Investing in Yourself; R. Tyson

INVESTING IN YOURSELF ROBERT C. TYSON LAST YEAR I took a trip through South America, and I witnessed much of a continent in ferment and in a quandary. I saw firsthand the ravages of runaway inflation on the social fabric. I heard offi cials, bankers, professors, and businessmen wonder out loud on how to stop inflation and trans form social unrest into economic development - into a speed-up of economic growth. The problem was crystallized at a conference on economic develop ment that I attended. A member of the conference rose to his feet and addressed the gathering, stat ing: "At times we seem to be try ing to grow forests while forget ting the nature of the tree." Somewhat surprised, everybody Mr. Tyson is Chairman of the Finance Com mittee, United States Steel Corporation. This article is from his address at Samford Uni versity, Birmingham, Alabama, August 27, 1966. in the audience turned to the speaker.

"Why don't we realize that we can only move an economy forward when we get the individual to move forward? Without him," he continued, "we move backward." This set me to thinking about self-development and economic de velopment, about the role of the individual in the oftentimes elu sive art of nurturing economic growth - of achieving a sustained rise in the creation of goods and services - a problem common to all countries, to every type of po Iitical economy. Economic growth is no idle phrase; although but a part of the so-called dismal science of eco nomics, it is one of the most pow erful forces in the sweep of cur rent events. Kings, presidents, generals, and 243 244 THE FREEMAN April even dictators worry about it be cause no society can be great un less its productive power is un leashed. Yet the very word "growth" can be misleading, and too many of us may be mesmerized into thinking that it is more or less biological if not automatic, that it can be fer tilized, seeded, cultivated, and har vested like so many acres of wheat or cotton, that it can be simply planned from above and ordered into existence, that it can even be accelerated through - presto -rev ving up the money press.

Only When Free . .. So we sometimes lose sight of the fact that economic growth, even in a closed society like com munism, is an intensely personal matter, that it rests heavily on h uman psychology, on indi vid ual motivation, on voluntary choices. We forget that printing-press in flation is an affront to the individ ual, a delusion that steals away his savings and corrodes his sense of dedication to work and thrift. Above all, we overlook the essen tial fact that only when the in dividual is free can he be fully productive and creative, that so ciety and all social institutions, in cluding the church, government, university, and corporation, live and think and act only through the individual. But, like "growth," freedom al so seems to me to be not always understood. Many Americans, for example, seem to hold that free dom is a grant of government, for getting that our Declaration of Independence holds that all men are "endowed by their Creator with certain unalienable Rights, that among these are Life, Liber ty, and the pursuit of Happiness."

If liberty were not so endowed, then what government could grant, government could also take away. Indeed, the genius of the Found ing Fathers was their realization that government is most fallible when it comes to usurpation of freedom, that men in public office should not be blindly trusted, that the American government there fore had to be, through the Con stitution, strictly limited in its powers, subjected to checks and balances, and expressly prohibited from infringing on the endowed freedom of the individual. Ours was to be a government of lavv, not of men. And thus does the Bill of Rights seek to confirm lib erty under law. Again, quite a few of us appear to believe that while free speech, free press, free assembly, and free exercise of religion are thorough going freedoms, free enterprise is somehow an exception to the rule. I call your attention to the 1967 INVESTING IN YOURSELF 245 growing grid of so-called "volun tary" controls in the guise of guidelines and guideposts.

Importance of the Individual I believe, in other words, eco nomic growth flourishes under free dom, under responsible citizenship and government, under individual growth. I believe individual growth stems from the individual's ability to serve, from his dedication to service, and from the raising of his sights on his aspirations and possessions-incentives, if you will. And I believe individual incentives are indispensable to growth in a free society and, as the manifold problems of communism prove, in an unfree society as well. Ironical ly, the individual in communist societies, under a philosophy of materialism, loses both material well-being and freedom. As Adam Smith, that canny Scotsman, father of modern economics and, incidentally, professor of moral philosophy, noted almost two hun dred years ago : "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest." In brief - responsible self-interest.

And thus does the public interest in economic growth involve the lawful private interests of individ ual growth. I believe, in short, the social good is advanced through the in dividual's free but responsible "pursuit of Happiness." So my philosophy for growth comes down to social growth through economic growth, economic growth through individual growth, and individual growth and individual fulfillment through self-investment and self discipline. <apital Formation To be sure, textbooks and econ omists treat capital formation adding to the total capital stock of a country - as the road to econom ic growth. This is true, as far as it goes, but it doesn't go far enough for, again, such thinking can lose sight of the individual tree for the forest. Capital for mation is indeed at the center of economic growth, but individual growth and individual investment are the foundation of capital cre ation. Thus, when we speak of an investment in an industry or in a country, we speak directly or in directly· of investing in people, in the individual. The individual, as a saver, is the beginning of in vestment; he, as an investor or consumer, is the end purpose of investment. In a free society, in other words, capital investment is of the people, by the people, for the people - or, more accurately, of the individual, by the individ ual, .for the individual, 246 THE FREEMAN April Now, who is this mysterious in dividual to whom I allude? He is a very unique being - he is each one of you. When you as an indi vidual have confidence in the fu ture, in the purchasing power of your money, in the inviolability of contracts and property - in short, in the climate of investment you will very likely work harder and save more. You may even directly commit your savings in an investment and share the own ership of enterprise. With these acts of working, saving, and in vesting, the wheels of economic growth begin to turn and the economy moves ahead.

So far so good. Yet the road to economic growth is usually not so simple, nor so smooth. Self-disci pline is called for. Work involves energy, time, wear, and tear. Sav ing involves forbearance, absti nence, doing without. Investing involves risk, uncertainty, the pos sibility of loss. But along come soothsayers and some of those cloaked in political power who proclaim an easier way, an easier life, instant or near-instant wealth, welfare, and security. They argue: Let's take care of the individual, for he's not responsible for his shortcomings; society is to blame. Let's spend ourselves into prosperity. Let's forget savings, for thrift can be antisocial. Let's run up the public debt, for we merely owe it to our selves. And, let's not worry too much about inflation, for it is the price of economic growth. This siren song is heady; the ballot box becomes a short cut to paradise. Of course there is a catch to this catchy tune - in fact, a lot of catches fraught with delusion and with losses of liberty. So, to me, the great economic question of the day ought not to be: How can we maximize our security and growth? Rather it ought to be: How can we maintain our liberty and hence our growth? For in liberty, in the Constitutional de sign of free choice in America, we have the mechanism for moti vating the individual, for achiev ing economic growth and hence genuine economic security, along with the opportunity to preserve and advance freedom.

A Time of Testing But I believe liberty is being tested as never before in America. I believe that our faith in free in stitutions is being tried. Campus rowdyism is giving many a col lege president a hard time. Rioters in our streets are beleaguering many of our major cities. Lobby ists and special interest groups demand all manner of handouts from the government - local, state, and especially Federal. In 1967 INVESTING IN YOURSELF 247 the name of welfare and security, the demands are for more and more - not tomorrow but today. These demands strain the body politic - and eco1].omic-and erode the foundations of our liberty. The hop~ of government-provided welfare and security seems to have become a widespread obsession. Have we lost the lesson of how shortsighted was the welfarism of "bread and circuses" in ancient Rome? Did Benj amin Franklin have many of us in mind when he wrote: "They that can give up es sential liberty to obtain a little temporary safety deserve neither liberty nor safety"?

To these questions I would only add the thought that liberty is not an abstraction; it is an intensely individual concern. It is also, as I have said, a social concern. In dividual growth and social growth are as one; individual responsi bility and social responsibility are also as one. Hence, I see freedom, responsibility, and growth as a three-way evolving process. To me, freedom and its preser vation imply personal responsi bility which, in turn, implies self discipline. Unless we discipline ourselves, there is danger that a Big Brother may do it for us. Re sponsibility, in other words, can not be casually shuffled onto the government. Responsibility means carin~ about others as well as caring for one's self. It means re sponsible self-discipline in the form of voluntary associations of individuals caring about other in dividuals. It does not mean fur ther delegation of health, educa tion, and welfare to the govern ment which is to delegate exces sive, and perhaps corruptive, polit ical power.

Limits on Government We should understand, then, that while government is neces sary for law and order, that in proportion as we give govern ment power to do things for us, we give it power to do things to us. Indeed, we should understand that the result of maximizing se curity via government is a maxi mizing .of loss of individual free dom. Hence, I believe we must dis cipline ourselves in the demands we put upon government. To the maximum extent possible we should "do it ourselves." We should realize that gains in na tional production originate with gains in individual production. We should realize that production and freedom have a common price: re sponsibility, work, forbearance, self-investment, self-discipline. And I believe that each of us must discipline himself to think through and resist the tempta tions of the soothsayers - temp248 THE FREEMAN April tations which undermine both the incentives and the independence of the individual. For example, we hear: "Reduce hours, spread the work, and prevent unemployment." This is a tempting but shallow and so cially costly demand. There is no fixed lump of work to be done. The work to be done is infinite and to the extent that each of us works less, less is accomplished. And time, after all, is relative - the fact that people worked twelve hours a day around the turn of the century is .called economic slavery; the fact that some peo ple currently work fourteen hours a day on two jobs is called moon lighting.

"Regulate job-destroying auto mation" is also suggested. This one has a certain specious plausi bility. But automation is the new 'war-cry of all those who have falsely believed in technological u~employment all the way back to the machine-smashing Luddites of early nineteenth-century England. The current labor shortage testi lies eloquently to the fallacy of this argunlent which leaped into prominence several years ago. Au tomation and machines realign and expand employment oppor tunities, increase the employee's productivity, and raise everyone's Iiving standards. "Curb profits and raise wages" is another cry. But profits are the spark plugs in the engines of en terprise. Curbing profits would thus curb enterprise and hence wages. Indeed, without profits there would be no private enter prise and no private wages what soever. "Restrict private affluence" is a popular theme. This thought at tacks income inequality and wealth accumulation and carries the im plication that, as in communism, we should all share and share alike. The argument, however, flies in the face of realism, of the diversity of skills and talents, of the need for individual incentives, of the fact that in a free society the consumer rewards in propor tion to the contribution that each of us makes to production.

"Expand public welfare" has much hasty appeal. This demand, sometimes predicated on a so called "starved public sector," car ries the pretension to some of our citizens that greater welfare is without injury to the private sec tor. Here it should be remembered that government cannot give un less it first takes away, that exces sive welfare can warp the incen tive to work of both the individual who receives it and of the in dividual who pays for it, that it can consequently stunt economic growth. "Put human rights over prop1967 INVESTING IN YOURSELF 249 erty rights" is another bit of false logic. Of course property has no rights, but property-holders do. And no individual can exist with out property - food, clothing, and shelter. Without private property the individual would have to turn to government for sustenance and so surely surrender his free dom. Human rights are not ex tended by denying property-holder rights. On the contrary, human rights and dignity are promoted by helping the property-less in dividual to help himself, to teach him marketable skills so that he can acquire property. on his own and attain independence.

Economic Growth Depends on Responsible Individualism Let me conclude, then, that the key to economic growth is the free individual, that true freedom can not exist without personal respon sibility, that without such respon sibility liberty becomes license and transgresses on the freedom of others - license and transgression, in other words, by both individual and government. Again, freedom involves choices - critical choices; and choices in volve consequences - critical con sequences. Consider some ramifi cations of freedom: Freedom to choose your leaders in public office. Freedom to choose your friends and associations. Freedom to choose your way of worship. Freedom to choose your career and where you work. Freedom to choose how you will utilize what you own and what you earn - whether to save or to spend, whether to invest or to con sume. Yet each of these choices cuts more than one way. With the political choice, for example, you can vote for the candidate who promises that he will work to pre serve our liberty. Or you can vote for the candidate who promises "pie in the sky."

I am convinced the "pie" here and now will be bigger and our liberty safer as we invest in our selves - and discipline ourselves to better serve others. ~ Beware of Enslaving Others WHAT YOU SHUN enduring yourself, attempt not to impose on others. You shun slavery - beware of enslaving others! If you can endure to do that, one would think you had been once upon a time a slave yourself. For vice has nothing in common with virtue, nor freedom with slavery. EPICTETUS ARE V lEW E R I 5 NOTE BOO K MEN can dream, can't they? And, while they are about it, they might as well dream about a po litical future that would restore to us our individual dignity and freedom to own and act. We need parables to tell us that the liber tarian philosophy has regenera tive power, and that we aren't necessarily destined to become a world of ants or bees, each of us assigned for life to our little place in a communistic heap or hive.