All Commentary
Tuesday, November 1, 1960

“We Never Had It So Good”

The claim that a growing statism (state control of the means of pro­duction plus welfarism) must lead eventually to disaster frequently evokes the rejoinder, “We never had it so good.” So far as statisti­cal measurements of current ma­terial well-being are concerned, much of the surface evidence sup­ports this cliché.

Prosperity, according to the Na­tional Bureau of Economic Re­search, is reported to have in­creased as follows:1

“Today’s national income of $2,300 per capita is double what it was (in constant dollars) forty years ago, and it is higher in the face of a 70% increase in population and a 20% reduction in the hours of paid work done per capita.

“Output per man hour has grown over the same period at the average annual rate of 2.6%.

“Today’s higher income is more evenly distributed than the lower income of earlier years.

“The economic difficulties of most everyone have been less­ened through the establishment and broadening of various social welfare programs.

“The four recessions we have encountered since World War II are among the milder in our his­tory, which means an unusually long period free of serious de­pressions.”

Now consider what has hap­pened politically during this pe­riod. Statism, measured in terms of governmental expenditures per capita, has advanced from about $80 in the years just after World War I to more than $700 now.²

Is it any wonder that most peo­ple, observing statism and pros­perity advancing coincidentally over so long a period, conclude that the growth of statism is the cause of the increased prosperity?

Furthermore, it is doubtful if the comeback, “We never had it so good,” can be proved to be wrong; statistically, anyway. A man leaping from an airplane at high altitude will, for a time in his fall, have the feeling of lying on a cloud. For a moment he could truthfully exclaim, “I have never had it so good!” If the man were unaware of the law of gravitation, no one could prove to him by phys­ical principles that disaster lay ahead. Yet, some of us would be­lieve, by reason of certain knowl­edge, that the man was not long for this world.

Some of us believe that the chant, “We never had it so good,” is founded on an illusion, that re­alities we cannot measure warrant this belief. It is our conviction:

1. That the practice of dishon­esty is evil and that retribution follows the doing of evil. Every evil act commits us to its retribu­tion. The time lag between the committing of an evil act and our awareness that retribution is be­ing visited upon us has nothing to do with the certainty of retribu­tion. It has to do only with our own limited perception.

2. That there is no greater dis­honesty than man effecting his own private gains at the expense of others. This is man’s ego gone mad, the coercive assertion of his own supremacy as he defies and betrays God’s other human creations.     

3. That statism but socialized dishonesty. It is feathering the nests of some with feathers coer­cively plucked from others—on the grand scale. There is no moral distinction between petty thievery and “from each according to ability, to each according to need,” as practiced by the State, which is to say, there is no moral dis­tinction between the act of a pick­pocket and the progressive in­come tax, TVA, federal aid to ed­ucation, subsidies to farmers, or whatever. There is only a legal distinction. Legalizing evil does not affect its moral content; it does no more than to absolve the moral offender from the type of penalties inflicted by policemen.

A Growing Threat

While many of us profoundly believe that we cannot maintain the present degree of statism, let alone drift further toward the omnipotent State, without our great economy flying to pieces, we find it difficult to do more than express our misgivings or alarm. Why, precisely why, does the pres­ent course presage disaster? In what manner will a growing dis­honesty tear an economy asunder? Perhaps the following explanation may be worth pondering.

At the outset, imagine an im­possible situation: a society com­posed of individuals, each com­pletely self-sufficient, no exchange of any kind between them. Moral qualities, such as honesty and the practice of the Golden Rule, would have no bearing whatever on the social situation. Each could be congenitally dishonest and un­just; but with no chance to prac­tice the evils, what difference would it make socially?

We Depend on Trade

Now, assume the development of specialization and exchange. The greater and more rapid the development, the more dependent would be each member of the so­ciety on all the others. Carried far enough, each would be com­pletely removed from self-suffi­ciency, utterly dependent on the free, uninhibited exchanges of their numerous specializations. Total failure in this respect would cause everyone to perish.

Whenever we become economi­cally dependent on each other—a necessary consequence of the highly specialized production and exchange economy—we also be­come morally dependent on each other. No free or willing exchange economy can exist among thieves, which is to say, no such economy can long endure without honesty.

Specialization in the USA today is in an enormously advanced but highly artificial state. We are now unnecessarily dependent on each other, more dependent than we have ever been before, more than any other people have ever been. An advancing exchange economy makes possible a rising standard of living— provided the advance is natural, integrated, that is, free market. It is possible, then, to buttress the technical advances by a growing moral insight and prac­tice. But our present pattern of specialization is artificially in­duced by state interventionism, and an unnatural system of de­pendencies has been created. This would need to be sustained by a level of mass honesty we could hardly hope to achieve under the best of circumstances.

But honesty is not on the in­crease! Statism, which forces all of us within its orbit, is nothing but a political system of organ­ized plunder, managed by every conceivable type of pressure group. Plunder is dishonesty, and statism, its organizer, grows apace!

Every natural or free market advance in specialization and ex­change increases the standard-of­living potential. This kind of progress is consonant with the whole man, being a cultural ad­vance of self-responsible persons. The two advances—in insight and technology—are integrated. Atomic energy, for example, would put in its appearance when the market—man in peaceful pursuits—signaled its necessity. Had we followed the signals of the mar­ket, atomic energy would present itself as a boon, not as a bomb.

How, we must ask, does statism operate? It is simple enough: The State forcibly takes vast sums—fruits of the people’s labor—and places these sums at the disposal of those who are ready or can be readied to specialize in atomic energy, for instance. Thus, there is brought prematurely into exis­tence a vast horde of unnatural specialists, unnatural in the sense that their specializations exist at the insistence of irresponsible politicians who cannot make good on their claim to omniscience. This is not an exaggeration, for no in­dividual has any competency what­ever to control the lives of others, to arrogate unto himself the free­dom of choice that is morally im­plicit in the right to life of each human being.

Try to comprehend the enor­mity of unnatural specialization in our country today. It cannot be done! As this is written, a Wash­ington release tells of $12 to $15 billion to be spent by the National Aeronautics and Space Adminis­tration to carry a crew of three men on a moon orbit, for moon exploration vehicles, and so on. To what extent will this generate unnatural specialization? To whatever extent people would not voluntarily invest the fruits of their own labor for these pur­poses! Would this vast outlay, twelve to fifteen times the entire federal budget of only forty-seven years ago, be voluntarily invested for such purposes at this stage in civilization? Hardly!

The State as Master

The Welfare State destroys the market mechanisms—lessens free choice and willing exchange. Simultaneously creating unnatu­ral specializations, it must, grant­ed statism’s premise, resort to welfarism; that is, it must assume the responsibility for the people’s welfare: their employment, their old age, their income, and the like. As this is done, man loses his wholeness; he is dispossessed of responsibility for self, the very essence of his manhood. The more dependent he becomes, the less de­pendable!

Thus, the State inflicts itself as a dangerous centrifuge on so­ciety: man violently spun from the center which is his wholeness, his self-reliance, his integrity, and thrown in fragments onto an ever-widening periphery of un­natural specializations; man dis­oriented in unnatural surroundings, lost in detail and trivia; man from whom integrity has taken flight; man minus responsibility for self, the State his guardian and master.

The only cohesive stuff that can withstand this centrifugal force is the singular product of the whole man: the man who engages the universe at every level of his be­ing—physical, mental, moral, and spiritual. Among the fruits of such an engagement are honesty, observance of the Golden Rule, and justice. These hold society together. But, as we have noted, statism progressively dilutes the cohesive stuff even as it increases the centrifugal force by unnatu­ral specialization. These tenden­cies are implicit in its nature. Statism, to change the metaphor, builds its tower of Babel with a mortar of constantly decreasing strength. The tower, therefore, will be at its highest and be most admired and worshiped the mo­ment before it tumbles.

We find in a growing statism the explanation for our double standard of morality. The same person to whom stealing a penny from a millionaire would be un­thinkable will, when the state ap­paratus is put at his disposal, join in taking billions from everybody, including the poor, to aid and abet his private gain or his per­sonal compassion for those hecannot or will not help with his own resources. In the first in­stance, we observe the whole man as he acts self-responsibly and, in the second instance, the frag­mented man, one whose welfare responsibility rests not with self but with the State. When there is no responsibility for self, the mat­ter of honesty comes no more in­to question than in the case of an animal. Honesty is a quality pe­culiar to man, the whole man. This applies equally to the Golden Rule and to all virtues.

Material Growth Follows Moral Growth

Speaking solely from the ma­terial standpoint, statism is in­compatible with any long-range goal of more goods and services for more people. But natural or free market specialization and ex­change, which we are also experi­encing on a large scale, are con­sistent with such a long-range goal. They are constructive and creative. This explains the phe­nomena we have observed during the past four decades: natural specialization and exchange, plus the greatest outbursts of inven­tiveness in recorded history, more than compensating for the dam­age inflicted by statism. There could be no greater error than to conclude that the statism caused the prosperity.

But specialization and exchange, regardless of how many inven­tions, cannot long endure except among a people more noted for their virtues than for their vices. The first chore—indeed, our only hope—is to rid ourselves of im­moral statism; short of this, we cannot possibly return to moral ways. Unless we can succeed in this venture, we may well witnessfor the first time in history the spectacle of an economy confer­ring more and more goods and services on more and more people right up to the point of flying to pieces. Personal morality is the cohesive stuff in an exchange economy and plays a necessary part in the good society; there­fore, it is preposterous to say to­day, “We never had it so good.”


1 See The Fortieth Annual Report (1960), National Bureau of Economic Research, 261 Madison Avenue, New York, N. Y.

2 How closely does this approach what we call the “authoritarian state”? One way to make an estimate is to measure governmental take of earned income. In 1917 it was less than 10%. Today it is 35%. We must keep in mind, however, that a state of dictatorship can exist prior to a 100% take—perhaps at the halfway mark.

  • Leonard E. Read (1898-1983) was the founder of FEE, and the author of 29 works, including the classic parable “I, Pencil.”