The Reverend Mr, Opitz is a member of the staff of The Foundation for Economic Education, a seminar lecturer, and author of the book, Religion and Capitalism: Allies, Not Enemies,
The real American revolution of two hundred years ago took place in the minds of people; it was a philosophical revolution which evolved a new temper and state of mind. There were some dating assumptions about the nature of the human person, with his Creator-endowed rights, as set forth in the catalog of self-evident truths contained in the Declaration of Independence. The acceptance of these novel truths about the human person led logically to a new conception of government, a theory of right political action radically different from all previous theories of the purposes of government in human affairs.
Government, according to the Declaration, is instituted for one purpose only—to secure every person in his God-given rights. Period. No longer was the State to exercise the positive function of ordering, regulating, controlling, directing, or dominating the citizens. The new idea was to limit government to a negative role in society; government’s task is to protect life, liberty, and property by using lawful force against aggressive and criminal actions. Government would discipline the anti-social, but otherwise let people alone. The law was to apply equally to all; justice was to he impartial and even-handed.
Along with the words Life, Liberty, and Property, the word Equality has a prominent place in the political vocabulary of American thought.
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 or should be equal, or are becoming equal. These several propositions are obviously untrue. The Declaration said: “created equal.” Now, the created part of a man is his soul or mind or psyche. Man’s body is compounded of the same chemical and physical elements which go into the makeup of the earth’s crust, but there is a mental and spiritual essence in man which sets him apart from the natural order. Man alone among the creatures of earth is created in God’s image—meaning that man has free will, the capacity to order his own actions, and so become the kind of person God intends him to be.
The political theory enunciated in the Declaration is based upon certain assumptions about human nature and destiny which were ingredients of the religion professed by our fore-bears. It was an article of faith in the religious tradition of Christendom—a culture compounded of Hebraic, Greek, and Roman ele-ments-that man is a created being. To say that man is a created being is to affirm that man is a work of divine art and not a mere accidental by-product of physical and chemical forces. Man is God’s property, said John Locke, because He made us and the product belongs to the producer. As an owner, God cares for that which belongs to Him. Therefore, the soul of each person is precious in God’s sight, whatever the person’s outward circumstances. “God is no respecter of persons.” (Acts 10:34) He “. . . makes His sun to rise on good and bad alike, and sends the rain on the honest and dishonest.” (Matt. 5:45) Equality before the law is the practical application of this understanding of the nature of the human person. Equal justice means that a nation’s laws apply, across the board, to all sorts and conditions of men, regardless of race, creed, color, position, pedigree, income, or whatever. In the eyes of the law, all are alike.
But right there the likeness ends; human beings are different and unequal in every other way; they are male and female, in the first place—and they are tall and short, thick and thin, weak and strong, rich as well as poor, and so on. They are equal in one respect only; they are on the same footing 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 capitalistic. (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.)
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 conceived the vision of a society constructed like a pyramid. A few men are 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 knew that those in the lower ranks would be discontented with their subservient position, so he proposed a myth to condition them with—in his words—a “noble lie,” or an “opportune falsehood.” “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.” You know dam well that fraudulent theories of this sort are in vented by men who suspect gold in their own makeup!
Hinduism, with its system of castes, provides a contemporary example of a system of privilege. Men are born into a given caste, and that’s where they stay; that’s where their ancestors were, and that’s where their descend ents 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 with a metaphor. He likens society to a lamp and says, “When the wick is aglow at the tip the whole lamp is said to be burning.”
Politics—it must be emphasized—rests upon certain assumptions in basic philosophy. We of the West make different philosophical assumptions than do Greek and Hindu philosophers, for we have a different religious heritage than they. The fountain source of the religious heritage of Christendom is, of course, the Bible. The Bible was the textbook of liberty for our forebears, who loved to quote such texts as “Where the spirit of the Lord is, there is liberty,” (2 Cor. 3:17) and, “You shall know the truth, and the truth shall make you free.” (Jn. 8:32) And they turned often to the Old Testament prophets with their emphasis on justice and individual worth.
Let me quote a few lines from an unsigned editorial appearing in the magazine Fortune some years ago:
The United States is not Christian in any formal sense, its churches are not full on Sundays and its citizens transgress the precepts freely. But it is Christian in the sense of absorption. The basic teachings of Christianity are in its bloodstream. The central doctrine of our political system—the inviolability of the individual—is the doctrine inherited from 1900 years of Christian insistence upon the immortality of the soul.
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.
The Rise of Aristocracy
England’s aristocratic order did not rise by accident; it was imposed by a conqueror. England’s social structure may be traced back to the battle of Hastings in 1066 and the Norman invasion of England. William of Normandy had a claim, of sorts, to the British throne, a claim which he validated by conquering the island. Having established his overlordship 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.” In other words, 55 per cent of the territory of England was divided among 170 men, ten of whom got the lion’s share, or 27 per cent among them, while 160
men got the rest. 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 privileges and dues.
Norman overlordship was a system of privilege. That is to say, the Norman rulers did not obtain their wealth by satisfying consumer demand. Under the system of liberty, by contrast, where the economic arrangements are free market or capitalistic, the only way to make money is to please the customers. Under the various systems of privilege 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 economically, at the expense of other people. It makes little difference whether the outward trappings of privilege are monarchical, or democratic, or bear the earmarks of 1984; in a system of privilege, political power is a means of obtaining economic advantage.
When our forebears wrote that “all men are created equal,” they threw down a challenge to all systems of privilege. They believed that the law should keep the peace—as peacekeeping is spelled out in the old-fashioned Whig-Classical Liberal tradition, as liberty and justice for all. This preserves a free field and no favor—which is the real meaning of laissez faire—within which peaceful economic competition will occur. The term laissez faire never meant the absence of rules; it doesn’t imply a free-for-all. 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 exponents of the freedom philosophy—whether they call themselves Libertarians, or Conservatives, or Whigs, or whatever.
The Wealth of Nations
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 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 as 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. But he acknowledged that there was an earlier idea of equality—equal treatment under the law. Here is what Tawney writes about the beneficial results of the movement toward political liberty and the free economy in the early decades of the nineteenth century, the movement known as Classical Liberalism:
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.
Smith’s “liberal plan of equality, liberty and justice”means the practice of political liberty. Now, when people are free politically and legally equal, there will still be economic inequalities. There will continue to be rich and poor, as there have been wealth differentials in every society since history began. But now there’s this difference: in the free economy the wealthy will be chosen by the daily balloting of their peers in the marketplace, and the wealthy won’t necessarily be the powerful, nor will the poor necessarily be the weak.
Variation is a fact of life; individuals differ one from another. Some are tall and some are short; some are swift and some are slow; some are bright and others are not so bright. The talents of some lie along musical lines, others are athletes, a few are mathematical wizards. Some people in every age are highly endowed with a knack for making money; whatever the circumstances, these people have more worldly goods than others.
Rich and poor are relative terms, but every society reveals a population distribution ranging from opulence to indigence. This occurs under monarchies, and it occurs in primitive tribes which measure a man’s wealth by cattle and wives; it occurs in communist states where, as Milovan Djilas pointed out in a famous book, a “new class” emerges out of the classless society, and the “new class” enjoys privileges denied the masses.
Under the system of liberty, the free market will reward men in differing degrees so that some men will make a great deal of money while others, such as teachers and preachers, have to get by on a very modest income. But under the system of liberty even those in lower income brackets enjoy a relatively high standard of living, and, furthermore, the practice of the Rule of Law guarantees that there’ll be no persecution for deviant intellectual and religious beliefs. The government does not try to manage the economy or control the lives of the citizens; it keeps out of people’s way—unless rights are violated.
Under conditions of political equality—which is the system of liberty, with the Rule of Law and the market economy—a man’s income depends upon his success at pleasing consumers, at which game some people are much more successful than others. A certain American entertainer earned millions of dollars last year by gyrating and howling in public places. He didn’t get any of my money, and except for the fact that I believe in liberty, I might have paid a substantial sum to keep him permanently tranquilized! On a somewhat higher level, there are talented people who are sensitive to consumer demand, and so they produce the kinds of goods or render the kinds of services that people will be able and willing to buy. They’ll make a bundle, in virtue of their ability to attract customers in free market competition.
Our own country’s past affords the best example of the enormous multiplication of wealth—broadly shared—which results from the release of human creativity under a system of liberty. But reintroduce a system of privilege, and dreams of prosperity fade.
Helping the Poor
The big domestic issue is poverty. Ever since New Deal days in the 1930s, governments have legislated various welfare schemes designed ostensibly to help “the poor,” spending trillions of dollars in these efforts. And the big issue is still poverty! it’s only the relative prosperity of the private sector, working against politically imposed obstructions, which has provided the funds to fuel the futile political programs touted as the remedy for economic distress. These are false remedies. The truth of the matter is that only economic action can produce the goods and services whose lack is indigence and destitution. Misguided political programs actually manufacture poverty by hampering productivity. Should we trust further government interventions to correct the very conditions government has caused by its earlier interventions?
Poverty may be measured in various ways, but whatever else it is, poverty means a lack of the things which sustain Fife at the basic level, or not enough of the things which make life pleasant and enjoyable. A genuinely poor person in the United States lives in a shabby room, dresses in hand-me-down clothing, and eats meals running heavily to starchy food, with little meat and fruit. A person who is this poor would be better off if he enjoyed a larger and finer house, had several extra suits, and ate tastier and more nourishing food. After im proving the situation at the level of necessities he’d move ahead to the amenities: to recreation, a second car, air conditioning, and so on. The point to note is that people move away from poverty and toward prosperity only as they command more economic goods, more of the things which are manufactured, grown, transported, or otherwise produced.
Poverty is overcome by production, and in no other way. Therefore, if we are seriously concerned with the alleviation of poverty, our 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 anyone for whom increased productivity is a major goal. There are some able production men in industry, but many 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 or agricultural production, which is why government welfare programs manufacture poverty, and the economic well-being of the nation as a whole sinks below the level of prosperity a free market economy would achieve.
Confirmation of this point comes from a New York Times Magazine article by the celebrated economist, Thomas Sowell:
To be blunt, the poor are a gold mine. By the time they are studied, advised, experimented with and administered, the poor have helped many a middle class liberal to achieve affluence with government money. The total amount of money the government spends on its anti-poverty efforts is three times what would be required to lift every man, woman, and child in America above the poverty line by simply sending money to the poor.
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. 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.
I’m arguing on behalf of a philosophy of government which understands the primary function of the Law as the defense of the life, liberty, and property of all persons alike. Such a political establishment leads to the kind of society in which bread and butter issues are handled by the market. So now, a few words about the nature of the market.
The market is not a magic instrumentality which comes up automatically with the fight answer for every sort of question. The market is a sort of popularity contest; the market tells us what people like well enough to buy; it’s an index of their preferences. Thus, the market provides a very valuable piece of information, but it’s far from the whole story. It’s important for a manufacturer to project an accurate guess as to where the hemline will be next season, or what people will look for when the new car models are unveiled. But a similar fingering of the popular pulse is an abomination in the intellectual and moral realms—unless one is a liberal intellectual! I refer to the proclivity of the current crop of liberal opinion molders to ask: “What’s going to be the fashion in ideas next 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; but when the climate of opinion changed he became 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 not some entity; the market is only a word describing people freely ex-changing goods and services in the absence of force and fraud. The market is the only device available for serving our creaturely needs while conserving scarce resources. But the market is no gauge of the validity of ideas. The market measures the popularity of an idea or a book or a system of thought, but not its truth or worth. Mises and Hayek are, for my money, far better thinkers and 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 as Mirror
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 glass! There is a great deal 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 are throwing 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, of course, is a power play, and it is the poor—generally the weakest members of a society—who are hurt first and most in any power struggle. Furthermore—and this is an important point—economic inequalities cannot be overcome by coercive redistribution without increasing political inequalities. Every form of political redistribution widens power differentials in society; officeholders have more power, citizens have less; political contests become more intense, because the control and dispersal of great amounts of wealth are at stake.
Every alternative to the market economy—call it socialism or communism or fascism or whatever—concentrates power over the life and livelihood of the many into the hands of the few who constitute the State. 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 people become more equal than others. We head back toward the Old Regime—the system of privilege.
Those who have assumed Or seized power to take from the “haves” and give to the “have-nots” will eventually realize that they are operating a dumb racket. The “have-nots” who may be on the receiving end at the beginning are generally not society’s best and brightest, not the kind of people the power brokers like to hobnob with. The politically powerful who operate the transfer system will—when the light dawns—continue to plunder the “haves” but will then divvy up their take between themselves and the beautiful people who possess enough sensibility to realize the rightness of running a society for the benefit of such as they! The poor are squeezed out; they are worse off than before. And the nation is saddled with the “democratic despotism” predicted by Alexis de Tocqueville as far back as 1835.
Those of you who are fans of Lewis Carroll will remember his poem, “The Hunting of the Snark.” Hunters pursued this strange beast, but every time they thought they had their quarry the snark turned out to be a quite different beast—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 cor rupts, 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 liberty. They chose liberty in full awareness that in a free society the natural differences among human beings would show up in various ways; some would be economically better off than others. But in a free society there would be no political inequality; everyone would be equal before the law.
The alternative to the free economy is a servile state, where a ruling class enforces an equality of poverty on the masses, and lives at the expense of the producers. To embark on a program of economic leveling, then, is like trying to repeal the law of gravity; it’ll never work, and the energy we waste trying to make it work defeats our efforts to attain the reasonable goals which are within our capacity to achieve.