The Macro Malady; L.E. Read

In earlier times, macro economics had its equivalent in tribal custom, feudal ism, mercantilism, and other variants of collectivism. 52 The Macro Malady* LEONARD E. READ master at his specialization-coer cion - he was grossly ignorant of the limits of his wisdom. Knowing so much in so narrow an area, and being unaware of his limitations, led him to assume a role for which no man - not even a Napoleon has any competence whatsoever. Napoleon was a "macro." His torically, he and his ilk have been the exceptions. Most people have been "micros." While victimized by authoritarianism, they have nevertheless been content to wres tle with social problems of the micro sort. That's the way the past reads to me. But the picture changes! Mil lions upon millions of people are now presuming to settle problems that are over their heads - macro problems. This accounts, in no small measure, for our headlong return to coercive collectivism. At least, this is my thesis.

A typical case in point: A noted 1fJCC THE MACRO MALADY 53 biologist, extrapolating population trends, predicts that there will be one billion billion of us on earth no further in the future than the Norman Conquest is in the past" •••~ome 12Q per50n6 per 5quare yard of the earth's surface ..."1 This, of course, is a horrendous statistic! But the nub of the mat ter is that the biologist has taken on a problem that's over his head. Such would be the case even were he limiting himself to the prob lems of our nation at the present moment. This scientist, however, takes on the social problem of the whole world, and some centuries hence! Now, how does this biting off of more problems than one can chew lead to coercive collectivism? Listen to one of the several sug gested remedies: . . . a program in which everyone is temporarily sterilized (perhaps with a substance added to water supplies or staple foods) will be necessary. This would make positive action, in applying for and taking an antidote, necessary before repro duction.

1 See "The Biological Revolution," Stanford Review, September-October, 1965. Predicting the future by extrapolation can easily lead to fantastic conclusions, points' out Dr. Henry Margenau, Yale physicist. By projecting the rate of in crease in the number of scientists against general population trends we would have more scientists in 2000 A.D. than people! Mass sterilization \ rrhe only way to have a baby is to apply for an antidote, a drug that will restore fertility. Who is to pos sess this permit-granting author ity ~ Not the scientist; he won't be here. The answer is that a gov ernment official will decide who is or is not to be born. Would an Abe Lincoln be given dispensation of life by this political god? Booker T. Washington? Sa.m Goldwyn? You? I? The biologist himself? Shades of 1984!2 The above, while somewhat startling and sensational, is no less out-of-bounds than Napoleon atop the Cosmos, or any more fa.r fetched than millions of Richard Does and Joe Doakeses who now take on social problems bigger than they are and end up by turn ing the problems over to govern ment for solution. Joe Doakes, who votes in favor of a resolution for the government to finance the· lo cal hospital, is in exactly the same category as the biologist - each trying to focus on a problem that is beyond his competence.

What has brought on this rash of macro addicts? Nearly every one trying to solve problems big ger than the would-be problem solvers? Perhaps we can put our finger on the reason. 2 I refer to George Orwell's book, 1984, his nightmare vision of England's future.

54 THE FREEMAN Feb1'uar-y Reflect on my farmer grand fathers. The social problems they dealt with - welfare, security, prosperity - were of a size befit ting their men tali ties; they thought in micro terms - that is, they did their thinking in terms of the few individuals with whom they had acquaintance and whose needs could be personally judged. Grandfather operated within an orbit of 7-10 miles radius; a trip to "the city," some 50 miles away, was as much of an occasion as one of my trips to London. Frankly, grandfather didn't know of any "need" except what he personally scanned. His communication with and vision of the nation or the world never went beyond a stint in the Civil War, a macro event. Unless a neighbor's barn were on fire, in which case everyone within seeing distance lent a hand, "need" wasn't much in evidence except for the now-and-then peri patetic beggar or hobo. In his mi cro-vision orbit just about every family looked out for itself; self reliance was in the driver's seat.

These people knew each other too intimately to fool each other. Pre tense seldom reared its head. What we should keep in mind is the fact that America's era of micro vision broke all the world's records for security, welfare, pros peri ty. Governor Bradford of the Plymouth Colony, when commenting on the results of dropping coercive collectivism, in effect the macro madness of the Old World, wrote: ... any generall wante or famine hath not been amongst them since to this day. Following that momentous deci sion in 1623, there has been no famine or involuntary starvation in our land for over three centur ies. However, we must not, in this analysis, give too much credit to our grandfathers. By and large, our ancestors had no more capac ity to think for themselves or to see beyond the surface of things than do their progeny who now people this country. Those who cannot think for themselves - an cestors, or us - must, perforce, re spond to their environment.

How the environment has changed! Replacing grandfather's little world of micro vision is a brand new world of television, radio, telephone, astro vision, "rorld-wide news coverage in daily papers, magazines, books; we hop in an auto and see America; we board a jet and view the world in a word, macro vision. Of a sudden - one might say, without warning - grandfather's progeny are constantly having dinned into their heads all the "needs" of all the people on earth. Appalachia is no less an intimate 1966 THE MACRO MALADY 55 and pressing need today than was a bucket brigade to put out grand father's fire. Distressed areas, backward countries the world over, foreign ideologies and isms, Negro unrest at home and in far away Africa, all the poor farmers and all the suffering wage earn ers, prices for steel, aluminum, copper (the list grows), the. cot ton surplus, downtowns .deserted for shopping centers, the threat ening efficiency of the Japanese, the vanishing gold supply, the weakness of the pound sterling, watel" famine on the Hudson, get ting to the moon "because it's there," Russian sputniks - you name it - are problems which most Americans ·now feel they must find solutions for.

Grandfather had to figure out how to milk his sick friend's cows as well as his own; I have to con trive ways to get all of mankind out of the mess it's in; I do un less I can see beyond the surface of things and, thus, not let my micro mentality be drawn into tackling macro problems. Why Do They Do It? Those persons who cannot see beyond the surface of things their number is legion - take on problems bigger than they are and, as a consequence, push us into coercive collectivism, that is, into the all-powerful state. But we may never understand why this is true, why they act as they do, unless we can effect a self-in duced blindness equal to their myopia, until we bring ourselves to seeing no more than they now see.3 In short, we can explain them only as we put our own vision .into reverse and back up to where they are - put ourselves in their shoes, as the saying goes. With this mental gymnastic ac complished, what is it we no longer see ? We now cannot see any ef ficacious results that could possibly flow from thinking in micro terms.

A leading labor official put it clear ly and succincti y : Only a moron would believe that the millions of private economic deci sions being made independently of each other will somehow harmonize in the end and bring us out where we want to be.4 3 For further exploratory reading on this point, see the chapter, "What Is Seen and What Is Not Seen" in Se lected Essays on Political Economy by Frederic Bastiat (Princeton: D. Van Nostrand Co., Inc., 1964), pp. 1-50. Or, on the same subject, read the chap ter, "The Broken Window" in Econom ics in One Lesson by Henry Hazlitt (Irvington, N.Y.: The Foundation for Economic Education, Inc., 1962) ,pp.15-16. 4 See The New York Times, June 30, 1962. For an extended explanation of why the labor official's view is false, see the chapter, "Incomprehensible Order" in my book, The Free Market and Its Enemy. (Irvington N.Y~: The Founda tion for Economic Education, Inc., 1965), pp. 50-67.

56 THE FREEMAN February The implication here is clear. The labor official, not being able to see any possibilities in micro economics (the free market), can see no solution to social problems except through the political im plementation of macro economics. That he in his blindness refers to free market see-ers as morons is only because the term is stronger than extremists, crackpots, nuts. There is nothing new or strange in this. Most of us have a. tendency to regard as slightly tetched the connoisseur of any speciality about which we know nothing. I use the labor official as a pro totype only because he expresses his blindness more brilliantly than do the vast majority of citizens who are in his unseeing state. The labor official simply does not see what a few at least dimly per ceive. 5 However, the fault may be as much with us as with him. Free market see-ers aren't able to throw enough light on the matter. In deed, some of "us" entertain a doubt now and then about the free market being adequate to the occasion - mail delivery, for in stance. Or monopoly, or disaster, or education. Who among "us"

has no blind spots? There is no man, present. or past, who achieves more than a micro 5 For an explanation of what one micro thinker sees, refer to my chapter, "The Miraculous Market," Ibid., pp. 6-21. mentality. As the distinguished French scientist, Lecomte du Noily, put it, "Man's image of his universe is founded on less than one-trillionth of the vibrations which surround him." In any event, our inability to recall a single see-all, know-all, individual should make this affirmation self evident. Noone of us ever sees more than a wee fragment of the whole universe, of another person, or even of the whole self. Now suppose a person - such as the labor official - is unable to see how ordinary mentalities focused on micro problems, if left free to act independently of each other, could possibly attend to social and economic problems. Remember, we have put ourselves in· his position. Blindfolded thus, we can see no opening to the free market (mi cro) avenue - none whatsoever!

What to do? Surely, there are macro problems galore. One ave nue, and one only, appears open to us; a macro-solving formula. Having only micro mentalities our selves, we don't quite know how to solve a macro problem. So, how are micro mentalities to be made into macro-problem solvers? What's the formula? This is the question we must, in our self-in duced blindness, ask ourselves. Our answer? Thoughtlessly, and f or the most part, we turn the macro problems over to governt9(J(J THE MACRO MALADY 57 mente But, by this process, what is it we really do ? We do· no more than give the macro problems to micro mentalities with but one in gredient added: a, police force! Reduced to its essence, we give micro thinkers the gun power of a constabulary on the naive as sumption that this renders a com petency to cope with macro prob lems. We add only force - not one iota of wisdom - and feel relieved by how intelligently, neatly, effi ciently we discharge our respon sibilities! This is the view we get when we cannot see beyond the surface of things.

The blindfold having s,erved its purpose, let's remove it.· The fal lacy of the above course of action, and the unj ustified sense of ac complishment, are immediately ap parent when we distill what we have done to micro dimensions: you and me. Let us say that you are insuffi ciently secure and prosperous. What can I do to ameliorate your plight? I can give or loan you something that is mine or, per.;. haps, give you some helpful coun sel. Isn't it obvious that my as sistance cannot be increased by forcibly imposing my will on you? What can I do with a gun that I can't do better without one? Noth ing whatsoever! For, surely, you won't sanction my employing this coerci ve means to take from others and give to you. Not in a you-and me micro situation, you won't. But if you start thinking in macro terms you will - as do millions. No plague has ever destroyed or impoverished or kept from self realization more human beings than has the macro malady. The pilgrims who starved and died during the three years after land ing at Plymouth Rock were its victims. Several million Russians perished during 1931-32 at the hands of macro thinkers - not by men playing God but by men playing against God.6 Every sol dier who loses his life on the bat tlefield dies of the macro malady micro men undertaking macro roles.

Causes of War Any observer can see that wars, the preparation for them, and their aftermath, lead toward the total state, that is, toward more governmental takeover and an in creasing number of macro prob lems. But only those who can see beyond the surface of things can see that when a people collectivize in a power organization - social ism, authoritarianism, the welfare state, the planned economy - in short, when they "macronize," 6 William Henry Chamberlin was in Russia at the time of this enormous disaster. See his article, "State Eco nomic Planning: Tragedy or Futility," THE FREEMAN, January, 1966, p. 27.

58 THE FREEMAN Ji'ebruary wars become possible, indeed, more than likely. Men in a free market, a people who limit them selves to micro problems - acting indi vidually and in response to free choice - do not make war; they create and trade! Just as do the people in the abutting states of Illinois and Wisconsin, so will any people who, when free of busybodies, tend to mind their own business. We cannot help concluding that the mac~o malady is but the social and economic manifestation of a vicious circle: macro organization brings on wars, and wars make macro problems which, in turn, compel us into macro organization. Inflation helps to make the point. This dilution of the medium of exchange is the fiscal outcome of excessive government, that is, of macro organization. And what are the solutions? One control atop another: price, wage, rent, inter est, production, exchange, all of which are of macro dimensions. 7 The water famine on the Hud son is now a macro problem aris ing from macro (socialistic) or ganization. s I see no point in ex tending the list; it is clear, if we 'l See "The American Setting: Present and Past," in my Anything That's Peaceful (Irvington, N.Y.: The Foun dation for Economic Education, Inc., 1964) .

8 See "Water Famine on the Hudson," THE FREEMAN, September, 1965. focus the eye aright, that micro mentalities, when trapped into macro-problem solving, contami nate society with mankind's most destructive disease: the macro malady. The Remedy What, then, is the remedy for the macro malady; how do we get ourselves out of this vicious cir cle? The answer, it seems to me, is simple enough but, in our world of macro vision, difficult to put in to personal practice. Perhaps the wise Socrates gave us the cue when he said, in effect, "That man thinks he knows every thing, whereas he knows nothing. I, on the other hand, know noth ing, but I know that I know noth ing." The first step, it seems, is to recognize that "1"- no matter who - am a micro mentality and, thus, incapable of coping with or solving macro problems. In short, when asked how to solve macro problems, I must learn to tell the truth: "I don't know."

The next step is to realize that no other person, regardless of pre tensions or the amount of force at his disposal, possesses anything beyond micro mentality himself and is no more capable of solving macro problems than I am. Re quired is a penetrating skepti cism: trust no man beyond his infinitesimal area of competence; 1966 THE MACRO MALADY 59 hold him to the very little he knows. When enough of this kind of realistic skepticism exists, we will have no more truck with "pre tenders to the throne." Only then may we begin to see slightly be yond the surface of things, at least beyond what the aforemen tioned labor official can see: the therapeutic power of freedom. True, "millions of private eco nomic decisions made indepen dently of each other" may not bring us out where he wants us to be; but this micro, free mar ket, individual, freedom-of ..choice process will bring millions of peo ple as close to where each of them wants to be as is possible. There is a distinction.

As stated above, the nearest ap proximation of the micro approach ever practiced broke all the world's records for security, welfare, pros perity, and the release of creative human energy. The argument that this worked all right in a simple economy but is inapplicable in a complex economy does not hold water. The more complex the econ omy the more must the micro way of life be relied upon. For, as the complexity of the economy in creases, man's ability to. manage it correspondingly diminishes. No self-respecting individual will con cede to any other person the com petency to manage his own creative life for him. Think, then, how absurd it is to expect a competency to direct the complex arrange ment involving millions of lives! The micro a.pproach - each per son operating within the limits of his knowledge and competence should require no theorizers; its record is so remarkable and pro fuse. Those of us who are priv ileged to apprehend its perfor mance know full well that its prac tice will put an end to macro problems. There'll be no more water famine on the Hudson, for instance, than there is a famine in chickens, or cornflakes, or mink coats. Only micro problems will remain: each person trying to fig ure out how best to improve his own little world in free and vol untary cooperation with others.

Problems will fit the problem sol vers and, thus, find such resolu tion as each is capable of. When individuals attempt to solve prob lems over their heads, they are in a wild and dangerous guessing game, like children trying to ex plain what makes the world go round, and with the power to im pose on the rest of us the vagaries of their imagination. But when in dividuals are at work on problems of their own size, they will be· at their best as problem solvers; they will, as we say, come to them selves. ~ A REVIEWER'S NOTEBOOK THE WHEN ADAM SMITH wrote his Wealth of Nations, he had North America very much on his mind. The British colonies along the North Atlantic littoral had been thriving in spite of the prevailing mercantilist philosophy. Wages were high because land was cheap and the pull of the frontier made city labor scarce. Smith read a lesson in this which helped make the nineteenth century the freest of all time.