The Real Revolution and You

While it may come as a shock to some, there is nothing revolutionary or even new about America's quarter-cen tury experiment in attempting to provide for c'social welfare." I t has been tried on various occasions in the last 6,000 Dr. Bierly, formerly a member of the staff of the Foundation for Economic Education, is now Liaison Officer with the William Volker Fund, Burlingame, California. [227 ] years. To cite just one-Augustus Caesar planned meticu lously for his people, and initiated various social reforms so they could live happily, free. from want, and even without exerting much initiative. But Caesar's Roman Empire vanished into the centuries-long black-out of the Dark Ages. The American Revolution No, the greatest of all socio-economic revolutions oc curred some 180 years ago on the shores of colonial North America-and it is still going on today. This revo lution seemed to some only a battle of Minute Men and muskets-fought on such bloody fields as Lexington and Concord and Bunker Hill. But more significantly it was a revolution of ideas, fought in the battlefield of men's minds.

The idea that triumphed was startling in its simplicity, but so powerful that it has long made America the mecca of the downtrodden and walked-over of the world. The idea was simply this: You are an individual person the equal of any other-not just in theory but in fact. You were created by God, given a mind with which to think, and plan, and learn, and do..Along with this you have a responsibility-to use your talents, and to be a responsible individual. While this idea may seem obvious today, we must recall that it had never before been accepted as fact, and really practiced in societal life, in all the previous 6,000 years of recorded history! Always before, people [228 ] had been weighted down with the tyrannous belief that some men are divinely endowed to lord it over others. The Declaration of Independence But on July 4, 1776, a long-germinating idea burst forth its rebellious message. The Declaration of Inde pendence was more than an angry protest that old King George was a wretched scoundrel for all the abuses he had hurled at the American colonists. It was a declara tion that no man is delegated by God to rule over his fellows; that individual persons have rights from their Creator; and that along with these rights, individuals are willing and able to look out for themselves and to recog nize the rights of others.

Much of the old world laughed. c'Such nonsense! This upstart nation cannot last. No such loose government has ever lasted-none ever will. Some are chosen to rule, others to fawn and givel" More than once the old-world cynics were almost proved right. Some colonists wanted to make George Washington king and transplant an old-world monarchy in America; but Washington knew that Valley Forge and the whole Revolution stood for something else-for throw ing. off the yoke of servitude. Again, behind the closed doors of the Constitutional Convention,. some notions were propounded that might have wrecked the young nation; but despite mistakes, the delegates produced a remarkable document, wisely [229 ] calculated to restrict the role of government and release the energies of free men. One Great Asset At the outset, the infant country was burdened with problems. Unemployment, high prices, unrest, and dis couragement followed fast in the wake of the revolution.

But the young United States also possessed an asset one so great that it more than offset the liabilities. That asset was a magnificent individual freedom which permit ted an unprecedented release of human energy. Human energy is an interesting thing. The individual person has energy. Yau have some; but 1 can't turn it on. Only you can! Magnify the turning on of this energy, full force, in 13 colonies and a few millions of people, and you can understand what happened to America. There were no economic plans. No blueprints. And no limitations but the requirement that what one did or made must be useful either to himself or someone else useful enough so that another person would willingly give what he already owned in exchange for it. Freedom in Action Encouraged by the freedom to do as they pleased, as long as they did not interfere with the rights of their neighbors, and urged on by the knowledge that they were allowed to keep the fruits of their own labors, the colo nists displayed a remarkable industry and a keen inven[230 ] tiveness-ever seeking and finding better, faster, easier ways to do things.

Many saved enough to be able to invest in new ideas. Not all of these investments panned out; but when they did, they resulted in still more savings, which in tum were converted into the tools that made possible still further advances in production. There was little regulation of industry, and no govern ment attempt to guarantee individual security. Men were on their own-free to work as they pleased but obliged to be self-reliant and provide for their own needs. The result: The greatest prosperity the world has ever known! The n10st stupendous advance in material well being-in new inventions and in the standard of living that has ever been seen! Are W e l?orgetting Our Own Revolution? But strangely enough, in the past half-century Amer icans have been running away from their own revolution. They have forgotten-or failed to understand-what it was that gave them their unprecedented prosperity. They have returned to the Old 'Vorld and imported an alien idea-the socialistic belief that government has the right to control productive activity, and that it is entitled to take from some persons in order to give to others!

This Marxian notion-catering as it does to the· human impulse to get something for nothing-has, in many of its forms, been Widely accepted. There remains but a [231 ] relatively small group which recognizes that these social istic tendencies are contrary to all that has made America great. And it is a still smaller segment who actually understand the religion-rooted, politico-economic ideas on which this country was founded. It is this group who are America's true revolutionaries. And those who are best informed and most articulate among them are fight ing the most genuine revolution in the world today-the revolt against the tyranny of the socialistic Welfare State. People sometimes say, "I believe in freedom. I thoroughly disbelieve in state socialism. What can I do? How can I help change things?" The answer, as I see it, is: "First, do something to yourseH; change yourseHI" That is, develop your own understanding of the system you say you believe in.

Until you thoroughly grasp ··the precious value of indi vidual liberty, the immense productivity of the free economy, and the great necessity of strictly limited government, you can do little to aid the cause of free dom. Ingredients for an Intellectual Revolution Each of us must begin by building up his own idea arsenal. Let me share with you elements of this again revolutionary idea which I have found helpful in clarifying my own thinking: 1. A belief in the dignity and inherent worth of the individual. 2. The conviction, which follows naturally, that what[232 ] ever an individual produces is rightly his own, to do with as he sees fit. To deny this is to deny his individual nature; unless· his property is his own, he cannot be independent of those who would make a prior· claim on his property. And so, no one has a right to tell a person what is a proper use for his property, so long as he does not employ it to damage others.

Every Nation Has Capitalism In sharpening my own understanding of the. private property concept, and in discussing ideas with others, I nnd it helpful to recognize that "capitalism" is universal in the modem world. Every advanced economy uses machines and tools to augment production, and these are capital. The big question is who will ·decide how the capital is to be used-the bureaucratic power, or the individuals in the market? While ours is a capitalistic system, the goal is not just any kind of capitalism, but an individual or competitive capitalism. Russia today is a capitalist country. Everyone has seen in the newsreels the Soviet copies of American farm machines crossing great nelds at harvest. How did Russia get these tools? From savings. If there were no savings, there could be no tools. And the conversion of savings into capital-tools-is capitalism. So we see that the schism that is splitting the world today is not between capitalism and noncapitalism. It is between state capitalism and individual or competitive capitalism; between state control of the means of produc[233 ] tion, and· individual decisions in the market place; be tween your deciding what color and style of shirt you will wear, and someone else doling out his idea of what ,viII satisfy your needs.

What's Happening to Individuals? In my thought and conversation, I also find it helpful to consider the individuals involved in a situation, rather than vague groups such as "society" and "government." One evening a young minister and his wife came to call at our home. He had never disguised his socialist leanings, and that night-as usual-we started to discuss politics and economics. The conversation soon ran to "social security," and he insisted that government could guarantee such security. I tried to show him that govern ment had no income but what it took from its citizens, so it couldn't guarantee anyone of us something we didn't already have-unless it forcibly took it from some one else. And at the same time, I observed, we had to pay a high-priced middleman in Washington to do the arranging for us. He finally accepted this as a correct description of our ~csocial security" system, but proceeded to end01'se the process of taking from one to give to another.

Taking by Force To Do "Good" I could hardly believe that this young clergyman, who took his Sunday morning texts from the Ten Com[234] mandments, could deviate so far on a Wednesday night! So, I proposed a test of his good faith. I said 1 would like to act out with him, in a simple man-to-man situa tion, exactly the same kind of process he was endorsing in the ""socialsecurity" system. He agreed. ""All right. Give me your wallet," I said. "'What do you mean?" "'Just this. You said it is proper for government to take from some, in order to give to others who are in need. I'm acting as 'government,:P and I know three families between here and town who need the contents of your wallet more than you do." "'This is differentl" he protested. But his wife, who hadn't said much so far, spoke up. "Give it to him, dear. He's got you trapped in your own arguments!" Actually, I wasn't trying to trap him-only to help him think about this problem clearly. Then I asked him to consider what would happen if I were to rob him every day of a sizeable part of the fruits of his labors in order to provide C:C:security" for others. I pointed out that he might soon lose the incentive for activity. Like the people who have lived under the Pharoahs, the Caesars, the Czars, Kings, Queens, Committees, and other forms of tyranny, he would probably do no more than he had to, just enough to sustain his own life.

Of course, no one article can ever begin to explain the ideas and thought-techniques which the individual must acquire if he is to be a successful expositor of the free dom philosophy, and thus aid in the revolt against stat[235 ] ism. But this one thing is certain: if anyone of us is to help win this idea-revolution, he must be able to answer the questions that are on the minds of his fellow citizens-and answer them in the way that reveals the fallacies and dangers of socialism, and the inherent soundness of the free ·economy. We Should Know the Answers Judging by conversations with business friends and other associates, here are ten of the many questions which thoughtful people are apt to ask: 1. How does inflation come about? How much infla tion have we had in this country since 1940?What does inRation mean to the man who has insurance, savings, or an investment in stocks and bonds?

2. What is the present average investment per worker in American 'industry? What has happened to the rate at which savings are being accumulated to invest in the tools of production, in order that the level of living might be maintained or improved? 3. What have compulsory pension systems by industry done to the value of equities 'in these industries? What is the significance of the fact that the "social security" program of the federal government is not a funded program? 4. What is really meant by production? Why was Karl Marx wrong in his "surplus value" theory? But what significance has the theory had in certain kinds of legis lation in this country in recent years? [236 ] 5. What is meant by distribution? What happens in the allocation of resources between diHerent kinds of economic activity when this allocation is interrupted in its natural procedures and diverted by means of sub sidies? Where do the funds come from with which subsidies must··be paid?

6. What is the significance of the Sixteenth Amend ment, and of other legislation that has been passed since 1913 to the concept of private property in this country? What is the meaning of private property? What is the basis for the idea that private property is important to a free market system? To a free political society? 7. What is the function of exchange in a free market economy? What is meant by a free market system? How can both parties to a transaction in a free market actually gain? 8. What caused the depression that began in 1929 and extended through the thirties? Is it correct to say that this was the breakdown of the free market system? Or was it rather the culmination of continued and regular intervention by government in our economy for a num ber of years prior to that time? 9. In a free market system, how do we take care of the problem of concentration of 4:4:economicpower"? What is there to prevent continued concentration of economic power and domination of the whole society by a very limited number of persons?

10. What iY meant by competition? What happens to an economy when it is curtailed or eliminated? I would not pretend that I-or any other persons-have [237 ] found fully satisfying answers to all of these questions. I have presented them simply as a challenge-an indica tion of how much understanding each of us must develop if he is to become a truly able expounder of the free economy. When Lightning Strikes So often it is a query-a simple, obvious question which we ought to be able to answer-that reveals to us how little we know. Once I was at dinner with my family when an electric stonn broke loose. With his back to the window, my five year-old son did not see the lightning strike, but he heard the thunder. We all jumped. ltWhat makes lightning, Daddyr 7he asked. It was a natural question. But did you ever try to ex plain lightning to a five-year-old? While fumbling for the answer to that question, I wondered how soon he might be asking about other things: "What is socialism? What is capitalism? Or-what is individualism? What is a free market?77 And I hoped in my heart I would be able to explain these things so well that he, too, would want to join the great idea-revolution of our time-a revolt started almost two centuries ago by men who loved freedom more than life itself.

[238] DEMOCRACY The second definition, rather than contra dicting the first, appears only to acknowl edge that democracy is now with. 'US. u. S. Army Definition, 1928: Democracy. A government of the masses. Authority de rived through mass meeting or any other form of "direct" expression. Results in mobocracy. Attitude toward prop erty is communistic-negating property rights. Attitude toward law is that the will of the majority shall regulate, whether it be based upon deliberation or governed by passion, prejudice, and impulse, without restraint or re gard to consequences. Results in demagogism, license, agitation, discontent, anarchy. United States Anny Training Manual, No. 2000-25, 1928. p. 91. U. S. Army Definition, 1952: Meaning of Democracy. Because the United States is a democracy, the majority of the people decide how our government will be organized and run-and that includes the Army, Navy, and Air Force. The people do this by electing representatives, and these men and women then carry out the wishes of the people.