This article is from an address at the annual meeting of the Chamber of Commerce of the United States in Washington, D. C., May 2, 1951. Admiral Moreell then was Chairman of the Board and President of Jones & Laughlin Steel Corporation. The U. S. crisis in 1951 was the Korean War; but the crises have continued, as has the urgency of the search for freedom.
The theme of this meeting is "Freedom." And I have been asked to study the problem of "preserving our freedom."
My dictionary defines "freedom" as "liberation from restraint or from the power and control of another." In the course of my studies there arose in my mind certain doubts, which merged into fears. I began to wonder whether we Americans have lost our zest for freedom: whether we really believe in liberation from restraints as a desirable way of life. I found evidence that many of us believe that we cannot trust freedom —because we are afraid it will not work! So we vote against freedom and for governmental restraints at almost every opportunity!
Now, before you jump to the conclusion that I favor unbridled license, I want to say that I, too, favor certain restrictions on freedom. For example, I want a restraint against the freedom of any person to do bodily harm to any other person, or to cheat him, or to defame him, or to use force against him in any manner. I want adequate laws against fraud, coercion and monopoly. But I believe that type of law is designed to protect the individual’s freedom of choice and action. It is true that it is a restraint. But it is one that does not injure any person who desires to live in peace and deal fairly with his fellow men. That type of law is aimed solely at the person who wants to restrict or destroy the freedom of others by imposing his will and his ideas upon them.
I doubt that any right-thinking American opposes what we, in general, refer to as "the police and defense powers of government." These are designed to protect all of us equally against internal or external aggression. Those basic powers were provided for in our Federal and State Constitutions just about as they had developed under the common law of England. But over the years a different concept of the functions of government has grown up among us.
The founding fathers established a form of limited government with divided governmental powers designed to protect the smallest possible minority — one person —against the demands of the largest possible majority —all other persons combined. But, today, there is evidence that we are turning to the dictatorial thesis that "might makes right"; that there is no inviolable right for any person if the organized and formalized majority decrees otherwise; that the mere legalizing of an action makes it morally proper.
Thus we appear to be drifting from freedom and responsibility to restrictions and irresponsibility. We now demand that government "protect" us against the results of our own freedom of choice. We appear to have accepted the theory of group morality; of determining right and wrong by voting on it — and then accepting the majority decision. It makes one wonder what the future holds for a nation wherein the people lose their faith in individual freedom and in personal responsibility for one’s own actions.
The Case of Businessmen
Now, before we consider specific examples of this rejection of freedom, I would like to make two points. First, I am not talking about "someone else" who is not with us today. I am talking specifically about myself — and about you, my fellow businessmen. For I see little evidence that we businessmen of America have greater faith in individual freedom than have farmers, industrial workers, doctors, teachers, ministers or any other occupational group. You may have heard it said that if only others — the traditional "man in the street" — knew as much about this subject as "we businessmen," there would be no danger to our freedom. I believe that is a self-righteous position, built on a false premise. I believe that many of us have made the same errors as those in other groups. If you wish to see with what ease we "free enterprisers" can justify our tastes for socialism, you have only to examine the "resolutions" of almost any organization of businessmen as they emerge from the Annual Convention!
Let us admit, then, that it is we who need to learn and not a nebulous "someone else."
My second point is that I am quite sure that I do not know the answers to the weighty problems which we face. I do not have a pipeline to God, or eternal truth, any more than you have. I speak to you as a student, not as a teacher. And, I come here, in all humility, to present for your consideration the results of my study of freedom.
Probably the most clear-cut example of our lack of faith in individual freedom is found in the compulsory social security pension system administered by the Federal Government which has spread so rapidly over our country. I would guess that few persons here would abolish this system, even if they could. The reason, I believe, is this: few persons believe that individual freedom and personal responsibility for one’s own welfare offer the greatest possible security in an admittedly insecure world. It appears that we Americans no longer believe that a free person in a free country can or will voluntarily provide for the welfare of himself, his family and his handicapped or temporarily unfortunate neighbor. In contradiction of our own Declaration of Independence, we appear to he rapidly becoming a nation of dependents. That philosophy of despair is summed up in the question that is heard whenever the subject of security by dependence on government is discussed: "Would you let them starve?"
Let us consider the implied meaning of that question. To me it says, if people are free and responsible for their own welfare, they will starve. It says that we have rejected Christ’s teachings on love and charity. It says that we — through our churches and our other voluntary organizations — cannot or will not care for the unfortunate among us. It says that a free economy results in starvation instead of progress and prosperity. It says that freedom is a failure and that, for our salvation, we must turn to the authoritarian concept of government‑guaranteed security. I believe this is an outright rejection of the original American belief in freedom of choice and personal responsibility for one’s own decisions and actions.
I believe few would find fault with the announced goal of social security, i.e., freedom from want in old age. But even if we are willing to incur the dangers to all our freedoms which arise when we maximize the importance of "freedom from want," we still must answer the question: "Will it work as it is now administered by Government?"
The receipts from social security taxes are used to defray current costs of government. But the goods and services which will be given in the future to the beneficiaries of social security will have to be provided from the then current production. They will be paid for by current taxes or by inflation. In either case the net effect will be to take from producers to give to non-producers. When this effect becomes substantial, the incentive to produce is impaired or destroyed. And we must remember that the very safety of the nation depends upon our ability and our willingness to produce! Social Security taxes are, in effect, a withdrawal against savings. If they are to be productive they should be used to increase our tools of production, not for current expenses of government!
Slavery and Privation
As proof of the error of our present approach, let us look at the nations of the world where governments exercise the greatest degree of control over their people. There you will find the lowest standards of living. Let us examine Russia and her satellites. The siren song of government-guaranteed security has brought mass privation to the citizens of those nations.
Look at Britain and her promise of security from the cradle to the grave!
It is important to recall that the British experiment in government security has not only led to successive crises in this post-war period; it has also required that Britain be bailed out periodically primarily by American aid, with secondary assists from Canada and other Commonwealth nations. It is proper, then, to raise this question: Who will be there to do for us what we have done for others if we follow this road into bondage?
Our approach to the concept of government-guaranteed security here in the United States is more along the lines of British national socialism than the Russian brand of socialism. Here, we retain a two-party system and the right to vote, but most of the leaders of both parties are pledged to the same general program in such matters as governmental housing, social security, subsidies to farmers, loans to poor business risks, rent controls, price controls, tariffs and other restrictions against the freedom of honest persons to trade with other honest persons on terms mutually acceptable. There may be a difference in the degree of socialization or in the mechanics of administration advocated by our two major political parties. But it is difficult to distinguish any major difference in basic principle. Thus, I believe, we have clear proof at home and abroad that democracy of itself does not automatically guarantee freedom; in fact, we have proof that regimentation lurks insidiously behind democratic promises of governmental security.
I will not undertake to list all of the many freedoms we have surrendered in the United States —the restraints against freedom of choice that we have voted against ourselves. But such a list would include controls over farmers, businessmen, industrial workers, bankers, foreign traders and other groups. It would include price controls, wage controls, rent controls, raw materials controls, controlled rates of interest, inflated money, artificially cheap credit, and controlled production. Each of these measures has the effect of preventing honest persons from doing what they want to do or of forcing honest persons to do something that they do not want to do. As such, each is a clear-cut denial of freedom. Else why has freedom been forsaken and forbidden in these vast areas of our daily activities?
To me, the sad part of these controls is that, even if we disregard the moral issues involved, I believe they will not accomplish what they are designed to do. I can find no evidence in history that they will work and I believe the reason is clear. It is not, as is claimed, an attempt to control prices or materials; it is always an attempt to control persons.
For example, when the "new deal" was tried in Old Rome, it was announced as a program to control prices. It was persons, however, who were fed to the lions when they were caught charging more than the legal price. But, as they always will, the people continued to trade on terms mutually acceptable to buyer and seller, even when facing the death penalty.
During the French Revolution, the government tried to stop the rise of prices by condemning the so-called black market merchants to the guillotine. But, in spite of this, prices continued to rise in proportion to the amount of inflationary paper money that was printed and distributed by government.
In Russia, the government tried to stop inflation by the direct processes of starvation, the concentration camp, and the firing squad. It did not work, even in this most completely controlled economy the world has ever seen!
The Vital Question
This brings us to the vital question: Will the price controls, wage controls, profit controls and other measures against freedom now being instituted by government stop inflation and high prices in our country? I believe the answer is "No." I believe that fines against so-called black marketeers will not stop inflation nor will prison terms stop it.
I concede that our government officials do wish to stop inflation. I suggest, therefore, that they consult the dictionary to find a definition of what they are trying to stop. They will find that inflation is defined as "a disproportionate increase in the quantity of money or credit, or both, relative to the amount of exchange business." That is, inflation is caused by a disproportionate increase of money and credit relative to available goods and services. The question then is: Who or what is responsible for increasing the money and credit?
It would appear to be our own government that is responsible for the inflation and high prices that are upon us today. Yet, this same government is leading the posse in an attempt to catch the culprits! While we are being warned to watch out for "speculators and black marketeers" the real culprit (our own government) continues its inflationary fiscal policies of creating more and more money and credit in relation to the production of goods and services.
We are now fighting one costly war while we are preparing for a greater one. Such a program requires a tremendous amount of goods and services. If these must be produced now, instead of ten years from now, then the efforts of individual citizens must be directed now to that purpose. Whatever the cost in effort of rearmament it comes at the time the goods are being provided. It is not possible to have the products now and to postpone the effort to suit our convenience. And if the government does not pay for the effort required to produce the goods of war with money gathered by taxes now, then, judging by past experience, the government will pay for those goods with printing-press money, or its equivalent, that will destroy by inflation the value of our earnings and savings as though they had been taken from us by taxes. It appears that the sole effect of so-called "deferred payments," as previously practiced, is to delude us into believing that it is possible to get something for nothing — instead of having to work and pay for it.
It is proper, I believe, to raise this question at this point: How can we discharge that obligation to "secure the blessings of liberty" to our posterity which the Constitution enjoins upon us, if we pursue the will-o’-the-wisp of inflation and thus mortgage the liberty of that posterity?
Four Minus One Is Three
We have been told that one-fourth of our production and services may eventually be absorbed by the armament program. In the face of that, some of our more optimistic government officials tell us that the Defense Program will cause little or no decline in our standard of living. I cannot follow this line of reasoning. For when one is subtracted from four, the result is three. And all the controls in the world cannot change that answer or the natural consequences that must inevitably result when more and more money bids for fewer and fewer goods and services.
I believe that if our government adopted the forthright approach of collecting in taxes the full amount of its expenditures, we would thus eliminate any excuse for building up a huge bureaucracy in the futile effort to prevent prices and wages from finding their natural levels. For on a pay-as-you-go basis, as goods and services are funneled into rearmament, an equal amount of purchasing power would be withdrawn by taxation. Thus there would be no serious inflation and little or no further general price rise in the overall economy.
But if we continue in the direction we have been going in recent years, with a steadily increasing stream of money accompanied by compulsions against individual freedom, we have reason for concern for the future of our nation. For such a course will bring two evils that must eventually destroy us — as surely as if we were invaded and conquered.
A Nation of Lawbreakers
In the first place, I believe economic necessity will eventually induce us to become a nation of lawbreakers in order to survive under a permanent system of wage, price and other controls. Normally honest persons will find it necessary for economic survival to return again to the under-the-counter deals and black market operations that existed under previous governmental attempts to abolish the free market and the right of persons to trade with each other on mutually acceptable terms. Good laws will then suffer along with bad laws. Because the only way to create respect for all law is to make sure that all laws are themselves respectable. Laws that cause normally honest people to become technical criminals are not respectable laws. But these laws against individual freedom of choice and action, laws that are designed to abolish the natural operations of a free and competitive market, will offer criminals and gangsters an unexcelled opportunity to flourish. This could easily mean the end of our American experiment in freedom — the end of our original concept of government as servant, not master of the people.
Another great danger is to be found in what happens to the officials who are called upon to administer these great governmental powers. For when a person gains power over other persons — the political power to force other persons to do his bidding when they do not believe it right to do so — it seems inevitable that a moral weakness develops in the person who exercises that power. It may take time for this weakness to become visible. In fact, its full extent is frequently left to the historians to record, but we eventually learn of it. It was Lord Acton, the British historian, who said: "All power tends to corrupt; absolute power corrupts absolutely."
Please do not misunderstand me. These persons who are corrupted by the process of ruling over their fellow men are not innately evil. They begin as honest men. Their motives for wanting to direct the actions of others may be purely patriotic and altruistic. Indeed, they may wish only "to do good for the people." But, apparently, the only way they can think of to do this "good" is to impose more restrictive laws.
Now, obviously, there is no point in passing a law which requires people to do something they would do anyhow; or which prevents them from doing what they are not going to do anyhow. Therefore, the possessor of the political power could very well decide to leave every person free to do as he pleases so long as he does not infringe upon the same right of every other person to do as he pleases. However, that concept appears to be utterly without reason to a person who wants to exercise political power over his fellow man, for he asks himself : "How can I ‘do good’ for the people if I just leave them alone?" Besides, he does not want to pass into history as a "do nothing" leader who ends up as a footnote somewhere. So he begins to pass laws-that will force all other persons to conform to his ideas of what is good for them.
That is the danger point! The more restrictions and compulsions he imposes on other persons, the greater the strain on his own morality. As his appetite for using force against people increases, he tends increasingly to surround himself with advisers who also seem to derive a peculiar pleasure from forcing others to obey their decrees. He appoints friends and supporters to easy jobs of questionable necessity. If there are not enough jobs to go around, he creates new ones. In some instances, jobs are sold to the highest bidder. The hard-earned money of those over whom he rules is loaned for questionable private endeavors or spent on grandiose public projects at home and abroad. If there is opposition, an emergency is declared or created to justify these actions.
If the benevolent ruler stays in power long enough, he eventually concludes that power and wisdom are the same thing. And as he possesses power, he must also possess wisdom. He becomes converted to the seductive thesis that election to public office endows the official with both power and wisdom. At this point, he begins to lose his ability to distinguish between what is morally right and what is politically expedient.
I am aware that whenever controls and restrictions are proposed, the argument is made that they are temporary, "for the period of the emergency only." But I have seen too many "temporary" measures harden into permanent controls by government to permit me to view them with complacency. We have been told by government officials that the present emergency may last for a generation or even longer! Will these controls and restrictions on freedom last that long? We should, I believe, base our appraisal of any measure on the moral principle involved, and reject all justifications which are based on political or other expediency. Such justifications are inevitable when people grasp for power. Moral principle is timeless. An act that is wrong ten years from now is just as wrong today!
We are now engaged in a contest between our philosophy of living and that of a totalitarian state. We have said again and again that it is our free way of life that gives us both spiritual and material superiority over Russia and communism. Yet, when the crucial test between these two philosophies is imminent, we apparently feel compelled to adopt their system in order to prove that ours is best. We feel compelled to reject freedom and embrace the communist idea of a planned economy and a controlled people. Thus we surrender in the most vital battle, the battle of ideas, even before a shot is fired. What will it profit us to defeat aggressive foreign nations who believe in a regimented people and government ownership of the means of production, if, in the process, we accept the validity of their doctrines for use here in the United States? That would indeed be a Pyrrhic victory!
A Return to Freedom
Where then does this search for freedom lead us? What should we do? First, I want to say that I am quite sure I am not capable of determining for 150 million people [in 1951] their everyday economic and personal decisions concerning such things as wages, prices, production and all the rest. I believe that no other person, or group of persons, is capable of doing so. For that reason, I propose that these decisions and the problems connected therewith be returned to the people themselves. This, I believe, could be done in three steps:
First, let us stop this headlong rush toward more collectivism. Let there be no more special privileges for employers, employees, farmers, businessmen or any other group or persons. Let there be no enlargement of the area of socialism. That is the easiest step of all. We need merely refrain from passing additional coercive laws! And let us not ignore the fact that whenever special privilege is granted to a person or group the freedom of others is correspondingly restricted — that is coercion!
Second, let us undertake at once an orderly demobilization of many of the existing powers of centralized government. This can be done by the progressive repeal of the various socialistic laws that we already have. Let us remove the special privileges that we have granted to persons and groups. This will be a very difficult step because every pressure group in the nation will fight bitterly to retain the laws that grant them monopoly privileges and protection from competition. But if freedom is to live, all special privileges must go! Would it not be a wonderful thing if each pressure group would voluntarily surrender its own special privilege as a contribution to the great cause of freedom for all?
Third, of the powers which remain in government, let us decentralize as many as possible by returning them to state and local governments. For on the local level the people will be better able to safeguard their freedom by critical scrutiny of the acts of their government officials.
But I am sure that none of these steps will be taken until we believe that freedom as a way of life will work! Thus, the very first step of all is for each of us to examine his own conscience, to find out why he has lost faith in freedom in those vast areas that have been delegated to government; and how he can regain that faith. It is my firm belief that such self-examination will result in a rebirth of confidence in freedom and in individual moral responsibility in a nation now beset by fear and confusion. For I am sure that when a person understands freedom, he must believe in it!
In this time of grave national crisis I believe we can obtain guidance from the wisdom of our founding fathers. I, therefore, commend for your consideration these statements by George Mason and Thomas Jefferson in the Virginia Bill of Rights, which was itself the foundation of our Declaration of Independence:
"That all men are by nature equally free and independent, and have certain inherent rights, of which, when they enter into a state of society, they cannot, by any compact, deprive or divest their posterity; namely, the enjoyment of life and liberty, with the means of acquiring and possessing property, and pursuing and obtaining happiness and safety.
"That no free government, or the blessing of liberty, can be preserved to any people but by a firm adherence to justice, moderation, temperance, frugality, and virtue, and by frequent recurrence to fundamental principles."
These, I believe, are the truths by which we must live if we are to be free!