Beneficiaries of Free Market Upgrading; L.E. Read

BENEFICIARIES OF FREE MARKET UPGRADING t'j oteonardC. Read SOCIALISM is indeed the great leveler. But the fact that the leveling is always downward seems to escape most theoretical socialists. They fail to see that their victims include not only those from whom the fruits of their labor are taken but also those among whom the spoils are distributed as well as those who police such compul sory redistribution.! The leveling of socialism involves cutting off the moun taintops to fill the valleys, taking from each according to ability and giving to each according to need, subtract ing the cream from some and adding it to the skim milk of others. The progressive income tax, government hous ing, subsidies to farmers, federal aid to education, TVA, and "social security" are but a few examples of the lethal socialistic weapons designed to do a leveling job. "The enshrinement of mediocrity" is a description no socialist will relish, but it accurately describes the result of drag ging down the successful to nourish the not-so-successful.

1 Read, Leonard E. Victims of Social Leveling. Irvington-on-Hudson, New York: Foundation for Economic Education, 1953. Copy on request. 200 BENEFICIARIES OF FREE MARKET UPGRADING 201 There· is, however, an upgrading system which, like a magnet held on high, tends to draw everyone upward. Instead of leveling people toward an economic bottom, it frees, releases, and attracts them to whatever economic heights are consonant with their desires and abilities. As might be expected, it is socialism's opposite: the free market, private property, severely limited government way of life. In terms of our planet's existence, one need turn back the clock no more than a moment or two-to the begin ning of the Industrial Revolution-to observe economic freedom's early triumphs at economic upgrading. Except for the very few-a fraction of one per cent of the popula tion on whom the monarchs bestowed titles and large estates-nearly. everyone at that time lived in abject pov erty. Adam Smith reported that there were areas in the British Isles where a mother had to bring twenty chil dren into the world to be assured of rearing two to adulthood.

The Industrial Revolution brought a great change. Its distinctive features were division of labor, free exchange of the resulting specializations, savings or capital forma tion, and mass production which is production for the masses. While this market or exchange economy has never been completely practiced, it certainly was begun spot tily, only in minor ways here and there. Upgrading a whole people who were lying economically prostrate was a task too enormous for these revolutionary devices in their infancy. But, lift up bit by bit they did. The plight 202 LEONARD E. READ of the people lying prostrate was not worsened as has been erroneously reported by numerous pamphleteers posing as historians. 2 Their low economic state was only highlighted or emphasized as some became able to stand economically erect. As suggested above, the free market economy has never been tried all the way. The British Empire gave it the best trial next to the U. S. A. However, even these partial attempts have not only eliminated famines but have con ferred tremendous economic bounties upon people from all walks of life. Millions of wage earners have been up graded to the point where they enjoy food and clothing and shelter quite comparable to that available to persons of great wealth. Indeed, their economic status and their opportunities for travel, luxury, leisure surpass what but a short time ago was the fare of monarchs.

Let me shift the line of argument for a moment. Re cently, while at a meeting in Switzerland, several of my American friends commented on different occasions, "I just love these Swiss people." Well, so do I, but why be so emphatic? Reflection and observation supplied the answer. The bartender at our hotel, I noted, had a pass able command of six languages. In some ways he was a more cultured person than many of those he served. And, he was typical of many Swiss who perform personal ser vices. Who wouldn't be favorably impressed if waited upon by superior individuals I The point is that the wage for "servants" in Switzer2 Hayek, F. A. Capitalism and the Historians. Chicago: University of Chicago Press, 1954.

BENEFICIARIES OF FREE MARKET UPGRADING 203 land is very low when compared to the U. S. A. While Switzerland has a much better economy than do most countries, nonetheless, it is far from being a truly free enterprise economy. As a consequence, many persons of ability, resourcefulness, and quality have not been raised from the personal servant status-have not been eco nomically upgraded. Their numbers are so high relative to demand that their wage is low. And, their numbers are high because of an absence of capital-horsepower and tools. They have been left to labor with little but their hands. Machines Displace Servants A European friend of mine told me that in his grand father's house in a big provincial city of the Austrian Empire during the 1870's one male servant's time was completely absorbed by carrying water and wood for the kitchen, water for the family washing and bathing and, in winter, in chopping and carrying wood, heating the stoves, and cleaning the oil-burning lamps. Another man turned up three times a week to dispose of the garbage and to clean the toilets. All these chores thirty years later were taken care of by installations made available by specialized industries. Seen from the point of view of the consumers, button pressing became the equivalent of two men's labor. Domestic help was released by ma chines, freed to seek a higher level of employment.

The further away from a true market or capitalistic economy a country is, the greater will be its percentage 204 LEONARD E. READ of "lower class" and the more will personal servants be available at low wages. In a country like India, for ex ample, one with a relatively modest income can afford a half dozen servants. The socialists in rebuttal might point to Russia as the exception to this rule. Russia is actually a confirmation of it. The vast majority of Russians don't even enjoy the status of servants who have the choice of quitting or taking jobs. They're slaves, for they have masters who coercively direct their lives. The U. S. A., in spite of present trends to the contrary, has more nearly approached the market economy than has any other country. Observe this striking fact: In no place the world over is there so much talk about "the servant problem" as here in our homeland. ,Cooks, maids, chauffeurs, valets, laundresses are only for the well-to-do.

In Westchester County, New York, it is difficult to obtain seven hours of competent house-cleaning service for ten dollars. Teen-age babysitters receive more in one evening for watching the neighbor's TV than I received as a boy for sixty hours of pulling weeds in the hot sun. Domestic help, even in the deep South with its hangover 'of slavery, is performed by the less and less competent and at higher and higher wages. Millions of Americans with extremely limited skills have been stepped to higher rungs on the economic ladder-beneficiaries of the market economy's upgrading power---and, thus, are· no longer available as "servants." The person who succeeds in becoming relatively well to-do may complain' about the lack of competent and BENEFICIARIES OF FREE MARKET UPGRADING 205 faithful servants such as grandpa had. Yet, this is pre cisely the situation the free market economy tends to create. While it does not necessarily lessen the wealth differential between people in a comparative sense, it does move the great mass of us into a wealth echelon over and above the domestic or servant or serf status.

Actually, if the market economy were permitted to function, we could expect the day when hardly anyone would have personal servants. The "cheap help" just wouldn't be available. They would become highly paid workers making dishwashers and numberless other me chanical servants not only for the well-to-,do but for themselves. Economically, the trend would be toward the open as distinguished from the closed, static society of the pre-Industrial Revolution period. Classes would give way to a social fluidity-persons moving in and out of different wealth levels. Return to a Free Market The real economic interest of the great mass of any society is in the perfection of the free market economy in the upgrading influences-even though this may not be apparent to them. They approve of leveling only be cause it is sold to them as a process which would elevate them. But despite the label, the package they are being sold can only level downward. This will continue until those of us who know the upgrading powers of the mar ket economy devise better ways to explain this wealth giving phenomenon.

206 LEONARD E. READ Showing how the millions may have a hand in creating nonhuman servants that in turn will serve them as well as others is a possible step not only toward better ex planation but in rescuing the free market economy which presently is on the socialistic skids. For it is this economy which makes it the interest of each to serve all, an incen tive we should seek ardently to improve, not lightly to destroy.