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Saturday, December 1, 1990

You Missed the Point, Bernie


Mr. Smith is a writer living in Santa Maria, California. He is a frequent contributor to The Wall Street Journal.

My friend Bernie is a socialist. Now Bernie would never admit to this—he likes to say enlightened liberal—but everything he favors seems to wind up with government ownership of something, so I cannot see much distinction between his label and mine. Perhaps I could be kind and say that Bernie is an enlightened liberal who just happens to favor a socialistic solution to all problems.

One of Bernie’s favorite arguments is actually a question: “Where in the U.S. Constitution does it say that we are to have a capitalistic economy?” The implication, of course, is that we are not legally bound to any economic system, and therefore we should start forming committees at once to nationalize everything from U.S. Steel to the Girl Scouts.

I had always dismissed the question/statement as totally irrelevant and never even gave it the dignity of a serious counter-thrust. In recent days, however, I have taken the time to consider the point, and I think that Bernie has really hit on something—an idea that negates every argument ever presented about the benefits of a planned economy.

The Constitution is a document that deals with political freedom and says nothing whatever about an economic system. This is highly significant because it presupposes that a free people will work out a way of doing business that is consistent with the principles of political freedom. In short, capitalism was never planned- -it just happened. It is the natural and inevitable result of political freedom.

Socialism, on the other hand, is necessarily the result of a planned economy. No society can ever install a socialistic economy without a massive planning effort. It is something that is born on the conference table, the unnatural result of planning boards pushing an economy in a direction that it doesn’t want to go. Is it any wonder that the black market flourishes whenever a planned economy exists? The black market is an unplanned phenomenon that moves like the winds and the tides and cannot be legislated out of existence. It is an illegal kind of unbridled cowboy capitalism that exists solely because it is needed and wanted.

Unfortunately, the inevitability of capitalism in a free society is not recognized by people who look at chickens and see ducks. Karl Marx, for example, had no understanding of American capitalism, seeing the world as he did through the eyes of a 19th-century German. Lenin understood even less, always equating Tsarist Russia with capitalism, and the basis of his life’s work was buttressed by this gigantic misconception. The man was unable to see any distinction between private ownership in an autocracy and the rights of a free people to go as far as their talents and energies will take them.

In this regard, I have always been quite impressed with a story told by Nikita Khrushchev during his 1959 visit to the United States. Khrushchev said that as a small boy in the Ukraine he and some friends made a surreptitious visit to a nearby orchard to help themselves to some fruit. They were caught by the landowner, and all but the small Nikita managed to escape. He was unmercifully beaten by his cruel captor and then violently thrown off the property and left to find his way home, if indeed he could still walk. This was to be Nikita Khrushchev’s lifelong impression of private land ownership and, consequently, his concept of capitalism.

One can only imagine how many times this mini-drama was replayed throughout Tsarist Russia; how many times acts of similar cruelty were accepted as the way the world works when people are allowed to own property. None of them—Marx, Lenin, Khrushchev, nor any of their compatriots—could grasp the idea that private ownership in a despotic, oppressive government has no relationship whatever to a game in which anyone can participate.

My old friend Bernie doesn’t even have this excuse because he has seen the capitalistic system at work, even benefited from it. Like most American males, he can look back to a boyhood in which he helped himself to a pilfered apple or orange along the way and received no corporal punishment for the transgression. Nor was he ever forced to work the lands or to clean the stables of the local patroon.

With Bernie, I think, it is his sense of neatness that is offended. Socialism is perceived as a desk-able thing because it is planned, which means that all of the bases are covered. Socialism is tidy and capitalism, to the Bernies of the world, is an uncontrolled messy thing that is badly in need of some grooming.

The point that is missed, over and over again, is that this is the very strength of the system. It is not planned, it is not the law of the land, and it is not beholden to a central committee. Capitalism is a natural expression of a free people, the normal and inevitable outgrowth of political liberty. It is, in effect, left to us by the Bill of Rights because it is the only economic system that is compatible with these freedoms.

No, it doesn’t appear in the Constitution, Bernie, and this is why it works. You, my old and good friend, have missed the point completely.


  • Mr. Smith, a frequent contributor to The Freeman, lives in Santa Maria, California.