Thinking About Economics; E. Opitz

288 Edmund A. Opitz economic order of our own time: it is the human need to cope with scar city, to satisfy creaturely needs, to provide for material wellbeing. The visible signs of this endeavor are all about us; factories, stores, offices, farms, mines, power plants. These are the locations where work is performed, services rendered, goods exchanged, wages paid, mon ey spent, and so on. This is the economy, and in the free society the economy is not under government control and regulation. In the free society the law protects life, liberty and property of all men alike, ensuring peaceful conditions within the community. This lays down a framework and a set of rules, enabling people to compete and cooperate as they go about the job of providing for their material well being. When government performs THINKING ABOUT ECONOMICS 289 as an impartial umpire who inter prets and enforces the agreed upon rules, then the uncoerced economic activities of people display regular ity and harmony-as if guided by Adam Smith's invisible hand!

The Capitalistic Economy In a society where people are free, the economy is referred to as capital istic. Some prefer the term free en terprise; others like the private en terprise system, or the private prop erty system, or the market economy. Now, of course, no society has ever been one hundred per cent free, which means that we've never had a completely free market economy. Some people have always seized and misused political power to rig the market in their favor. Obviously, it is not the market's fault if SOfile people choose to break the rules. The appalling thing is that many intellectuals mistake these devia tions from free enterprise for free enterprise itself! And so they con demn ((capitalism." But the ((capitalism" they condemn is actually the failure of certain people to live up to the rules of capitalism-the system of voluntary exchange among un coerced people. We're aware of human frailties and shortcomings; we know that it's easier to preach than to practice, easier to announce a set of ideals than to live up to them. Economic theory provides us with a description of the way an economy would work among a peo ple who exercise individual liberty and practice voluntary association.

It is this theory we seek to under stand and explain, and it is the de viations from this ideal that we seek to correct. Every person of good will wants to see other people better off; better fed, better housed, better clothed, and well provided with the amenities. So everyone wants the economic order to function effi ciently. But how important is it that the economic order be free from bu reaucratic direction and political controls? Does it do any harm if we allow the economic order to be quar terbacked by government? Let's ex amine a concrete example to indi cate the serious secondary conse quences of government control. In the economic sector of our soci ety there is a multi-billion dollar industry engaged in the production of newspapers, magazines, and jour nals of· opinion. There is also the book trade. Those who publish and distribute the printed word consti tute The Press, and one of the im portant freedoms cherished in our intellectual heritage is Freedom of the Press. The concept is now ex tended to cover the media-radio and television-where the same principle applies.

Freedom of the Press means sim ply that the government does not tell editors what to print and what 290 THE FREEMAN May not to print-nor does it dictate to purveyors of television commentary. Some editors print stuff they think will sell. Some editors are men of strong conviction trying to promote a cause they believe in; others are party hacks thumping the tub for some ideological idiocy like com munism, or anarchism, or the New Left, or whatever. But not a single editor in the country is out crusad ing for government censorship of the press; except indirectly! Editorial Inconsistency A large number of editors, writers and commentators who demand freedom for themselves in one breath, demand government regula tion of business and industry with the next! If, at the urging of The Press, government continues to ex tend its controls over one business after another, how can anyone be lieve that government will respect the editorial room as a privileged sanctuary, and keep its hands off that section of business .known as The .Press? Socialize the economy and The Press becomes a branch of the government bureaucracy, free no longer.

The fact that The Press actively cooperates in its own entrapment makes the end result even more bit ter. It is one thing to go down fight ing; it is something else to cooperate in your own demise. Political control and regulation of the written and spoken word means excessive influ ence over the minds and thoughts of people. It means eventually a minis try of Propaganda and Information, and an Office of Censorship. If you get the impression that I don't think highly of some of the people involved with The Press, you'd be correct; they are-with notable exceptions-a sorry lot. They, along with their counterparts in the Uni versi ty and in the Church-with notable exceptions are guilty of that tttreason of the intellectuals" denounced by the French writer, Julien Benda, in his 1927 book of that title. The intel lectuals' treason in the modern world, wrote Benda, is to abandon the pursui t of truth and to seek political preferment instead.

Lest you think I am being unduly harsh on some of those who refer to themselves as Intellectuals, I shall quote a few words of C. S. Lewis: It is an outrage that they should be commonly spoken of as Intellectuals. This gives them the chance to say that he who attacks them attacks Intelligence. It is not so. They are not distinguished from other men by an unusual skill in finding truth nor any virginal ardour to pursue her .... It is not excess of thought but defect of fertile and generous emo tion that marks them out. Their heads are no bigger than the ordinary; it is the atrophy of the chest beneath that makes them seem SO.l lThe Abolition of Man, pp. 34-35.

1979 THINKING ABOUT ECONOMICS 291 A Vital Connection I use The Press to point up the vital relationship between intellec tual freedom and economic freedom. Freedom of thought, bound only by the rules of thought itself; freedom of belief, in terms of the mind's own energy;freedomofutterance, guided by logic and within reason-these spiritual freedoms are of the vE~ry essence of our being. When they are threatened directly all of us rush to their defense. My point is that they are threatened indirectly when ever-and to whatever degree their material and economic support is straitjacketed by government regulations and controls. The same analysis would apply to the Academy and to the Church. If the government owns the campus and pays the professor's salary, the teacher becomes a political flunky, no longer free to research, write, and teach according to his best insights and conscience. And when private property is no longer regarded as the sine qua non of a free people, when private property suffers increasing encroachments by government, then church properties, too, becoIne politicized. And, as taxes increase and disposable individual income diminishes, private voluntary fund ing of churches correspondingly de clines and religious programs suffer.

Accept economic controls, and what then becomes of Academic Freedom and Freedom of Worship? In short, freedom is all of a piece; philosophy is not the same as dig ging a ditch, but socialize the ditch digger and the philosopher begins to lose some of his freedom. Freedom of the marketplace and liberties of the mind hang together as one depends on the other. The great philosopher, George Santayana, reflected sadly that, in this life of ours, the things that matter most are at the mercy of the things which matter least. A bullet, a tiny fragment of common lead, can snuff out the life of a great man; a few grains of thyroxin one way or the other can upset the endocrine balance and alter the personality, and so on. But the more we think about this situation and the more instances of this sort we cite, the more obvious it becomes that the things Santayana declared matter least, actually matter a great deal.

They are so tied in with the things which matter most that the things which matter most depend on them! Economic Liberty Paramount In precisely the same way, economic liberty matters a great deal because every liberty of the mind is joined to freedom of the market, economic freedom. There's an old proverb to the effect that whoever controls a man's subsis tence has acquired a leverage over the man himself, which impairs his freedom of thought,· speech, and 292 THE FREEMAN May worship. The man who cannot claim ownership over the things he pro duces has no control over the things on which his life depends; he is a slave, by definition. A man who is not allowed to own becomes the property of whoever controls his means of survival, for ~~a power over a man's support is a power over his will," wrote Hamilton in The Federalist. Economic planning im plies the power to regulate the noneconomic sectors of life.

F. A. Hayek puts it this way in his influential book, The Road to Serf dom: ~~Economic control is not merely control of a sector of human life which can be separated from the rest; it is the control of the means for all our ends."2 In a totalitarian country like Rus sia or China the government acts as a planning board to assign people to jobs and direct the production and distribution of goods. The whole country is, in effect, a gigantic fac tory. In practice, there is bound to be a lot of leakage-as witness the in evitable black market. But to what ever extent the State does control the economic life of the Russian and Chinese people it directs every other aspect of their lives as well. The Masses Content to Drift The masses of people everywhere and at all times are content to drift 2The Road to Serfdom, p. 92. along with the trend; they pose no problem for the planner. But what happens to the rebels in a planned economy? Suppose you wanted to publish an opposition newspaper in a place like Russia or China. You could not go out and simply buy presses, paper, and a building; you'd have to acquire these from the State.

For what purpose? Why, to attack the State! You would have to find workmen willing to risk their necks to work for you; ditto, people to dis tribute; ditto people willing to be caught buying or reading your pa per. A Daily Worker may be pub lished in a capitalist country, but a Daily Capitalist in a communist country is inconceivable! Or take the orator who wants to protest. Where could he find a plat form in a country in which the State owns every stump, street corner, and soap box-not to mention every building? Suppose you didn't like your job, where could you go and what could you do? Your job is pretty bad, but it is one notch better than Siberia or starvation, and these are the alter natives. Strike? This is treason against the State, and you'll be shot. Listen to George Bernard Shaw, de fending Socialism, writing in Labor Monthly, October 1921: ((Compul sory labor, with death as the final penal ty, is the keystone of Socialism." Shaw was a vegetarian because he loved animals; perhaps 1979 THINKING ABOUT ECONOMICS 293 he was a Socialist because he hated people!

Point One: Economic freedom, is important in itself, and it is doubly important because every other free dom is related to it. To have economic freedom does not, of course, mean that you will be assured the income you think you deserve, nor the job to which you think you may be entitled. Economic freedom does not dispense with the necessity for work. Its only promise is that you may have your pick from among many employment oppor tunities, or go into business for yourself, and as a bonus the free economy puts a multiplier onto your efforts to enrich you far beyond what the same effort returns you under any alternative system. Under primitive conditions a fam ily grows its own potatoes, builds its own shelter, shoots its own game, and so on. But we live in a division of labor society where individuals specialize in production and then exchange their surpluses for the surpluses of other people until each person gets what he wants. Most of us work for wages; we produce our specialty, and in return we acquire a pocketful of dollar bills. The dollars are neutral, and thus we can use them to achieve a variety of pur poses. We use some of them to satisfy our needs for food, clothing and shelter; we give some to charity; we take a trip; we pay taxes; we go to the theater, and so on. The money we earn is a means we use to satisfy our various ends.

These interlocking events production, exchange, and consump tion-are market phenomena, and the science of economics emerged, as Mises put it, with ttthe discovery of regularity and sequence in the con catenation of market events." Economics Concerns the Means to Achieve Human Goals Economics has often been called a science of means. The economist, speaking as an economist, does not try to instruct people as to the na ture and destiny of man, nor does he try to guide them toward the proper human goals. The ends or goals peo ple strive for are, for the economist, part of his given data, and his busi ness is merely to set forth the means by which people may attain their preferences most efficiently and economically. Economics, as Mises says, uis a science of the means to be applied for the attainment of ends chosen." And a ttscience never tells a man how he should act; it merely shows how a man must act if he wants to attain definite ends."3 When people are free to spend their money as they please, they will often spend it foolishly-I mean other people, of course! As consum ers they will demand-and produc3Human Action, p. 10.