Freedom Follows the Free Market
JANUARY 01, 1963 by DEAN RUSSELL
Dr. Russell is a member of the staff of the Foundation for Economic Education and Director of the
Many of my conservative and libertarian friends are of the strong conviction that we are in danger of losing our freedom to the Russian communists. I do not agree with them, even though I am fully aware of the international communist plot and of the fact that there are many Russian agents in our country. I am convinced that the primary threat to freedom in the United States is not Russian communism but democratic socialism and the erosion of our free market economy—an erosion that has been increasingly accepted, supported, and encouraged by the overwhelming majority of the American people for the past 35 years.
The Russian communists and their American agents have had almost nothing to do with this trend. We, the people ourselves, must bear the full responsibility. Thus, those of us who value freedom would be well advised to use our money and energy to fight the immediate and increasing danger of democratic socialism at home instead of the potential danger of totalitarian socialism from abroad.
Before we can do that, however, we must first understand how freedom in general can be lost even when various specific freedoms are increasing—as is the case in the
It is clear to me that freedom is at its high point in the United States today in almost all areas of human activity except one—the free market economy, the voluntary exchange of our goods and services. In that area, freedom has been declining steadily in our country for the past three decades. It is still declining. And it is my firm conviction that therein lies the primary threat to human freedom.
Economic Freedom the Key
My thesis is that the free market economy is the key to all freedoms. In fact, the market and freedom are really synonymous terms. If the market is totally free, each person has complete freedom of speech, press, and religion. But if the market is totally controlled, there is no freedom in those or any other areas.
That statement is a truism. It cannot be otherwise. For example, let us apply that idea to three nations wherein the economies are currently almost totally controlled—
But imagine, if you will, what would be the inevitable results if the government could exercise no control of any description over any peaceful economic activity—in short, imagine a market economy in those nations.
Publishers and editors could then be either for controls over the economy or against them. If the market were free, and the editors were in favor of keeping it that way, obviously the government would not interfere with the newspapers’ support of what existed and had the support of government. Further, any editor favoring a controlled economy would be free to say so—if the market were free. The people in general would doubtless denounce the authors of such proposals but, in a market economy where the presses are privately owned and are not controlled by government, there is nothing more they could do about it. Nor would the government do anything about it or, for that matter, even want to. Again this is a truism—and it is always difficult to try to explain and prove the obvious. I can only say again that the press cannot possibly avoid being free in a free market.
Now reverse the situation and imagine that the government owns and operates all the newspapers, or completely controls them; imagine that the market economy has been totally abolished. Obviously, there cannot be a free press under that arrangement. It isn’t a case of wanting or not wanting it; the situation presents a physical and intellectual impossibility for a free press.
If the government owns the newspapers, obviously it cannot question its own actions, or advocate the reverse of what it is doing; otherwise, the government wouldn’t be doing it in the first place. If the government leaves the presses under nominal private ownership but exercises complete control, the same situation necessarily prevails. Since the officials of government must necessarily make the decisions in a controlled economy, obviously they cannot deliberately make mutually contradictory decisions. They cannot use compulsions in practice and then question the compulsions inprint. Such a procedure would be illogical and unthinkable nonsense. Again, it is a truism that there can be no freedom of any description in a totally controlled economy, and there must necessarily be complete freedom in a market economy.
As another example, try to imagine the existence of freedom of religion in a controlled economy. From the comfort of your armchair, you can easily deduce the reception in Russia and Spain today that must necessarily be accorded to the advocates of the religious tenets of, for example, the Latter Day Saints (Mormons). For the most part, those people preach personal responsibility for one’s own economic welfare, the private ownership of property, the free market economy, and the responsibility of individuals and of the church (not the government) voluntarily to feed the hungry and clothe the naked.
That religious philosophy cannot possibly be permitted unrestrained expression in any nation with a completely controlled economy. If it were permitted to flourish, that subversive idea could easily lead to the overthrow of government. The public utterance of the free market philosophy could no more be tolerated as a religion than as an editorial policy in a totally controlled economy.
Nor is it possible even to imagine a religion that in no way takes any interest in the use, ownership, and exchange of property. Thus, there can be no positive and active freedom of any kind (including religion) when the market economy is destroyed.
The same reasoning holds true for speech, vote, and family life, as well as for every other peaceful human activity. Freedom follows the market. All the history I have yet been able to read bears witness to that truism. And I can find no other answer in logic.
Nor can any constitution or bill of rights permanently stop the inevitable verdict. No legalities concerning freedom of press, speech, and religion have ever been able to stand permanently against the realities of an economy completely controlled by government. Obviously, the judicial branch of government cannot long be permitted to pursue a course in direct opposition to the legislative and administrative branches of government, even in the unlikely event it wanted to. In one way or another, there must necessarily be at least a rough balance of agreement among all branches of government; otherwise, there could be no government.
We should remember that the Soviet Constitution clearly guarantees freedom of press and speech, as do the constitutions of other nations where the market economy has been abolished. In that situation, however, constitutional guarantees are without meaning. It cannot be otherwise. For no totalitarian government can offer its presses and auditoriums to persons who are in total disagreement with government policies.
The evidence in support of this thesis is clear for the totally controlled and the totally free economy. But what about the so-called welfare state or mixed economy, such as that of the
First, we should never forget that the only thing governments can control is people. For example, governments never control prices, just people. A can of beans doesn’t care what its price is. But people care—the people who grow the beans, can the beans, sell the beans, and consume the beans. And that’s all that price controls can ever mean—people control. It is another of those truisms that most of us never see, or choose to ignore. The phrase, "price control," generally brings a picture of government action to help people. But when we give the process its correct descriptive title, "people control," quite another picture comes to mind. For obviously, when the government controls people, it necessarily deprives them of their freedom.
So there we have it again. Price controls are automatically destructive of the market economy where people buy and sell on mutually acceptable terms. And when this process is abolished, people automatically lose their freedom—to whatever extent the prices are controlled. It cannot be otherwise.
With the possible exception of thinking without acting, all freedoms of all descriptions are finally based on the market economy. Government controls over people almost always involve compulsions and prohibitions against their ownership, use, and exchange of goods and services. Control of the press, speech, and religion necessarily follows the controlled market, because, in one way or another, all of them also directly concern the use of property. If the presses, auditoriums, and church buildings are owned or controlled by government, it is childish to imagine that there can be any freedom of press, speech, and religion. And only an underdeveloped mind could imagine that the presses, auditoriums, and church buildings could be free in the traditional sense when the rest of the economy is controlled.
The Case Against Price Supports
Just as the government cannot control prices, so also is it absurd to imagine that the government can support prices. Without exception, the only thing that government can ever do is to control people—to prevent them from doing what they wish to do, or to compel them to do what they do not wish to do. Thus, it follows that the government’s price support program for agricultural products necessarily deprives farmers (and others) of their freedom.
Here is a harsh and little understood fact: Because of price supports, freedom of agriculture in the
I once made that statement to a group of fine people in
I couldn’t possibly have planned a more convincing affirmation of my thesis that freedom follows the market, that the government can never support a price but only can control people, that the traditional American freedom of a person to be his own master on his own land is now a thing of the past in the
The incensed farmer then shouted at me, "But we, the people, voted for it! Don’t you believe in democracy?"
Thus he offered dramatic support of my position that the communists haven’t done this to us, but that we have done it to ourselves. We have used our hard-won franchise as the means to destroy the market economy and thus to vote away our freedom. I explained to my audience that, in my opinion, such a procedure makes it all the worse; that if some tyrant had done this to us, we would eagerly draw straws to determine which of us would have the privilege of shooting him down; that when we democratically vote away our freedoms, they are gone just as surely as if they had been taken from us by conquest.
If you have any doubt that freedom of agriculture is now a thing of the past in the
They Were Called "Extremists"
A few persons were aware of this direct relationship between the market and freedom when the government first moved into the area of agriculture to help the hard-pressed farmers, and those few protested vigorously. But they were called "extremists," were forced to conform, and were soon forgotten by the vast majority of us who have "never had it so good." But this undeniable truism remains: It is never prices and things but only people who are controlled, and supported, and subsidized, and maximized, and minimized by government. We American people don’t even have the excuse of Esau—hunger—for selling our birthright of freedom for the pottage of government paternalism. Apparently, our primary reason for doing it is merely sheer greed for more and more.
And so it is with tariffs, subsidies, and all other government interferences with freedom of exchange. In every case, peaceful persons are deprived of their freedom to exchange their goods and services on mutually agreeable terms. In every case we are deprived of a bit more of our freedom.
To Join or Not To Join
All of us also have lost our hard-won freedom to join or not join organizations of our own choice. Currently, some 17 million Americans must belong to labor unions, whether the individual member likes it or not. Our government also has made it legal for union leaders to tax us for their alleged services, whether or not we want them. That is, union dues are deducted (like taxes) from our pay checks before we get them.
The fact that you, yourself, may not now belong to a union is purely academic and perhaps merely temporary; the essential principle of no freedom of choice in the matter has now been firmly established and written into the law of the land. It is legally enforced by strikes, threats, and bloodshed against those who are still naive enough to imagine that employers and employees in the
Let it be recorded that the card-carrying members of the communist party did not, and could not, do this to us, even though they surely wanted to. It was done primarily by our best people—our ministers, our teachers, our editors, our businessmen, and our most honest legislators. And it was inspired by the best of all reasons—that is, the human desire to help one’s fellow man.
Those good people forgot, however, that the only thing any government can ever do, even in its proper function of preserving the peace, is to control people—to compel them to do what they do not wish to do, and to prevent them from doing what they want to do. That procedure is, of course, the proper way to stop murderers and thieves and frauds; for clearly, the police powers of government should be used to prevent those antisocial people from imposing their wishes upon others by violence and misrepresentation. But when the same powers are used against peaceful persons in their peaceful activities, freedom is always and undeniably infringed.
For example, every American has lost his freedom to save or to spend his earnings as he pleases. Our government compels all of us to "save" a portion of our wages and salaries—that is, the government deducts a portion and promises to give it back at some later date. This compulsory scheme is called Social Security, and it is generally cited as the essence of true freedom for the people. Perhaps as many as 95 per cent of the American people are now in favor of this loss of personal choice (freedom) and would categorically oppose any suggestion to return to a situation in which each person is responsible for his own welfare in a market economy.’
And so it goes—through hundreds and thousands of government prohibitions and compulsions in the peaceful economic affairs of men. Without exception, every one of them is a direct loss of freedom of choice and responsibility.
"It Can’t Happen Here"
Again, the only control that any government can exercise is people control. Any attempt by government to control things must necessarily involve the control of people, and that is undeniably a loss of freedom.
Most of the editors in the
In their sermons, most of our ministers promise us that "our hard-won freedom to worship as we please will never be lost." At the same time, they suggest that the police powers should be used to perform still another charitable service that was once the direct responsibility and pride of our churches.
And invariably, as the legislator demands still another interference in the market place, he thunders this familiar theme: "The people will never lose their right to vote as they please."
And true enough, as I have already stated, those four precious freedoms of press, speech, franchise, and religion appear to be stronger than ever in the
Must History Repeat Itself?
But somewhere along the line, our essentially free economy must drift into an essentially controlled economy, if the present trend continues. That will be the end of human freedom in the
The empirical proof of that truism is so obvious that one can only be astounded that so few of us see it. Examine anywhere at any time the degree of freedom that has existed in highly controlled economies versus less controlled economies over a significant period of time. Always the answer is the same: Where the economy is freest, there also is the highestdegree of freedom of press, speech, and religion.
Even a comparison of slave economies will bear witness to the validity of this thesis. For example, it is true that slavery was still practiced during the Golden Age of ancient
And the fact that, in the United States today, it is we ourselves who are voting to restrict and to destroy the market economy is entirely outside of the issue here being discussed. Freedom stands or falls with the market, regardless of the mechanism used to maintain or to destroy it.
Mr. Khrushchev has stated that Russian communism will bury us. That threat is arrant nonsense, and I suspect that Mr. Khrushchev knows it. But he also made another statement that is far more significant. He promised that our grandchildren will live under socialism. That could easily come true—not because of Russian rockets but, as Mr. Khrushchev also predicted, because we American people will eventually choose socialism over the market economy.
I am an optimist, however, and I predict that Mr. Khrushchev’s prediction will not come true. For most fortunately for us and our grandchildren, this final fact remains: We are the direct heirs of the long tradition of Anglo-American common law and the vital idea that every individual has rights above and beyond the majority decisions of the group. That principle will die hard among a people who have lived with it (and died for it) for so many hundreds of years.
Fortunately, our economy is still more free than controlled, and thus we still have the precious freedoms of press, speech, religion, and franchise. There is still time to use them to advocate and to vote for a return to a completely free market economy. Admittedly, it will be a difficult process at this late date, but we can do it if enough of us understand it and want it.
The fundamental and vital choice is "people control" or the market economy. We cannot have it both ways. The decision rests with you, as it should.
‘ See "The Social Security Program" by Paul L. Poirot, The Freeman, November 1962.
2 Jules Francois Toutain, The Economic Life of the Ancient World (New York: Barnes & Noble, Inc., 1951), p. 109.