Makers or Takers; R. Donway

MAKERS ROGER DONWAY or TAKERS UNTIL quite recently, it was con sidered a sophisticated criticism of capitalism to dismiss it as having succeeded. From David Riesman to Daniel Bell, the prophets of abund ance were most laudatory about the ability of free enterprise to meet people's needs. The enrichment made possible by capitalism was described in terms so glowing, in deed so utopian, that most capital ists would hesitate to use them. These theorists did not, how ever, draw the conclusion that capi talism is a good thing. Rather, they drew the conclusion that capital ism had been a good thing - in an age of scarcity. But since capital ism had eliminated scarcity, and given us ·abundance, it was no longer useful. Indeed, by a kind of economic Peter Principle, they rea soned that capitalism was incap able of dealing with the conse quences of its own success. Capitalism was an idea whose Mr. Donway deals as a free lance student and writer with the social implications of certain philosophical issues.

532 time had gone; now a new idea was needed to deal with the results. Specifically, these sociologists as serted that abundance required a "consumer's ethic," in which peo ple would be free from all the con straints against consumption, in cluding economic constraints. The policy of the future would have to be: severing the capitalist tie be tween production and the ability to consume. More recently, of course, abund ance has not been the social prob lem uppermost in the liberal mind. The New York Times warns us editorially (April 7, 1974) that we are entering "An Age of Scarcity." The carefree days, apparently, are over; conditions like this winter's gas and oil shortage will become more frequent, even standard. One might think, then, that we would hear a chorus from the Left de manding the return of capitalism, the magical eliminator of short ages, the system born of scarcity and limits.

But apparently not so. Mr. Allan 1974 MAKERS OR TAKERS 533 C. Barnes, a vice-president of the Rockefeller Foundation, hastens to remind us that, after all, HAn In,.. quiry into the Nature and Causes of the Wealth of Nations was writ ten in a time of comparative plenty." Daniel Bell had said that the justification for capitalism was "the Malthusian injunction for prudence in a world of scarcity," and "the bending to niggardly na ture." But now Stephen Shepard of Business Week tells us that "the United States was a 'cowboy econ omy,' with a frontier ethic of limit less resources." Pay Attention to Need The objection of the scarcity theorists seems to be that the free market does not recognize need as such. If a good is less plentiful than before, capitalism simply lets the price rise until it reaches a level where the quantity of the good demanded at that price is equal to the quantity of the good offered at that price. The system recognizes no intrinsic shortage or shortfall.

Paul Samuelson acknowledged that this is a logical alternative for dealing with limited resources, but the consequences of it, he said, are illustrated by the millions of deaths which occurred during the Irish potato famine. What we re quire for an age of scarcity, accord ing to these critics, is a more selfconscious economic system, one which is responsive to people's needs, rather than one which bases people's comsumption merely on earnings. The policy of the future will have to be: severing thecapi talist tie between production and the ability to consume. The connection between produc tion and consumption is thus the common enemy of these two at tacks - and the real enemy, one suspects. It is therefore necessary, in answering these critics, to un derstand the source of that connec tion, and the error in trying to abolish it. A Vital Connection One may begin by observing that, outside a social context, the connection between production and consumption exists as a natural fact: production is the only means of assuring oneself the goods a man needs to live. And indeed those who believe that the world owes them a living do not generally try to col lect that debt from the world of nature; they look instead to the world of men.

For within a social context, the connection between production and consumption is not nearly so clear. Other people are capable of produc ing the needed goods, and these goods can be acquired from them. Why does the acquirer have to en gage in any sort of production?

534 THE FREEMAN September Why is it not sufficient that some one else has produced the goods he needs? We might begin to answer those questions by asking this more gen eral question in return: how is it that we can acquire goods from other people at all? It is, on the face of it, an odd thing to happen. After all, if other people produce goods as a means of achieving their desires, why do we expect that they will hand those goods over to us? If they need the goods, why do they get rid of them ? It sounds para doxical. Of course, people do get rid of things they need, and even of things they desperately need. The world is filled with hungry people who are throwing their food to the wind. Such people are called sowers. And they are not consid ered irrational, because by throw ing away their food, they can count on getting back what they desire more. So, too, it is reasonable to expect that a person will hand over his goods to. us, if his doing so is a means for getting back what he desires more. And that is just what it is in a free trade, since both sides set the terms, and both sides can insist on the terms being lived up to.

Trade, then, is a means of ac quiring goods from others, and a means that it is reasonable to expect will work. But trade is not a way of separating consumption from production. For in order to engage in trade, one must have something tradable, something either produced or acquired. Since our lives have beginnings, and since we consume goods as well as trade them, it cannot be the case that the source of the goods we trade is always an earlier trade. Ultimately, all trades must be rooted in production, on both sides of the exchange. Is there, then, a,ny way of "set ting free" consumption? Is there any method of acquisition which does not involve production on the side of the acquirer? Trade involves it, as we saw, because of our need to obtain the consent of the pos sessor of the goods. A method which obtained goods without the consent of the possessor would not have this problem. And indeed, co ercive acquisition is a way of sep arating consumption from produc tion: takers need not be makers.

But it is important to ask wheth er this way can be counted on? Can the person who tries to obtain goods by coercion reasonably ex pect that his actions will be the means to consumption? A faulty Method I think that he cannot. Ludwig von Mises pointed out that men act only in the expectation that their 1974 MAKERS OR TAKERS 535 action is the means of bringing about the future state they desire. Production makes sense, therefore, only if the producer can count on having disposal of the goods he produced. If he does not have dis posal, wha tever else may happen, the goods are not, for him, a means of accomplishing his desires. Thus to the extent that others, the tak ers, can count on controlling the producer's goods without his con sent, the would-be producer has no motive for production. Precisely in those circumstances where coer cion can be anticipated, the coercer cannot count on there being any goods to take.

I believe this is what Ayn Rand meant by writing the following words for her character Henry Rearden: If you choose to deal with men by means of compulsion, do so. But you will discover that you need the vol untary cooperation of your victims, in many more ways than you can see at present. And your victims should discover that it is their own volition - which you cannot force - that makes you possible. Obviously, the point applies not only to individual thieves, but also to social systems based on coercion, to what Sir Henry Maine called "a society of status," and what Her bert Spencer called Toryism. None of these systems can be counted on to work; they are attempts to sur vive on a wing and a prayer, with out the wing, and without a prayer. Socialists, of course, have long claimed that their system had a Midas touch, and would flower to unimagined heights. I have argued here that socialism, or any coercive system, has a Tantalus touch; the goods it reaches for recede before it. It is amusing in this regard that Robert Kilroy~Silk ends his book Socialism Since Marx by urging us to socialism with a quote from Robert Browning: "... a man's reach should exceed his grasp." For the socialist, it always will. ~ IDEAS ON LIBERTY To Buy or Not to Buy THE NATURAL ORDER of things requires that the maker shall pro duce his goods and display them for the inspection of the buyer who is, at all times, free not to buy. The right to buy or not to buy is vital to economic well-being and, of course, to personal liberty.

SIR ERNEST BENN. "Rights for Robots"