with practiced skill, setting person against person, class against class. These ugly traits of human nature have caused trouble since time immemorial. "Thou shalt not covet," is one of the Ten Commandments; envy and covetousness are two of the Seven Deadly Sins. Our forebears, aware of the destructive potential of these traits, endeavored to neutralize them by making their control a religious duty.

But if the egalitarian drive is to pick up momentum, it needs the fuel only envy and covetousness can supply. Socialism uses envy, and exploits the new morality whose energumens tell people that they should covet their neighbor’s goods. Roll your own Ten Commandments, and remember that there are easier ways of getting your hands on a buck than working for it! The society is first divided into the Haves and the Have-nots. Then the Have-nots must be convinced that their lack of the amenities is somehow the fault of the Haves; that the man who earns twenty-five thousand dollars a year is somehow to blame for the fact that another man earns only seventy-five hundred.

With a part of ourselves we’d like to believe this, so it is not surprising that a lot of people are reluctant to utter a mea culpa in the case of their own failures and shortcomings; they find it gratifying to learn that someone who seems more successful than they, is the reason they are not doing better. Such sentiments as these are music to our ears, but they cannot survive even a limited exposure to economic reasoning.

Advantages of Trade

We can learn from economics, if we will, that the free economy is not like a zero sum game where one man’s gain inevitably means another man’s loss. In a poker game, as one man’s stack of chips grows higher and higher there is a corresponding shrinkage of the other players’ stacks. In the market economy, by contrast, there is a progressive increase in the number of chips (so to speak) available to every player; and every man earns precisely what consumers think his services are worth. Now, in his secret thoughts, Everyman knows he is worth a great deal more than consumers think he’s worth! It is only experience and self-discipline that allows the reality sense in most people to be brought into play and prevail in the end. But economic understanding, and reasonable considerations such as these, must be squelched in order to inflame more acutely the envy of the Have-nots.

But envy is only the first half of the story; the inflamed envy of the Have-nots must be orchestrated into harmony with the aroused guilt of the Haves. Now, a person whose wealth has been obtained by force and fraud should feel guilty; if there is no guilt feeling associated with advantages gained at another’s expense there is evidence of a moral blind spot. Parenthetically, there are scores of millions in this category — gaining advantages at someone else’s expense —every person on the welfare state’s subsidy list! And paradoxically, most of these would be thought of as being in the Have-not category, and would so place themselves, and they would attach great virtue to the particular means by which they obtain an income!

Consumers Make the Awards

Every one of us in a free society is rewarded by his peers according to the value willing buyers attach to the goods and services he offers for exchange. This market place assessment is made by consumers who are ignorant, venal, biased, stupid; in short, by people very much like you and me! This does seem to be a clumsy way of deciding how much or how little of this world’s goods shall be put at this or that man’s disposal. Isn’t there an alternative? Yes, there’s an alternative, and it occurred to people more than two millennia ago. We’ll invite the wise and the good to come down from Olympus to sit as a council among men, and we’ll appear before them one by one, to be judged on personal merit and rewarded accordingly. Then we’ll be assured that those who make a million really deserve it, and those who are paupers belong at that level; and we’ll all be contented and happy. What lunacy! The genuinely wise and good would not accept such a role, and I quote the words of the highest authority declining it: "Who made me a judge over you?" Anyone who applied for such a role would cast grave doubt on his wisdom and goodness by the mere fact of applying!

The market place decision that this man shall earn twenty-five thousand, this one ten, and so on, is not, of course, marked by supernal wisdom; no one claims this. But it is infinitely better than Socialism’s alternative, which is to recast consumers into voters, who will elect a body of politicians, who will appoint bureaucrats to divvy up the wealth by governmental legerdemain. This mad scheme backs away from the imperfect and crashes into the impossible! There are no perfect arrangements in human affairs, but the fairest distribution of material rewards attainable by imperfect men is to let a man’s customers decide how much he should earn; this method will distribute economic goods unequally, but nevertheless equitably.

Parenthetically, it should be understood that the market does not measure the true worth of a man or a woman. If it did, we would have to rate all who make a lot of money as superior beings — rock music stars, producers of porno films, publishers of dirty books, television commentators, authors of best sellers — and they’re not superior. To the contrary! But such people constitute only a tiny sector of the free economy, and they are a very small price to pay for the blessings of liberty we enjoy.

A Guilt Complex

In a free society, those who earn more than the national average are entitled to enjoy their possessions, for they’ve gained them in a system of voluntary exchange; the well-being they enjoy is matched by the well-being they have bestowed upon other people! There are no valid reasons for anyone to be plagued by feelings of guilt on this score. There is genuine reciprocity in the free society, but its opponents are blind to the market’s built-in mutuality. The Left, therefore, will make a determined effort to instill a guilty conscience in everyone who lives above the poverty level. They use Karl Marx’s exploitation theory which alleges that the man who works for wages produces, over and above his wage, a "surplus value" which is garnisheed by his employer. To be employed is to be exploited, and the whole capitalist class should feel guilty for denying the working class its due!

This naive notion was demolished by Böhm-Bawerk even while Marx lived, and it is not now defended even by Communist theoreticians. But the "surplus value" idea accords with feelings of envy and guilt, so it is still useful as propaganda.

Given a century and more of Marxist propaganda and it is not surprising that there are a lot of guilt-ridden millionaires and sons of millionaires, as well as many captains of industry and top executives whose hearts bleed for "the poor." Envious Have-nots and guilty Haves: fertile breeding ground for Socialistic propaganda!

It is not only among individuals that wealth differentials are exploited; there are Have and Have-not nations. The Have-not nations are those to whom Americans have given upwards of two hundred billions of dollars worth of goods since the end of World War II. But despite this incredible bounty (for which the nations of the world rise up and call us blessed!) we still have too much, in the eyes of our critics. The words vary but the music is always the same: Americans who represent only 7 per cent of the world’s population consume 20 percent of the world’s food, drive 75 per cent of the world’s automobiles, have 75 per cent of the world’s television sets, and so on and on and on.

Now, I’m an amateur critic of the quality of life lived in America, and for those who insist on having my opinion I’d say that Americans do eat too much, and they stuff themselves with food of the wrong kind. It would be good for them to leave the car in the garage occasionally, and walk, or ride a bicycle. Furthermore, no mixture of ease, comfort, speed and gadgetry will add up to the good life — as most persons would agree. But all this is by the way; the matter at issue here is not the desirability of a more Spartan or Stoic style of life — which, incidentally, is not practiced by the rich of Asia, Africa, Europe, or you name it. It’s just that more people in these fifty states are enabled to enjoy more material wealth than all but a handful of people elsewhere, and so we are conspicuous enough to provoke the carefully nurtured envy of the rest of the world. Should Americans deliberately lower their living standards? Well, perhaps there are good reasons for a return to plain living, hard work and the Puritan ethic — but deferring to local liberals and critics from the Have-not nations is not one of them!

Productivity the Key

Americans do consume more on the average than the people of other nations. It might be interesting to ask why. The answer is clear: Americans consume more because Americans produce more. If the people of India want to consume more, they’ll have to learn to become more productive. And America is bursting with people who would be delighted to tell them how to increase their productivity. You merely have to accumulate capital at a faster rate than population growth, so that each worker will have more and more machinery, tools, and equipment. Productive efficiency, in other words, requires institutional incentives for capital accumulation — such as widespread belief in the sacredness of private property; an ethic which exalts honesty, thrift, and hard work; the idea of inherent rights, and so on. A nation that builds on a foundation like this is bound to prosper, as America has.

Suppose the American government continues to yield to the pressure of envy stemming from the Have-not nations, and increases the tax bite on American citizens so that they will consume less. Suppose, in other words, that a larger and larger percentage of the goods produced here annually is siphoned off and shipped abroad.

What will happen to production here when our people are prevented from enjoying its fruits? You know what will happen to it; production will decline, inevitably. Why does a man produce? He produces in order to consume; consumption is the end in view of all productive activities. If everything a man produces is taken from him he’ll stop working; and if fifty per cent is taken from him he’ll slow down.

The upshot is that the worst help we can give to the Have-not nations is to inflict policies upon Americans which will inevitably make us dollars poorer without making the Have-not nations a penny richer.

This envy/guilt syndrome provides an interesting glimpse into the Socialist mentality, which has little concern with production, with the way material goods come into existence. Socialists are preoccupied with the political redistribution of the already existing stock. There is, in fact, only one way to make economic goods appear, and that is to apply human energy, augmented by tools and machinery, to raw material. Human labor applied to natural resources is the only way to produce food, clothing, shelter, and the amenities; but the Left has no interest in this process, let alone in increasing its efficiency.

Tax and Subsidize

The attention of the Left is focused on taxing producers and subsidizing consumers. Assuming that production occurs by magic, automatically, Socialism has no program except to seize property from the Haves and distribute it to the Have-nots. The guaranteed end result of this to enforce domestic poverty and spread hunger around the globe. But a certain glamour attaches to any Robin Hood operation which promises to take from the rich and give to the poor — and some of this glamour lingers even after it has become plain that Robin the Hood is actually robbing both rich and poor for the benefit of Robin!

As a result of economic progress, a society moves up from a situation where just about everybody is poor to one characterized by general prosperity, shared by all but a few. That is to say, there will be pockets of poverty in any prosperous society, and the contrast between rich and poor makes the residual poverty painfully obvious to all compassionate people. Indignation suggests a remedy which appears obvious to those who respond emotionally, without thinking. If some are better off than others, why pass a law to deprive the former of a portion of their property and dole it out to those in need! Not an efficient procedure, by the way; it costs the government several dollars to give one dollar to "the poor."

Imagine a system of medicine where doctors blamed sickness on the healthy, and sought to cure illness by making the well sick! This is madness, and if this tactic were used in medicine few patients would survive. Economic distress likewise; poverty cannot be relieved unless we known its cause, and this means that we must also learn the cause of prosperity, for poverty can be overcome by productivity, and in no other way.

Prosperity in a nation is generated by efficiency in production, and productive efficiency demands such things as a climate of freedom, security for property, the accumulation of capital, progressive technology, good work habits, skillful management, and the like. It follows that any impairment of the functioning of any or all of the factors that cause prosperity makes people poorer. Here are some examples of political interventions which hamper productivity: confiscatory taxation which diminishes the supply of capital; minimum wage laws which disemploy large numbers of people; monopoly unionism which institutionalizes unemployment by exacting an above the market wage and imposing a rigid wage structure; price and wage controls; inflation.

Such political interventions as these do no one any good, and they do some people immense harm. Those most severely affected are the very ones whose plight arouses our sympathy and causes some short-sighted citizens to demand drastic government action to correct disparities in income! The only sound strategy is to apply the formula for prosperity across the boards; and this means that we must find some way of stopping government from hurting people by unwise legislation. Unshackle production, turn the market loose, and everyone will share — more or less — in the ever-increasing prosperity.

Of course, it is not enough for a nation to be merely prosperous; riches don’t bring happiness. A happy person is one who has something to live for, whose way of life challenges him to draw upon his powers and exert his full potential. Material well-being — food to nourish you, clothing to keep you warm, shelter against the elements — material well-being is one element in the good life. But in our time this one element looms so large in the eyes of many that evidence of economic distress anywhere is all the excuse they need to demand a program that will wreck the system which produced our prosperity! It is as if a doctor had treated a completely paralyzed patient with some miracle drug which restored function to arms and legs but left the former patient with one stiff knee, and was then accused of malpractice and blamed for the man’s game leg!

Justice and Charity

Justice first; no legislation designed to give some an economic advantage at the expense of others, no arbitrary controls which prevent people from being as productive as they choose to be. Then, after justice, charity — which is simply an acknowledgement that some handicapped people can’t cope. The scope of private philanthropy is still enormous, even after a generation of government welfare schemes. The springs of compassion have not run dry, and it is obvious that they run more freely in the voluntary sector of society than in the coercive governmental sector. The coercive sector hits John Doe with heavy taxation during his productive years and uses his money to finance programs he’s against. Doe is tens of thousands of dollars poorer as a result. During the same period the Social Security tax deprives this man of thousands more. And all the while government is inflating the currency which increases the price of everything John Doe buys. When retirement comes, the government leaves John Doe with a lot less money than he actually earned during his productive period, and it cheapens the value of every dollar it gives him during his latter years. This is how government takes care of the poor!

There is no doubt in my mind that envy, covetousness and guilt —plus plain stupidity and ignorance — are of Socialism’s essence. Socialism would stall at ground level if it could not inflame these feelings and shortcomings. But there are other causes contributory to the advance of Socialism in our time. There’s idolatrous religion. We live in a period when the traditional religious faiths no longer exert the hold they once had over the minds of millions of people. The predominant world view is earthbound, with little or no place for the dimension of transcendence, or the sacred. Unable or unwilling, therefore, to make a religion of Religion, many twentieth century people make a religion of politics or economics.

A Religious Impulse

The term religion has reference, on the one hand, to intensity of belief and devotion; and, on the other hand, it has to do with the object which inspires this intense belief and devotion. Lacking a transcendent object, God, because of the prevailing earthbound world view, intense belief and devotion will affix itself to some object whose nature does not merit worship, such as the State, or Revolution. Thus Socialism or Communism becomes an ersatz religion for millions of people in our time.

The case of H. G. Wells is instructive. Wells was an early Fabian, and until the disillusionment of his late years, worked tirelessly for the advancement of Socialism. "Socialism," he wrote, "is to me a very great thing indeed, the form and substance of my ideal life, and the only religion I possess. I am, by a sort of predestination, a Socialist." Similar sentiments have been voiced by a multitude of the intellectual, literary, scientific, and political leaders of our time. Perversely, the low ebb of spiritual religion in our time has affected the churches, making it possible for men whose real religion is reform or revolution to capture large segments of the church for Socialism — by controlling various sounding boards, such as editorial offices, teaching and preaching posts, social action committees, interchurch councils.

And just as the religious impulse has been bent to the uses of Socialism, so has the artistic impulse. The artist cannot "let nature take its course”; he must impose significant form upon it, bringing his kind of order out of what appears to him to be chaos. Twist the artistic vision around to society, and lo! the planned economy! The untutored mind does not sense the magnificent and intricate order in a free society, which is the result of human action but not the consequence of human design. Merely enforce a few simple rules against theft, fraud and murder, enforce contracts, redress injury — and within these few rules people acting freely and productively will project an order so complicated that it defies human understanding. Could we fully understand it, economic calculation apart from a market would be feasible — which it is not.

The artist in us dislikes loose ends, insists on tidying things up, is caught up in a vision it feels bound to realize. Fine, on canvas! But if you insist on a certain pre-planned order and pattern as an end result in your society — the nation as a work of art — it is obvious that this overall goal cannot be achieved if everyone in the society is free to pursue his own peaceful goals. There is no way to achieve a unitary National Goal except by nullifying individual goals.

Diversity Encouraged

The free society not only tolerates individual differences, it encourages diversity on the ground that each person has his unique contribution to make to the total richness. This position runs counter to the pressure for uniformity in this age of mass man. The advocate of the free society, therefore, runs the risk of rubbing people the wrong way; often he has to make his case against the grain of human nature which hates dissent. In order that a society may be free, a great many people must exhibit a much higher level of tolerance for individual eccentricity than has hitherto prevailed.

The believer in freedom, then, is like a salesman trying to persuade people to buy a product, by telling them that, chances are, there are things about it they won’t much like after they get it! That’s a hard sell! Freedom means putting up with a lot of things you don’t like, and living with a lot of people you can barely stand. Freedom of speech and press, of religion and economics, means that other people will say, print, believe and produce things which we might find distasteful. Freedom doesn’t come cheap; it costs, and those unable or unwilling to pay the price will never achieve freedom, nor will they retain the freedom they now enjoy.

The late Dean Inge used to say that labels are libels! How shall we label the social system of America, England, and some European nations in the period between the Civil War and the New Deal? It was an age marked by a great expansion of science and technology, so we might speak of the Age of Science. A fine historian characterized the period as the Age of Materialism. Democracy took over as the kings departed, and that label is popular. The mode of production during this century was "capitalist," the label given currency by Marx. It suited the Communists to use one label, "Capitalism," for the social system they wanted to destroy, rather than, say, "Democracy."

A Deadly Label

Now, a modern western nation is an exceedingly complex affair, and it takes patient analysis to understand any single phenomenon of the many it exhibits. A social evil demands attention and it takes knowledge and skill to trace out its root causes. Much simpler to blame everything that goes wrong on Capitalism! Why poverty? Capitalism! Why the Great War? Capitalism! Why the Great Depression? Capitalism! Why unhappiness? Capitalism! Nothing was better calculated to deaden the analytical and critical faculties of several generations of intellectuals than this Marxist strategy; it worked; "social scientists" were conditioned to salivate on demand over the prospect that they had been chosen to lead humanity into the promised land.

Some able men are attracted to Socialism because it pretends to be scientific and progressive; and they regard themselves as scientific and progressive. But it is obvious that the mass of ordinary people are quite otherwise; they are stubborn and backward, and consequently, they make a mess of things. They refuse to accept the best scientific information available to them, preferring instead to be sloppy and unscientific. Witness their life style, their eating habits, the way they rear children, their resistance to new trends in schooling, the foolish way they spend their money, their superstitions! The indictment against the man in the street is a lengthy one, and the conclusion is that ignorant people such as this cannot be trusted to run their own lives. Any volunteers for the job of running people’s lives for them? Of course! Lots of highbrows believe themselves competent to operate a progressive society along scientific lines, all for the people’s own good, of course.

Who Shall Live Your Life?

Now, it may be true that a lot of people exercise but little wisdom in running their own lives, but it is a non sequitur to deduce from this that A’s situation will be improved if B runs A’s life for him against A’s will ! We know that this cannot work because it violates the basic law of life, a law as fundamental in human affairs as the law of gravity in Newtonian physics: Each person is in control of his own life, and if he doesn’t take charge of himself no one can assume this responsibility for him.

Life is a chancy thing, and of course we all make mistakes. But the mistakes we make while running our own affairs will teach us something, and we’re on earth to learn. As St. Augustine put it, "We are here schooled for life eternal." Unless we are allowed to make our own mistakes, to pick ourselves up after every failure, and stand taller with every success, the learning process is stymied. The great issue here is between those who regard human beings as mere things to be manipulated into some social pattern, versus those who believe that persons need liberty, because without it they cannot work out their proper destiny, which requires this life and the life to come for fulfillment.

The attention so far in this paper has been directed at "them," people of the Left, Liberals, Socialists. What about "us"; free enterprisers, capitalists, businessmen? Do people get turned on to Socialism because of us? I’m afraid they do. Now, no one can really blame an ordinary businessman for not understanding the theory of the free economy, and for his inability to articulate its concepts clearly. The blame, if any is to be laid, attaches to intellectuals who dig no deeper than this for their understanding of the free economy. Admittedly, however, it does not make our chore any easier when business organizations seek government favors for their members, or rush forward to praise wage and price controls.

But the real problem is elsewhere. A sharp distinction must be made between the economic theory of the free market and the ideologies erected around market theory by its self-proclaimed defenders. How many potential supporters of the free economy have been turned off by hearing certain ideologues of capitalism loudly proclaim that you have to be an atheist before you can become a genuine capitalist! Or you have to be a rationalist. Or a utilitarian. Or an anarchist. Furthermore, it is difficult for an outsider to judge the arguments for the free market on their economic merits if he has to wade through dubious notions of history, art, literature, psychology, ethics and religion to get to them! High level arguments in economic theory coupled with low level arguments in the ideological framework are not very damaging to Socialism, but they can make a shambles of Capitalism! It is only within the right philosophical structure that the market becomes the market economy, and that structure needs shoring up.

Economic action is necessary to survival, but by itself it cannot generate the free economy. The food, clothing, and shelter without which no people can exist are produced by human exertion on natural resources, and there is no other way. The division of labor is as old as mankind; people have always traded and bartered. These interlocking events constitute the market, and the market is ubiquitous. But the ever-present market does not become the market economy by spontaneous generation; nonmarket factors must be present to act as catalytic agents. Create a political structure around belief in the inviolability of the individual person and you have a context of liberty and justice for all in which property is respected and free choice maximized. The market, then, is institutionalized as the free economy. Neglect this necessary political framework — the one we inherited from the eighteenth century — and as it decays it will take the free economy down with it.

Our Fear of Freedom

There is something in human nature itself which makes us ambivalent toward freedom. Human beings would never strive for a free society unless the urge to be free were a drive deeply rooted in human nature; and we wouldn’t have to strive for freedom — nor periodically lapse into despotism — were there not a paradoxical strain in our make-up which fears freedom. Let me try to elucidate.

Each of us has his own life to live, his own ends to achieve. We are purposive beings, so we project a series of goals which constitute our lifelong pursuits, and we set up various targets for occasional endeavors. It is a self-evident truth that each of us wants maximum freedom to live the life that is ours and to pursue the goals we have chosen for ourselves. It is inconceivable that anyone in his right mind would deliberately invite other people to impair his freedom of action, for no one can set goals for himself and simultaneously ask other people to prevent him from reaching them! If, in some bizarre situation, a person does ask another to restrain him, then his real goal is to be restrained—no matter what he says his goal is.

The most evil tyrant imaginable, whose goal is to extinguish human liberty, does not want impediments placed between himself and his goal; he wants to be free to wield power unconditionally. Everyone, in short, desires his own freedom; but not everyone is seriously concerned that all other persons have as much freedom of action as he has. Very few people, as a matter of fact, favor equal freedom — a social condition of maximum freedom of action for everyone.

And there’s the rub! Freedom for yourself is a biological urge; the will to equal freedom for everyone stems from a more complex facet of our nature.

Man Must Think and Choose

No person can help wanting freedom for himself. This is part of our fight for survival, the struggle to continue in existence. Man shares this with every other living thing. But every living organism — except man — has a built-in servomechanism which preserves the nature and guarantees the continuing identity of the organism in question, whether tree, tiger, oyster, or whatever. The truly human person, however, is a different kind of creature; we cannot complete our nature — realize our potential to the full — without deliberately willing to do so. Our inner freedom is so flexible that each person has a lot of latitude in choosing what he will make of his life. Your final destiny depends on the wisdom of your daily resolves. Each of these daily and hourly decisions we make, breeds consequences — for which we must assume responsibility, and with which we have to live. This is intrinsic to the human situation.

Things would be much simpler if we could just sit back and let Nature take its course with us, as Nature does take its course with animals. It’ll never happen! Nor can we be wound up like robots to function as we should, as T. H. Huxley once wished. Belying his name as "Darwin’s bulldog," the famous scientist said, "If some great power would agree to make me always think what is true and do what is right, on condition of being wound up every morning before I got out of bed, I should instantly close with the offer." Don’t wait, the offer will never be made!

We are neither robots nor animals. We are persons, gifted with an inner freedom, which puts us under the necessity of choosing, where we face the constant risk of making wrong choices. We are responsible beings, and the burden weighs heavy on us. This is the freedom we dread — our unique freedom which forces us to strive constantly if we would attain our humanity. It is in this fear of freedom that Socialism takes root. Socialism offers the siren promise that we need not be individually responsible, either for ourselves or for anyone else. "They" will be responsible for us, and at the same time relieve us of any obligation toward others; the burden of being human will be lifted from our shoulders.

Human nature, then, exhibits these two facets; the biological urge to be free, and the all-too-human wish to shirk responsibility. The biological drive to be free manifests itself in some types as a grab for power, a lust to dominate others. This is a constant threat latent in human nature, which is why every period in history has to contend with tyrants and dictators. That history is not one unbroken record of tyranny, that freedom ebbs and flows, is due to the fact that this authoritarian thrust in human nature may be rechanneled. Such rechanneling is our first line of defense against tyranny, and it consists of moral and religious restraints on the will to power which the authoritarian accepts as binding upon himself. The energies of the might-have-been tyrant are redirected in constructive ways.

There is a second line of defense against tyranny. This barrier is located in the hearts and minds of the to-be-tyrannized-over; it is a deeply felt conviction which affirms, in the familiar words of the Eighteenth Century: "Resistance to tyrants is obedience to God." Our ancestors believed that life and liberty were inseparably joined; both were gifts of God. And because no one could fully serve his Maker unless he was free, freedom was just as precious as life itself. No person who acquiesced in tyranny could fulfill his life’s purpose.

In a nation where both lines of defense are in working order there is maximum liberty for all persons. On the one hand, inner restraints quench the thirst for power; and on the other, a people, who know that the purpose of life cannot be realized unless they are free, will be alert to detect the slightest threat to their liberties. But when the would-be tyrant recognizes no inner curbs on power, and when the populace invites him to rule over them because they shirk the responsibility and burdens of being human, then the dictatorship is total.

To be a person, means accepting full responsibility for our acts of choice and our conduct. But the prevailing earthbound ideology instructs us that we don’t really possess free will, and because we are the mere end products of our natural and social environment we are not responsible for ourselves. Accept this blighting ideology and the will to freedom withers; you have optimum conditions for tyranny. The same materialistic ideology which convinces the multitudes that they are not responsible convinces authoritarians that there are no inner restraints on power. Dictatorship gets the message: All systems go! The tidal movement of Socialism in the twentieth century is no mystery.

You’d like to roll back this tide? It’s very simple! The social order outside of us is a reflection of the mental and moral situation inside of us. If there is social disorder, we may infer that there is disorder within, in our hearts and minds. The great Spanish philosopher, Ortega y Gasset, puts it this way: "Any explanation of the visible changes appearing on the surface of history which does not go deep down until it touches the mysterious and latent changes produced in the depths of the human soul is superficial." (What is Philosophy?, p. 31) Each person, therefore, must first work on himself before his improved understanding can radiate to those in his orbit.

If only we could straighten out our own thinking we might order our lives aright, and if a significant number of people did this, then the society — which, after all, is but a reflection of ourselves — would begin to square itself away. This is a slow way to go, but it is the only way.

If we have looked back over history to learn the lessons taught by the rise and fall of nations, we know that societies never die of old age but only of autointoxication. We learn that civilizations have been, and can be, rejuvenated —from within! What other peoples have done in times past we can do today and tomorrow — provided we have the will to do it. We have all the ingredients for the restoration of our society; only the will is lacking — and only individual decision can make that up!

Originally published in the July 1975 edition of The Freeman. Read more from the Edmund Opitz Archive.

Post from: LibertarianChristians.com

Why do “They” turn to socialism?

The great political battles of the modern world have been fought around certain key words, one of which is Equality. The watch­words of the French Revolution, you recall, were “Liberty, Equal­ity, Fraternity.” Talleyrand got fed up with this slogan and once remarked that he’d heard so much talk about fraternity that if he had a brother he’d call him cousin!

There’s a sound reason for Talleyrand’s adverse reaction to the idea of brotherhood. The hu­man capacity for affection is lim­ited and it is selective. The de­mand for unlimited brotherliness puts human nature under a strain; it generates a backlash in the form of the either/or mood of the revolutionary who puts a gun to your head and says: “Be my brother, or I’ll kill you!” Sane so­cial living forbids murder; it strives after justice; and it re­serves brotherliness and love for family and friends.

Real friendship, even within a limited circle, is a genuine achieve­ment. Recall the words of La Bruyere, writing in the middle of the seventeenth century: “Some ask why mankind in general do not compose one nation, and are not contented to speak one lan­guage, to live under the same laws and agree among themselves to have the same customs and the same worship; whilst I, seeing how contrary are their minds, their tastes and their sentiments, wonder to see even seven or eight persons living within the same walls under the same roof and making a single family.”

We don’t have the word Fraternity in our political heritage, but the idea of Equality occupies a prominent spot. Our Declaration of Independence reads: “We hold these truths to be self-evident, that all men are created equal.” Note well that the men who pre­pared this document did not say that “all men are equal”; they did not say that all men are “born equal”—both propositions being obviously untrue. They said “cre­ated equal.”

Now, the created part of a man is his soul or mind. Man’s body is compounded of the same chemical and physical elements which go into the make-up of the earth and its creatures, but there is a men­tal and spiritual essence in man which sets him apart from nature—his soul or psyche. It is an arti­cle of faith in our religious tradi­tion that the soul of each person is precious in God’s sight what­ever the individual’s outer cir­cumstances; and equality before the law is implicit in this premise—the idea of one law alike for all men because all men are one in their essential humanness.

But right here the likeness ends; human beings are different and unequal in every other way. They are alike in one respect only; they are equal before the law. Equality before the law is the same thing as political liberty viewed from a different perspec­tive; it is also justice—a regime under which no man and no order of men is granted a political li­cense issued by the state to use other men as their tools or have any other legal advantage over them. Given such a framework in a society, the economic order will automatically be free market, or capitalism. We are speaking now of the idea of equality in a politi­cal context. Later I shall deal with the opposing concept of economic equality, which is incompatible with limited government and the free market.

Equal Justice Before the Law

Political equality is the system of liberty, and its leading features are set forth in Jefferson’s First Inaugural Address: “Equal and exact justice to all men, of what­ever state or persuasion, religious or political; peace, commerce, and honest friendship with all nations—entangling alliances with none…. freedom of religion; freedom of the press; freedom of person under the protection of the habeas corpus;” and so on.

The idea of political equality—equal justice before the law—is a relatively new one. It did not exist in the ancient world. Aristotle opened his famous work entitled Politics with an attempted justifi­cation of slavery, concluding his argument with these words: “It is clear, then, that some men are by nature free, and others slaves, and that for these latter slavery is both expedient and right.”

Plato wished to see society con­structed like a pyramid. A few men at the top wielding unlimited power; then descending levels of power—the men on each level being bossed by those above and bossing, in turn, those below. On the bottom are the slaves, who outnumber all the rest of society. Plato knows that those in the lower ranks will be discontented with their subservient position, so he proposes to condition them with a “noble lie,” as he calls it. “While all of you in the city are brothers, we will say in our tale, yet God in fashioning those of you who are fitted to hold rule mingled gold in their generation,… but in the helpers silver, and iron and brass in the farmers and other craftsmen.” Fraudulent theories of this sort are invented by men who suspect gold in their own make-up!

Hinduism provides a contem­porary example of a system of privilege. The highest caste in Indian society is the Brahmin caste; the lowest caste is the Sudra. In between are the Kshat­riya and Vaisya castes—warriors and merchants, respectively; out­side the caste system altogether are the Untouchables. Men are born into a given caste, and that is where they stay; that’s where their ancestors were, and that’s where their descendants will be. There is no ladder leading from one level in this society to any of the others. Hinduism justifies these divisions between men by the doctrine of reincarnation, ar­guing that some are suffering now for misdemeanors committed dur­ing a previous existence, while others are being rewarded now for earlier virtue. This outlook breeds fatalism and social stagnation. The eminent Hindu philosopher and statesman, S. Radhakrishnan, defends the caste system. He lik­ens society to a lamp and says, “When the wick is aglow at the tip the whole lamp is said to be burning.”

Our Western Heritage

Politics rests upon certain as­sumptions in metaphysics, and we make different metaphysical as­sumptions than do the Greeks and Hindus. In other words, we have a different religious heritage. Our religious values come from the Bible. Christianity was introduced into the ancient world, and it has had important political conse­quences. We take personal liberty for granted and regard slavery as artificial because of nineteen cen­turies of emphasis on the worth of the individual soul. The soul of man was a battleground on which were thrashed out the issues of good and evil. The individual was held responsible for the proper ordering of his soul; that is, he had the gift of free will. His sal­vation was neither automatic nor guaranteed; it hinged on a series of voluntary decisions, choices freely made.

It takes a while, centuries some­times, for a new idea about man to seep into the habits, laws, and institutions of a people and shape their culture. It was not until the eighteenth century that Adam Smith came along and spelled out a system of economics premised on the freely choosing man. Smith referred to his system as “the liberal plan of equality, liberty, and justice.” The European so­ciety of Smith’s day was, by con­trast, a system of privilege; it was an aristocratic order.

Control by Conquest

England’s aristocratic order did not arise by accident, but through conquest; it may be traced back to the Battle of Hast­ings in 1066 and the Norman in­vasion. William of Normandy had a claim, of sorts, to the English throne, a claim which he validated by conquering the island. Having established his over lordship of England he parceled out pieces of the island to his followers as pay­ment for their services. In the words of historian Arthur Bryant, “William the Conqueror kept a fifth of the land for himself and gave one-quarter to the Church. The remainder, save for an insig­nificant fraction, was given to 170 Norman and French followers—nearly half to ten men.”¹

This redistribution of England’s territory was, of course, at the ex­pense of the Anglo-Saxon resi­dents who were displaced to make room for the new owners. The new owners of England from William on down were the rulers of Eng­land; ownership was the comple­ment of their rulership, and the wealth they accumulated sprang from their power and their feudal holdings. That is to say, they did not obtain wealth by satisfying consumer demand. Under the sys­tem of liberty where the economic arrangements are free market or capitalistic, the only way to make money is to please the customers. Under any alternative system, you make money by pleasing the poli­ticians, those who hold power. Either that, or you wield power yourself.

This was a fine system—from the Norman viewpoint; but the Anglo-Saxon reduced to serfdom viewed the matter quite differ­ently. It was obvious to the serf and the peasant that the reason why they had so little land was because the Normans had so much; and, because wealth flowed from holdings of land, the Anglo-Saxons reasoned correctly that they were poor because the Nor­mans were rich! It is always so under a system of privilege, where those who wield the political power use that power to enrich them­selves at the expense of other peo­ple. It makes little difference whether the outward trappings are monarchical, or democratic, or bear the earmarks of Orwell’s 1984; in a system of privilege, political power is a means of ob­taining economic advantage.

Keeping the Peace

When our forebears wrote that “all men are created equal,” they threw down a challenge to the system of privilege. They believed that government should keep the peace—as peacekeeping is spelled out in the old-fashioned Whig-Classical Liberal tradition. This preserves a free field and no favor—which is the meaning of laissez-faire—within which peaceful eco­nomic competition will occur. The term “laissez faire” never meant the absence of rules; it didn’t im­ply a free-for-all. The term comes originally out of chivalry and was used on the jousting field to signal the beginning of a match. Two armored knights got ready to ride at each other and the cry of “laissez faire” meant, in effect, “You boys know the rules; may the best man win.” Government, under laissez faire, does not in­tervene positively to manage the affairs of men; it merely acts to deter and redress injury—as in­jury is spelled out in the laws. This is the system of liberty championed by present-day liber­tarians and conservatives.

Adam Smith’s “liberal plan of equality, liberty, and justice” was never practiced fully in any na­tion, but what was the result of a partial application of the ideas of The Wealth of Nations? The results of abolishing political pri­vilege in Europe and starting to organize a no-privilege society with political liberty and a market economy were so beneficial that even the enemies of liberty pause to pay tribute.

R. H. Tawney, one of the most gifted of the English Fabians, was an ardent socialist and egalitar­ian. His most famous work is past affords the best example of the great multiplication of wealth which results from the release of individual human creativity under the system of liberty.

The Nature of Political Power

I’ve used the term “power” sev­eral times, so let’s note that the word “power” in this context re­fers to government. There’s only one genuine power structure in a given society, and that is the gov­ernment. Government possesses a unique, one-of-a-kind type of power, and unless the government deputizes or licenses some other person or agency no one in a given society may exercise the kind of power which government alone wields. We employ meta­phors when we speak of buying power or economic power. Govern­ment is the power structure. Only government can mobilize the police, the armies, the navies; only government can draft a young man to serve in Vietnam; only government can tax, and so on. The largest corporation in the land cannot force me to buy one of its products or work for it; I can ignore General Motors, but no one who chooses to live within these fifty states can ignore the real power structure—which is the political agency, government.

Under a monarchy, economic ad­vancement is obtained by pleasing the king or the queen. Royal fa­vorites lived well while enjoying the friendship of the ruler, but when they fell out of favor they sometimes lost their heads. The mass of people lived in what we would think of as poverty, and typically they lacked the guaran­tees of intellectual, religious, and civil liberties that we take for granted. Moreover, the entire na­tion from top to bottom lived quietly with the idea of economic stagnation; no one thought in terms of a progressive increase of the stock of goods so that every­one would move gradually up the economic ladder—they thought in terms merely of redistributing the existing stock of wealth. No one thought of increasing the size of the pie; the idea was to obtain a bigger slice for one’s self—either by seizing it in a direct power grab, or as largesse by being a friend of the powerful. A similar sentiment—anti-economic in na­ture—prevails today.

The big domestic political issue is poverty. The nation has been geared to welfare measures ever since the New Deal, a generation ago; then in 1964 Congress opened the Office of Economic Opportun­ity and declared war on poverty. Indigence may be measured in various ways, but whatever else it is, indigence is a lack. A person who is poor would be better off if he owned a larger and finer house, had several extra suits and sport jackets in his closet, enjoyed tas­tier and more nourishing food plus an occasional drink. After improving the situation at the level of necessities he’d move ahead to the amenities—to recre­ation, a second car, air condition­ing, and so on.

Poverty Overcome by Production

The point to note is that people move out of poverty only as they command more of the things which are manufactured, grown, or otherwise produced. Poverty is overcome by production, and in no other way. If you are seriously concerned with the alleviation of poverty your concern for in­creased production must be equal­ly serious. This is simple logic.

But look around us in this great land today and try to find some­one for whom increased produc­tivity is a major goal. There are some able production men in in­dustry, but most established busi­nesses have learned to live com­fortably with restrictive legisla­tion, government contracts, the foreign aid program and our inter­national commitments. The com­petitive instinct burns low, and the entrepreneur who is willing to submit to the uncertainties of the market is a rare bird. And then there are the farmers. Agri­cultural production has taken a great leap forward in recent years, but no thanks to those farmers who latch onto the government’s farm program and accept pay­ment for keeping land and equip­ment idle. Union leaders claim to work for the betterment of the membership, but no one has ever accused unions of a burning de­sire to be more productive on the job. Politicians are not interested in increased industrial production. As a matter of fact, it might be said that the national government is continually—by its interven­tions—manufacturing poverty, and the whole country lives at a level lower than natural economic necessity would dictate.

An overall increase in the out­put of goods and services is the only way to upgrade the general welfare, but there is no clamor on behalf of increased productivity—only an occasional murmur. The clamor is for redistribution, for political interventions which ex­act tribute from the haves and bestow largesse on the have nots. Present day politics is based on the redistributionist principle: taxes for all, subsidies for the few. Its alleged purpose is to elevate the low income groups by depress­ing the wealthy. President John­son, addressing Congress in Jan­uary 1964, phrased it thus: “We are going to try to take all of the money that we think is unneces­sarily being spent and take it from the ‘haves’ and give it to the ‘have nots’ that need it so much.”

Several years earlier a theo­logian of considerable reputation, Nels Ferre, expressed similar sen­timents, but gave them a religious flavor: “All property is God’s for the common good. It belongs therefore, first of all to God and then equally to society and the individual. When the individual has what the society needs and can profitably use, it is not his, but belongs to society, by divine right.”³

The Role of the Market

The rage for redistribution is upon us, and we might multiply statements similar to the ones I have quoted from Mr. Johnson and Dr. Ferre. Those who es­pouse this viewpoint hold the ut­terly mistaken notion that the dis­tribution of rewards in a free market society, or capitalism, is analogous to the parceling out of loot to members of a robber gang, or the division of spoils after a pirate expedition. Actually, these things are as unlike as night and day; there is no comparison between them. In the free econ­omy, a man is rewarded to the degree that he pleases consumers.

Now, the market is not a magic instrumentality which comes up automatically with the right an­swer for every sort of question. The market is a sort of popularity contest; it tells us what people like; it’s an index of their prefer­ences. The market provides a very valuable piece of information, but it’s not the whole story. It’s im­portant for a shoe manufacturer to project an accurate guess as to whether women next season will prefer chunkies to wedgies; but a similar fingering of the popular pulse is out of keeping in the in­tellectual and moral realms—un­less one is a liberal intellectual! I refer to the proclivity of the current crop of opinion molders to ask: “What’s going to be the fashion in ideas this season?” One glaring example of this—a former professor of mine was a leading clerical spokesman for involving the United States in World War II; now he’s a co-chairman of SANE. This man has a good market in the intellectual realm, but of course he opposes the market in the economic realm.

The market is the only device available for serving our creatur­al needs while conserving scarce resources; but the market is no gauge of the truth or falsity of an idea. The market measures the popularity of an idea, but not its truth. Mises and Hayek are better economists than Samuelson and Galbraith but the market for the services of the latter pair is enor­mously greater than the popular demand for Mises and Hayek. Likewise in aesthetic questions. An entertainer’s popularity is no index of his musicianship, and a best selling novel may fall far short of the category of literature.

The market is simply a mirror of popular preferences and public taste; but if we don’t like what the mirror reveals, we won’t im­prove the situation by throwing rocks at the mirror! There is much more to life than pleasing the cus­tomer, but if the integrity of the market is not respected consumer choice is impaired and some peo­ple are given a license to foist their values on others. Permit this kind of poison to infect economic relationships and our ability to resist it elsewhere is seriously weakened.

We throw rocks at the mirror whenever we undertake programs of social leveling, aimed at eco­nomic equality. The government promises to aid the poor by redis­tributing the wealth. This is a power play, and it is the poor—generally the weakest members of society—who are hurt first and most in any power struggle. Fur­thermore, economic inequalities cannot be overcome by coercive redistribution without establish­ing political inequalities. Every form of political redistributionism widens power differentials in so­ciety; officeholders have more power, citizens have less; political contests become more intense, be­cause control and dispersal of great wealth is at stake.

Every alternative to the market economy—call it socialism or communism or fascism or what­ever—concentrates power over the lives and livelihood of the many in the hands of a few. The principle of equality before the law is dis­carded—the Rule of Law is in­compatible with any form of the planned economy—and, as in the George Orwell satire, some men become more equal than others. We head back toward the Old Regime—the system of privilege. Every state tends to create the means of its own support—com­prising citizens and pressure groups who realize their depend­ence on the state for such eco­nomic advantages as they enjoy. The court at Versailles was the symbol of this under the Old Regime; the symbol in our time is a deep freeze, a vicuna coat, a television set, the relief racket, a lush government contract, farm subsidies, predatory labor unions, or what have you.

Human beings are imperfect now and forever, and the societies we form exhibit all the imperfec­tions individuals display and more besides. There’s no way to achieve utopia; heaven on earth is an im­possible dream. But human beings will do better under the system of liberty than under any other social arrangement.

In the nineteenth century, as Tawney pointed out, the abolition of privilege got rid of slavery and serfdom; it turned the peasant into a human being. Furthermore, this was a comparatively peaceful century—between the Congress of Vienna and the First World War. Real wages doubled, redoubled, and doubled again. Diseases were diminished and people lived long­er; illiteracy almost disappeared, and people were freer in their daily lives than ever before.

Things were far from perfect, but they were more than tolerable—until a few people got the idea that human affairs could be per­fected if the lives of all men were put under political direction and control. This would create a vast power structure on top of so­ciety; but the fear of power was overcome by the thought that power, this time, was democratic and majoritarian in nature, and thus benign. The tragic fallacy here is that power obeys the laws of its nature, no matter what the sanction. Political power is invari­ably coercive, and if used wrongly destroys what it is set up to secure.

Fans of Lewis Carroll will re­member his poem, “The Hunting of the Snark.” Every time the hunters closed in on their quarry the snark turned out to be a boojum. Every time a determined group of people have concentrated power in a central government to carry out their program, the pow­er they have set up gets out of hand. The classic example of this is the French Revolution, which turned and devoured those who had started it.

It is not so much that power corrupts, as that power obeys its own laws. Our forebears in the old-fashioned Whig-Classical Lib­eral tradition were aware of this, so they sought to disperse and contain power. They chose politi­cal liberty, in full awareness that in a free society the natural dif­ferences among human beings would show up in various ways; some would be better off than others, but there would be no political inequality.

The alternative to the free economy is a servile state in which a ruling class enforces an equality of poverty on the masses. To embark on a program of economic leveling is like trying to repeal the law of gravity; it’ll never work, and trying to make it work defeats our efforts to attain rea­sonable goals.

—FOOTNOTES—

¹ Story of England, Arthur Bryant, Vol. I, p. 164.

² Religion and the Rise of Capital­ism, but in 1931 he wrote a book entitled Equality, arguing, in effect, that no one should have two cars so long as any man was un­able to afford even one. He wished to take from those who have and give to those who have not, in or­der to achieve economic equality.

³ Christianity and Society, p. 226.

Originally published in the September 1969 edition of The Freeman. Read more from the Edmund Opitz Archive.

Post from: LibertarianChristians.com

Two Concepts of Equality

The eighteenth century writers, seeking to set forth the features of a system of liberty, confronted a European society stratified into orders of rank, caste, and priv­ilege. At the top was royalty and the aristocracy; at the bottom, peasants and serfs. In between were the independent yeomen, the artisans, merchants, and those born to serve. The stratification was not as rigid as, say, Indian society, but it was a society of status where people were locked into their station in life genera­tion after generation. This in­equitable social arrangement was reinforced by a set of taboos and, when need be, was enforced by the police power.

The liberating movement of the Enlightenment challenged this monolith with an idea, the idea of equality. Adam Smith, in his Wealth of Nations, elaborated on what he called "the liberal plan of equality, liberty, and justice." On this continent, the writers of our Declaration believed it axi­omatic that "all men are created equal." Not "are equal," not "born equal," but "created equal." The created part of a man was his soul—in terms of the metaphys­ics of the period—and the souls of all men were precious in God’s sight whatever the individual’s outer circumstances. Equality be­fore the law appeared to follow from this premise—the idea of one law alike for all men because all men were one in their essential humanness. But right there the likeness ceased; men were dif­ferent and unequal in every other way. Equality before the law is political liberty viewed from a different perspective; it is also justice, being a regime under which no man and no order of men are granted a political li­cense issued by the state to use other men as their tools or have any other legal advantage over them.

This "liberal plan of equality, liberty, and justice" was central to classical Liberalism. It was never applied one hundred per cent, but what was the result of a partial application of this idea? The results of abolishing political privilege in Europe and organiz­ing a no-privilege society were so beneficial that even the enemies of liberty pay tribute. R. H. Taw­ney was one of the most gifted of the English Fabians, an ardent socialist and redistributionist, but honest enough to give the devil his due. He writes:

With the abolition of restrictions on freedom of movement, on the choice of occupations, and on the use of land and capital, imprisoned en­ergies were released from the nar­row walls of manor and guild and corporate town, from the downward pressure of class status, and from the heavy hand of authoritarian gov­ernments, to unite in new forms of association, and by means of them to raise the towering structure of in­dustrial civilization. It was not only in the stimulus which it supplied to the mobilization of economic power that the movement which leveled le­gal privilege revealed its magic. Its effect as an agent of social emanci­pation was not less profound. Few principles have so splendid a record of humanitarian achievement…. Slavery and serfdom had survived the exhortations of the Christian Church, the reforms of enlightened despots, and the protests of humani­tarian philosophers from Seneca to Voltaire. Before the new spirit, and the practical exigencies of which it was the expression, they disappeared, except from dark backwaters, in three generations…. It turned [the peasant] from a beast of burden into a human being. It determined that, when science should be invoked to increase the output of the soil, its cultivator, not an absentee owner, should reap the fruits. The principle which released him he described as equality, the destruction of privilege, democracy, the victory of plain people…. [It was] the end of institu­tions which had made rich men ty­rants and poor men slaves.1

Century of Emancipation

Walter Lippmann in 1937 looked back at the nineteenth cen­tury and called it "the great cen­tury of human emancipation. In that period," he continued, "chat­tel slavery and serfdom, the sub­jection of women, the patriarchal domination of children, caste and legalized class privileges, the ex­ploitation of backward peoples, autocracy in government, the dis­franchisement of the masses and their compulsory illiteracy, official intolerance and legalized bigotry, were outlawed in the human con­science, and in a very substantial degree they were abolished in fact."2

It is a peculiar thing about so­cial evils that in their grossest forms they may last for centuries and be accepted as part of fate, rather than as curable evils. But when circumstances improve to a certain degree, that is to say, when people move up a notch or two out of poverty, filth, degrada­tion, and disease, and the means of further improvement are in sight, then circumstances come to seem intolerable. Men refuse to credit "the liberal plan of equal­ity, justice, and liberty" for such improvements as they enjoy; they condemn it for not having com­pleted their liberation! It is as if a totally paralyzed person un­dertook a treatment which re­stored his powers except for one limb, and instead of praising the treatment for what it accom­plished, blamed it for his game leg.

The system of political liberty—limited government and the free market—aimed at equality before the law and necessarily re­sulted in inequalities in material goods. Everybody was levered above the subsistence level, and many went from rags to riches. But nearly everyone thought he deserved better. In this new dis­pensation economic inequalities came to be regarded as the intol­erable bane of modern life, which it is the function of government to overcome. The result has been that the political slogans of the twentieth century have played variations on the theme of soak the rich and subsidize the poor. Present-day politics is based on the redistributionist principle: Taxes for all, subsidies for the few. Its purpose is to elevate the low income groups by depressing the wealthy. This social leveling is supposed to bring about eco­nomic equality—or as close an approximation thereto as is prac­tical.

Concentration of Power

Economic inequalities cannot be overcome by political means with­out establishing political inequal­ities. Every form of political re­distributionism widens power dif­ferentials in society; every form of socialism concentrates power over the life and livelihood of the many in the hands of a few. The principle of equality before the law is discarded and, as in the George Orwell satire, some men become more equal than others. We head back toward the Old Regime.

But things will not stop here; forces have been set in motion and their momentum will carry us beyond where their instigators would want to stop. The first stage was political equality with the consequent economic inequalities.

The second stage was the delib­erate designing of political in­equalities in order to bring about economic equality. At this point one might think pragmatically and regard the situation merely as a choice between two ideas of equality—political equality or economic equality, each with its necessary accompanying inequal­ities. People in our time have ac­cepted political inequality and the enhancement of power differen­tials in society because they be­lieve that this power, under pop­ular sovereignty, would reduce economic inequalities. But power obeys its own laws, and one of its basic laws—exemplified by political power wherever it has existed and whatever form it as­sumes—is to use political power to enhance the economic well-be­ing of officeholders and their friends, at the expense of the rest of the nation. Albert Jay Nock designated this perversion of government as The State, a two-headed monster comprising (a) those who wield political power, and (b) their friends who derive economic advantage from its exercise. "Votes and taxes for all; subsidies for us and our friends." Every government tends to create the means of its own support. The court at Versailles was the symbol of this under the Old Regime; the symbol in our time is a deep freeze, a vicuña coat, a television set, the relief racket, or what have you.

But these things merely scratch the surface. A hundred billion tax dollars are siphoned into Washington annually, and every dollar of it spent by the govern­ment creates a vested interest in the continuance of the spending program. The result is a malin­vestment and a maldistribution of wealth, and an aggravation of economic and political problems. Political inequalities introduce class divisions into society, and the resulting economic inequal­ities become sharper as they cease to reflect the rendering of goods and services in willing exchange.

A generation and a half ago H. G. Wells observed sadly that things will get worse before they start getting better. Well, they’ve gotten worse!

—FOOTNOTES—

¹ R. H. Tawney, Equality (New York: Harcourt, Brace & Co., 1931), pp. 119, 120, 121.

² Walter Lippmann, The Good Society (Boston: Little, Brown & Co., 1937), pp. 192-3.

Originally published in the June 1964 edition of The Freeman. Read more from the Edmund Opitz Archive.

Post from: LibertarianChristians.com

Which kind of Equality?

Benedict of Nursia pictured the ideal monastery as “a little state, which could serve as a model for the new Christian society.” Those who respond to the call of monasticism and draw apart from secular society are to undertake a new community based upon the bond of fellowship set forth in The Rule of St. Benedict. The discipline of the Order was so rigorous as to make the Spartans appear hedonists by comparison. “The life of a monk,” Benedict writes, “should be always as if Lent were being kept. But few have virtue enough for this,” he adds sadly, “and so we urge that during Lent he shall utterly purify his life, and wipe out, in that holy season, the negligence of other times.”

The “negligence” to which Benedict referred might crop up any time, for example, when it came a monk’s turn to do kitchen work. Servers are urged to “wait on their brethren without grumbling or undue fatigue.” As an inducement to good behavior they are awarded an extra portion of food. But what about wine? “God gives the ability to endure abstinence” to some; the others are rationed to a pint a day. Benedict yields this point reluctantly. “Indeed we read that wine is not suitable for monks at all,” he writes. “But because, in our day, it is not possible to persuade the monks of this, let us agree at least as to the fact that we should not drink to excess, but sparingly.”No monk is permitted to call anything his own. “He should have nothing at all:” reads the Rule, “neither a book, nor tablets, nor a pen—nothing at all. For indeed it is not allowed to the monks to have bodies or wills in their own power.” But the instinct for ownership sometimes broke through this prohibition, and the abbot is instructed to search each monk’s bed frequently for concealed private property. “And if anything is found belonging to any one which he did not receive from the abbot, he shall be subjected to the most severe discipline.”

Life within the walls outdoes nature in the harshness of its struggle for existence and only the most fit are permitted to enroll. “When any new comer applies for admission,” reads the Rule, “an easy entrance shall not be granted him.” He must persevere in knocking at the gate, and if he is “seen after four or five days to endure with patience the insults inflicted upon him, and the difficulty of entrance, and to persist in his demand, entrance shall be allowed him . . .”

But the new man must then pass time in each of several decompression chambers lest he get the spiritual equivalent of “the bends.” He stays a few days in the guest cell, then graduates to a novice’s cell under the surveillance of an elder brother who tells him of “the harshness and roughness of the means through which God is approached. . . .” After two months of this the Rule is read to him. If he doesn’t falter “again he shall be tried with every kind of endurance.” Six months of this and the Rule is again read to him; four more months and another reading. And then, after “he shall promise to keep everything, and to obey all the commands that are laid upon him: Then he shall be received in the congregation; knowing that it is decreed, by the law of the Rule, that from that day he shall not be allowed to depart from the monastery, nor to free his neck from the yoke of the Rule, which, after such long deliberation, he was at liberty either to refuse or receive.”

Even after this rigorous culling of the unfit the old Adam continued to reassert itself, in ways noted above, and even in physical violence among the monks. This is the implication of Rule LXX: “No one shall take it upon himself to strike another without orders.”

Benedictine Influence

Such is the discipline of one earnest and successful effort to fashion a society of and for saints. It endures to this day. Benedictine monks converted England. The important Clunisian reformation of the tenth century stemmed from the Benedictine Abbey at Cluny, France. The Cistercian Order was a twelfth-century offshoot. The influence of these movements on western culture was immense. “By degrees,” says Newman, writing about Benedict, “the woody swamp became a hermitage, a religious house, a farm, an abbey, a seminary, a school of learning and a city.”

Let us turn from the sixth century to the sixteenth, from the historical reality of the Benedictines to a literary artist’s dream—to Rabelais’ exuberant ideal construct of a society of gentlefolk, the Abbey of Thélème.

Gargantua is the hero of Rabelais’ masterpiece. He is a mighty leader in battle—among other things—and with the help of friends emerged victorious from the Picrocholian War. His friends deserve a reward for their help, and what is a more suitable gift for a knight than a castle? This will hardly do for Friar John of the Funnels, however. Why not, in this case, find a suitable monastery and make Friar John its abbot? “But the monk gave him a very peremptory answer, that he would never take upon him the charge nor government of monks. `For how shall I be able,’ said he, ‘to rule over others, that have not full power and command of myself? If you think,’ continued John to Gargantua, ‘that I have done you, or may hereafter do you any acceptable service, give me leave to found an abbey after my own mind and fancy.’ ” This was done, and we are given a Renaissance man’s vision of a model community.

The Thélèmites had but one rule: Do What Thou Wilt. “All their life was spent” writes Rabelais, “not in laws, statutes, or rules, but according to their own free will and pleasure.” This did not mean that Rabelais countenanced a lax hedonism; it means that Rabelais had confidence in the gentleman and his code: “Because men that are free, well-born, well-bred, and conversant in honest companies, have naturally an instinct and spur that promptest them unto virtuous actions and withdraws them from vice, which is called honor. Those same men, when by base subjection and constraint they are brought under and kept down, turn aside from that noble disposition by which formerly they were inclined to virtue, to shake off that bond of servitude wherein they are so tyrannously enslaved; for it is agreeable to the nature of man to long after things forbidden, and to desire what is denied us.”

In order to get this kind of a person for his abbey, Rabelais practiced an exclusion almost as rigorous as that set forth in the Benedictine Rule. The inscription on the great gate of Thélème warned off “. . . religious boobies, sots, impostors,… bigots.” Rabelais wanted no “attorneys, barristers, nor bridle-champing law-practitioners;” no “usurers, pelf-lickers, . . . gold-graspers, coin-gripers. . . . Here enter not, unsociable weight, humor-some churl. . . .”

But the red carpet is rolled out for others. “Here enter you, and welcome from our hearts, All noble sparks, endowed with gallant parts. . . . Here enter you, pure, honest, faithful, true, Expounders of the Scriptures, old and new; Whose glosses do not plain truth disguise. . . . Strange doctrines here must neither reap or sow, but Faith and Charity together grow.” The net result is that at Thélème, “Sound bodies, lined with a good mind, Do here pursue with might, Grace, honor, praise, delight.”

Mere Freedom—Only That

The vision is an enchanting one, and even Albert Jay Nock was moved to enthusiasm. “The lover of freedom,” he writes in his essay on Rabelais, “the disbeliever in a dull and vicious mechanization of the human spirit, its debasement and vulgarization of life’s abiding values, will nowhere find a more abundant consolation and encouragement than in this vision of the humanists. Nowhere, we believe, is there a more elevating, convincing, and wholly sound conception of human nature’s possibilities when invested with no more than mere freedom—only that.”

Let it be granted that the vision of Benedict of Nursia and the Rule it inspired reflected a saint’s nature and met, to a significant degree, the needs of spiritual athletes for whom life is a period of probation only, and the delights of the world a snare for the soul. Rabelais, on the other hand, although consciously within the Christian heritage, was most at home in that wing of it which embodied those elements of Christianity which have been called the last creative achievement of classical culture. As a humanist, he projected the vision of an ideal society which reflected the new awareness of what a marvelous creature man is at his best—”how like a god”—inhabiting a world only a little less wonderful than himself.

Thus we have, in theory, taken care of those constructed along heroic lines—the saints and the gentlefolk. What about the rest of us, who are neither saints nor heroes, and who have been forced to concede that the gentleman’s code—while it works well on the tennis court or in the drawing room—does not fully meet the demands of life on all its levels? What about the run-of-the-mine citizen? It was possible to discount him in classical political theory, whose most enduring expositor, Aristotle, could not conceive of a civilization without slavery. But Christian social theory cannot take this way out. As every man is precious in God’s sight, so every man must signify in any Christian sociology, and he must signify in terms of the Christian understanding of man—a creature who is out of joint with his true nature, who has to negotiate a fallen world, and who must await another order of reality to attain his own fulfillment.

I take it to be a distinguishing feature of Christian sociology that it is non-ideological and anti-utopian. I would call a social theory “ideological” which views man in terms of only one of his aspects; which takes account only of man’s material needs; or regards him as a purely spiritual being; or stresses his rationality, or his instincts, or whatever, at the expense of his wholeness. It is obvious that man is a creature of many facets, but violence is done if the wholeness of man’s nature is ignored or denied.

Social Heredity

A social theory is “utopian” to the extent that it assumes that man’s felicity is attainable in time and within history by a simple reliance on the natural harmonies, when these are uncorrupted by the artificial institutions of civilization. “Man is born free,” cried Rousseau, “and is everywhere in chains”—fastened on him by the societies he has fashioned. Actually, society is man’s native habitat. Society is as natural to man as water to a fish—neither organism could survive without its natural environment. As a creature of his genes man is a mere anthropoid; his “social heredity”—absorbed and learned one generation from another—makes him human.

Harmony, according to the utopians, is to be attained in one or the other of two directions; by anarchism or collectivism. That is to say, we might achieve an ideal society if the arrangements between people were the result of freely contracted relationships based on each man’s rational calculation of his own self-interest or advantage. Or, on the other hand, social harmony might be attained by the political imposition of a rational plan from the top down which put every man through his paces, according to the superior wisdom of a ruling elite.

In contrast to the position of the utopians—whose dubious premises and faulty reasoning can be used equally well to justify either anarchism or collectivism—man, as he is understood in Christian thought, has his citizenship in two realms, not one after the other, but concurrently. The natural sensory world engages him, obviously. It is an essential part of his environment which he shares with the animals; but man is the only animal who participates also in a non-spatial, non-temporal environment. This means that society has a more than natural and social significance; it is part of the cosmic scheme.

Our economic needs could not be met if we tackled them individually; and fellowship with others is a demand of our natures. But society has a significance beyond the meeting of our creaturely need for bread and our social need for fellowship; by a just ordering of social life we are, as Augustine put it, “schooled for life eternal.”

City of God

The contemporary Anglican theologian, V.A. Demant, writes, “Perhaps, only because man is not in the Kingdom of God has he to make civilization, but the effort is made because of the pull of his Patria in the Eternal World impels him to make a frame of life which upholds him when he is in via on earth.” This point is, of course, the theme of Augustine’s City of God, and I quote from Book XIX. “Even the heavenly city, therefore, while in its state of pilgrimage, avails itself of the peace of earth, and, so far as it can without injuring faith and godliness, desires and maintains a common agreement among men regarding the acquisition of the necessaries of life, and makes this earthly peace bear upon the peace of heaven; for this alone can truly be called and esteemed the peace of the reasonable creatures, consisting as it does in the perfectly ordered and harmonious enjoyment of God and of one another in God.”

Christian social theory is at odds with most secular social theory, but this is not the only difficulty; it has intramural problems as well. Yielding to those who demand a Single, Simple Formula, Christian social theory may become a parody of itself in one or the other of two directions—material or spiritual. Although Marxian communism is a purely secular scheme of salvation on the social level alone, and within time, there are some who have seen no incompatibility between communism and Christianity. A more common parody of the full-bodied Christian position is that which vaporizes it into a cloying spirituality. The former seeks to resolve social problems without reference to man’s spiritual nature and needs; the latter stresses the inner life as if there could be a healthy spirituality apart from a righteous ordering of human relations. When things are right the inner, spiritual life of individuals is “in play” with the structures of their social life. Josef Pieper has said that the western culture of Christendom might be characterized as “theologically grounded worldliness.”

A Bedrock of Faith

If man is more than a natural and social being it follows that the problems emerging on these levels cannot be resolved, or even understood, on these levels alone. The dislocations that bedevil us on the political and economic level cannot be cured at that level because they stem from a malady rooted on the spiritual level; they are surface manifestations of a distortion of our beliefs and our system of values. Our society was originally founded on the bedrock of a spiritual faith, and today we must again probe beneath the surface to that same bedrock. But the purpose of going down to bedrock is not to stay there; it is to build from there!

Every Christian believes in spiritual values, but not necessarily in the kind that are vacuum packaged; not in the kind that become the private jewel of some connoisseur for his solitary ecstasy. The path between altar and marketplace has always been a two-way street. Jesus’ summary of the law was twofold: love God and love your neighbor, balancing ethical expenditure by spiritual income. It conveys something like a half truth and a whole error to label man a spiritual being. He is, in fact, a spiritual being who eats, feels the cold, and needs shelter; a being whose nature demands fellowship with his own kind. True spirituality cannot exist apart from sound thinking, just dealing, and efforts to improve the quality of human relationships.

We have gone through a period when large numbers of people shared a belief that we could solve just about every human problem by political action. This is, of course, absurd. But it is a sorry reaction to this absurdity to subtract one’s weight and influence from such healthy forces as are now at work in social and political life. This mood of retreat and resignation is a dubious kind of spirituality. In reality it is a new “failure of nerve,” and a critic has written caustically about those so afflicted: “Having abandoned genuine thought about problems—especially the new problems that cannot yield to old formulae and incantations—they luxuriate in the feeling of greater purity and spirituality than their fellows.”

The Ancient City

If we reduce spirituality to a kind of private fancy it is easy for us to think of religion and politics as two distinct spheres, as separate as church and state. Such a view would have been incomprehensible to the ancient Greeks. The classic study of the religious and civil institutions of ancient Greece and Rome is The Ancient City by Fustel De Coulanges. “The foundation of a city,” he writes, “was always a religious act . . . A city was like a little church, all complete, which had its gods, its dogmas, and its worship. . . . Neither interest, nor agreement, nor habit creates the social bond; it is this holy communion piously accomplished in the presence of the gods of the city.” It was a social system “where the state was a religious community, the king a pontiff, the magistrate a priest, and the law a sacred formula; where patriotism was piety, and exile excommunication; where individual liberty was unknown; where man was enslaved to the state through his soul, his body, and his property.” Christianity, on the other hand, “taught that only a part of man belonged to society. . . . The mind once freed, the greatest difficulty was overcome, and liberty was compatible with social order.”

It is risky to generalize thus about a complex civilization like Greece which underwent several changes of character over the centuries, so let us use Socrates as a type case. Ernest Barker, in his Political Thought of Plato and Aristotle, writes “The laws of his country were to him (Socrates) a sacred thing. . . . For him there was no rule of natural justice outside the law . . . what is just is simply what is commanded in the laws.” Barker goes on to say that “To a State like the ancient State—both church and State in one—any new religious beliefs, or disbeliefs, resulting in the formation of hostile groups of opinion, were in reality dangerous.” The ancient society, in other words, represents the fusing of religion and politics into a unitary state, leaving little elbowroom for the exercise of individual initiative.

“The victory of Christianity, “writes Fustel, “marks the end of ancient society. . . . It was not the domestic religion of any family, the national religion of any city, or of any race. It belonged neither to a caste nor to a corporation. From its first appearance it called to itself the whole human race.” Such a religion was bound to have momentous political consequences. Christianity created a new kind of individualism. After some fifteen centuries of its influence, “The Englishman .. ,” G. G. Coulton writes, “could carry his own atmosphere with him everywhere; he was self-sufficient avec sa Bible et son Anglaise.”

Encounter and Tension

The enlargement of the idea of God, from a family, urban or tribal deity into a Being with universal attributes, developed the kind of religious institution—a church—which must forever confront political institutions in an atmosphere of encounter and tension. The history of Europe is in large measure polarized between the two powers; sword and scepter, crown and miter, Empire and Papacy. Such a dualism is fatal to the idea of the monolithic state. The effect of this polarity is to decentralize power and disperse authority. There is no other way to deal with the root problem of politics—the governance of power. In addition to the division of authority between Empire and Papacy, power was further fragmentized among numerous kings, counts and lesser officials.

In practice, then, during much of the history of Europe, power got itself deadlocked; with the result that there was widespread practice of what might be called “interstitial liberties” by the people. Men were free in the spacious nooks, crannies and crevices of European society long before the law moved up to recognize specific freedoms. We had to wait till the seventeenth and eighteenth centuries for a developed philosophy of freedom.’

But just about as that occurred, Christianity as conscious faith lost its hold on men’s minds and loyalties, and we began to slide back toward a kind of pseudo-theocracy, or “totalitarian democracy,” which, in modern communism and fascism, amalgamates religion with politics and succeeds in debasing both. Politics, in the collectivized state, is a sheer power struggle with no concern for the ends of justice and freedom. Religion, in the collectivized state, must be forced into state service as an opiate of the people. Omnipotent government cannot abide a universal religion; it must construct its own domesticated variety of secularized religion.

The history of the Eastern Church and Empire is another story. Christopher Dawson writes: “The Byzantine Church became so closely bound up with the Byzantine Empire that it formed a single social organism which could not be divided without being destroyed. . . .” The Making of Europe, p. 57.

And thus we complete one of those enormous spirals of history. Religion, ethics and politics are once again wrapped up in one package, as they so largely were in Greek speculation. The individual Greek could hardly conceive of ends for his life outside his Polis. Aristotle’s remark that “man is a political animal” might be translated “man is a creature found only in city-states.”

Beyond Society

With modern men it is different. Our pilgrimage has brought us to a different turn on the spiral of history and we know that we have a potential that projects us beyond society. We have acquired a sophistication which will not permit us to be reabsorbed into our societies without inner tension and conflict. This is one result of our centuries of encounter with Christianity. We may be anti- or non-Christian but nevertheless its effects have leaked into our lives to shape the modern psyche in the region of the values and premises we take for granted. Our mood is mostly Christian, whatever creed or philosophy we profess.

This may sound like a call for a religious revival, and, in a sense, it is just that. But a mere revival of religion is not what we need, unless the religion which is revived understands that man exists for ends beyond society and beyond history Augustine’s two cities again. Nor will this sort of a revival be accomplished by mere exhortation. Perhaps it will not happen at all so long as men expect to wring utopian results out of any kind of political or economic action.

There are political implications in the concept of spiritual liberty; the practice of justice is urged upon us as a religious imperative, and the relevance of the Christian religion to American institutions has been spelled out many times. But where does economics fit in? At first glance, economics appears to deal solely with the provisioning of our material and creaturely needs and to have no religious significance. This is a misreading of the situation, I believe, so let me say a few words about economics.

Economic Activity Fundamental to Human Existence

Economic activity is fundamental to human existence. A Robinson Crusoe could get along without politicking, but if he did not work he would die of hunger and exposure. Emerging from economic activity are the concepts of rights to property and claims to service around which many political battles are fought. Economics, on the surface, deals with prices, production and the operations of the market as determined by the buying habits of every one of us.

In reality, however, economics is concerned with the conservation and stewardship of the earth’s scarce goods; human energy, time, material resources and natural forces. These goods-in-short-supply are our birthright as creatures of this planet. Use them wisely, as natural piety dictates and common sense confirms—that is providently and economically—and human wellbeing is the result. Ignore the realities in this area, as we have done in our time, and a host of evils follows. We might be able to live with economic ills if we didn’t think we could cure them with political nostrums, but our political efforts aimed at mopping up the consequences of economic mistakes head us in the direction of the Total State.

Every collectivist ideology—from the Welfare State idea to totalitarian communism—is strung on a framework of economic error. People are prisoners of their beliefs, and so long as they cherish a wrong understanding of economics they will be appealed to by one form of collectivism or another. But when they embrace sound economics, collectivism will cease to be a menace.

All creatures take the world pretty much as they find it, save man. Man alone has the gifts which enable him to entertain an idea and then transform his environment in accordance with it. He is equipped with needs which the world as it is cannot satisfy. Thus he is compelled to alter and rearrange the natural order by employing his energy on raw materials so as to put them into consumable form. Before he can do much of anything else, man must manufacture, grow, and transport. His creaturely needs man shares with the animals, but he alone employs economic means to satisfy them. This is an enormous leap upward, for by relying on the economic means man becomes so efficient at satisfying his bodily hungers that he gains a measure of independence from them. And when they are assuaged, he feels the tug of hungers no animal ever feels: for truth, for beauty, for meaning, for God.

A Means to All Our Ends

Whatever may be man’s capacities in the upper reaches of his nature—to think, dream, pray, or create—it is certain that he will attain to none of these unless he survives. And he cannot survive for long unless he engages in economic activity. At the lowest level economic action achieves merely economic ends: food, clothing, and shelter. But when these matters are efficiently in hand, economic action is a means to all our ends, not only to more refined economic goods but to the highest goods of the mind and spirit. Add flying buttresses and spires to four walls and a roof, and a mere shelter for the body develops into a cathedral to house the spirit of man.

There are two schools of thought which incline to dismiss economics, but neither has much excuse for being except as a protest against the errors and one sidedness of the other. On the one hand are the economic determinists, who argue as if man were merely a soulless appendage to his material needs. For them, the modes of production at any given time decree the nature of man’s institutions, his philosophies, and even his religions. Economics, under this dispensation, will lose its independence and become a mere tool of the State.

On the opposite side of the fence is a school of thought which appears to regard it as a cosmic calamity that each soul is sullied by connection with a body which must be fed and kept warm. Spiritual purity will not be attained until there is deliverance from this incubus; but until that happy day let us try to forget that man has creaturely needs which only the products of human labor can satisfy. Nothing in this scheme disposes men to pay any attention to economics! But there is a third way.

The mainstream of the Judeo-Christian tradition is characterized by a robust earthiness which makes it as alien to the materialism of the first of the above alternatives as to the disembodied spirituality of the second. Soul and body are not at war with each other, but are parts of our total human nature. It is the whole man who needs to be saved, not just the soul. Creaturely needs are, therefore, legitimate; and being legitimate they sanction the economic activities by which alone they can be met. They cannot be met by political action. The market economy presupposes a moral order, and it needs a framework of law to punish breaches of the rules. But granted this institutional framework economic activities are self-starting and internally regulated. Political action which goes deeper into economic life than maintaining the Rule of Law commits the injustice of giving economic advantage to some at the expense of others.

Christianity is a religion of world and life affirmation. It includes the dimension of eternity but it is not “other worldly.” It can therefore extend diplomatic recognition to the temporal order and respect the integrity of its political and economic rules while insisting at the same time that ultimate felicity is not to be attained by any conceivable improvement of that order. Utopia is not within its purview.

Contemporary social and scientific theory is now at least open-ended toward this idea, having shed the utopian expectancy of last century. Theories about people and things are no longer expected to hang together with the neatness of a proposition in Euclidean geometry. The rationalist may demand that life conform to his verbal formulations of it, but reality refuses to be thus coerced. Anyone can draw up a blueprint for an ideal society composed of bloodless abstractions who are expected to perform like puppets. But when we deal with man in all his concreteness, the rules must be tempered with artistry. In religious terminology, this artistry is the practice of the traditional religious virtues of mercy, compassion and charity.

Originally published in the February 1978 edition of The Freeman. Read more from the Edmund Opitz Archive.

Post from: LibertarianChristians.com

No Continuing City: The Paradox of a Christian Society

An invitation to speak at Grove City College is a great honor, doubly so, in that I’ve been asked to talk about Ludwig von Mises. But I am humbled when I contrast the size of the debt I owe to Mises with the meager gesture that is all I am able to offer as a token payment.

I had read Mises’ major works before I met the man. I then had the rare privilege of getting to know one of the finest minds in our time, a man who belongs with the great masters of his discipline, Economics; a scholar who advanced that discipline in several particulars by his own genius. And not only that, Mises was an inspired teacher; from the days of his celebrated Vienna Seminar almost till the end of his life, men and women sat at his feet, and some of them have become famous in their own right. The Misesian influence spreads and will continue to manifest itself.

Mises lived his active life during the first two-thirds of this century—a period of world turmoil which affected him personally and tragically, forcing him out of his native land and finally out of Europe, losing most of his precious library and other belongings in the course of his escape. Some refugee scholars came to America in the late thirties and early forties and we rolled out the red carpet for them. But not for Mises. Mises had set his entire life resolutely against the ideological absurdities of the twentieth century which produced the totalitarian upheavals in Europe, as well as the milder but related political and social events in America.

Those European intellectuals who had opposed European fascism and communism in the name of socialism were welcomed here by their domestic counterparts—American socialists, liberals and New Dealers. Lectureships, academic appointments and other honors were made available to them. With Mises it was different. His teachings were a threat to every variety of statism, whatever the label: communism, fascism, Naziism, state interventionism, national planning.

Communist and fascist gangs fought pitched battles in the streets of European cities, but these brawlers were really brothers under the skin; both were statists and collectivists. They fought each other for power; they hankered for the authority to put a nation under red shirts versus brown shirts versus black shirts. But they had a common enemy, and they knew it. The common enemy of all the totalitarians was the old-fashioned Whig philosophy, which, in the second quarter of the nineteenth century began calling itself “liberalism.”

Classical Liberalism

Classical liberalism believed in liberty and justice for all; it severely restricted the role of government and politics; it stood for the Rule of Law, private property, and the free market economy. It designed a set of rules which maximized every person’s opportunity to pursue his personal goals; it worked for equal freedom by abolishing the legal privileges which had hitherto given some groups in society unfair advantages over others. It got rid of serfdom and slavery.

Mises was a liberal in this old-fashioned sense, at a time when the intellectual currents in Europe and America were nearly all moving in other directions. And so, his arrival in New York went almost without notice. But Mises did have readers in this country, and one of them was Henry Hazlitt, who had reviewed Mises’ great book, Socialism, shortly after the English translation became available. Mises and Hazlitt had exchanged letters, and Hazlitt tells about receiving a phone call one day in 1940, a short time after Dr. and Mrs. Mises arrived in Manhattan. “The voice at the other end of the line,” Hazlitt recalls, “said ‘This is Ludwig Mises.’ It had the same effect on me,” Hazlitt continues, “as if the voice had said ‘This is Adam Smith’.” Such—in the eyes of a select few—was the stature of the man who arrived in New York on the 2nd of August, 1940.

Cast your mind back about a quarter of a century, to the mid-fifties. Mises had been here for fifteen years, he had gained a number of friends and his influence was spreading. Yale University had published his monumental Human Action and reprinted his Theory of Money and Credit and Socialism. These are among the great books of our time, although their time is yet to come.

The news began to filter down into the universities that here was a man of massive intellect and broad cultivation who had devoted a lifetime of rigorous thought to expounding and defending the free market economy—call it capitalism—together with its correlate, the old-fashioned liberal social philosophy. This was but the echo of a forgotten language on most campuses, where orthodoxy in the social sciences included central planning of the society and governmental regulation of the economy among its basic tenets. It occurred to several faculties that it might be a nice gesture in the direction of academic balance to give Mises an hour on campus to tell the students all about capitalism.

Mises has told us why he refused to accept these invitations. “Some of these teachers,” he wrote, “try… to demonstrate their own impartiality by occasionally inviting a dissenting outsider to address their students. This is mere eyewash. One hour of sound economics against several years of indoctrination of errors!

“If it were possible to expound the operation of capitalism in one or two short addresses,” he continued, “it would be a waste of time to keep the students of economics for several years at the universities. It would be difficult to explain why voluminous textbooks have to be written about this subject. It is these reasons that impel me reluctantly to decline your kind invitation.”

I am in perfect accord with the sentiments expressed in this letter of Mises; Mises’ philosophy is not to be summarized; not in an hour, not in a semester. I shall not try; but if I succeed in intriguing even one person into reading Human Action who otherwise might have neglected it the purpose of this lecture will have been achieved.

Mises as a Man of Thought—A Man of Action

Ludwig von Mises was a man of action; but by action I do not mean “activity.” As the world tends to judge activity, men of action are presidents, generals, explorers, mountaineers, race car drivers and the like. Mises’ action was thought, and thought is the most intense form of action there is, and the most enduring. If some present day Emerson were to write an essay on Man: As Thinker, he could do no better than to hold up Mises as his exemplar. In Mises, thought and action joined, and were as one.

I do not mean to suggest that when Mises was asked to list his occupation he wrote in “Thinker,” or “Philosopher.” I suspect he wrote “Economist.” In popular understanding, an economist is someone who concerns himself with the workings of business, industry, and trade or one who forecasts the ups and downs of the stock market. Now, these are indeed important human concerns; and Mises did write several big books about production and distribution, capital and interest, money and credit, work and wages, the business cycle, and the several other topics dealt with in academic courses in economics. But Mises’ thought and his writings ranged over the whole spectrum of knowledge, from epistemology to history; he wrote about human action over time from the inner motivations which give rise to action to the remote consequences of a person’s decision to act one way rather than another.

I used to walk past a store window in a town where I lived, in which was displayed a drawing of the old pirate symbol, a skull and crossbones. As you walked past this drawing of a death’s-head it changed, all of a sudden, as if by magic, into the portrait of a lovely woman. Change perspective and things have an entirely different focus. Misesian economics represents a new focus; the subject matter changes from a mere bread-and- butter affair into an affair of the mind and spirit; economics deals with valuing, purposeful, goal-seeking man.

“Production is not something physical, natural and external,” writes Mises, “it is a spiritual and intellectual phenomenon. Its essential requisites are not human labor and external natural forces and things, but the decision of the mind to use these factors for the attainment of ends… The material changes are the outcome of spiritual changes.”

A Disposition Toward Freedom

Nearly everyone in the modern world has a disposition toward freedom, and this disposition is powerfully strengthened by the Christian philosophy. Nevertheless, freedom lives precariously in our time in the few places where it survives at all. Freedom may be lost because people do not care enough for it, but that is not our trouble. We want it, but perversely we try to implement freedom by social policies which inhibit and destroy it. There is an anti-economic mentality; it is a refusal to face up to the way-things- are in this significant portion of the human situation.

The theologian may give lip service to the idea of God’s overlordship of the whole of life yet in practice refuse to admit the existence of an economic realm in which prevails a regularity of phenomena to which he must adjust his action. Man may try to deny his creaturehood in this area, and think to annul economic laws by statute. But if there are regularities here, man must reckon with them; or they will have their reckoning with him.

It is a fact of the human situation as such—regardless of the nature of the social order—that mankind does not find, ready-made in its natural environment, the wherewithal to feed, house, and clothe itself. There are raw materials only, and most of these are not capable of satisfying human needs until someone works over these natural resources and transforms them into consumable goods. Man learns to cooperate with nature and make use of natural forces to serve his ends. He has to work in order to survive. Work is built into the human situation; the things by which we live do not come into existence unless someone grows them, harvests them, manufactures them, builds them, transports them.

Learning to Economize

Work is irksome and things are scarce, so people must learn to economize and avoid waste. They invent laborsaving devices; they manufacture tools, they specialize and exchange the fruits of their specialization. They learn to get along with each other, our natural sociability reinforced by the discovery that the division of labor benefits all. Division of labor and voluntary exchange constitute the market place, which is the greatest laborsaving device of all.

“This division of labor, from which so many advantages are derived,” wrote Adam Smith, “is not originally the effect of any human wisdom which foresees and intends that general opulence to which it gives occasion. It is the necessary, though very slow and gradual, consequence of a certain propensity in human nature . . . the propensity to truck, barter, and exchange one thing for another . . . . It is common to all men, and to be found in no other race of animals.”

The longest journey must begin with a single step, and it is a very long journey that leads from those primitive beginnings to the complex economic order of our time. But at every step along the way there is that human need to cope with scarcity, to satisfy creaturely needs, to provide for material well-being. And it is just as true now as it ever was that human labor is required before goods appear, and that prosperity depends upon productivity.

Signs of the Market

The visible signs of our economic activities are all about us; factories, stores, offices, farms, mines, transportation systems, power plants, and so on. These are the locations where work is performed, things transformed, services rendered, goods exchanged, wages earned, money spent. This is the economy, and the hallmark of the free society is that the economy is not under governmental control; politicians do not regulate the economy, consumers regulate the economy by their buying habits. The billions of consumer decisions made daily in the market place to buy or not to buy determine what goods will be produced, in what quantities, sizes and colors. Consumers, by their market- place decisions, determine who shall stay in business, and how large and prosperous a business shall be. The changing needs, desires, and tastes of consumers regulate wages and salaries. If an entrepreneur makes a profit it is a sign that consumers approve of the services he renders them. In the market place the consumer is sovereign.

The free society has an indispensable role for government. The law, in a society of free people, protects the life, liberty, and property of all persons alike, ensuring peaceful conditions within the community. Government performs as an impartial umpire, by interpreting and enforcing the previously agreed upon rules. A free society endeavors to secure and preserve freedom of personal action within the rules, and the rules are designed to maximize liberty and opportunity for everyone.

Government, in the interest of maximum freedom, uses lawful force against criminals in order that peaceful citizens may go about their business. The use of lawful force against criminals for the protection of the innocent is the earmark of a properly limited government, and it stands in utter contrast to the state’s use of tyrannical force on peaceful citizens—whatever the excuse for such action. It’s the contrast between defensive force and aggressive violence; it’s the rule of law versus oppression.

Laissez-faire Capitalism

In a society where people are free the economic order is referred to as capitalistic. Some prefer to call it the market economy, or the private property order. Laissez-faire capitalism—when the term is shorn of the pejorative connotations that opponents have injected into it—laissez-faire capitalism is the ideal of individual liberty and voluntary association applied to the workaday economic world. It is the economic counterpart of a social order where individual persons have maximum latitude to pursue their personal goals.

Mises believed in the unhampered market economy, and with enormous erudition in several large volumes he expounded the operations of this intricate system. Starting with the self-evident truth that people would rather be more prosperous than less prosperous, other things being equal, Mises demonstrated with devastating logic that every political interference with the market hurts some people and makes the entire society poorer. The way to make the nation richer and benefit everyone is to turn the market loose; remove every obstruction that interferes with people’s freedom in the market place and the nation’s wealth will be maximized. There is no way to upgrade the general welfare except by increasing productivity, and a free people is more productive than a politically regulated people.

Political Intervention

Government is not an economic institution; government is a political institution, and there’s no way that you can employ a political means to accomplish an economic end. All political interventions can do is transfer wealth from one set of people to another set; political action does not produce the wealth it redistributes. Furthermore, government is society’s power structure, and when the government uses a power play to garnishee wealth from producers it will redistribute that wealth to those who possess enough political clout to go to Washington and lobby for subsidies. And this will not be the poor.

The welfare state operates, ostensibly, for the benefit of “the poor,” but “the poor” are in reality its principal victims. Every economic program launched by government defeats the purposes for which the program is proposed. For example, government embarks on a vast public housing project, and Mises demonstrates that the end result will be a misallocation of resources and fewer housing units than would be available were housing left to the market.

The welfare state is a misnomer; a more apt label for what we have is the provider state. The theory back of the provider state is that government will supply the material wants of the people by way of food stamps, public housing, free schooling, medical care, direct relief, or whatever.

Now, the government has nothing of its own to give away so what it gives to Peter it must have first taken from Paul. The government takes from producers a portion of everything they manufacture or grow, and it takes a portion of everything people earn by rendering services of one kind or another. The government redistributes a portion of the wealth siphoned into its coffers by taxation, and thus another accurate label for the kind of government we now have is the redistributive state. The market place allocates rewards peacefully, and then government forcibly reshuffles the original apportionments.

It goes without saying that the market place does not always proportion reward to merit. But the state is not a meritocracy either! The populace, when free, rewards its heroes, and they may not be yours. On the other hand, the market place never punishes merit; the rack, the wheel, and the stake are exclusively instruments of the state. If the state is allowed autocratic power in the market place it will curb freedom everywhere else.

If the mood of the citizens is to demand or accept government handouts a new breed of politicians will emerge, soliciting votes on the promise of more government largess to satisfy the demands of the various pressure groups and lobbies. The siren song is: Vote yourself a raise in pay, or vote yourself better housing, cheaper food, free medical care, and the like.

What Government Gives, It Must First Take Away

Now we know that this world of ours is not run along the lines of something-for- nothing; there is always a quid pro quo. If government gives you something-for-nothing or something-for-less, it is obvious that this same government is forcing some of your fellow citizens to take nothing-for-something, or less-for-something. Your gain is another’s loss; you are living at the expense of someone else. Other people are being victimized for an assumed benefit you enjoy. This is unfair; it is immoral.

The ethical code is violated whenever you pick another person’s pocket or steal his purse, and the violation is compounded when you do it legally, that is, when you allow government to do your thieving for you. But only a people with larceny in their souls will write a form of theft into their statutes. Some cynic has suggested that robbery is the first laborsaving device. He’s at least half right. And if people do covet their neighbor’s property they will surely find legal ways to get their hands on it, and conscience will bend around to approve.

An exclusive preoccupation with economizing may lead some people to neglect ethical and other considerations in their single-minded drive to have their own way, to succeed, to get more for less—more reward for less effort; maximum gain, regardless; something for nothing, whenever possible. So economic science, from the very beginning, has been joined symbiotically to a philosophy of society called Whiggism or Whiggery in the eighteenth century, later to adopt a more fitting label, liberalism. The term, Whig, derives from Whiggamore, a label contemptuously applied to some of the seventeenth-century English Dissenters and Nonconformists who led the opposition to the court party. Adam Smith was a Whig, so was Edmund Burke, and so were most of the men we speak of as Founding Fathers. The Whig Party of England became the Liberal Party in 1829.

The Wealth of Nations

Adam Smith, writing in 1776, described the prevailing “mercantile system, in its nature and essence a system of restraint and regulation.” In contrast to this “system of restraint and regulation” Adam Smith offered “the liberal plan of equality, liberty and justice.” These words of Adam Smith shed a good deal of light on our efforts to understand what men like Mises mean by “laissez-faire capitalism.”

Laissez faire has never meant a free-for-all; capitalism has never implied the absence of rules. Adam Smith does speak of “allowing every man to pursue his own interest in his own way,” and if those words are lifted out of context they do suggest a desperate no- holds-barred, rough and tumble struggle for money and power. But when we know that these two lines I have quoted from Smith follow one another in the same sentence his meaning is unmistakable. He is advocating a society based on equality, liberty and justice.

Once you have a society whose rules are designed to offer equal justice for all persons, then everyone is free to pursue his personal goals. This is the free society of classical liberalism, and the free economy—or capitalism—is the only way a free people can conduct their economic affairs.

Spiritual Foundation

Classical liberalism presupposes a religious philosophy which regards man as a created being who bears a unique relation to God, being formed in His image—meaning that man possesses free will and the ability to initiate and command his own actions. This free being is under the moral law laid down in the original constitution of things, responsible for discovering this law and obeying it. He is given dominion over the earth. He is commanded to work in order that he might eat; he is the steward of the earth’s scarce re sources and held accountable for their economic use.

Classical liberalism, in other words, is the secular projection of Christian philosophy. The American Dream, as Jacques Maritain put it, kept “alive, in human history, a fraternal recognition of the dignity of man—in other words, the terrestrial hope of man (expressed) in the Gospel.” The thing called “liberalism” today, bears no resemblance whatsoever to classical liberalism; it has nothing in common with the Whiggism of Adam Smith or the liberalism of Ludwig von Mises.

Mises wrote a book entitled Liberalism, describing liberalism as “a doctrine directed entirely towards the conduct of men in this world . . . it has nothing else in view than the advancement of their outward, material welfare and does not con cern itself directly with their inner, spiritual and metaphysical needs.”

A Deeper Meaning

Now, some critics of classical liberalism have judged it to be crass, too neglectful of man’s higher nature. Not so, says Mises: “The critics who speak in this vein show only that they have a very imperfect and materialistic conception of these higher and nobler needs. Social policy with the means that are at its disposal, can make men rich or poor, but it can never succeed in making them happy or in satisfying their inmost yearnings . . . . All that social policy can do is . . . further a system that feeds the hungry, clothes the naked, and houses the homeless. Happiness and contentment do not depend on food, clothing and shelter, but, above all, on what a man cherishes within himself. It is not from disdain of spiritual goods that liberalism concerns itself exclusively with man’s material well- being, but from a conviction that what is highest and deepest in man cannot be touched by any outward regulation.”

Mises further describes some of the central principles of classical liberalism as individual liberty, equal treatment under the law, and the elimination of class privileges; private property, the free market, free trade, and the peaceful cooperation of all mankind. Most Americans still respond positively to these ideals because they are part of our heritage inscribed in our basic documents, celebrated on patriotic holidays.

Man has an innate urge to live better, including the drive to improve his material circumstances and enjoy more prosperity. To this end he has always engaged in some degree of specialization, and he’s traded and bartered things he wants less for whatever it is he wants more. These voluntary exchanges are market transactions.

The Cultural Framework

The market has always existed; voluntary exchanges occur among primitive peoples, and there is a brisk under-the-counter market in communist nations like Russia and China. But mere wishes do not transform the market into the market economy. The market economy emerges only when the cultural conditions prepare the ground for it, as was the situation in certain western nations in the eighteenth century.

When a nation’s cultural framework includes such spiritual ingredients as the rule of law, equal liberty, security for property, a high level of morality, and that respect for rationality which makes science and technology possible, then the impulses and incentives which everywhere produce the market will give rise to capitalism, or the market economy—which is the market institutionalized.

“The reformers of the oriental peoples want to secure for their fellow citizens the material well-being that the Western nations enjoy,” writes Mises, “. . . they think that all that is needed . . . is the introduction of European and Western technology.” What they really need, Mises continues, is “the social order which in addition to other achievements has generated this technological knowledge . . . . The East is foreign to the Western spirit that has created capitalism.”

How can a society whose world-view includes such doctrines as Maya, karma and caste produce the social structure upon which the market economy is based? Accept the idea of Maya and you exclude the idea of a rationally structured, cause and effect universe. The doctrine of karma makes it virtually impossible for individuals to have the necessary self-responsibility and will to succeed which are essentials for a going-concern economy. And caste divisions in a society are incompatible with the idea of inherent rights and equality before the law. Capitalism is rooted in the cultural heritage of the West, Christendom, and you can’t have the fruits without the roots; you cannot merely wish an end result—to will the end is to will the means.

A Creative Intelligence

The pivot on which Western culture has turned is the conviction that a Creative Intelligence is working out its purposes through nature, history and persons; and that every individual enjoys a unique relationship with this Power. Because he is a created being, there is a sacred essence in man, which, in the fullness of time was understood as conferring certain rights and immunities in the political sphere.

By the eighteenth century, our philosophical forebears regarded as self-evident the truth that all men are created equal, possessing certain rights endowed by the Creator. Government was to be structured around the sovereign person so as to secure his rights and protect his private domain. Americans organized themselves politically around a spiritual framework which, paradoxically, regarded politics as relatively unimportant. The law was to protect life, liberty and property, so that men and women could better attend to the more important things in life—such as religion, art, education, science, sociability and play.

The philosopher-king idea had prevailed in most ages: Find the wisest and best men and then give them power over the nation so as to magnify their capacity to do good. The American notion was just the opposite. Americans had had some experience of the corrupting influence of power, and they were aware of the depravity of human nature—that man is a fallen creature. So the brand new political idea adumbrated on these shores was to limit political power so drastically that even if evil men do seize power they can’t do much harm. I’d phrase their insight this way: Never advocate any more power for your best friends than you would want to have wielded by your worst enemies.

The Political and Economic Aspects of Freedom

Two centuries ago things came to a head, in two great social achievements. In the Declaration of Independence and Constitution we had the political philosophy and the legal structures for a society of free people. The economic counterpart of our unique politics was the free economy, which promised a society of prosperous people.

But at this very period, Western civilization was to undergo a process of radical secularization which virtually destroyed the ideas of human nature and destiny which undergirded our freedom and prosperity. The human person underwent a radical devaluation; once regarded as the lord of creation he came to be looked upon as the accidental end product of natural and social forces—“little more than a chance deposit on the surface of the world, carelessly thrown up between two ice ages by the same forces that rust iron and ripen corn.”

Gone was the idea of a moral law for man’s guidance and fulfillment; gone was the idea of free will: a man’s character was not made by him, but for him. Man was the mere creature of circumstance, deprived of initiative, he could not act, he could only react.

An English critic named Christopher Booker, writing on Samuel Johnson, makes reference to this enormous transformation in the human outlook. “On the eve of the French Revolution and the age of Romanticism, European civilization stood on the verge of one of the most astonishing and fundamental shifts in collective consciousness in history—the keynote of which was to be an almost exact reversal of every truth about human nature and experience which Johnson had fought through to with such remorseless honesty and pain . . . it was proclaimed that human happiness could be achieved by political means, that the causes of most human ills did not lie within us, but outside us. If there was one belief which was to characterize western civilization with ever increasing force from the time Johnson passed away, it was that most human suffering is caused by external factors. In Marx, in Freud, in almost every philosopher and thinker who has shaped western attitudes over the past two hundred years (with one or two towering exceptions, such as Dostoevsky), we find this same overpowering drive to offload the blame for all our guilt, our pain, onto others, onto society, onto our parents, onto political structures, onto our material circumstances.” (The American Spectator, October, 1978.)

The Consequences of Error

The religious and philosophical errors of the eighteenth and nineteenth centuries produced the social and personal disasters of the twentieth century—faulty thinking and fallacious ideas have come to violent issue in the wars of our time. We tried, and we erred; but we can learn from our mistakes. Try a new direction, and we may succeed. In deed, we are succeeding as more and more thoughtful people examine the philosophy of freedom in its several dimensions and deeper levels. And as they search, more and more people are encountering the towering figure of Ludwig von Mises. Here was a man of unwavering integrity, a man who lived the truths he taught.

It is impossible to summarize the philosophy of Ludwig von Mises, but I shall close with what might be construed as a personal testimony by Mises himself, which does sum up the character of the man. It is a paragraph from his little book Bureaucracy.

“Mankind would never have reached the present state of civilization without heroism and self-sacrifice on the part of an elite. Every step forward on the way toward an improvement of moral conditions has been an achievement of men who were ready to sacrifice their own well-being, their health, and their lives for the sake of a cause that they considered just and beneficial. They did what they considered their duty without bothering whether they themselves would not be victimized. These people did not work for the sake of reward, they served their cause unto death.”

Originally published in the July 1980 edition of The Freeman. Read more from the Edmund Opitz Archive.

Post from: LibertarianChristians.com

The Philosophy of Ludwig von Mises

The Civil War marks a deep cleavage in American life; the increasingly industrialized America of the latter decades of the 19th century was quite different from pre-Civil War America. The economy of the first part of the last century did of course engage in some manufacturing, but the businessman of the period was typically a merchant and a trader rather than a factory owner or mine operator. Men of ambition made money shipping lumber to China and returning with tea, opium, mandarin screens, and the like. American whalers plied their arduous trade all over the world. The Yankee clipper, sailing out of eastern ports from Baltimore to Salem, was the most beautiful thing afloat, and the swiftest vessel on the seven seas till after the Civil War.

Most Americans, during this period, lived in villages and small towns; farming was the major occupation, and rural life was a struggle for survival. Poverty was widespread, giving rise to the old New England maxim: Use it up, wear it out, make it do, or do without. Herman Melville’s great novel, Moby Dick, tells how dirty and dangerous life was on board a whaling ship. Imagine then, if you will, what it was like trying to wrest a living out of the rocky soil of New England if life aboard a whaler was the preferred alternative!

No one would refer to the early decades of the last century as “The Era of Free Enterprise Individualism.” It is the post-Civil War period that is usually labeled so. “Free Enterprise” and “Individualism” are two very slippery terms. In any event, the decades under evaluation here are bounded, on the one side, by the Presidency of Ulysses S. Grant, and on the other, by William McKinley; roughly from 1869 to 1901. This was America’s Gilded Age, so labeled by Mark Twain in his novel of that name. The Gilded Age expressed Mark Twain’s disillusionment over the decline in his nation from the decent, old, kindly America he remembered from his boyhood to the America of Black Friday, Credit Mobilier, Boss Tweed, Tammany, and the hustle for the fast buck.

The Changing Scene

Mark Twain, in collaboration with his neighbor, Charles Dudley Warner—called “Deadly Warning” by his friends—published The Gilded Age in 1873. The theme of this novel is announced in the Preface: “In a State where there is no fever of speculation, no inflamed desire for sudden wealth, where the poor are all simple-minded and contented, and the rich are all honest and generous, where society is in a condition of primitive purity, and politics is the occupation of only the capable and the patriotic, there are necessarily no materials for such a history as we have constructed.” But we no longer have people of this character, Mark Twain is telling us; corruption has eaten so deeply into the hearts and minds of people that he and Warner have ample material for the 453-page fictionalized history he and his friend have constructed.

In chapter 18 the authors venture a conjecture as to how this mutation in the American character had come about: “The eight years in America from 1860 to 1868 had uprooted institutions that were centuries old, changed the politics of a people, transformed the social life of half the country, and wrought so profoundly upon the entire national character that the influence cannot be measured short of two or three generations.” The Gadarene progress was more rapid than Mark Twain had anticipated; it worked itself out close to the bitter end before he died thirty- seven years later.

Twain’s satire was merely a prologue; the play followed, and the main characters are all well- known names. There was Commodore Vanderbilt (who conferred that naval distinction on himself because he ran a ferryboat between Staten Island and the Battery); and Jay Gould, who built himself a mansion just up the road from the property which now houses The Foundation for Economic Education. There was Daniel Drew, and Jim Fisk, and Andrew Carnegie; there was Huntington, Stanford, Harriman, Rockefeller and Morgan. I’ve listed here ten names; add ten more if you wish, or a thousand more. The point is that these “robber barons,” as they’ve been called, were a mere handful of men whose deeds and misdeeds have been lovingly chronicled by three generations of journalists and muckrakers.

Conniving with Politicians

These extravagant characters have been represented as exemplars of unrestrained individualism at its worst, fiercely competitive, practitioners of undiluted laissez faire capitalism. They were nothing of the sort. So far were they from wanting a genuinely free market economy that they bought up senators and paid off judges in order to stifle competition. They did not want a government that would let them alone; they wanted a government they could use. Had they been able to understand the original idea of laissez faire they would have opposed it. They were- not individualists; they did not believe in a fair field and no favor; they stacked the odds against their competitors.

The last thing Vanderbilt, Gould, Carnegie and the others wanted was open competition in a game where the best man wins. To the contrary! They connived with politicians to obtain advantages for themselves by controlling government and the law; they manipulated the public power for private gain. And the government was eager to oblige.

This was done openly, and virtually everyone knew about it. Witty commentators referred to certain politicians as the Senator from coal, or the Senator from railroads, or the Senator from steel. Observing the situation in Pennsylvania, one critic was led to remark that Standard Oil had done everything with the legislature—except refine it! Such political practices were a far cry from the vision of James Madison, who had declared that “Justice is the end of government, and justice is the end of civil society.” The Gilded Age was a throwback to the age-old practice of using political power for the economic advantage of those who hold office, and for their friends.

If you want the story of these men and their times, a good place to start is Gustavus Myers’ History of the Great American Fortunes. First published in 1907, this book went through several editions here and in England. It was published in a large inexpensive edition in 1936 as a Modern Library Giant. I bought my secondhand copy in 1953; the original purchaser bought his in 1939 and it contains a gracious inscription by Myers himself: “May you be included in my next- supplement to this tome.”

Myers tells the reader that he was just a reformer when he began his research, eager to reveal the unsavory tactics of rapacious men in business and industry in the absence of government supervision of economic life. Only later did he conclude that a radical restructuring of society—some form of socialism—was the only answer. The conclusion is a strange one. Myers demonstrates throughout his book that such powers as government exercised in this nation during the Gilded Age were misused so as to wrongfully give monetary advantage to some at the expense of others. If this government with a little power did harm, there is no reason at all to assume that a new government wielding a lot of power will do good!

I have gone through Myers’ book and underlined every passage which describes a sinister alliance between politicians and these fortune hunters; there are some hundred and fifty such passages. Let me offer you a representative sample.

. . . peculiar special privileges, worth millions of dollars.

. . . as a free gift from government.

. . . the free use of the people’s money, through the power of government.

. . . a notorious violator of the law, invoking the aid of the law to enrich himself still further.

. . . causing public money to be turned over to his private treasury.

By either the tacit permission or connivance of government.

The simple mandate of law was sufficient authorization for them to prey upon the whole world outside their charmed circles.

. . . while it was essential to control law-making bodies, it was imperative to have as their auxiliary the bodies that interpreted the law. [That is, the courts.]

I think you catch the flavor of Mr. Myers’ book. He is a moralist; he is indignant; he preaches a hell-fire and brimstone sermon against the wicked men who took advantage of their fellow Americans by subverting the law from its proper role of administering an evenhanded justice between person and person. They bent the law into an instrument of plunder. But Myers is not a philosopher; he does not shape his material according to a coherent theory of the economic and political orders.

Gaudy tales about these few unprincipled buccaneers distract our attention away from the millions of Americans on the farm and in the workshops. These hard working people constituted the real American economy during the Gilded Age. This bustling, surging economy of ours received immigrants from Europe at a rate of about a million a year, and it absorbed them on our farms and in other places of work. The standard of living was rising all the while; wages doubled between 1870 and 1900.

It was an age of invention. During the eighty years from 1790 to 1870, the U.S. Patent Office had granted just over 40,000 patents; during the next thirty years it granted just over 400,000. New types of farm machinery transformed agriculture. To cite one instance: not one bushel of wheat had been raised in the Dakota Territory before 1881; by 1887 its wheat crop was sixty-two million bushels. In 1870 there was nothing that could be called an American steel industry; by 1900 we were producing more than ten million tons of steel annually—more than all the rest of the world combined.

The economic opportunity in America attracted millions of foreigners to these shores during these decades. These men, women and children did not uproot themselves from Europe, leaving family and friends, then undertake an uncomfortable ocean voyage, in order to be exploited; they came here because they could, by their own efforts, forge a better life for themselves in the freest economy the world had yet known.

An Economy of Opportunity

The economy was not wholly free, else there would not have been a single robber baron. But the fact that certain sharp operators piled up large fortunes by means of legally sanctioned thievery means that there was already wealth here to be stolen. The wealth they filched from the taxpayers was created by millions of industrious Americans laboring under conditions that approximated the free market. Compared to working conditions in Europe, we had an economy of opportunity. Thirty million immigrants told us so by coming to these shores, where they found a better and freer life for themselves and their descendants.

Let me retrace our steps to the place where I alleged that Gustavus Myers was long on indignation, but somewhat short on theory. He tells the sordid tale of a gang of private citizens in cahoots with government to operate a scam against the public. His fortune hunters are supposed to represent “free enterprise,” but in reality, the robber barons are to the market economy what Jesse James and the Dalton brothers were to the hardy homesteaders who settled the western territories. In other words, they were more predators than producers.

We need to come to some understanding of the political order appropriate to a society of free people. By the same token, we need to know how the free economy operates, and the role of the businessman within a market economy.

Politically, I call myself an old-fashioned Whig. I’m a believer in equal justice under the law, and something of a Jeffersonian, so let me quote a few lines from Jefferson’s First Inaugural Address describing the society he strove for: “Equal and exact justice to all men; of whatever state or persuasion, religious or political; peace, commerce, and honest friendships with all nations,—entangling alliances with none . . . freedom of religion; freedom of the press; freedom of person under the protection of the habeas corpus.”

Later in the same Address Jefferson praised “. . . a wise and frugal government, which shall restrain men from injuring one another, which shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.”

The function of government, in the Jeffersonian scheme, is to secure the God-given rights of all persons, to deter and redress injury, and otherwise let people alone.

Limited Government

The American Constitution is more explicit in what it forbids government to do than in what it authorizes government to do; the words “no” and “not” in restraint of governmental power occur forty-five times in the first seven Articles and the Bill of Rights. Limiting the scope and power of government maximizes individual liberty and gives us a society of free people. Government, in a free society, has no power to confer economic advantage on some at the expense of others, which eliminates “robber barons,” be they individuals or groups, rich or poor. The government of a free people does not misuse its power to tax by taking wealth from those whose labor produced it and allocating it to the pressure groups who possess political influence.

Limited government under the Rule of Law maintains an evenhanded justice; it keeps the peace of the community by curbing those who break the peace. It lets people alone, and it punishes any individual who refuses to let other people alone.

A free government is distinguished from other forms of government by the use it makes of the law; it employs lawful force against criminals in order that peaceful people may go about their business. This is force used in self defense. Every other political system uses legal violence against peaceful people—for any sort of reason the users of violence may conjure up. This is the aggressive use of force. The distinction is between law and tyranny, as the Greeks put it. “Let no man live uncurbed by law; nor curbed by tyranny,” said the playwright Aeschylus.

Given the law order of a free society, the economic activities of men and women, as they go about the business of earning a livelihood, is necessarily free market and voluntary.

Consumer Sovereignty and the Free Society

In a genuinely free society, a laissez faire society in the early sense of this much abused phrase, the businessman is a mandatory of consumers; the customer is boss. Consumer sovereignty! Is this the way the businessman likes it? Of course not. Our businessman would like to think of himself as the man in charge, a captain of industry running a tight ship. But who’s he kidding? He doesn’t even have the power to set wages and prices. His competition, his employees, and his customers make those decisions for him. If he tries to lower wages he will lose his best workers to his competitors who pay the going rate or more. If he tries to raise prices, people buy elsewhere. He’s stymied, and that’s why he’s tempted on occasion to persuade some politician to bend the rules in his favor, just enough to give him what a friend of mine called, ironically, a “fair advantage.”

But when a businessman yields to this temptation he forfeits his standing as a businessman and becomes something else—a branch of the government bureaucracy. He has left the economic order, and is now part of the State. As a businessman he had no power over anyone; as a part of the State he shares, with government, the power to tax. People now have to pay for his products whether they buy them or not.

Was there “free enterprise” during the Gilded Age? Yes, there was—but not much of it on the part of the “robber barons” who were in cahoots with government. Was there “individualism” during the period? Well, there was individuality, but the kind of individualism which means equal freedom for every person to pursue his private goals was not a guiding policy.

But who are we, as we go stumbling down the road to serfdom, to cast the first stone?

Originally published in the August 1984 edition of The Freeman. Read more from the Edmund Opitz Archive.

Post from: LibertarianChristians.com

The Robber Barons and the Real Gilded Age

Capitalism, by conquering poverty, creates the “problem” of poverty.

If we look back over the history of the past two or three thousand years we realize that most people who have ever lived on this planet were desperately poor, not merely poor by our standards – poor by any standards; miserably housed, shabbily clothed, and continually on the verge of starvation, only to go over the edge by the hundreds of thousands during the regularly recurring famines.

Medieval Europe is regarded by many scholars as one of the high points in world civilization. It gave us the great cathedrals, scholastic philosophy, magnificent works of art, literature like Dante’s Divine Comedy, specimens of craftsmanship that grace our museums, and chivalry. But the Middle Ages in Europe suffered from a number of famines. Between 1201 and 1600 there were seven famines, averaging ten years of famine per century. Coming down to 1709, there was a famine in France that wiped out one million people, five percent of the population. The last great natural famine in Europe was the Potato Famine in Ireland in the late 1840s, which claimed about one and a half million lives.

But Europe has always been a favored region, more prosperous than the rest of the world, less subject to natural disasters than Asia. There have been starving times in Western civilization, but never were they of the same order of magnitude as the disasters in the Orient. India and China have been especially vulnerable to famines. A famine in China between the years 1876 and 1879 resulted in an estimated 15 million deaths. And within living memory, a famine in China’s Hunan Province in 1929 resulted in two million dead. Ten major famines in India between 1860 and 1900 caused the death of close to 15 million people. During the Bengal famine of 1943-44—in and around Calcutta-one and a half million people died of starvation and the epidemics that followed.

I have recited these rather unpleasant facts, not for their own sake, but to emphasize a neglected or overlooked truism: Poverty is the natural state of mankind. Poverty is the rule; prosperity is the exception. In most parts of the globe, in most periods of history—including the present—most people most of the time have been or are desperately poor. Prosperity is what the ruling class enjoys. The rich are the superior warriors, the superior hunters, the favorites of the gods, and these wealthy few—it was believed—deserve what they have.

Water runs downhill, fire burns, grass is green, the masses of people are poor. This was the perceived natural order of things, accepted and rarely questioned. Such was the mentality that prevailed throughout most of the world most of the time—until a few centuries ago. Poverty for the multitudes was simply a fact of life. It was a hardship, but being poor was not perceived as deprivation.

The rich were envied, but the envy rarely translated into thoughts of redistributing their wealth. Occasionally something triggered a peasants’ revolt or a slave rebellion, but when each of these fizzled out, all ranks went back to “The good old rule/ The simple plan/ That they should take who have the power/ And they should keep who can.” Universal poverty was a fact. But poverty was not a problem! The distinction is simple: a fact or situation just is; a fact or situation for which there is perceived to be a solution becomes thereby a problem, and a new mentality is generated.

The Capitalist Alternative

Masses of people, the world over, have now been persuaded that someone or something keeps them poor, and their resentment follows. This fact helps to explain the modern world’s hostility toward capitalism. Capitalism is not at all the cause of the poverty of the noncapitalistic nations, but it is the source of their dissatisfaction with their poverty. Capitalism in fact overcomes poverty; but in overcoming poverty capitalism creates the problem of poverty.

There was a breakthrough a few centuries ago, one of those great tidal movements in human affairs resulting in a new mentality and a different way of viewing the human condition. It was the discovery by the people of a few western nations of the complex set of institutions which later came be to be called capitalism. The breakthrough might be symbolized by two documents, one penned by Thomas Jefferson setting forth the vision of a nation founded upon a new philosophy, that “all men are created equal,” that they are “endowed by their Creator with certain unalienable rights,” and that everyone is entitled to equal justice under the law. These axioms form the cornerstone of the free society.

At the same time, on another continent, a man named Smith wrote a great book which explained why the economy need not be centrally planned, directed, and controlled by the government—as it was under the mercantilism of his day. Let the law be vigilant to protect the life, liberty, and property of all — as the Whigs advocated — and the buying habits of freely choosing men and women in the marketplace will provide all the directives needed for the producers to grow and manufacture the things consumers want most. This is the market economy, the backbone of a free society. Under these conditions a free people will multiply their productivity and thus generate their own prosperity.

Capitalism is the name given to the set of institutions which enable free people to produce wealth up to the limit of their time, talents, capacity, and desire; and then to voluntarily exchange the fruits of their labors with others. Capitalism becomes fully operative only when there are institutional guarantees of individual liberty, with laws designed to secure the G0d-given rights of every person to life, liberty, and property.

The intelligent and ethical way of arranging human action in society, the free society-market economy way of life which we are labeling capitalism, was like a bootstrap by which whole nations of people could and did elevate themselves out of misery, grinding poverty, and periodic starvation. Capitalism tackled poverty using the only means by which poverty can be alleviated, namely, by increased productivity.

Remove every obstacle that hinders the productive and creative energies of men and women and you create an abundance of goods and services, shared by everyone involved according to his contribution to the productive process, as that contribution is judged by the man’s peers. This ever-increasing supply of goods and services will move the entire society up the rungs of the ladder of wealth. Some will climb to the top rungs, but even the least well-off on the bottom rungs will experience a level of well-being that would be regarded as affluence in noncapitalistic societies past or present.

Liberty and the Economic Miracle

The results of this new social order were almost miraculous, but there was nothing magical about the way the results were achieved. The results were achieved by people who had the intelligence to understand the requirements of a free and prosperous commonwealth, and who possessed the integrity and character to live by those requirements. We had a significant number of people a couple of centuries ago, who “pledged their lives, their fortunes, and their sacred honor” to establish not simply a new nation, but a nation founded upon new principles.

Capitalism generated a new mentality, a new perception of the human condition. After the experience of capitalism anywhere, people everywhere came to regard prosperity as the rule; poverty as the exception. The fact that we launched a “war on poverty” demonstrates this. No one would contemplate a war on poverty in India or Africa, where need is much more desperate than here. Only in a prosperous nation like our own, where the great war against poverty had already been won — by means of the market economy — would the elimination of the last, lingering remnants of poverty emerge as a political issue. The trouble is that if we employ the wrong remedy to eradicate the remaining pockets of poverty — as we are doing — we may find that we have destroyed prosperity instead, as in the familiar story about killing the goose that laid the golden eggs. Charles Murray’s recent book, Losing Ground, demonstrates that we have been losing the political war against poverty despite spending hundreds of billions of dollars yearly.

The 18th-century breakthrough I’ve referred to brought with it a new understanding of how economic goods come into being, the nature of material wealth, and how this new wealth is allocated in differing amounts among all the participants in the productive process. The economic breakthrough was not miraculous; it was preceded by a new vision of how the ancient ideas of liberty, justice, and law should be applied. No longer Were these venerable ideas to be the prerogative of the few; equal justice under the law was for everyone; liberty was to be enjoyed by all, and every person had a natural right to the property created by his labor.

For thousands of years the planet was regarded as a static warehouse, containing a fixed amount of wealth, impossible to increase, never enough for everyone. The serf tilling his field grumbled that he had to pay various feudal dues to the lord of the manor, but he was realistic enough to know that even if he kept everything he produced, he’d still go hungry much of the time. He was cursed by low productivity, caused by a faulty understanding of the nature of wealth.

When it is believed that the earth contains only a fixed amount of wealth, the preoccupation is with the allocation of what’s already here, which means, invariably, that one man’s gain is another’s loss.

The new perception that dawned during the 18th century was that new wealth is in a process of continuous creation, in ever-increasing amounts, with more for everyone resulting from each new cycle of production. This new abundance would be distributed—not equally, but equitably—by voluntary exchanges in the marketplace, with each person receiving from his fellows what they think his contribution is worth to them. Each of us benefits in such a voluntary exchange.

This is a paradigm of capitalistic society; peaceful exchanges within the rules, with the rules designed to protect person and property. Each participant in a voluntary exchange is a net gainer, having given up what he wants less to get what he wants more. And as these exchanges multiply every person has a strong inducement to work harder, producing more of the things other people will want from him in exchange. And as each person betters his own circumstances he improves the lives of other people. Production, in a free society, begets production, with more for everyone.

In the pre-capitalistic ages the kings and nobles used their political power to enrich themselves at the expense of the peasants. The serfs who did most of the work were entitled to enjoy only a portion of the goods they produced. Post-capitalistic societies operate in similar fashion. Those who possess political power in welfarist America or socialist Britain or Soviet Russia, exercise the taxing power to deprive productive people of a huge chunk of their earnings. These tax dollars — minus the political costs of effecting these transfers — are then doled out to various “deserving” pressure groups in the private sector.

We witness what Frederic Bastiat might have called a Plunder-bund — the law designed to protect life, liberty, and property perverted into an instrument to enrich some by impoverishing others. Albert Jay Nock referred to the law thus perverted as The State — holders of public office in cahoots with factions in the private sector to operate a scare against productive people.

Our basic political structures were largely built around the conviction that, “to the producer belongs the fruits of his toil.” We were to have a private property order. The Declaration does not mention a right to property, substituting a right to “the pursuit of happiness.” We cannot read Jefferson’s mind as he wrote the document, but we do know what was in almost everyone else’s mind at the time; it was Life, Liberty, and Property.

The colonists had migrated out of situations in Europe where they lived on the estate of a master, working mostly for his benefit and only partly for their own. Here in the colonies the idea of freehold property was established. You owned your farm in fee simple, which means that your estate was your very own. You could will it to your descendants, sell it, dispose of it as you wished.

What you produced on your property was yours to keep, or sell, or give away. Now, you owned what your labor created, and you had an enormous incentive to devise labor-saving devices and work harder, longer, and more skillfully because everything you produced was yours. You got the added benefit; not some absentee landlord. Wealth creation increased by geometrical progression under these circumstances, with free men and women living under a just system of laws, holding a strict property right in the fruits of their labor.

The American colonists of the 17th and 18th centuries lived in a society whose primary institution was not government, or the press, or business, or the academy; it was the Church. As Alexis de Tocqueville observed of us in the 1830s: “Religion… is the first of their political institutions.” And it was the colonial churches which labored for the creation of the kind of personal character in men and women which a free society, with its market economy, demands as its basic ingredient.

We are reminded of this need for exemplary character by the late, great economist Wilhelm Roepke who said that the market economy cannot “… go on in a moral vacuum… Self-discipline, a sense of justice, honesty, fairness, chivalry, moderation, public spirit, respect for human dignity, firm ethical norms—all of these are things which people must possess before they go to market and compete with each other.” And as these early Americans entered the marketplace they practiced the Puritan ethic of work and thrift, believing that thus they served God as co-creators of a new nation, and proved that poverty is not mankind’s fate.

The Wealth of the West

The Western World is relatively wealthy because it is relatively capitalistic. The Third World is poor because it shuns capitalism. This is the truth of the matter, obvious to any person who examines the issues impartially. But this truth is overcome by a worldwide ideology which declares that the wealth of the West is the cause of Third World poverty!

President Julius Nyerere of Tanzania voiced this Third World ideology when he wrote: “In one world, as in one state, when I am rich because you are poor, or I am poor because you are rich, the transfer of wealth from the rich to the poor is a matter of right; it is not an appropriate matter for charity.” Along the same line, Third World voices tell us that the United States is to blame for the famine in Ethiopia — a country which exported its surplus grain and other foodstuffs until the Communists took over.

Third World politicians have a method in their madness: they want things from the West — American dollars, foodstuffs, machinery, and other goods — so they try to convince us that we owe it to them because we are to blame for their plight. This is the Marxist notion that the rich, under capitalism, get richer by making the poor poorer. This ploy would not work except that millions of Americans have also swallowed the Marxist exploitation theory; that those who are better off got that way by making others worse off; that the wealth created by capitalism is the cause of poverty.

Here, for example, are the words from a keynote address given at the World Council of Churches Assembly held in Vancouver two years ago: “We inhabitants of the industrial nations… exploit the majority of the world’s population… The demon of profit for the few at the expense of the many, i.e., their impoverishment, has the whole world economic system firmly in its grip.” These false and defamatory sentiments are echoed by many academic and ecclesiastical voices, here and abroad.

Americans do consume more than most people elsewhere and it might be interesting to find out why. The answer is simple, to the point of being self-evident: Americans consume more because Americans produce more. Americans produce more, not because we are superior beings, but because our relatively free institutions impose fewer restraints on our productive energies than is the case in other nations, and our private property system guarantees to the producer that he will own the fruits of his toil. Any nation that adopts the free market will be more productive, and thus more prosperous, and in the long run this is the only way to feed the world’s hungry.

A False Axiom

The redistributionist policies of our own welfare state, as well as similar international policies which tax Americans in order to subsidize other nations, is based on the false axiom that the wealth of some is the cause of the poverty of others. Something like this was true during the pre-capitalistic ages, but capitalism introduced an entirely new ball game in which each one of us prospers to the degree that he contributes to the well-being of other people, as they see it. Walter Lippmann puts it this way: “For the first time in human history men had come upon a way of producing wealth in which the good fortune of others multiplied their own.” Freedom in production and exchange does not promise perfection. When people are free, many of their choices may offend us, which means that the free society demands infinite tolerance for each other’s foibles. But that’s a small price to pay for all the benefits received.

To believe that wealth is the cause of poverty makes as much sense as to assume that health is the cause of disease. And to contend that the remedy for poverty is to soak the rich and give to the poor is as idiotic as believing that the only way to heal the sick is to make the healthy ill. The sick can be made well only as they adopt the sensible regimen of the healthy, and the poor can move out of poverty only as they become more productive. The world’s economic problems and other ills will only worsen unless there is a revival of that sound philosophy, which, two centuries ago, gave us the free society and the market economy which I’ve been labeling capitalism. Education along these lines — replacing bad ideas with better ones — is slow, frustrating, uphill work. But there is no other way.

Meanwhile, we try to live with — while working to correct — the false assumption of people everywhere, that wealth is the cause of poverty. The truth of the matter is that poverty in a nation is caused by the low productivity in that nation. And it is our good fortune that there is a simple recipe for overcoming low productivity while moving in the direction of prosperity. The recipe is: follow the prescriptions of people like Jefferson and Madison; Adam Smith, and Bastiat; Mises, Hayek, Roepke, Friedman, and others. The remedy is simple, but simple is not necessarily easy!

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The War on Poverty Revisited

The term Weltanschauung is nothing more than a highfalutin label for “world view.” Everyone has a world view, although not everyone is fully conscious of it or aware of its implications. In other words, everyone conducts his life on the basis of some fundamental premises he takes for granted. The premises may not be explicitly stated, in which case they can be deduced from observations of the way a person habitually acts. Your Weltanschauung is analogous to the contact lenses you are wearing; you don’t see the lenses while you are using them to see other things. The late Cornell philosopher E. A. Burtt put it well when he said: “In the last analysis it is the ultimate picture which an age forms of the nature of the world that is its most fundamental possession. It is the final controlling factor in all thinking whatever.” That is why it is so important.

We are in the midst of a battle for men’s minds. This is obvious at the level of the news, where we read and hear about a confrontation between Communism and what, for want of a better term, is labeled The Free World. The battle for the mind goes on at the level of official propaganda, and it is also fought out in the classroom, on the podium, from the pulpit, in books—wherever the intellect is engaged and ideas are wrestled with.

The Communists are pretty clear about their world view, Dialectical Materialism, and strongly motivated by it. The people of The Free World, on the other hand, are so unclear about their basic beliefs that little dedication is aroused. Once it was different. Two centuries ago the philosophy of freedom was in the ascendant and clear thinkers declared that “We hold these truths to be self-evident.” And they spelled them out in detail. The Free World today gives little more than lip service to its heritage, half-heartedly accepts a milk and water version of the opposition’s world view. That makes for a lopsided contest, for the side that seems to be in focus and dynamic can always recruit fellow travelers from among the lackadaisical.

Two world views are in conflict: Materialism, intellectually insubstantial but passionately adhered to, versus non-Materialism, which generates only lukewarm devotion despite its intellectual and moral strengths. This paper exposes the weakness of the Materialist’s case and demonstrates the strengths of the contrary world view.

Everyone, to repeat, entertains some picture of the entire scheme of things; everyone has a mental image of what the cosmic totality is like — in the final analysis. During the past couple of centuries the most popular world view has conceived the universe along the lines of a mechanism — an immense and intricate piece of clockwork, each cog and gear meshing with the others in a self-contained system. If you like labels, this world view has been called Mechanism by some, Positivism by some, Materialism by others. Karl Marx adopted the belief that only matter is genuinely real, and he gave this doctrine enormous momentum. The Marxist version of this theory is called Dialectical Materialism, and Dialectical Materialism is the most widespread religion in the world today, numbering among its adherents millions who are not Marxists — except at the rock-bottom level of believing that matter is the fundamental reality in this universe.

I believe that Materialism is intellectually incoherent and demonstrably untrue in four essential areas. In the first place, this world view has no genuine place within it where mind, reason, and free will can find their rightful niche. Secondly, Materialism cannot accommodate the idea of inherent rights — immunities belonging to each person in virtue of his humanity. Thirdly, the idea of a moral order is incompatible with the notion that only material things are real. And finally, no one can achieve a proper view of himself as a person who accepts the Materialist teaching that he is merely a chance collocation of atoms, a by-product of physiochemical interactions. Materialism is genuinely compatible with collectivism, but it is incompatible with the freedom philosophy. The free society and market, economy need a world view which has a sound theory of mind, reason and free will; a logically grounded doctrine of inherent rights; a firmly based belief in the moral order; and an authentic understanding of personhood.

If we believe that only matter is genuinely real, we are logically committed to the corollary that mind is secondary, a derived thing dependent on that which is more basic than itself, namely matter. Mind, then, is not sui generis; it does not exist in its own right; it is not a primary ingredient of the cosmos. Mind, for the Materialist, is merely an epiphenomenon; it is matter in a late stage of development. Mind, intellect, consciousness, cognition, tea-son, rationality, will — are offshoots of matter; shadow, not substance. The really fundamental stuff of the universe — according to this theory — consists of the particles of matter which we can see, touch, count, weigh and measure.

The Reality of Matter Depends upon Reason

It is a peculiar quirk of the modern mentality to affirm without question the reality of matter, but to deny reality to mind. The catch is that it is only by using our mind that we know that matter exists! A rock does not know that stars exist; a tree is unaware of the oceans. Only we human beings know these and other things, and we know them by exercising our cognitive faculties upon the impressions gained through the senses. But our own mind is so close to us, it is so intimately a part of our very self, that we allow ourselves to be misled into downgrading our minds into something subservient to matter.

Matter is indisputably real; that is obvious. But the reality of the mental activity by which we come to know this is equally obvious; every attempt to prove otherwise must be self- defeating. Downgrade the mind, even by the tiniest degree, and you discredit any conclusion you presume to reach by the exercise of your mental powers. A rational case against reason is a contradiction in terms, for the more airtight your argument against reason the stronger the proof — contrary to your intention — of the efficacy of reason.

My proposition may be put in the form of Aristotle’s Law of Identity: Mind is Mind. Mind is not a mere attribute of something sub-mental. Mind is a primordial ingredient of the universe at the most basic level. To reduce Mind to the non-mental is to declare that Mind is non-Mind, which is nonsense. Because Mind is Mind we human beings are able to understand, to make choices, to take charge of our own lives, and to order our lives in line with human purposes. If we believe anything less than this about ourselves we lower our capacity to resist those misguided authoritarians who would make us their creatures.

Our Declaration of Independence talks about “unalienable rights . . . endowed by the Creator,” then goes on to say that governments are instituted to secure these rights. It appears to be one of those self-evident truths that no people would make a valiant effort to structure the laws of their society so as to protect each person’s private domain and render justice for all, unless they first believe in individual rights — the idea that each person possesses an inviolable region at the core of his being. The old-fashioned Whig idea of the Founding Fathers was to limit the reach of the law to the task of securing and preserving freedom of individual action within the rules of the game, and the rules were designed to maximize liberty and opportunity for everyone, allowing everyone the elbow room each of us needs to pursue his personal goals. Only thus may each person’s rights be secured.

The Nature of Rights

The word “liberal” today is the opposite of what the word meant when it first entered the vocabulary about two centuries ago, and a similar fate has befallen the word “rights.” Formerly, rights signified individual freedom and personal immunity from arbitrary interference with peaceful action; the popular belief today is that “rights” are legal privileges entitling people to housing, medical care, education, equal pay, or whatever. How may we recover the sounder idea which was once the keystone of our political system?

There are three schools of thought as to the nature of rights. The popular “liberal” belief today is that society is the dispenser of rights, but this viewpoint depends on the verbal sleight of hand which confuses rights as immunities with “rights” as entitlements. If you define words to mean whatever suits your purpose, anything can be made to mean anything else. As Dr. Johnson said, if you call stones plums you can make plum pudding out of stones!

The second school of thought declares that nature is the source of rights. Let it be noted that rights, whatever they might be, are not material objects. Your liver, your brain, your heart are material objects; they have mass and extension, and can be weighed and measured. Likewise your body; when life has departed, your carcass can be reduced to $1.98 worth of chemicals! But your rights are like your ideas, in that neither your rights nor your ideas occupy space, nor can either be reduced to a chemical formula.

Now, nature is the material world; it’s a marvelously intricate combination and recombination of the 105 chemical elements from actinium to zirconium. To speak of chemicals as the source of our rights makes as little sense as to speak of the chemical origin of mind and thought. Nor does it make much sense for the Materialist to speak of human nature as the source of man’s rights, because his philosophy has first subordinated human nature itself to physical nature.

The world view of Materialism, I argued earlier, has no genuine place within it for Mind and thought; nor does it have a valid ground for the concept of rights—which is why it twists them into entitlements. There is a radical alternative to Materialism, but what shall we call this other world view? Call it whatever you like, but it’s the religious or theistic world view in its affirmation of the reality of a non-material, mental, or spiritual dimension of the universe. Call it the sacred or divine order, if you like. Or refer to the Mysterium Tremendum Fascinans explored by Rudolph Otto in his seminal book The Idea of the Holy.

Our forebears were not afraid of using three-letter words in public so they used the term God for the creative Power. This Power also worked within — the word enthusiasm is derived from two Greek words meaning “the god within” — and thus each person participates in an order of reality beyond society and beyond nature. He is thereby endowed with an inner sanctum which is his alone, any trespass upon which is taboo. His rights are endowed by the creative Power.

The world view which declares that only material things are real, has no place for an independent moral order, and this leads to moral relativism. Theories of moral relativism have seeped into the popular mentality to emerge as slogans and bumper stickers such as “Whatever turns you on,” “If it feels good, do it,” “Do your own thing.” The result is that the shrewd, the wily, the clever, the unscrupulous doing their thing have the rest of us over a barrel.

Moral Relativism

The U.S. News and World Report for October 8, 1984 has a story headlined “Nearly 1 in 3 Gets U.S. Benefits.” It listed the eleven biggest programs from Social Security to infants’ nutrition, involving 66 million people. Many of these recipients are into several programs, for 129,299,000 checks are mailed out from Washington regularly to these 66 million people. The report did not cover farm families, or union members, or the government bureaucrats, or those employed in schools paid for by taxpayers, or people in tariff protected industries, like those in Detroit who charge us thousands of dollars extra for the cars we buy. And there are others. We are now a nation where almost everyone is trying to live at the expense of everyone else. We have written a form of theft into our statutes. Why? Because there’s a little larceny in our souls!

It’s too easy, and too false, to blame the politicians. They’re only our hired hit men, and in cases of this sort the principal is at least as guilty as his agent. Large chunks of the American electorate decided that living off government handouts is easier than working for a living and safer than stealing, so they created political parties in their own image and elected politicians who promise them an inside track to the public treasury.

Moralists in former periods inveighed against this sort of thing, but in the modern world they were no match for the theoreticians of communism and socialism who convinced almost everyone that legal plundering was the wonderful wave of the future. Intellectuals today are not so sure, and many now side with the free society-market economy team. And it is our good fortune that many men and women in public life, people of integrity and intelligence, are fighting in their own way the same battle we are waging.

Reason to Believe in An Objective Moral Order

Is there an objective moral order? That is not possible within the world view of Materialism! Is it probable within a theistic world view? I think so. Your individual physical survival depends on several factors. You need so many cubic feet of air per hour, or you suffocate. You need a minimum number of calories per day, or you starve. If you lack certain vitamins and minerals, specific diseases appear. There is a temperature range within which human life is possible; too low and you freeze, too high and you roast. These are some of the requirements you must meet for individual bodily survival. They are not statutory requirements; nor are they mere custom. They are laws of this universe; they are built into the nature of things. This is obvious.

And it is just as obvious that there are certain requirements and rules built into the nature of things which must be met if we are to survive as a civilization characterized by personal freedom, private property, and social cooperation under the division of labor. It would be impossible to have any kind of a society where most people are constantly on the prowl for opportunities to murder, assault, lie and steal. A good society is possible only if most people most of the time do not murder, assault, steal and lie. A good society is one where most people most of the time tell the truth, keep their word, fulfill their contracts, don’t covet their neighbor’s goods, and occasionally lend a helping hand.

No society will ever eliminate crime completely, but any society where more than a tiny fraction of the population exercises criminal tendencies is on the skids. To affirm a moral order is to say, in effect, that this universe has a deep prejudice against murder, a strong bias in favor of private property, and hates a lie. We may not like living in a stringent universe which lays down a tough set of rules for individual and social survival. But let’s face it; nobody has ever come up with a better alternative to living here and now.

Of course we know that this planetary home of ours is where we belong; and it’s a pretty good place to be, even if at times it’s a pretty tough test run. Each of us came into this world chock full of potentialities and with an immense capacity for learning. At birth we were, in effect, handed a do-it-yourself kit, a do-it-yourself kit for the manufacture of a human being. And then we were given a life sentence in order to transform this raw material into a full-fledged mature adult. In the nature of the case this has to be an inside job, for each person is the custodian of the time, energies and talents which are uniquely his own. Each individual is in charge of his own life, constructing, by the choices he makes hourly and daily, the person he has it in him to become. No outsider can take over this responsibility for us.

The collectivist promise that if we give them the power they will fashion a new social environment which will create a new humanity, is a damnable lie — and I’ve chosen the word deliberately.

Becoming a human being is a full time job, and it’s for life. But there is that perennial urge in the human psyche egging us on to bigger things, like the latest dream of empire, like a “brave new world,” like one more desperate try at some newfangled model of the Tower of Babel. Every collapse of these megalomaniac dreams hurts, but it does provide some people with a clue that human fulfillment lies in a different direction; we have to begin from within. Gerald Heard used to say that we must grow as big inside as the whale has grown outside! A cartoon shows a man paying the final installment on his psychiatrist’s bill. As he hands over the money the former patient says to the doctor: “You call this a cure? When I came to you I was Napoleon; now I’m nobody.” We know that this former patient is on his way, but a gain of this sort feels at first like a loss!

Man is not God; he did not create himself, nor did he write the laws of his being; but men and women do make themselves. And as we seriously take ourselves in hand, we begin to discover who we are and what we may become. “That wonderful structure, Man,” wrote Edmund Burke, “whose prerogative it is to be in a great degree a creature of his own working, and who, when made as he ought to be made, is destined to hold no trivial place in the creation.”

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Battle for the Mind

Status quo is a Latin phrase meaning, in a modern translation, “the mess we are in.” A great number of our contemporaries must understand it so, because never have so many persons and organizations come forward with such a variety of schemes for reforming other people and saving the world. This is the age of the Man with the Plan. The reformer, with his blueprints for social uplift, is in his heyday. I suppose that I too would be classified by some as a reformer, for I travel around the country making speeches and taking part in seminars. And the gist of what I have to say is that, indeed, things are in bad shape, but that they might be improved if we approached economic and political issues with more sense and in a different spirit. If the distinguishing mark of a reformer is his yen to save the world, then I am not a reformer. But I live close enough to the tribe so that many of them send me their literature.

Across my desk come the outpourings of many earnest souls, offering salvation to the world if only the world will embrace their particular panacea. The panaceas peddled by these folk come in all sizes and styles, ranging from world government to a low cholesterol diet. In between are the socialists, the land reformers, the money reformers, the prohibitionists, the vegetarians, and those who believe that the world is in the strangling clutch of a far-flung conspiracy of sinister men who operate anonymously behind the scenes. As I read this material I am thankful that the world has so far refused to let itself be saved on the terms each and every one of these reformers lay down. These people differ wildly among themselves as to the details and precise nature of the remedy, but they are in basic agreement as to the general pattern reform should take. Reform—as they understand it—consists of A and B putting their heads together and deciding what C should be forced to do for D. William Graham Sumner of Yale, said something like this about a century ago.

Sumner was describing and deploring a tendency he perceived in the governmental policies of his day to expand the network of governmental interventions and regulations over society in the interests—allegedly—of upgrading the general welfare. This could not be done, he argued, except to the detriment of the productive part of the nation whose interests were to be sacrificed for the assumed benefit of selected individuals and groups. The A and B who put their heads together symbolized government, the public power. D symbolized those who got government handouts and subsidies of various kinds. C symbolized the great body of the nation, the men and women engaged in productive work, whose taxes supported not only the government but the vast and growing number of people, rich and poor alike, who fattened at the public trough. Sumner called C “the forgotten man” because he was the victim sacrificed whenever the public power was misused to confer private advantage. It is intriguing to note that when the New Deal resurrected Sumner’s phrase the meaning was inverted. D, the new class with access to public funds, was now “the forgotten man.”

“The New Freedom”

The thing which Sumner saw taking root a hundred years ago has come to full flowering in the totalitarian states of this century. But the seeds of today’s Democratic Despotism were planted as far back as the 18th century when certain Continental philosophers decided that man had now come of age and could take charge of his own affairs. When you translate this idea from the French it reads: We enlightened few to whom the new truth has been revealed, will take charge of all the rest of you. The kings have been deposed and we represent The People. Combine majoritarian political processes with the powers conferred by science to control both nature and man, they said, and we will hatch a perfected humanity and manufacture a kingdom of heaven on earth. The age-old utopian dream will be a reality; it will be called “The New Freedom”!

Bring this ideology down to the middle of the 19th century and we come to the man from whom so many 20th-century problems stem—Karl Marx. The determining factor for mankind, Marx wrote, is “the mode of production in material life.” A man’s very consciousness is determined by his social existence. “Men’s ideas,” he added, “are the most direct emanation of their material state.” The logic of this is fantastic, for according to Marx’s own statement, he himself is a mere mouthpiece for the material productive forces of 1859; Marx’s mouth may frame the words, but his mind does not generate the ideas. The ideas come from “the mode of production in material life.”

Salvation by Politics

Marx does not stop here; he goes on to fashion an idol. Declaring himself an atheist, he excoriates those who do not “recognize as the highest divinity the human self-consciousness itself.” This new mortal god has only one obligation to the world: Save it! Aristotle’s god, the Prime Mover, derived esthetic enjoyment from contemplating the world He had made; and many philosophers, and ordinary folk as well, have enjoyed the starry heavens and the glories of nature. But if Marx were to have his way, these kinds of pleasures would be prohibited. “The philoso phers have only interpreted the world in various ways,” he wrote: “the point, however, is to change it.” (1845) A contemporary of ours, the late Bertram Wolfe, writing critically of Marxism, gives us this interpretation: “History was to be given a new meaning, a new goal, and a new end in Time . . . . At last man would become as God, master of his own destiny, maker of his own future, conscious architect of his own world.” Salvation by politics!

Utopians, dreaming of an earthly paradise, have drawn up their blueprints of a heaven on earth, but in practice, every attempt to realize a perfect society has resulted in an intolerable society. Newfangled heavens on earth—as exemplified by the totalitarian nations—resemble nothing so much as visions of the old-fashioned hell. Nations began to walk the road to serfdom and the new slavery was inevitable. Meanwhile, another set of ideas was germinating.

The Rule of Law

Human beings have long aspired to be free. But it was only two centuries ago that this aspiration took concrete form in the philosophy of political liberty under the Rule of Law, with its economic corollary, the free market. America announced its ideal of political liberty to the world in The Declaration of Independence. The year was 1776. The Declaration states that men and women are given certain rights and immunities by their Creator, among them the right of every person to live his life peacefully, plus the right to freely exercise the energy that being alive confers—our rights to life and liberty. When a person is free to exercise his energies—which is to say, when he is free to work—he produces goods and services, and these rightfully belong to him. A person’s right to property follows logically from his rights to life and liberty, and private property is the cornerstone of a society of free people.

The economic complement to the political structure envisioned in the Declaration is Adam Smith’s monumental work, The Wealth of Nations. Smith demonstrated once and for all that the business, industry and trade of a nation does not need to be planned and managed by the political authority. Jefferson paraphrased Smith’s idea when he wrote: “If the government should tell us when to sow and when to reap we should all lack bread.” The uniquely American political philosophy of the Declaration said, in effect, that government should not run people’s lives; government’s proper role is similar to that of an umpire. The umpire on a baseball diamond does not operate the game, manipulating the players as if they were pieces on a chess board. The umpire’s job is to be an impartial arbiter of the rules upon which baseball functions, interpreting and enforcing them as needed.

And so it is with the government of a free society. The people manage their own affairs according to the set of rules for living together in society, and the full time job of government is to ensure that the rules are obeyed. This is called the Rule of Law, referred to by Smith as the “liberal plan of liberty, equality, and justice.” Smith showed that a society with equal justice under the law provides optimum liberty for the citizens, and that these same citizens in their capacity as consumers direct and regulate economic production by purchasing this and not pur chasing that. Entrepreneurs analyze this data and produce whatever goods they think the customers will buy. This is capitalism, economic freedom in the marketplace, and it is the other side of the coin of political liberty. Neither can survive without the other.

Regulated by Consumers

Adam Smith did not advance the idea of an unregulated economy; no one believes in an unregulated economy. Capitalism is an economy regulated by the customers; it is consumer sovereignty exercised within the guidelines laid down by the moral law. A free society presupposes that each person is responsible for the way he lives his life; it presupposes that most people most of the time will not murder or assault or steal; most of the time they will tell the truth, fulfill their contracts, and treat their fellows decently. No kind of a society is possible among creatures who habitually violate these moral laws, and a free society presupposes high grade human material. If you have good people—defining “goodness” to include a modicum of intelligence—a good society follows. If men and women pursue the excellence appropriate to our species, choosing such exemplars as Jefferson’s “aristocracy of virtue and talent,” they will have a good society to match.

The original proponents of political liberty and a free economy called themselves Whigs in the 18th century-men like Jefferson and Madison in this country, Edmund Burke and Adam Smith in England. Their followers began to call themselves Liberals when England’s Whig Party changed its name to The Liberal Party in 1832. But the meaning of the word “liberal” began to change even before the turn of the century, and it now means centralized government and a good deal of economic planning—just the opposite of the thrust of early Whiggism and Classical Liberalism. We who believe in the free society cannot now call ourselves Liberals, although early liberalism is in our heritage, so I have taken to calling myself a Whig, after F. A. Hayek who once said, “Call me an old-fashioned Whig, with emphasis on the old-fashioned.”

Freedom of the Press

Whiggery fought some important battles in its time and gained some well-earned victories for several specific freedoms we tend to take for granted. For example, it brought the press out from under the political umbrella, freeing it from interference by a government censor empowered to tell editors and writers what to print and what to spike. There’s a lot of hogwash written about “freedom of the press” these days, but that’s another story!

A corollary of the free press is freedom of speech. This means that people are free to speak their minds and criticize the authorities without risking jail; free speech is an essential element of any society where people elect public officials. The departure of the kings introduced the electoral process as a means of choosing personnel for public office. And when citizens must select public officials by balloting, it is necessary that the issues be ventilated by written and oral debate—which must be free.

The third major freedom worked out by the Whigs was religious liberty. A free society has no official, established church supported out of the tax fund. Churches are supported by voluntary contributions, and there are no laws to punish heresy. The nearest thing to an established church in America is the public school system; but despite that, and despite the enormous quantities of tax money now being siphoned into colleges and universities, we still give a lot of lip service to the idea of academic freedom.

Academic freedom is a good idea, although the ways we now translate that idea into action are open to serious question. Freedom of the press is also a good idea, even though some journalists understand it to mean unlimited license to distort reporting into conformity with their ideological biases. “Separation of church and state” has become my least favorite American shibboleth, but I am nevertheless a devout believer in religious liberty. However critical I am of much that now goes on in these sectors of our life I know that condi tions are much worse when the government operates the schools, the churches and the press—which is the theory and the practice of collectivist nations.

Let People Alone

In Whig theory, government should let people alone; government should not dragoon people into carrying out some vast national purpose; it should not override their personal plans in favor of some grandiose national plan. So long as John Doe is minding his own business, pursuing whatever peaceful goals he has in mind for himself, government should let him alone. But whenever John Doe’s life, liberty or property is violated by any person, government should be alert to detect the crime and punish the perpetrator. The use of lawful force against criminals to protect the peaceful and productive members of society is the earmark of good law. “The end of government is justice,” wrote Madison, “and justice is the end of civil society.” Establish rules of the game designed to secure fair play for everyone, while providing maximum liberty for each man and woman to pursue personal goals. Get government out of its activist role. Limit the law to enforcing the rules against those who violate them—and the free society is the result.

Letting things alone is not the same as doing nothing; letting things alone is an acquired skill. The journal with which I am associated is called The Freeman. Between 1920 and 1924, the editor of The Freeman was a unique personality named Albert Jay Nock. Associated with Nock was a group of young writers such as Suzanne LaFollette, Van Wyck Brooks, and Lewis Mumford. Some-one—reflecting on those four years—remarked to Nock, “Albert, you’ve done wonderful things for these young people.”

“Nonsense,” said Nock, “all I’ve done was to let them alone.”

“True,” replied his friend, “but it would have been different if someone else had been letting them alone.”

Wise and Salutary Neglect

Rightfully letting things alone, in statecraft, is Edmund Burke’s policy of”a wise and salutary neglect.” But let me turn to medicine for a good analogy of the nature of government action proper to the free society. Certain medical theorists of about a century ago—especially in Germany—examined the human organism and found it a crude contrivance of pipes, tubes, levers and dead weight. This botched mechanism could be kept going only if someone constantly patched and repaired it. Writing of this antiquated medical theory, an historian says: “This held that the body was a faulty machine and Nature a blind worker. The student made an inventory of the body’s contents and found, as he expected, some out of place, some wearing out, some clumsy makeshifts . . . some mischievous survivals left over.” Medical practice, based on this theory, was to interfere with the body’s working by probing, operating, removing and altering. The practice sometimes proved disastrous to the patient!

Medical theory has changed. Modern theory, according to the same historian, regards the body as “a single unit, health a general condition natural to the organism . . . and the best diet and regime, to live naturally.” This theory regards the body as a self-regulating, and for the most part, a self-curative organism. It need not be interfered with except to repair or remove any obstruction that prevents the free flow of the healing power of nature. This is an ancient idea, as witness the Latin phrase vis medicatrix naturae. Medical or surgical ministrations do not create health; the body does that of itself, if let alone.

The new outlook in medicine is summed up by the title of the famous book by Harvard professor Walter B. Cannon: The Wisdom of the Body. I believe it was Dr. Cannon who introduced the concept of “homeostasis,” the idea that the human body maintains all the balances necessary to preserve health—unless something interferes. In which case, call the doctor!

Health and Freedom

There is a striking parallel between present day theories of health and the ideal of freedom in human affairs. The believer in freedom is one who has come to realize that society is a delicately articulated thing, each part depending on every other. Hence, arbitrary interference with anyone’s peaceable willed action not only diminishes the freedom of the person restrained but affects all other persons in society. The attempt to masterplan society upsets the balance which every part of society naturally has with every other part, because every unit of society is an autonomous, initiating, reasoning, responsible human being.

Nearly everyone favors freedom in the abstract. Most intellectuals champion freedom of speech, academic freedom, freedom of the press, and freedom of worship; they distrust economic freedom. Those who would deny freedom in the marketplace assume that, in the absence of political controls over production, economic life would be chaotic. The assumption, in other words, is that manufacturers would not produce the goods consumers want unless government stepped in and told them what to make, and in what sizes, styles, and colors. The assumption is absurd; and so is the belief that the free economy rewards some at the expense of others. Everyone in the free economy is rewarded by his peers according to their evaluation of the worth of his goods and/or services to them.

The Problem Is Scarcity

Why is there economics? What is the problem that calls forth this discipline? The problem, in one word, is “scarcity.” Virtually everything men and women want, need, or desire is in short supply. On the human side of the economic equation is a creature of insatiable needs and desires. On the other side of this equation is the world of raw materials and energy, which are scarce relative to human demands for them. Unlimited wants on one side of the equation, but only limited means for satisfying them on the other. The equation will never come out right. Human wants always outrun the means for satisfying them. Economics, in the nature of the case, is “an anti- utopian, anti-ideological, disillusioning science,” as the late Wilhelm Roepke used to point out.

For a thing to qualify as an economic good, two requirements must be met: the item must be needed or wanted, and secondly, it must be in short supply. Air, despite the fact that it is necessary to our lives, is not an economic good, for it is not in short supply; under normal condi tions there is enough air for everyone with lots left over. But conditioned air is an economic good, even though it is not necessary for life but only ministers to our comfort. Conditioned air is scarce, there is not as much of it as people want, merely for the taking; so people have to give up something in exchange in order to get it. Aside from fresh air, virtually everything we want or need is an economic good; there is not enough of anything for everyone to have all he wants merely for the taking. Some frustration is therefore inevitable; frustration is built into the human situation and we have to learn to live with it. All that economics can promise is a means for making the best of an awkward situation.

Economics, then, is the discipline which deals with goods in short supply—just about everything we want—and the problem it faces is how to allocate scarce goods so as to best satisfy the most urgent human wants, in the order of their urgency. The free market approach to this problem is to rely on the individual free choice of consumers, as manifested in their buying habits. The buying habits of people form a pattern which tells entrepreneurs what to produce, and in what quantities, sizes, and so on. This is the tactic of liberty as applied to the workaday world; this is the market economy, or the price system, and if government merely protects people in their productive activities, and in their buying and selling—protects them by curbing predation and fraud the economic activities of man are self-starting, and self-regulating.

Market Performance

The free market is the only device available for allocating scarce resources equitably. The market’s performance is so efficient and so intelligent that it has excited the admiration of those who have studied and understood its workings. Virtually every one of the charges that has ever been directed against the free economy proves, upon examination, to be aimed at a problem caused by some misguided political interference with the free economy.

No one likes the term Socialized Medicine but there are many people—including some doctors—who support things like Medicare. The professed aim of Medicare is to increase the availability of medical and surgical services by political interventions and subsidies. Now medical and surgical services are in short supply, relative to the demand for them. This is to say that medical and surgical services are economic goods, and—like all economic goods—they are scarce relative to demand. Therefore, a way must be found to ration them.

The free market is the only efficient and fair way to allocate scarce goods, and it follows that only the free market can be relied upon to furnish the greatest quantity of high grade medical and surgical services at the lowest possible price, to a citizenry which has a great variety of other needs and desires to satisfy as well. Every political alternative to the market means a wastage of economic goods and resources; it means less for all. This law applies to medical and surgical services. Socialized Medicine must inevitably lead to a misallocation of available medical resources, with fewer available benefits for those who need them.

The Better Alternative

There are no perfect solutions in human affairs; there are only better or worse alternatives. The private practice of medicine does not promise perfection, any more than the private practice of education, or the private practice of religion, or the private practice of anything you’d care to mention. But private practice surely beats the alternative, which is to have the politicians and bureaucrats run the show. In that direction lies disaster!

Nineteenth-century collectivist theories resulted in twentieth-century totalitarian politics, with its record of slaughter, conquest, poverty, fear, terror, regimentation, and the Gulag. Ideas have consequences; the consequence of bad ideas is monstrous evil on a vast scale. But ideas are changing. Former left wing intellectuals are now neo-conservatives. Some even admit to being conservatives—a conservative being defined by Mike Novak as a liberal who has been mugged by reality! I’m not going to assert that we’ve turned the corner, but we have made progress and the corner is within sight.

Universal Order

This is a universe we live in, not a multiverse or a chaos. Old Mother Nature has a passion for order; she will tolerate disorder up to a point—then watch out! For thousands of years we have known what we ought to do in the moral and spiritual dimensions of our lives, but we find it difficult to perform as we should at this level. Man likes to think that he can “get away” with things, and so he ignores or defies that Purpose which manifests itself in and through the universe. The universe tolerates wayward man up to a point, but if man does not learn his lessons from his own waywardness he will be taught the hard way. “Things won’t be mismanaged long,” said Emerson. Nature will not allow it.

Victor Hugo in his great novel Les Miserables put the matter more dramatically. You recall his long description of the Battle of Waterloo and the defeat of the French. And then these words at the end of chapter 53: “Why Napoleon’s Waterloo?” Hugo asks. “Was it possible that Napoleon should gain this battle? We answer No. Why? Because of Wellington? Because of Blucher? No; because of God! Bonaparte victor at Waterloo—that was no longer according to the law of the 19th century. Another series of events was preparing wherein Napoleon had no further place . . . Napoleon had been denounced in the infinite and his downfall was resolved. He bothered God. Waterloo is not a battle; it is the universe changing front.”

And so I say, Let’s not try to save the world! Saving the world is God’s job; our job—yours and mine—is to live in the world up to the level of our best insights. That might make the world worth saving!

Read more from the Edmund Opitz Archive.

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To Save the World