Gaining The Free Market; F. A. Harper

This attitude is not taken toward other fields of contempla tion-arithmetic (2 plus 2), geography (the shape of the world), chemistry (the composition of water). Why treat [ 93 ] social science diHerently? True, the views one holds in either social science or chemistry may be wrong, but it should be evident that a person:Js opinion on any subject can:Jt possibly be right if he holds no opinion at all. So I should like first to offer some basic assumptions as a working hypothesis and then, with them as a back ground, discuss the present plight of the free market and what can be done about its re-establishment. The Right To Life If I should, at this instant, draw a gun from my pocket and shoot our esteemed Chairman, everyone here would be duly shocked. Furthermore, newsmen would photograph the corpse and the culprit and spread the shocking story across the land. Why would people be shocked by the murder? It must be because they accept my first assumption: A person has the right to life.

I am here using the term "righf:J in the sense of a per son:Js natural or inherent right as opposed to statute law or social custom; in the sense of having divine origin rather than of stemming from a permit or prohibition designed by one's fellow men; in the sense of a recognition that sover eignty rests with God rather than with any collective of humanity, and that the individual person is therefore di rectly responsible to God rather than to any collective of humanity which may presume to grant him rights. This concept of rights assumes the existence of a divine law that controls the consequences of men's acts in a manner [94 ] which no one of them, nor any group of them, can alter at will. Man can break divine law and suffer the conse quences, but he cannot rewrite divine law in any degree. The nature of rights, as I use the word, is reflected in ~hat one means when he says: "This above all I believe to be right in the eyes of God." One is bound under this concept of moral rights to proclaim for others the same rights that he claims for himself.

Each of us was born with a right to life and a right to continued life. And why do I believethat? Because I think it is logical to assume that the event of birth is itself pur poseful-that a purpose is implied in the very fact of birth. We see this innate right to life reflected even in the in fant's instinctive struggle for continued life. As the infant grows into adulthood in a free society, his every act of planning and building toward a better future for himself and for those he loves and respects seems predicated on the glorious fulfillment of this right to life. It is this same right to life that underlies the Command ment, Thou shalt not kill, and its likeness in other moral codes which have guided civilized man. The Founding Fathers, in the early history of this nation, incorporated this concept of the right to life into the Dec laration of Independence by proclaiming the rights to "Life, Liberty and the pursuit of Happiness." They de clared these rights to be self-evident. But time seems to have blurred their self-evidentness, or it would not now be necessary for us to be concerned about them.

My second assumption is: A person has the right to all proper means of sustaining his life. Life is sustained only [95 ] if, in addition to agents of health like the inborn antibodies of the blood, one has sufficient food and protection. These are economic goods and services with which we are con cerned in marketing. What Are Proper Means Now how can a person obtain these economic means of sustaining his life? And what is meant by proper means? If a person existed alone, rather than as a part of society, there would be only one way: 1. He would have to produce them himself. But, since he is a person in a society of persons, these three additional ways are possible: 2. He may receive them in free exchange from someone who has produced them. 3. He may receive them as a gift from someone who has produced them. 4. He may steal them from someone who has produced them. The last of these-theft-must be eliminated, along with cannibalism, as a proper means of sustaining one's life in society. If, for instance, our Chairman and I constituted a society, we could not sustain our lives on the fruits of theft from one another, any more than we could do so by eating each other in cannibalism. It is improper, then, to exist on either the life or the livelihood of another against his will.

When the Founding Fathers spoke of rights to life, liber ty, and the pursuit of happiness, were they not speaking of life and livelihood as being essentially the same? If I were [96 ] to murder our Chairman, you might be more shocked than if I were to pick his pocket. But you would still be shocked at the thievery, for the reason that the two are closely similar in the sense of the rights which have been violated. Martin Luther aptly expressed the connection between theft and murder by saying that whosoever eats up, robs, and steals the nourishment of another commits as great a murder as he who carves a man or utterly undoes him. That, as I see it, is the logical and moral basis for the Com mandment: Thou shalt not steal. It is why theft as well as murder must be ruled out, leaving only production,' ex change, and gifts as proper economic means of sustaining one's life in society. I have retained gifts, in contrast to theft, as a proper source of sustenance because giving is voluntary and de rives from the will of the one who has produced the gift.

The spigot controlling the volume of voluntary gifts is self regulating, in the sense that the producer himself decides the rate of flow. Voluntary giving does not have the sui cidal effect on production that theft has. IIi fact, produc tion is stimulated by the urge to give-witness the stimulus from the desire to care for the members of one's family. The Right To One's Own Product The right to sustain one's life would be meaningless with out the right to a source of sustenance, for to deprive a man of his sustenance is to deprive him of his life. If we add the specification that sustenance must be from a proper source-a source other than theft in any of its forms-my [ 97] third assumption follows: A person has the right to what he has produced. The contribution of this right to the peaceful relations of mankind can be perceived if one will reverse it and as-' sume that nobody has any right to what he has produced, which is the concept of socialism or communism. One im mediately wonders why-to what end-anyone would then produce anything at all. But let us assume that a person would go on producing, even though he has no right to what he has produced. To use it himself would, by this code, be improper. How, then, could one subsist? Only by theft-only by taking what others have produced-would it be possible for him to continue to live. Fantastic? Yes, so fantastic that such a state of affairs is difficult to visual ize. But that is the meaning of the absence of the right to what one has produced. That is the meaning of socialism communism, which denies these rights of man. And it shows how theft-the only alternative of this third right-is immoral and therefore destructive of the very person who practices it.

Once a thing has been produced and has acquired worth in the. market place, it becomes the property of someone until it has been consumed or loses its worth for some other reason. Under the right to have what one has produced, it is the producer who becomes its rightful owner initially, at the instant of production. He may keep it for a minute or a month or longer before consuming it or disposing of it to some other person who then becomes its rightful owner. The producer may have sold it or given it away, but each of the three proper types of private property which sustain [ 98 ] life- (1) what one has produced for his own consumption, (2) what he has received in exchange for what he has produced, and (3) what others have given him from what they have produced-is founded in the right to have what one has produced. The Right To Property If a person is entitled to what he has produced, he is also entitled to keep it. So, closely akin to the right of a person to what he has produced, but different in an important respect, is my fourth assumption: A person has the right to private property.

I would make a definite distinction between the rightto what one has produced and the right to private property although the latter is clearly founded on the former. The distinction aris.es from the fact that ownership may pass from one person to another, and I shall speak further of that in a moment. So whatever is obtained through free ex change and voluntary giving, as well as what one has him self produced, is properly the object of private ownership of property. How about ownership of things in the name of a cor poration? Does not this type of ownership violate personal rights to property? No. This is not a violation of private property rights because corporation officials, under a rev ocable grant of consent, act as agents for the individuals who own the corporation. What, then, about government ownership? Is it not like corporate ownership? No. Ownership by government is a [99 ] violation of private property rights because, although' seemingly acting as agent for the individual persons, gov ernment is in this respect quite diHerent from a corpora tion. A person can sell his share of a corporation whenever he desires, sever his participation, and buy oatmeal with the proceeds. But he cannot do so with what is owned by the government. Can a person in Russia or anywhere else sell his "share of ownership in common" in the collective?

No. After being forced against his will to invest the fruits of his labor in what the government owns, he is then pro hibited from withdrawing his contribution at will. If one is not free to sell a thing, he really does not own it. That is the test of ownership which should be applied; and by this test, government ownership fails to meet our requirements of personal rights to property. So, we must conclude that private ownership of prop erty is the only moral basis for ownership in society. As Dr. D. Elton Trueblood has aptly said: "Stealing is evil because ownership is good." The right of private property and the right to have what one has produced are clearly implied in the Commandments about thievery and covet ing. They are also implied, though less directly, in the Commandment about taking the life of another person. Just as I could not kill you if you did not have life, neither could I steal from you nor covet what is yours if you did not have private property.

Based on this concept of the right to private property and the sources of things which may be owned, this defini tion on theft evolves: Morally, theft is the taking from an other person, against his will, of anything which he has [100 ] produced and has chosen to keep, or which has come into his possession by voluntary exchange or voluntary giving. That is the test of theft to be applied in any instance under survey by any person who really believes in private prop erty and in the chain of rights from which it is derived. And it allows of no modification without renouncing belief in these rights. The Right To Dispose Of Property My fifth assumption is: Inherent in the right to private ownership of property is the right of the owner to dispose of it at will-to sell it, trade it, or give it away. And if this right is to be admitted, it requires the exist ence and operation of a free market. A market, as I under stand it, is any place where owners sell or exchange their private property at will. And it is this selling or exchang ing in a free market that comprises marketing.

Marketing is not to be confused with production. The two are not synonymous. One widely used marketing text says: "Marketing is the business of buying and selling." Production is the bringing about of any change that will command a price-that can be bought or sold. It is true that if there were no production, there could be no market ing. But that does not make them the same. Similarly, there could be no electricity from a water-power genera tor unless there were a waterfall, but that does not make the electricity and the waterfall the same thing. Market ing-willing exchange-can take place only after produc tion has occurred. [ 101 ] The free exchange of goods and services-the essence of marketing-should not be confused with some of the de vices commonly used to move goods from one place to an other, or otherwise to better fit them to the wishes of a buyer. Let me illustrate. If you were to visit all the markets of the world, you would find a variety of transportation aids-jinrikishas, camels, trucks, and the like. But the use of these, in and of itself, does not comprise marketing; they are only facili ties which may be used where trading-marketing-is be ing carried on. They may also be used where no marketing is being done-by a farmer hauling his product from the field to his own barn, or by slaves performing some task on a plantation or slaving at the salt mines as political prison ers in a completely communized state. In none of these lat ter instances was any marketing involved because all ves tiges of a free market and willing exchange between priv ate owners were lacking.

As another illustration, I do not consider the constant repainting of the George Washington Bridge to'be market ing, even though it helps maintain transportation of per sons and things. This occupation might be continued with labor under orders of a dictator, if the United States were to become completely communized. The presence or ab sence of marketing is to be judged solely by whether or not there is free exchange of goods and services, not by the motions people may be going through. If we do not want to contribute to the destruction of marketing, it is necessary to understand clearly what is marketing and what is not and to understand why free[ 102] dom is as essential to marketing as apples are to apple pie. So, I offer you these five assumptions: (1) the right to life, (2) the right to sustain life by means consistent with moral conduct in a society, (3) the right to what one has produced, (4) the right to private ownership of property, and (5) the right to sell or trade or give away whatever one owns. without restraint or interference from non owners. These are the rights spoken of 175 years ago as the rights to "Life, Liberty and the pursuit of Happiness"

-which phrase, incidentally, was originally written in this form: "Life, liberty and property." Anyone who rejects these assumptions may also reject everything else I have to say. But anyone who accepts them as "self-evident truths" should then be willing to test the present plight of the free market against this background of rights by con sidering a few significant figures. The Present Plight Of The Free Market About 35 cents of every dollar of personal income, as nearly as I can derive the figure, is now being taken by the government. o What is more, the funds appropriated by the government to be spent during the current year-if all spent-would amount to over 40 cents out of every dollar of personal income. This figure represents the proportion of the productive effort of this nation that is being re moved by direct means from the area of free choice. Those who produced it and earned it-like the slaves in our ~ Details of this calculation will be supplied on request.

[ 103] earlier history and the present victims of Stalin's rule are denied free choice in its use to whatever extent their product and property are taken from them against their wills. A test of whether or not you have lost your freedom of choice would be to refuse to pay your taxes-in whole or in any part. If these figures of 35 to 40 cents lack meaning as to their full import, they may be compared with some similar figures for other countries in 1929-30, at a time when a comparable figure for the United States was only about 14 cents out of the dollar: Taxes as per cent of national income (l: USSR 29 Germany 22 France 21 United Kingdom 21 This means that government in the United States is now removing free choice from a far higher percentage of the livelihood of the people of this country than were the governments of Russia, Germany, France, and the United Kingdom two decades ago. And the proportion in the United States today is more than double what it was two decades ago. If the tide cannot be turned, may not the present plight of citizens in those four countries fore shadow our future here?

Let me interpret the meaning of these figures in another way. I spoke of the popular resentment that would be o Edmund E. Lincoln, "Sobering Realities Regarding Tax Burdens," The Commercial and Financial Chronicle, April 1, 1948. Figures expressed as nearest per cent. [ 104] aroused by my murdering our esteemed Chairman or by my picking his pocket. But this taking of about one-third of the average life (livelihood) of 150 million persons is equivalent to taking in full the economic life of upwards of 50 million persons each year. Upwards Of 50 Million Slaves In speaking of upwards of 50 million persons each year, I mean an uncertain number up to a possible maximum of 50 million persons each year. It will be said that in return for these taxes, we get back certain services we need or want. True. But included in one's tax bill are many things he would not buy at any price-for instance, the use of sub sidies to bribe some persons to refrain from producing what other persons are willing to buy. Also included are many things which, though appealing to him at some price, are forced upon him by the governmental monopoly at exces sive prices-prices higher than he would pay for those services in a free and competitive market. Say, for instance, that you would willingly pay, in a free market, one-tenth of your yearly income-and no more-for all the services of government, and that the average of all the other citi zens valued them the same. This would mean that, by the test of the free market, the present tax-cost for these serv ices is an overpricing by more than three times the worth.

The only way to determine the degree of overpricing would be to put these services to the test of appraisal by citizens in a free market. My reason for speaking of life and livelihood as equiva[ 105] lents to be thus compared is that whatever one produces, and his property, can quite appropriately be called the economic extensions of the individual. A person who is totally a slave-a person who enjoys no powers of free choice, who has no liberty to develop his own potential and to do what he thinks is best according to his own wis dom and conscience, who is prohibited from having what he has produced for his own use or for whatever trade or charity he deems wise-such a person should be consid ered dead economically, politically, and morally, even though he seems still to be alive by the test of a steth oscope. He is dead so far as the free market and marketing are concerned. I have already quoted Martin Luther's ex cellent statement on this point of similarity between lost economic liberties and murder. And Hamilton once said that control over a man's subsistence amounts to control over his will. Most certainly I This is not just a theory of Luther's and Hamilton's; it stands also as a legal interpretation of the United States Supreme Court: "The power to dispose of income is the equivalent of ownership of it.":\) One who is deprived of the right to spend his "income" as he wishes never really owned it. And to deprive him of it is to deprive him of his livelihood-his economic life-to that extent.

Yet, in contrast to the indignation caused by the out right physical murder of one person, this taking of up wards of 50 million economic lives each year frequently is lauded as a public service, and the persons in charge of the operation are generally honored and revered. o Helvering v. Horst, CCH-U. S. -Tax Cases 40-2, p. 10,959. [ 106] If I have given anyone a new feeling of partial economic rigor mortis, I have accomplished one of my purposes. And if you don't yet sense that feeling clearly, please try it again when you :611 out your next tax return. Indirect Losses But that is not the only loss of a free market. In addition to the income taken from citizens by government in the form of taxes, nearly all of the remaining two-thirds is now either actively under wage and price controls-as well as other controls-or is daily threatened under latent powers of control. For instance, the one-third of your income taken by the government includes only certain costs of admin istering wage and price controls. Your personal budget must carry all the added costs of meeting their burdensome requirements-to say nothing of the adverse effect on your income of the controls themselves.

Then there are many other long-standing controls, such as those on railroad fares and freight rates, and the "emer gency control" by which the government recently took over the railroads for nearly two years. Yet the budget for running the railroads of the nation during these periods is thought of as private business and free choice when, in fact, it is not. And, then, there are innumerable other laws and li censes. The United States Department of Commerce itself has said: c;c;Practicallyevery business, large or small, is af fected by some form of governmental licensing con[ 107] trol. A license is a permit or authorization to engage in some business or activity."# Licenses are power, otherwise, they might as well be dis pensed with. Controls that are at the moment inactive-"stand-by" -are no less controls in the sense of power over the per son. When the power is there but inoperative, it is like a noose around the victim's neck that has not yet been drawn tightly by the person holding the other end of the rope. The victim must not confuse the slackness of the rope with its absence. He should bend his every effort to ward its removal rather than let his attention be diverted by the "freedom of choice" of who shall hold the rope and serve as his hangman later.

Now I ask you, in view of all this: What is the status of the free market and marketing in the United States today? This important aspect of freedom seems to me to be prac tically nonexistent. Unless things are changed drastically, I say in all seriousness that we might as well abandon the American Marketing Association and join the American Historical Association-or perhaps even better yet, join either the American Foundation for the Blind or the American Prison Association. The Great Hypocrisy When, at the start of my discussion, I spoke of how shock ing it would be if I were to draw a gun and shoot our Chair man, I was not merely trying to be dramatic. My purpose ~ Small Business and Government Licenses, U.S. Department of Commerce (U.S. Government Printing Office, 1950) p. 1. [ 108] was to focus one side of this professional hypocrisy: The taking of only one life in a certain manner causes a right ful upsurge of resentment against the murderer, whereas if the same person were to administer an innnitely greater crime of a similar nature, he would be called a public ser vant, lauded as a hero, honored and revered.

We all recall that during World War II a leading ad vertising executive became the administrator of price con trols, and that in World War II~ a forr,nertop executive in the communications and transportation equipment neld participated in the attempt to force all his countrymen to abandon the free market. Such positions of power are probably accepted with good intentions, but intentions do not determine the con sequences of one's acts. One who professes a faith in the free market while engaging in its destruction is like one who murders a person while claiming to be his friend. He is engaging in sheer hypocrisy. Perhaps he did not know that the gun was loaded; but one who cannot tell, or will not take the care to Hnd out, is not to be entrusted with a weapon of power· because no plea of ignorance nor care lessness will bring the victim back to life. Realizing this, it is one's individual obligation to refrain from "honor" and "public service" in this sort of hypocrisy and to refrain from doing homage to those who are prac ticing it. If homage there must be, let it be showered, in stead, on persons like Donald R. Richberg who in the early thirties was engaged in atremendous effort to control prices, and who now says: '"'"In retrospect I can only ex plain, as did the man who threw a champagne bottle into [ 109] the chandelier, that it seemed to be a good thing to do at that time."

Emergencies Not The Time For Weakness I realize full well the contention that there seem to be times of emergency when the free market seems unable to take care of the situation. In answer, I would only repeat my earlier assumptions and observe that if these are truly our rights, they are likewise justice; that justice is strength, not weakness; that it is during an emergency, of all times, when the strength of justice is most needed. What is good should not be rationed. There is no more sense in our sub stituting weakness for the rules of justice in an emergency than for an engineer to lay aside the rules of strength when he is constructing a bridge to be used for the emergency of heavy loads. One who believes that there is strength in violating the free market must believe that control will yield strength and justice. And if he believes that, why does he not advocate the same measures for all time, not merely in emergencies?

It must be that the proposal of abandoning the free mar ket during emergencies really stems from the belief that the free market is a sort of immoral luxury-that whatever may be said economically for the free market in the course of normal events, there is somehow a moral virtue in its violation during emergencies. On the contrary, the free market is both economic and moral. Its abandonment is both uneconomic and immoral and, therefore, constitutes a weakness when strength is most needed. [ 110] If the consumer is to be king in a free market, nobody else can be crowned king over prices and the market nobody, at any time, because duplicate rule by overlap ping ownership is impossible even in an emergency. Gaining The Free Market Our chairman earlier today spoke of the free market as being the world's greatest democracy. Isn't it, then, an empty pride that espouses political freedom when it means only the right to vote for who shall have the dishonor of administering the destruction of what he spoke of as the greatest democracy-the free market? How, then, is free dom of the market to be brought about?

I like very much the concept in Patrick Henry's famous remark: "I know not what course others may take, but as for me ..." It is my clear responsibility to so·conduct my self that there is no avoidable conflict between what I profess to believe and how I conduct myself. And if any one should care to know the reasons for my beliefs and my conduct, I would try to.explain them as best I can. If we are engaged in some national error-such as vio lating the rights of free men in the market place-it is be cause of our individual errors. A nation does not err; it is people who err. And the collective error is no more or no less than the summation of individual errors. My part of that problem, then, is my own conduct. First, in order to erase from view all these confusing details of the problems that confront us, I must under stand that freedom is not a thing to be created because the [ III ] disposition toward freedom is something inherent in man.

Along with the basic rights listed at the beginning of my remarks,' it may also be assumed that man is created in harmony with these rights. Even the small child evidences this innate harmony with freedom, as all of us know who have watched children assert their individtiality. Freedom exists naturally in the absence of man-made restrictions, or violations of rights. In this sense, it is like the force of gravity moving water along an incline unless barriers are placed in its way. All that need be done is to let freedom reign. Viewed in this light, then, my part of the task of regain ing the free market is simply to do everything within my power to remove the barriers to free exchange of property at a rate of exchange mutually agreeable to the two parties to the deal. No third person has the right to intercede in the exchange nor to prohibit it nor to dictate its terms; if he does so, he is practicing the moral equivalent of theft and murder and deserves to be dealt with accordingly. If one would feel more comfortable with some Biblical ref erence for these charges of theft and murder, it can be found in Matthew 20:15, which proclaims: "Is it not law ful for me to do what I will with mine own?" The answer is to be found among the Commandments.