The Moral Dimension of FEE
MAY 01, 1996 by GARY NORTH
Dr. North is president of The Institute for Christian Economics in Tyler, Texas. He was FEE’s director of seminars in the early 1970s and has served as a member of the board of trustees.
“. . . man playing God is a prime evil, an evil seed that must grow to a destructive bloom, however pretty it may appear in its earlier stages.”
Leonard E. Read
A quarter of a century ago, Jerome Tuc cille wrote a book, It Usually Begins With Ayn Rand. For some people, this may have been true in 1971. But far more true even then was this statement: “It usually begins with a copy of The Freeman.” For over three decades, I have asked people: “How did you get into the conservative movement?” More than any other answer, I have heard this one: “Somebody gave me a copy of The Freeman. I don’t remember who.”
When we think of the Foundation for Economic Education, we think of The Freeman. The two are completely intertwined. The Freeman is much better known than FEE. Yet this was not always the case. FEE began in 1946. It had no magazine for almost a decade. But more important for the purposes of this essay, FEE had little recognition prior to The Freeman. It was an unknown organization. The Freeman is what put FEE on the map and has kept it there.
In this sense, The Freeman has represented FEE to the public far more than most journals represent their publishers. For four decades, FEE has appeared to the public as The Freeman‘s publisher more than as an organization with a comprehensive program, one aspect of which is a monthly magazine. We do not think of the Harvard Business School primarily as the publisher of the Harvard Business Review. We do think of FEE primarily as the publisher of The Freeman. This has elevated The Freeman to special status, both for FEE and for the libertarian movement.
A Brief History of The Freeman
In the 1920s, Albert Jay Nock had edited a magazine called The Freeman. Frank Chodorov, Nock’s disciple, revived the name in the late 1930s for the magazine he edited for the Henry George School. He was soon fired, and the name went with him. It was revived again in 1950 when Henry Hazlitt and John Chamberlain began publishing a magazine that replaced Isaac Don Levine’s Plain Talk. George Nash writes of this effort:
By the end of its first year of publication, The Freeman had attained a modest circulation of about 12,000. This rather low figure does not, however, adequately reflect either its influence or its significance in the early 1950′s. Here at last was a respectable journal (“a fortnightly for individualists”) which was providing a regular forum for hitherto dispersed writers. Here at last was a periodical applying libertarian theories to daily realities. Not only professional journalists but also scholars like Hayek, Mises, and Germany’s neo-liberal economist Wilhelm Ropke appeared in its pages. Men as diverse as Senators Harry Byrd and John Bricker, John Dos Passos, Roscoe Pound, and General Albert Wedemeyer acclaimed its value. It is difficult to convey a sense of the crucial role of The Freeman at the height of its prestige, between 1950 and 1954.
FEE anonymously took over publication of this Freeman through its Irvington Press entity from 1954 until its demise in late 1955. In January 1956, the modern Freeman was born under the then anonymous editorship of Paul Poirot. This 64-page magazine was formatted somewhat like Reader’s Digest. Like Reader’s Digest in those days, The Freeman contained no outside advertising. Even today The Freeman only accepts advertisements related to the overall purpose of FEE.
In 1953, Chodorov founded the Intercollegiate Society of Individualists, with young William F. Buckley Jr. as its first president. At that time, ISI had no regular publication, but it sent books and articles to college students around the nation. This organization was another key player in the revival of conservatism. What should be apparent is that Frank Chodorov, a defender of Henry George’s single tax on increased land value, a non-interventionist foreign policy, and the free market, was the key figure in the revival of both conservatism and libertarianism, yet few people remember him today. Of his three surviving legacies—The Freeman, ISI, and Buckley—only the first retains Chodorov’s forthright commitment to the unhampered free market and non-interventionist philosophy generally.
Oasis in a Desert
The publishing world was an intellectual desert for conservatives and libertarians in 1956. The number of conservative American publications was so small and their influence so minimal that it is difficult to remember them. Human Events had begun in 1944, a joint effort of Frank Hannigan, Felix Morley, and William Henry Chamberlin. It was a libertarian newsletter, not the tabloid it is today. There was The American Mercury, but by then it had become an outlet for defenders of a conservative variety of fiat money inflation. The year before The Freeman began, Buckley launched National Review. He had wanted to use the name, The Freeman, but FEE’s trustees refused to surrender it. There was Christian Economics, a tabloid funded by Calvinist-libertarian multimillionaire J. Howard Pew of Sun Oil. It had begun in 1950. It was sent free of charge to American clergymen. The Saturday Evening Post and the Chicago Tribune were conservative in tone and both published conservative and libertarian authors, but neither publication was openly ideological. So, in 1956, there were few outlets for conservatives and libertarians.
Our memory of FEE prior to The Freeman is sketchy, at best. FEE put out numerous pamphlets and short books, but there was no regular pattern of publication for nine years. Leonard Read assembled a staff of competent but unknown free-market economists out of Cornell University’s Department of Agriculture: F. A. (“Baldy”) Harper, who was not very bald, W. M. (“Charley”) Curtiss, and in 1949, two of their former Ph.D. students, Paul Poirot and Ivan Bierly. Orval Watts, another key figure on FEE’s original staff, probably had more to do with teaching Read his economics than anyone else. Dean Russell and the two Cornuelle brothers, Richard and Herbert, also were on board. There was also a young woman who would later become better known as Mary Sennholz. Ludwig von Mises would journey up from New York City to give lectures at FEE, but he was never on FEE’s full-time staff. Neither was Henry Hazlitt.
The staff’s early contributions are now forgotten in the mists of time. What is remembered is The Freeman. The importance of The Freeman was not just the quality of the articles that appeared in it, but its very survival. It has survived for four decades, just as National Review has survived; and between these two journals, we can identify and trace the history of post-War American conservatism’s two factions: libertarian and conservative. Their survival has been basic to the origins and extension of the conservative movement.
To survive and prosper in a highly competitive market, a product, service, or company has to become known for its unique contribution to the consumer. This is known in modern advertising as positioning. To position itself, an organization needs what has been called a USP: a unique selling proposition. In non-profit circles, it probably should be known as the unique service proposition. An organization’s USP is that unique service which no other company can offer equally well, or at least no other company can offer without appearing to be a copycat. One of the most famous USP’s in history is the one for M&M candies: “Melts in your mouth, not in your hand.” Another famous one is Federal Express’s, which offers next-day delivery “when it absolutely, positively has to get there overnight.” The unique selling proposition shapes both the development and operations of the organization. If it unofficially changes its USP, or if its operations do not testify to and reinforce its USP, a successful firm’s success will almost always depart. The most famous recent example of a near-suicide in this regard was Coca-Cola’s decision to change its formula. The re-introduction of the old formula under the name Coca-Cola Classic saved the company from a disaster.
There has never been a systematic effort to produce a USP for FEE. The Freeman has always had a slogan: ideas on liberty. But a slogan is not a unique selling proposition. Nevertheless, The Freeman has always had an unarticulated USP:
The only magazine that introduces newcomers to the idea of the free market as a moral institution, not just as a means of efficient production.
Notice that this USP conforms to the old box-top contest rule: “25 words or less.” The Freeman‘s editors have never departed from this unarticulated USP. If there is a miracle of FEE, this is it.
In 1946, FEE was unique: the only non-profit organization devoted to spreading the story of the free market. It had a monopoly. That original monopoly, like all monopolies, has faded, and it has faded rapidly since the mid-1960s. There have been many imitators. This is a positive development. As Read liked to say, “You never know if your idea has been successful until someone repeats it to you without knowing where it came from.”
In 1946, FEE’s unstated unique selling proposition was obvious: “The world’s only free-market think-tank.” Of course, the phrase “think-tank” had not yet come into existence, but you get the idea. Nevertheless, that USP was highly vulnerable: as soon as FEE was imitated, FEE could no longer claim that USP. It can still claim that it was the world’s first free-market think- tank, but in a culture devoted to the latest fad, this is not a particularly awe-inspiring claim. But because of The Freeman, FEE has not needed a USP. As the publisher of The Freeman, FEE has always had one.
The Moral Dimension
Leonard Read once heard a speech by one of FEE’s most popular speakers, Ben Rogge (pronounced “ro-guee”). Rogge had stated something to the effect that it is a shame that socialism doesn’t work, since it is a good idea ethically. According to Read’s account, he challenged Rogge on this point after his speech. Read told him, and continued to tell audiences for years thereafter, that he would hate to live in a world in which a good, moral idea produces harmful results. That would mean that an idea which produces better results—the free market—could be immoral. The reason that socialism produces bad results is because it is an immoral idea. Or, as he wrote, “But even if socialism were the most productive of all economic systems, it would not meet with my approval. Socialism de-emphasizes self-responsibility, and, thus, is contrary to my major premise which is founded on the emergence of the individual.” This statement encapsulated Read’s moral vision. Read gave FEE its operational slogan in the title of his book, Anything That’s Peaceful. But a slogan is not a USP. A slogan does not convey to the observer what the organization’s unique service is in the competitive marketplace.
There are numerous free-market think-tanks today. Most of them present academic extensions of formal economics, most notably the University of Chicago’s department of economics. They may be oriented more toward policy than academics, as the Heritage Foundation and the American Enterprise Institute are. They may be both academic and policy oriented, as the Cato Institute is. They may be strictly academic, as the Mises Institute is. They may be ideological, as the Center for Libertarian Studies is. But none of them can say, as The Freeman implicitly announces in the name of FEE,
The only organization that introduces newcomers to the idea of the free market as a moral institution, not just as a means of efficient production.
Academic free-market economics is tied self-consciously to a value-free theory of knowledge. The standard slogan is this: “Economics is not good or bad; it is either true or false.” What has distinguished FEE for half a century has been its commitment to another worldview: “Economics is either true or false to the extent that it is moral or immoral.” This outlook has always relegated FEE to the fringes of academic discourse. At the same time, however, it has given FEE a unique position within conservative and religious communities that are convinced that value-free anything is a myth, either an academic myth or a cover for a hidden agenda. For those who take seriously the words, “thou shalt not steal,” FEE has offered a well developed body of literature to support this moral assertion. It has been doing this for fifty years.
Defenders of the free market have faced a major obstacle for over a century: the socialists and economic interventionists have always claimed possession of the high moral ground. They have been able to appeal to people’s better instincts in their defense of coercive State power. They have pointed to the effects of capital shortage—poverty—and have called for programs of coercive wealth redistribution in the name of the downtrodden. This moral appeal has always been stronger than the economists’ precise technical arguments regarding the two systems’ comparative rates of output per unit of resource input. Even today, in the wake of the collapse of the Communist economies, socialism’s moral appeal is still dominant. It asks some variation of this rhetorical question: “Would you let the poor starve?”
FEE has always responded to this moral claim in terms of a rival moral claim. It has had this moral response to socialism’s rhetorical question: “The pathway to wealth, long term, is not theft but personal responsibility. Theft in the name of the poor is still theft.” The Freeman has been FEE’s monthly report: “How has political plunder failed? Let me count the ways.” The goal has not been to count the ways merely to pile up examples of socialism’s technical failures; the goal has been to provide evidence that coercion for noble purposes must produce ignoble results.
From the beginning, FEE has defended the market in terms of the high moral ground. In an era of pragmatism, this positioning has not impressed many academics, whether of the free-market persuasion (“value-free”) or the socialist persuasion. Yet the ultimate pragmatism, in FEE’s universe of moral cause and effect, should lead people to accept the high moral ground. Freedom works. It delivers the goods. Socialism fails. This failure became visible to all but hard-core Communists and socialists with the collapse of Europe’s socialist economies, followed within months by the fall of the Soviet Union in 1991. Nevertheless, freedom must be defended, not because it works but because it is right. FEE’s position has always been that we must not get the pragmatic cart before the ethical horse. This outlook has always distinguished FEE from its many imitators.
The Non-Miracle of the Market
FEE has never really believed in the miraculous quality of what has often been described as “the miracle of the free market.” For teaching purposes, Leonard Read liked to speak of such a miracle, but that was because he dealt with readers and listeners who were entranced by the myth of the State. The so-called miracle of the free market has seemed miraculous to those who assume that socialism is a good idea and ought to work. The non-miracle of the market rests on this fact: personal responsibility, the desire to improve one’s condition, and minimal civil government work together to allow the productivity of the most precious of all scarce economic resources, human creativity. The so-called miracle of the market is nothing more and nothing less than the outworking of “thou shalt not steal.”
The miracle is not the market; the miracle is that two centuries ago, English-speaking political rulers began to change their minds regarding the supposed benefits of government coercion. Beginning in the late eighteenth century, decision-makers for the British Empire decided that less regulation might be beneficial after all. The American Revolution had persuaded them that they would have to reduce regulation in this hemisphere. Both sides decided that reduced trade barriers were necessary if both countries were to benefit. Adam Smith’s The Wealth of Nations (1776) justified intellectually what Jefferson’s Declaration of Independence (1776) soon produced: an international trading zone in which British bureaucrats would no longer set the terms of trade. Had they never attempted to set the terms of trade, there probably would not have been a revolution.
This was a revolutionary concept on both sides of the Atlantic in 1776. It was grounded in Jefferson’s moral vision: life, liberty, and the pursuit of happiness. This concept in turn rested on the long accepted but rarely honored idea that man is responsible before God for his own actions. This moral vision includes economics but is not limited to economics. As Read wrote: “Our revolutionary concept was economic in this sense: that if an individual has a right to his life, it follows that he has a right to sustain his life —the sustenance of life being nothing more nor less than the fruits of one’s labor.”
When this principle was progressively and haltingly put into practice on both sides of the Atlantic after the American Revolution, the “miracle of the market” appeared: the phenomenon of compound economic growth. Into the hands of the poor were placed low-cost technological wonders that were beyond the dreams of kings in 1776 or even 1906. As Will Rogers put it in the middle of the Great Depression of the 1930s, “America is the first nation where a person goes to the poorhouse in an automobile.”
The Road to Unserfdom
In the words of Clarence Carson’s series in The Freeman, the world has been caught in the grip of an idea: socialism. Our world is still in the grip of that idea. This grip is looser today than it was in 1946, and it is called something else than socialism, but it is still far tighter than it was a century ago, in that golden age described best by this phrase: “After indoor plumbing but before the income tax.” Prior to World War I, as Robert Nisbet has said, the only contact that most American had with the federal government was the Post Office.
Today, the promises men live by are still government promises. Whether in the field of education, health care, retirement income, or any of a hundred other areas of modern man’s dependence on government, the reigning faith has not changed: In Government We Trust. This faith has been challenged, but nowhere more eloquently than in the pages of The Freeman. This faith has also been challenged by events. It will be challenged in the next century by the inability of governments to make good on their promises, at least not in money with today’s purchasing power. This is why FEE and The Freeman must continue to play a prophetic role by sounding the alarm. Economic events will eventually catch up with the unchanging moral premise of FEE: thou shalt not steal. Again, this is a matter of positioning. He who sounds the alarm in advance and provides cogent testimony for his case is in a better position to exercise leadership in the midst of the crisis that he predicted.
Men cannot predict the future course of events. But we can say this in confidence: if certain practices continue, certain consequences will follow. We live in a universe of moral cause and effect. Bad policies will eventually produce bad results. This takes time, but it is the law of liberty. Societies break it at their peril.
Where are those who will respond to FEE’s message? Where is the Remnant? We cannot know for sure, any more than most of us can remember who it was who gave us our first copy of The Freeman. But we can make informed guesses. We can ask ourselves this question: Who among us has begun to break with the religion of the Savior State? Who has begun to unplug from dependence on the State for his future? I suggest the following groups: (1) parents who have pulled their children out of the public schools; (2) investors who have decided that Social Security is going to default before they die; (3) users of the Internet who have begun to explore alternative sources of information; (4) churches that have never accepted the Social Gospel; (5) full-time foreign missionaries who are in the field, trying to show people a better way to live; (6) small businessmen who are tired of the government red tape that strangles them and who are ready to forfeit government subsidies to get out of the trap. Members of these groups are obvious candidates for the unofficial office, liberator.
The appropriate response of any new believer is evangelism. This is why so many people have been handing out copies of The Freeman for over four decades. They have recognized that The Freeman is a means of evangelism: “good news” for people who have grown weary of the seemingly endless pleas that civil government intrude into the economic affairs of individuals.
For over four decades, The Freeman has offered case studies of very bad ideas, morally speaking, that have produced very bad results, economically speaking. To a lesser extent, it has offered positive case studies where liberty has worked. But in an age that is caught in the grip of the socialist idea, the economy’s successes have been attributed to socialism and the failures have been attributed to the free market. This was especially true prior to the late 1960s. Even today, the welfare State—the State as healer, meaning the State as Savior—is still widely believed in by most people, though not in its more obviously tyrannical forms. To refute this error, The Freeman has published many articles that demonstrate that the failures should be attributed to some variant of political plunder.
Because so many people have spent their lives as targets of government propaganda, which includes the propaganda of the government school system, reading The Freeman has been a liberating experience. They have felt as though they have been set free. The Freeman has put into clear, cogent language the case for liberty. New readers have responded again and again: “I always suspected this, but I was all alone. Now I know I have allies.” For some readers, The Freeman has served mainly as ammunition in the war against government coercion. But for others, it has been more like a religious experience: making the connection with others who share their views. In the words of one of the characters in Shadowlands, the movie about C. S. Lewis, “I read to know that I’m not alone.” For those who do not intend to remain alone, giving away copies of The Freeman has been an obvious solution.
For many years, FEE sent out The Freeman free of charge. In recent years, FEE has limited this free subscription to three months. FEE also asks donors to provide gift subscriptions. Both approaches have advantages. The important thing is that those who want to continue to read The Freeman can do so, either by paying for it or, in the case of students, through the generosity of subscription donors. The evangelical impulse is valid and should be yielded to, but it must be paid for.
What Is to Be Done? By Whom?
Leonard Read always said that improvement begins with self-improvement. Plans to reform the world must begin with plans to reform my assigned segment of the world. The answer to the question, “What is to be done?” should begin with “What am I prepared to do?” So, I can begin by asking myself these questions:
Have I made a list of people I know who might want to read a copy of The Freeman?
Have I bought extra copies of The Freeman to send out with a personally signed cover letter or to hand out personally?
Am I ready to donate money to FEE to pay for three student subscriptions?
Do I know of any private high school that might be ready to assign The Freeman or other FEE publications?
Do I know any physician or other professional who would place copies of The Freeman in his office’s waiting room?
Am I prepared to sponsor a local chapter of FEE’s network of discussion clubs?
Read always spoke of a majority of one: the self-governed individual. I control this majority. I have the only vote that counts. It does no good for me to curse the darkness unless I am prepared to light a candle. Am I prepared to buy a candle? Am I prepared to give away an occasional candle? The Freeman is a very bright candle.
There is no doubt that FEE is the granddaddy of the conservative movement in the post-World War II era. It has been in public service longer than any other organization. Human Events has been published longer than FEE has existed—by about two years—but FEE is more than a publisher, however much the success of The Freeman makes FEE appear to be merely a publisher. The Freeman has been published longer than any other libertarian journal, even if we do not view the post-1955 Freeman as an extension of its five-year-old predecessor. FEE has maintained its unique service proposition longer than any other organization on the American right.
Will this continue? That depends. As Leonard Read used to say, “FEE is doing just fine: it gets all the money that people think it’s worth.” If FEE’s supporters continue to be pleased with what FEE is doing, FEE will survive. It flourished during the first two decades of Read’s tenure for two reasons: first, it had an operational monopoly; second, because Read was the incarnation of a unique service proposition. He had the remarkable ability to raise lots of money without appearing to raise money, a skill he combined with his even more remarkable refusal to acknowledge any exceptions to the free market’s principle of voluntarism but these: defense against violence, enforcement of contracts, and prosecution of fraud.
Unlike the other libertarian think-tanks, FEE has avoided the pitfalls of political cheerleading or behind-the-scenes policy-making. Read’s original vision has been maintained. This also makes FEE unique. In what today appears to be a time of political fruit-gathering after all the decades of wandering in the wilderness, FEE’s stand is clear: anything that’s peaceful. If FEE continues to maintain this stand, it will continue to prosper. But even if FEE’s non-political stand were somehow to lead to its demise, that would surely be better than the alternative. As Read would say today, “But even if political cheerleading were the most productive of all fund-raising systems, it would not meet with my approval.”