The Case for Economic Freedom

My economic philosophy is here offered with full knowledge that it is not generally accepted as the right one. On the contrary, my brand of economics has now be­come Brand X, the one that is never selected as the whitest by the housewife, the one that is said to be slow acting, the one that contains no miracle ingredient. It loses nine times out of ten in the popularity polls run on Election Day, and, in most elections, it doesn’t even present a candidate.

I shall identify my brand of economics as that of economic freedom, and I shall define eco­nomic freedom as that set of eco­nomic arrangements that would exist in a society in which the government’s only function would be to prevent one man from using force or fraud against another—including within this, of course, the task of national defense. So that there can be no misunder­standing here, let me say that this is pure, uncompromising laissez faire economics. It is not the mixed economy; it is the unmixed economy.

I readily admit that I do not expect to see such an economy in my lifetime or in anyone’s life­time in the infinity of years ahead of us. I present it rather as the ideal we should strive for and should be disappointed in never fully attaining. Human society is not destroyed by men who have ideals but find that they cannot, in their imperfection, always at­tain them; rather it is destroyed by men who have no ideals, by men who have no benchmarks against which to measure their own performances.

The tragedy of the classical socialist is that he has false ideals; the threat to society of the modern liberal is that so often he has no ideals, no guides to conduct, other than political expedi­ency and a spurious realism. The man who insists that he will walk the middle of the road has his path determined for him by those who define the ditches, and never then takes a step of his own real choosing.

To put it another way: I am not frustrated by the fact that politi­cians often pass laws that do violence to the free market. I am frustrated by the fact that so many people do not know that violence has been done, that so few feel any sense of uneasiness at the departure from the ideal.

I am convinced that we continue to move away from the free mar­ket because few of the leaders of opinion even know or understand the ideal of the free market, be­cause the ideal itself is no longer accepted as a basic guide to ac­tion. We drift toward socialism, not because we consciously wish to go there, but because we no longer know or care where our own home is.

How has this come about? Who has done us in? The fact is, of course, that we have done our­selves in. We have not been be­trayed by subversives. We have been betrayed by our own indo­lence, by our preoccupation with profiting individually from the government interventions we de­plore, by our failure to prepare and present the case for economic freedom as powerfully and per­suasively as possible. The cure must start within each of us in­dividually and not with programs to reform everyone else.

Where do we find the most powerful and persuasive case for economic freedom? I don’t know; probably it hasn’t been prepared yet, and each concerned person should work at it himself. Cer­tainly it is unlikely that the case I present is the definitive one. However, it is the one that is per­suasive with me, that leads me to my own deep commitment to the free market. I present it as grist for your own mill and not as the divinely inspired last word on the subject.

The Moral Case for Economic Freedom

You will note as I develop my case that I attach relatively little importance to the demonstrated efficiency of the free market sys­tem in promoting economic growth, in raising levels of living. In fact, my central thesis is that the most important part of the case for economic freedom is not its vaunted efficiency as a system for organizing resources, not its dra­matic success in promoting eco­nomic growth, but rather its con­sistency with certain fundamental moral principles of life itself.

I say, “the most important part of the case” for two reasons. First, the significance I attach to those moral principles would lead me to prefer the free enterprise system even if it were demonstra­bly less efficient than alternative systems, even if it were to pro­duce a slower rate of economic growth than systems of central direction and control. Second, the great mass of the people of any country is never really going to understand the purely economic workings of any economic system, be it free enterprise or socialism. Hence, most people are going to judge an economic system by its consistency with their moral prin­ciples rather than by its purely scientific operating characteris­tics. If economic freedom survives in the years ahead, it will be only because a majority of the people accept its basic morality. The suc­cess of the system in bringing ever higher levels of living will be no more persuasive in the future than it has been in the past.

Let me illustrate: ‘The doctrine of man held in general in nine­teenth century America argued that each man was ultimately re­sponsible for what happened to him, for his own salvation, both in the here and now and in the hereafter. Thus, whether a man prospered or failed in economic life was each man’s individual re­sponsibility: each man had a right to the rewards for success and, in le same sense, deserved the punishment that came with failure. It followed as well that it is explicitly immoral to use the power of government to take from one man to give to another, to legalize Robin Hood. This doctrine of man found its economic counterpart in le system of free enterprise and, hence, the system of free enter­prise was accepted and respected by many who had no real under­standing of its subtleties as a technique for organizing re­sources.

As this doctrine of man was replaced by one (largely reflecting Freudian psychology and sociology) which made of man a helpless victim of his subconscious and his environment—responsible for neither his successes nor his failures—the free enterprise system came to be rejected by many who still had no real understanding of its actual operating characteristics.

Basic Values Considered

Inasmuch as my own value sys­tems and my own assumptions about human beings are so im­portant to the case, I want to sketch them for you.

To begin with, the central value in my choice system is individual freedom. By freedom I mean exactly and only freedom from coer­cion by others. I do not mean the four freedoms of President Roose­velt, which are not freedoms at all, but only rhetorical devices to per­suade people to give up some of their true freedom. In the Rogge system, each man must be free to do what is his duty as he de­fines it, so long as he does not use force against another.

Next, I believe each man to be ultimately responsible for what happens to him. True, he is influ­enced by his heredity, his environ­ment, his subconscious, and by pure chance. But I insist that pre­cisely what makes man man is his ability to rise above these influ­ences, to change and determine his own destiny. If this be true, then, it follows that each of us is ter­ribly and inevitably and forever responsible for everything he does. The answer to the question, “Who’s to blame?” is always, “Mea culpa, I am.”

I believe as well that man is im­perfect, now and forever. He is imperfect in his knowledge of the ultimate purpose of his life, im­perfect in his choice of means to serve those purposes he does se­lect, imperfect in the integrity with which he deals with himself and those around him, imperfect in his capacity to love his fellow

If man is imperfect, then all of his constructs must be imper­fect, and the choice is always among degrees and kinds of im­perfection. The New Jerusalem is never going to be realized here on earth, and the man who insists that it is, is always lost unto free­dom.

Moreover, man’s imperfections are intensified as he acquires the power to coerce others; “power tends to corrupt and absolute power corrupts absolutely.”

This completes the listing of my assumptions, and it should be clear that the list does not constitute a total philosophy of life. Most im­portantly, it does not define what I believe the free man’s duty to be, or more specifically, what I be­lieve my own duty to be and the source of the charge to me. How­ever important these questions, I do not consider them relevant to the choice of an economic system.

Here, then, are two sections of the case for economic freedom as I would construct it. The first sec­tion presents economic freedom as an ultimate end in itself and the second presents it as a means to the preservation of the noneco­nomic elements in total freedom.

Individual Freedom of Choice

The first section of the case is made in the stating of it, if one accepts the fundamental premise:

Major premise: Each man should be free to take whatever action he wishes, so long as he does not use force or fraud against another;

Minor premise: All economic behavior is “action” as identified above;

Conclusion: Each man should be free to take whatever action he wishes in his economic behavior, so long as he does not use force or fraud against another.

In other words, economic free­dom is a part of total freedom; if freedom is an end in itself, as our society has traditionally asserted it to be, then economic freedom is an end in itself, to be valued for itself alone and not just for its in­strumental value in serving other goals.

If this thesis be accepted, then there must always exist a tremen­dous presumption against each and every proposal for governmen­tal limitation of economic free­dom. What is wrong with a state system of compulsory social se­curity? It denies to the individual his freedom, his right to choose what he will do with his own money resources. What is wrong with a governmentally enforced minimum wage? It denies to the employer and the employee their individual freedom, their individ­ual rights to enter into any volun­tary relationship not involving force or fraud. What is wrong with government-to-government foreign economic aid? It denies to the individual freedom to choose, as his conscience dictates, whether to send aid or not. What is wrong with a tariff or an import quota? It denies to the individual con­sumer his right to buy what he wishes, wherever he wishes.

It is breathtaking to think what this simple approach would do to the apparatus of state control at all levels of government. Strike from the books all legislation that denies economic freedom to any individual and three-fourths of all the activities now undertaken by government would be eliminated.

I am no dreamer of empty dreams and I do not expect that the day will ever come when this principle of economic freedom as a part of total freedom will be fully accepted and applied. Yet I am convinced that unless this principle is given some standing, unless at least those who examine proposals for each new regulation of the individual by government look on this loss of freedom as a “cost” of the proposed legislation, the chances of free enterprise surviving are small indeed. The would-be controller can always find reasons why it might seem “expedient” to control the individ­ual; and unless slowed down by some general feeling that it is immoral to do so, he will usually have his way.

Noneconomic Freedoms

So much for the first section of the case. Now for the second. The major premise here is the same, that is, the premise of the right­ness of freedom. Here, though, the concern is with the noneconomic elements in total freedom—with freedom of speech, of reli­gion, of the press, of personal be­havior. My thesis is that these freedoms are not likely to be long preserved in a society that has de­nied economic freedom to its indi­vidual numbers.

Before developing this thesis, I wish to comment briefly on the importance of these noneconomic freedoms. I do so because we who are known as conservatives have often given too little attention to these freedoms or have even played a significant role in reduc­ing them. The modern liberal is usually inconsistent in that he de­fends man’s noneconomic free­doms, but is often quite indifferent to his economic freedom. The modern conservative is often in­consistent in that he defends man’s economic freedom but is in­different to his noneconomic free­doms. Why are there so few con­servatives in the struggles over censorship, over denials of equality before the law for people of all races, over blue laws, and so on?

Why do we let the modern lib­erals dominate an organization such as the American Civil Lib­erties Union? The general pur­poses of this organization are completely consistent with, even necessary to, the truly free soci­ety. Its modern liberal leadership has led it to make mistakes but, in spite of those mistakes, I con­tinue as a member of the organi­zation. After all, it was the only organization to protest when Moise Tshombe was denied a visa to enter this country. It was the first organization to study the handling of General Walker in the Mississippi case, to see if his rights before the law were being denied. Undoubtedly there are leftists in the organization, but probably few more than in other groups with which I am involved, such as the American Economic Association, the Episcopal Church and, yes, the Republican Party.

Particularly in times of stress such as these, we must fight against the general pressure to curb the rights of individual hu­man beings, even those whose ideas and actions we detest. Now is the time to remember the ex­ample of men such as David Ri­cardo, the London banker and econ­omist of the Classical free market school in the first part of the last century. Born a Jew, turned Quaker, he devoted some part of his energy and his fortune to eliminating the legal discrimina­tions against Catholics in the Eng­land of his day.

It is precisely because I believe these noneconomic freedoms to be so important that I believe eco­nomic freedom to be so important. The argument here could be drawn from the wisdom of the Bible and the statement that “where a man’s treasure is, there will his heart be also.” Give me control over a man’s economic actions, and hence over his means of survival, and except for a few occasional heroes, I’ll promise to deliver to you men who think and write and behave as you want them to.

The case is not difficult to make for the fully-controlled economy, the true socialistic state. Milton Friedman, Professor of Economics, University of Chicago, in his new book, Capitalism and Freedom, takes the case of a socialist soci­ety that has a sincere desire to preserve freedom of the press. The first problem would be that there would be no “private” capital, no private fortunes that could be used to subsidize an antisocialist, pro-capitalist press. Hence, the social­ist state would have to do it. How­ever, the men and women under­taking the task would have to be released from the socialist labor pool and would have to be assured that they would never be discrimi­nated against in employment op­portunities in the socialist appa­ratus if they were to wish to change occupations later. Then these procapitalist members of the socialist society would have to go to other functionaries of the state to secure the buildings, the presses, the paper, the skilled and unskilled workmen, and all the other components of a working newspaper. Then they would face the problem of finding distribu­tion outlets, either creating their own (a frightening task) or using the same ones used by the official socialist propaganda organs. Fi­nally, where would they find read­ers? How many men and women would risk showing up at their state-controlled jobs carrying cop­ies of the Daily Capitalist?

There are so many unlikely steps in this process that the as­sumption that true freedom of the press could be maintained in a so­cialist society is so unrealistic as to be ludicrous.

Partly Socialized though Largely Private Enterprise

Of course, we are not facing as yet a fully socialized America, but only one in which there is signifi­cant government intervention in a still predominantly private enter­prise economy. Do these interven­tions pose any threat to the noneconomic freedoms? I believe they do.

First of all, the total of coercive devices now available to any ad­ministration of either party at the national level is so great that true freedom to work actively against the current administration (what­ever it might be) is seriously reduced. For example, farmers have become captives of the gov­ernment in such a way that they are forced into political align­ments that seriously reduce their ability to protest that of which they do not approve. The new trade bill, though right in the principle of free trade, gives to the President enormous power to reward his friends and punish his critics.

Secondly, the form of these in­terventions is such as to threaten seriously one of the real corner­stones of all freedoms—equality before the law. For example, farmers and trade union members are now encouraged and assisted in doing precisely that for which businessmen are sent to jail (i.e., acting collusively to manipulate prices). The blindfolded Goddess of Justice has been encouraged to peek and she now says, with the jurists of the ancient regime, “First tell me who you are and then I’ll tell you what your rights are.” A society in which such gross inequalities before the law are encouraged in economic life is not likely to be one which pre­serves the principle of equality be­fore the law generally.

We could go on to many specific illustrations. For example, the government uses its legislated monopoly to carry the mails as a means for imposing a censorship on what people send to each other in a completely voluntary relation­ship. A man and a woman who ex­change obscene letters may not be making productive use of their time, but their correspondence is certainly no business of the gov­ernment. Or to take an example from another country, Winston Churchill, as a critic of the Cham­berlain government, was not per­mitted one minute of radio time on the government-owned and monop­olized broadcasting system in the period from 1936 to the outbreak of the war he was predicting in 1939.

Each Step Leads to Another

Every act of intervention in the economic life of its citizens gives to a government additional power to shape and control the attitudes, the writings, the behavior of those citizens. Every such act is another break in the dike protecting the integrity of the individual as a free man or woman.

The free market protects the in­tegrity of the individual by providing him with a host of decen­tralized alternatives rather than with one centralized opportunity. Even the known communist can readily find employment in capi­talist America. The free market is politics-blind, religion-blind, and, yes, race-blind. Do you ask about the politics or the religion of the farmer who grew the po­tatoes you buy at the store? Do you ask about the color of the hands that helped produce the steel you use in your office build­ing?

South Africa provides an interesting example of this. The South Africans, of course, provide a shocking picture of racial bigotry, shocking even to a country that has its own tragic race problems. South African law clearly separates the whites from the nonwhites. Orientals have traditionally been classed as nonwhites, but South African trade with Japan has become so important in the postwar period that the government of South Africa has declared the Japanese visitors to South Africa to be officially and legally “white.” The free market is one of the really great forces making for tolerance and understanding among human beings. The controlled market gives man rein to express all those blind prejudices and intolerant beliefs to which he is forever subject.

Impersonality of the Market

To look at this another way: The free market is often said to be impersonal, and indeed it is. Rather than a vice, this is one of its great virtues. Because the re­lationships are substantially im­personal, they are not usually marked by bitter personal conflict. It is precisely because the labor union attempts to take the employ­ment relationship out of the mar­ket place that bitter personal con­flict so often marks union-manage­ment relationships. The intensely personal relationship is one that is civilized only by love, as between man and wife, and within the family. But man’s capacity for love is severely limited by his im­perfect nature. Far better, then, to economize on love, to reserve our dependence on it to those re­lationships where even our imper­fect natures are capable of sus­tained action based on love. Far better, then, to build our economic system on largely impersonal re­lationships and on man’s self-in­terest—a motive power with which he is generously supplied.

One need only study the history of such utopian experiments as our Indiana’s New Harmony to realize that a social structure which ignores man’s essential na­ture results in the dissension, con­flict, disintegration, and dissolu­tion of Robert Owen’s New Harmony or the absolutism of Father Rapp’s Harmony.

The “vulgar calculus of the mar­ket place,” as its critics have de­scribed it, is still the most humane way man has yet found for solving those questions of economic allo­cation and division which are ubiq­uitous in human society.

By what must seem fortunate coincidence, it is also the system most likely to produce the affluent society, to move mankind above an existence in which life is mean, nasty, brutish, and short. But, of course, this is not just coincidence. Under economic freedom, only man’s destructive instincts are curbed by law. All of his creative instincts are released and freed to work those wonders of which free men are capable. In the controlled society only the creativity of the few at the top can be utilized, and much of this creativity must be expended in maintaining control and in fending off rivals. In the free society, the creativity of ev­ery man can be expressed—and surely by now we know that we cannot predict who will prove to be the most creative.

You may be puzzled, then, that I do not rest my case for economic freedom on its productive achieve­ments; on its buildings, its houses, its automobiles, its bathtubs, its wonder drugs, its television sets, its sirloin steaks and green sal­ads with Roquefort dressings. I neither feel within myself nor do I hear in the testimony of others any evidence that man’s search for purpose, his longing for ful­fillment, is in any significant way relieved by these accomplishments. I do not scorn these accomplish­ments nor do I worship them. Nor do I find in the lives of those who do worship them any evidence that they find ultimate peace and justification in their idols.

I rest my case rather on the consistency of the free market with man’s essential nature, on the basic morality of its system of rewards and punishments, on the protection it gives to the integrity of the individual.

The free market cannot produce the perfect world, but it can cre­ate an environment in which each imperfect man may conduct his lifelong search for purpose in his own way, in which each day he may order his life according to his own imperfect vision of his destiny, suffering both the agonies of his errors and the sweet pleas­ure of his successes. This freedom is what it means to be a man; this is the God-head, if you wish.

I give you, then, the free mar­ket, the economic expression of man’s freedom itself and the guar­antor of all his other freedoms.