A Tale of Two Students

FRANK CHODOROV The Tale of Two Students THEY WERE members of the debat ing club at a local college, and would we please help them pre pare for the debate: Resolved, that the Federal government should adopt a permanent program of wage and price control. They had good reason for com ing to us. Human Events had made editorial comment on this debate topic in a recent issue, and the students inferred that we were something of an authority. We are not immune to flattery, and the coed debater was pleasant to talk to. To bring the matter up to date: The late Frank Chodorov, former editor of THE FREEMAN, was as sociate editor of Human Events when this article first appeared there, November 28, 1951. The question of price controls has been debated for several thou sand .years but seems to plague anew each succeeding generation. Before the college season opens, some five hundred colleges submit to a central committee their ideas on what ought to be debated. The committ~e consists of faculty rep resentatives from four intercol legiate fraternities and a member of the American Society of Speech.

These five sift the suggested sub jects and draft four resolutions that seem to embrace the maj or ideas. The four resolutions are submitted to the member colleges; the one receiving the highest vote becomes the debate of the year. Our editorial comment on the topic for 1951-1952 was that it is "loaded" - the mere statement im plies the acceptance of a question able premise. The premise is that a wage and price control program is not only practical but even de sirable; that goes without saying, and the only matter left open for discussion is the desirability of a permanent program. We pointed 707 708 THE FREEMAN December out, also, that in the current text books, with which we are familiar, the idea of controls is favorably trea.ted, so that the debaters on the negative side would be argu ing against what they had learned in class. If they debated well, how would they fare in their economics examinations?

The notebooks were made ready. We adopted the Socratic method. What is the purpose of price con troIs? we asked. "To keep prices down, of course." What made them high? "A shortage of goods and a great demand." Or an abundance of money, we volunteered. The controls won't bring more goods to market and they are not intended to reduce the amount of money in circula tion. They simply aim to compel sellers to accept, and buyers to quote, prices lower than those pre vailing in the free market. "You are implying," said the young lady, "that there is an im mutable law .of supply and de mand. One of my books says there is no such law." Immutable, we ventured, is a long word leading to a long argu ment. Would she be good enough to tell me what she would do, were she a dressmaker, if the fixed price of dresses were below her costs? "I'd quit making dresses." Unless she reluctantly accepted prices forced upon her by women who disregarded the law, we added.

However, if she went out of busi ness, there would be fewer dresses on the market. Would the price of dresses then go up or down? The question, she suggested, answered itself. So, we jumped to the Q.E.D.: that price controls· had the effect of creating shortages and thus raising the prices they were de signed to lower. She demurred: "The govern ment could go into the business." And could sell dresses at a loss which would be made up by taxing the buyers of dresses. "Can't enforcement agencies hold prices down?" We traced the course of a pork chop from litter to the butcher shop, just to pick up the number of points at which prices would have to be fixed and surveillance maintained, not overlooking the hide's trip from slaughterhouse to the glove shop. Would it be wrong to estimate that the number of cops needed to enforce price con trols in general would come to at least a tenth of the population?

Would not the withdrawal of these men from productive work result in lessening the supply of goods? And, who would watch the cops? "Well, then, are you in favor of the black market?" We are in favor of the true mar ket, even if it is labeled "black."

1971 THE TALE OF TWO STUDENTS 709 The true market never can be sup pressed .•Even the ruthless Soviet commissars cannot do it. The stu dents were surprised at this re mark, so we related how, when the Russians reduced the value of the ruble several years ago, they gave as their reason the large fortunes that had been built up by "profit eers" -- which was an admission thatan illegal market had been in operation. (Patronized by law enforcement agents.) The Loophole Economy "But, Americans are law-abid ing. Didn't the OPA hold down prices during the war?" They were too young to remem ber, and their textbooks do not record the shenanigans under OPA: how butchers would be "fresh out" if you asked them to weigh the meat before your eyes; how the tails of men's shirts were cut short to meet the fixed prices; how you had to buy an accessory you didn't want, at an outrageous price, in order to get an automo bile at the legal price.

"If wages are held in line, prices would automatically follow." Under wage controls, we ex plained,both employer and em ployee become criminals if one of fers and the other accepts an in crease in wages. During the war, to avoid putting everybody in jail, the War Labor Board hit on the device of upgrading jobs so as to make increases in pay legal. But applications for permission to in crease were too numerous for the Board .to handle, and the employ ers in desperation resorted to un der-the-counter wage boosts, in order to hold their employees (so as to fill defense orders). "You mean that neither prices nor wages can be controlled?" Yes, they can; in the army or in prison. The Argument for Controls When There Is No Case "Wait a minute," the coed inter jected, "I've got to take the affirm ative side. I need arguments in favor of controls." That was a chore. How does one support· what one holds to be a fallacy ? Well, underlying every fallacy is a doctrine, and if you accept the doctrine, the fallacy seems to melt away. In this case, the doctrine is that political power can make the market place jump through a hoop; there are no laws of economics to hamper the strong arm of the state. We had to accept that position, if we were to beaf any help to the affirmative side.

Sticking to the Socratic method, we asked: what is the advertised social purpose of controls? "To distribute equitably what ever is in short supply." Like the father, we suggested, 710 THE FREEMAN December who sees to it that none of his children gets more than the oth ers. That is what we call "egali tarianism." To argue the affirma tive in this debate, we said, you must accept egalitarianism as an' ideal and a possibility; you must assume that the state has the right, the capacity, and the duty to allocate production and equalize consumption. "Hold on; you're preaching so cialism." Maybe statism, we volunteered, is a better word. But, why get dis turbed over a na.me? "We don't dare mention social ism. The students don't like it, and neither does the faculty adviser." Then we remembered that in the textbooks this controlled economy business is described as "demo cratic." Socialism is not men tioned. Putting nomenclature aside, we pointed out that the af firmative in this debate must rest its case on the goal of abolishing inequalities in the distribution of wealth and the state's ability to do so.

"What about the rights of the citizens ?" Pure fiction, we sneered. The only rights the citizens have are the privileges given him, on lend lease, by the state. "You mean the worker does not have the right to sell his services to the highest bidder?" Of course not. We must keep in mind that the good of society, as determined by the state, takes precedence over the good of the in dividual. After all, if the worker insists on fending for himself, how can the state take care of his in terests? "But, surely, if a farmer has put his back into a bushel of po tatoes, those potatoes belong to him and he has a right to sell them for whatever is offered." Property Rights Rejected It was the young man who brought up the'right of property, and we had to argue that that, too, is fiction. In his textbooks, we said, he would learn that in our highly integrated economy the individual worker produces nothing; society is the only producer. If society produces everything, the state has a first claim on everything, and is entirely within its rights when it confiscates property (by taxation) and distributes it for the general good.

They were perturbed. This was hard to take. "You mean to say that to support the affirmative in this debate we have to take the position that the 'individual has no rights? That the state is su preme?" That's your basic premise, we insisted. Once you admit that the individual has rights which the 1971 THE TALE OF TWO STUDENTS 711 state must respect, the case for controls is lost. The students had come to us without prejudice. They were in terested only in winning a debate, whichever side they took. But, when the argument for controls was related to the underlying doc trine of statism, their sensibilities were aroused. The debate took on a new meaning; it was not an im personal verbal joust; it was a Lost Freedoms battle of values, a contest between right and wrong - and neutrality was impossible. When they left, we felt that freedom is not' a lost cause. It is rooted in the human soul; it can not be eradicated by sophistry, nor obfuscated by erudition. Once it is spelled out, youth will recognize freedom, embrace it, and, if need be, fight for it. t) IDEAS ON L$ LIBERTY I WILL NOT undertake to list all of the many freedoms we have surrendered in the United States - the restraints against freedom of choice that we have voted against ourselves. But such a list would include controls over farmers, businessmen, industrial workers, bankers, foreign traders, and other groups. It would include price controls, wage controls, rent controls, raw materials controls, controlled rates of interest, inflated money, artificially cheap credit, and controlled production. Each of these measures has the effect of preventing honest persons from doing what they want to do or of forcing honest persons to do something that they do not want to do. As such, each is a clear-cut denial of freedom.

Else why has freedom been forsaken and forbidden in these vast areas of our daily activities? To me, the sad part of these controls is that, even if we disre gard the moral issues involved, I believe they will not accomplish what they are designed to do. I can find no evidence in history that they will work and I believe the reason is clear. It is not, as is claimed, an attempt to control prices or materials; it is always an attempt to control persons. ADMIRAL BEN MOREELL, In Search of Freedom (1951) BRIAN SUMMERS 712 CHARITY is a virtuous act of conscience whereby an individual voluntarily gives of himself in the belief that he is helping his fellow men. Neither the psyche of the benefactor nor the merits of his beneficiary need concern us here. The point is that an act of charity is a willful deed of an individual prodded only by his concern for others. It is in this light that the Welfare State appears most ob scene, for it replaces charity with the confiscation and redistri bution of wealth. This is not charity because there are bene ficiaries with no corresponding benefactors! The taxpayers as a group are not the benefactor because collectives can't have consciences any more than they can have headaches. Individ uals and only individuals can have consciences. The voluntary bestowers of charity are replaced with involuntary payers of taxes, many of whom now contemplate their own trips to the feeding place. The beneficiaries, no longer having any individ uals to thank for their gains, come to view them no longer as gifts, but as "rights." Thus does the Welfare State replace the noble acts of individuals gratuitously aiding one another with Mr. Summers is a graduate student in mathematics at the State University of New York at Stony Brook.