Davis E. Keeler Is director of the Law & Liberty Project of the Institute for Humane Studies, Menlo Park, California.
The indivisibility of liberty is illustrated by the frequent occurrence that the violation of one “right” may also involve the violation of some other right. For example, a restriction on freedom of contract may also be thought of as a denial of equal treatment. The imposition of wage and price controls in an inflationary economy provides a good case in point.
Inflation spreads unevenly through society. Certain identifiable groups get newly-created money first and spend it before the market discounts it by raising prices. These people receive the benefit of inflation through a wealth transfer from other persons who do not know it is inflated money they are taking or who cannot do anything about it.
The money passes from the favored first recipients through various hands, gradually losing its premium, as prices gradually adjust upward to discount the inflated money. Eventually inflation is fully discounted and recipients of the inflated currency can no longer exploit their less fortunate neighbors.
However, if price or wage controls are imposed, those favored persons who received the initial issue of the inflated money continue to receive a premium value for it, as those who sell to (work for) them cannot adjust prices upward to reflect the decreased value of the inflated money. These people suffer a wealth transfer, as their goods (labor) must be sold cheap to the politically-favored recipients of the inflated currency.
While the secondary holders of this inflated currency may, themselves, enjoy some of the benefits of price or wage controls in their purchases, this will be restricted by shortage. This is because no additional wealth has been created by inflation, and as there has been a transfer of part of the existing stock of wealth to the politically-favored first holders, the secondary holders will find themselves bidding with money now generally recognized as less valuable for a decreasing stock of goods and services. This is why shortages accompany price controls. Goods available on the black market will, of course, discount the inflated currency to its true value, as will all prices when controls are eventually rescinded by an electorate grown tired of the burden of controls. When this finally happens, the unfortunate holders of the inflated money, forced to take it by price or wage controls, will find it reduced to its true non-inflated value. Then the process of government-induced wealth transfer from the politically weaker to the politically stronger will be complete.
While this is a rather simple example, it can easily be multiplied.
This is because almost all economic regulation involves the creation of invidious distinctions. If you look at almost any scheme of economic regulation you will find that it involves treating similar people differently. This is how it achieves its “results.” This is also why socialists are so uncomfortable with the traditional rule-of-law stricture that all laws be general, that they apply to all people equally. Without the ability to create wealth transfers by legally favoring one group over another there would be no “benefits” for the socialists to distribute.
But, more fundamentally, this illustrates the fact that many of the rights enumerated in the Constitution are merely particular instances of the general right to liberty. While these rights emerged piecemeal in the modern period in such specific guarantees as freedom of the press or due process of law, they are not the basis of our liberty, but merely particularized examples of our larger right to freedom. As Blackstone explained:
The liberties of Englishmen are not mere infringements of the King’s prerogative, extorted from our princes by taking advantage of their weaknesses, but a restoration of that ancient constitution, of which our ancestors had been defrauded by the finesse of the Norman lawyers, rather than deprived by the force of Norman arms.
And this also explains why we should be intolerant of any restriction upon our liberties, no matter how slight. For the relation of rights is such that an acquiescence in the restriction of one may be used as an argument to violate another: “What’s wrong with registering guns; we register automobiles, don’t we?”
There is a natural tendency for people in a democracy such as our own to be tolerant of small abuses of our liberties, but it puts us on the slippery slope of logic when we must then argue that some new restriction is bad while some other was acceptable.
Liberty is an exciting idea. It illuminates the mind like sunlight. It refreshes like the breeze. It is whole and consistent and just. It is so powerful and persuasive that even its enemies claim to be in favor of it. And if we respect its wholeness and consistency and logic, it can be the most powerful idea in the world.
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Cooperation
The “cooperation” of socialism refers to the sharing of whatever is available to consume, regardless of how it came to be produced or saved, or who might claim ownership. Man, as consumer, is to help himself to anything he needs—but at the other fellow’s expense. The double trouble with this concept of “cooperation” is its inherent immorality and the fact that it doesn’t work. The theory doesn’t work out in practice because most human beings won’t work—or save—if they’re systematically robbed by loafers, or taught to be loafers themselves. And, whereas voluntary charity may be considered one of the highest forms of moral human action, it seems clear that reversing the process to let the receiver of alms grasp what he wants from whom he pleases is quite as immoral as any other form of theft.
Because consuming may follow but cannot precede production, it is important that economic policy give consideration to producers and encourage them. Private property—the right to the fruits of one’s own skill and labor, earned by serving rather than exploiting others—affords such encouragement. The owner of property is free to trade with others, if they are willing. He may not force anyone to buy his goods or services, but must vie for the buyer’s favor—cater to the consumer—in open competition with all other producers within his market area.
Stiff competition? Yes, indeed. But also cooperation of the highest order, for it involves absolute respect for the lives, the property, the freedom—the gamut of human rights—of every peaceful person in the world.
PAUL L. POIROT
