Free Markets and Human Freedom; D. Russell

This Is one of a series of articles examining current interventions of the welfare state In the light of warn ings from the French economist and statesman, Frederic Bastlat (1801-1850). 132 stitution that can plunder legally the government. Woe to the people who cannot limit the sphere of action of the state! Freedom, private enterprise [i.e., the market econ· omy], wealth, happiness, independence, personal dignity, all vanish .... Through. out history, plunder has been practiced through abuses and excesses of govern ment. . . . The only remedy is the pro gressive enlightenment of public opinion .... [which Bastiat believed to be "sov ereign"] until the people finally come to realize that it is better to leave the great est possible number of goods and services to be exchanged by the interested parties at freely negotiated prices in the market economy.* While Bastiat developed his theme well indeed in that particular essay *This extract (condensed and translated by me) is from the essay, "The Physiology of Plun der." The Complete Works of Bastiat (Guillau min, Paris, 1878; vol. 4), p. 141 ff. This essay is also in the translation of Bastiat's book, Eco nomic Sophisms (Foundation for Economic Ed ucation, 1964).

FREE MARKETS AND HUMAN FREEDOM 133 (and I especially recommend it to you), my objective is to apply the same principle to the activities of our own government in the United States today. I'll begin with a state ment I'll be repeating several times in this chapter: Governments never control prices. No government ever has controlled a price. No govern ment ever will control a price. It sim ply can't be done. Governments control people (you and me) and nothing else. Govern ments tell the seller ofa loaf ofbread (or the owner of a rental apartment) what price to charge. Thus it's ob viously the owner who's controlled; the price itself couldn't care less. Freedom and the Market Sometimes the specific price the owner must charge is the minimum. Sometimes it's the maximum. Some times the same price is both mini mum and maximum. Whichever, it's never the price that would be deter mined by peaceful people freely ex changing their goods and services in the market place. And always the control is on the person who owns the product or service. The process is one of "people control," and (as Bastiat said) the inevitable result is loss of freedom, independence, and per sonal dignity-as well as the pro duction of fewer goods and services.

Few Americans (when asked to identify the foundations of their freedom) will agree with me that it's basically the free market economy. Instead, they identify the source as our Constitution, or democracy in general, or religious teachings, and so on. In every case, however, they're identifying the results, not the cause. If you have a market economy, all of these desirable attributes necessar ily exist or soon appear. If there's no free market, however, there's no pos sibility of a free press, or elections to change leaders, or any of the other freedoms we enjoy. For all freedoms (repeat all) depend on the existence of private ownership ofthe-meaIls of production ina free market economy where production is directed by the desires of the owners to earn a profit. Since most people consider that statement both startling and ques tionable (admittedly it is a minority viewpoint), let's see how a reason ably well-educated and rational per son could arrive at such a conclusion in today's socialistic world. In short, why do I persist in such an extreme viewpoint when probably more than 90 per cent of our educators, com municators, and religious leaders hold the contrary viewpoint?

Let's begin with this: Freedom for both religious and nonreligious ac tivities is guaranteed in the Russian constitution. It's a meaningless guarantee, however, because of the absence of private ownership and control of the means to implement freedom of religion in practice. For example, how can you have freedom 134 THE FREEMAN March of religion when you can't own a church? Or even rent one? Since all resources (all buildings). are owned in common, necessarily you must have the permission of the owner (government) to use the church building. Do you imagine that (even if the government gave you permis sion to use one of its church build ings) you could preach in it a sermon on "private ownership with respon sible stewardship" as recommended in the Bible? Private Ownership When the Russian government as sumed ownership of all the syn agogues "for the benefit of all the people," freedom of religion for Jews automatically and necessarily dis appeared, Le., since their temples were henceforth to be used in the best interests of all the people, ob viously they couldn't logically con tinue to be used by a group of zealots with a religion contrary to the idea of government ownership of all buildings and resources. True enough, the Jews are sometimes per mitted (given permission by govern ment) to attend services in one of the several synagogues owned and still maintained by the communist au thorities. That arrangement is not exactly what we ordinarily mean by freedom of religion, however.

My thesis is that the free market economy is the key to all freedoms. In fact, the market and freedom are really synonymous terms. If the market is totally free, all presses and churches and assembly halls and speaking podiums are privately owned and are operated for a profit. Thus, each person can preach (or hear preached) whatever appeals to him. And anyone can pay to have published whatever idea he wants to write and circulate. But if private ownership is abolished, there's no possibility offreedom in those or any other areas, Le., everything is nec essarily by permission of the owner the government, the police force. For example, let's apply this idea to two nations where the economies are currently almost totally con trolled, where all resources and all means of production and distribu tion are owned in common by all the people-Russia and Cuba. There is no freedom of any kind in either of those nations today. Freedom is a physical and mental impossibility that can't even be imagined there.

While certain actions by the people (including church attendance) do have the appearance of freedom of choice, we must remember that those actions are necessarily by permis sion of the government, and can be rescinded arbitrarily tomorrow "for the good of the people who own everything." In those unfortunate countries, no person can write what he pleases and have it published, or even send it through the mails to his own friends, 1985 FREE MARKETS AND HUMAN FREEDOM 135 without police permission. Nor can you hire. a hall to make a speech, or to assemble together to hear a speech, without police permission. In neither country is there even a mechanism to establish a news paper, much less a newspaper in op position to government. Nor can you establish an opposition political party. Where would you meet? It's doubtful the government would offer you one of its halls to denounce the government. You couldn't even meet in a park or the woods; they're also owned by the people, i.e., the government.

No Personal Choice There simply is no possibility of human freedom ofchoice when there is common ownership of all re sources, ineluding a place to stand on. When all resources must be used for the benefit of all the people in stead of for the profit of the "greedy private owners," there's simply no "mechanism" you can use to prac tice your own brand of freedom of anything. But imagine, if you will, what would be the inevitable results ifthe government could exercise no con trol over the peaceful economic ac tivities ofpeople in general. In short, imagine a market economy in those nations. Publishers and editors could then be either for controls over the econ omy or against them. Even the editor who favored a controlled econ omy would be free to say so, if the market were free. Of course, many people would doubtless denounce those editors and publishers who made such proposals. But in a mar ket economy where presses are pri vately owned and operated for a profit, there is nothing more they can do about it, except to refuse to buy the newspapers they disagree with and hope those papers go broke from lack of subscribers. In short, the press cannot possibly avoid being free in a free market.

Now reverse the situation again and imagine that all newspapers are owned in common (by the govern ment) and are operated for the ben efit of all the people. Imagine that private ownership and the market economy have been abolished. Ob viously, there cannot be afree press under that arrangement. Just as the owner of The New York Times will never denounce himself in his own newspaper, just so will the owners of Izvestia and Pravda never denounce themselves in their newspapers. The situation presents a physical and in tellectual impossibility for a free press when the government owns all of the presses. As another example, try to imag ine the existence of freedom of reli gion in a controlled economy of com mon ownership. Just how would you go about it mechanically? For ex ample, the Latter Day Saints (Mor136 THE FREEMAN March mons) send their missionaries all over the world-literally to any na tion they can get into. For the most part, those people preach personal responsibility for one's own eco nomic welfare, the private owner ship of property, the free market economy, and the responsibility of individuals and of the church (not the government) voluntarily to feed the hungry and house the homeless.

Just where could they preach that philosophy in Russia, Poland, and Cuba? All pulpits are owned in com mon in those common ownership countries. Will "the people" (govern ment) turn those pulpits over to a group dedicated to the opposite phi losophy? They may do it-if you'll share your church equally with the devil worshippers. Your church "(whatever it may be) endorses private ownership and re sponsible stewardship. That reli gious philosophy cannot possibly be permitted unrestrained expression in any nation that endorses the con cept of common ownership of prop erty. If it were permitted to flourish, that subversive idea would quickly lead to revolution and the overthrow of government. In short, the public utterance of the free market philos ophy could no more be tolerated as a religion than as an editorial policy in the controlled economy of com mon ownership. The same reasoning holds true for speech, vote, and family life-as well as for every other human activity that involves differences of opinion.

All the history I've yet read bears witness to that truism. And I can find no other answer" in logic. Nor can any constitution or bill of rights permanently stop the inevi table verdict. No legalities concern ing freedom of press, speech, and re ligion have ever been able to stand permanently against the realities of an economy controlled by govern ment. Obviously, the judicial branch of government can't long be permit ted to pursue a course in direct opposition to the legislative and administrative branches of govern ment, even in the unlikely event it wanted to. In one way or another, there must necessarily be at least a rough balance of agreement among all branches of government; other wise, there could be no government. Free Unions in Poland? Lech Walesa discovered that real ity in Poland when he had to use a government building for his union headquarters. (Remember, you can't buy, build, rent, or own a building in a "common-ownership" nation.) And when he wanted to print and dis tribute a pamphlet defending his union and denouncing the govern ment's union, he necessarily had to go to a government printing press and ask them to do it. That arrange ment simply couldn't last.

I spent five weeks in Poland dur1985 FREE MARKETS AND HUMAN FREEDOM 137 ing the build-up period that led to "Solidarity." I was astonished that so many Polish people (along with the vast majority of the American people) believed that a free union could exist in a common-ownership country. It's possible to have a free and vol untary union in a market economy ofprivate ownership. But there's just no way (even mechanically) it can ex ist under common ownership. "Sol idarity" or common ownership (one or the other) had to go. I was sad dened (but in no way surprised) at which one lost. Incidentally, I watch with great interest the ongoing and far-from-settled conflict between church and government in Poland. In due course, one of them has to go; for obviously, a free church can't ex ist under common ownership. If the presses, auditoriums, and church buildings are owned or con trolled by government, it is childish to imagine that there can be any freedom of press, speech, and reli gion. President Reagan saw this "press, speech, and assembly" real ity when he was a presidential can didate in New Hampshire in 1980.

Remember when he was scheduled to debate George Bush alone, and the sponsors of the debate wouldn't let the other candidates onto the plat form? Ronald Reagan picked up the microphone and (on national televi sion) announced that he had paid the private owners for the use of it, and that he would say who could use it. At home from my easy chair, I stood up and cheered. For that's the essence of all freedoms. Someone owned the microphone, the podium, and the assembly hall-and rented them out at a profit. Freedom in a market economy works so automat ically and smoothly that, if you were to thank. the owner of that hall for his deep interest in preserving free dom of assembly, he wouldn't even know what you were talking about. His sole interest was the possibility of profit. And that's why you and I have freedom of assembly. Farm Price Supports Just as the government can't con trol prices (but only people), just so is it absurd to imagine that the gov ernment can support prices. Without exception, the only thing that any government can ever do is (in one way or another) control people, i.e., to prevent us from doing what we want to do, or to compel us to do what we don't want to do. Thus, it follows that the government's price support program for agriculture necessarily deprives farmers of their freedom.

And it most surely does just that. Here is a harsh and little under stood fact: Because of price supports, freedom of agriculture in the United States really doesn't exist. That is, you can no longer grow what you wish to grow on your own land. Ifyou have any doubt, try this experiment: 138 THE FREEMAN March On any land that will grow tobacco, plant a few acres of it (even for your own use instead of to sell) without getting permission from govern ment. You'll be fined or jailed (or both) for your antisocial and illegal action. Again, freedom follows the free market. When it's not free, nei ther are you. And so it is with tariffs, subsidies, aid to all kinds of dependent people, and other government interferences with freedom of exchange. In every case, peaceful persons are deprived of their freedom to exchange their goods and services on mutually agreeable terms. In every case, we are deprived of a bit more of our free dom of choice.

All of us have lost our hard-won freedom to join or not to join orga nizations of our own choosing. Cur rently some 20 million Americans must belong to labor unions, whether the individual member likes it or not. The fact that you, yourself, may not now belong to a union is purely academic and per haps temporary; the essential prin ciple of no freedom of choice in the matter has now been firmly estab lished and written into the law ofthe land. It is legally enforced by strikes, threats, and even bloodshed against those who are still naive enough to imagine that employers and employ ees in the United States are still free and responsible persons. Perhaps you'll better understand the fearful danger we are in when you contemplate the implications of this fact: Compulsory unionism has long been broadcast to the world by our State Department's "Voice of America" as the very essence offree dom itself. Actually, that's what "Solidarity" in Poland was all about, Le., it was a revolt against the com pulsory unionism imposed by gov ernment on all employees. They ob jected, and tried to set up their own voluntary unions that no one had to join. That endeavor was no more suc cessful in Poland, however, than it is in most states in our own country.

Let it be recorded that the card carrying members ofthe Communist Party did not, and could not, do this to us, even though they surely wanted to. It was done primarily by our best people-our ministers, our teachers, our editors, our business men, and our most honest legisla tors. And it was inspired by the best of all reasons, Le., the human desire to help one's fellow man. Control of People Those good people forgot, however, that the only thing any government can ever do, even in its proper func tion of preserving the peace, is to control people-to compel us to do what we don't want to do, or to pre vent us from doing what we want to do. That procedure is, of course, the proper way to stop murderers and thieves and rapists; for clearly, the 1985 FREE MARKETS AND HUMAN FREEDOM 139 police powers of government should be used to prevent those antisocial people from imposing their desires upon others by violence. But when the same powers are used against peaceful persons in their peaceful ac tivities, freedom is always and un deniably infringed.

For example, every American has lost his freedom to save or to spend his earnings as he pleases. Our gov ernment compels ~ll of us to "save" (actually, it's a tax) a portion of our wages and salaries-that is, the gov ernment taxes away a portion and promises to give it back (sometimes more, sometimes less) at some later date. This compulsory scheme is called Social Security, and. it is gen erally cited as the essence of true freedom for the people. Perhaps as many as 75 per cent of the American people are now in favor of this loss of personal choice (freedom) and would categorically oppose any sug gestion to return to a situation in which each person is responsible for his own welfare in a market economy. And so it goes-through hundreds and thousands of government pro hibitions and compulsions in the peaceful economic affairs of men and women. Without exception, every one ofthem is a direct loss offreedom of choice and responsibility.

Again (remember, I promised to re peat this several times) the only con trol that any government can exercise is people control. Any attempt to control things must necessarily involve the control of people, and that is undeniably a loss of freedom. Most of the editors in the United States scoff at my fears. "We will al ways preserve freedom of the press," they say, as they advocate additional government compulsions and pro hibitions in the market, including postal subsidies to themselves. In their sermons, most of our min isters promise us that "our hard-won freedom to worship as we please will never be lost." At the same time, they suggest that the police powers should be used to perform still an other charitable service that was once believed to be the responsibility and pride of our churches. And invariably, as the legislator demands still another interference in the market place, he thunders this familiar theme: "The people will never lose their right to vote as they please."

And true enough, those four pre cious freedoms of press, speech, fran chise, and religion appear to be strong in the United States today, even though freedom itself is in great danger. That seeming contradiction is explained by this fact: We still op erate within the framework of a market economy. It still survives in spite of the increasing attacks upon it. In spite of the fact that govern ment now taxes and spends more than one-third of the combined in140 THE FREEMAN comes of all persons, the market pro cesses of competition, pricing, profit and loss still generally prevail. In spite of the fact that governmental controls over the economic affairs of all of us are steadily i~creasing, the long-established order of the market still prevails to a large extent. (Per haps we should be thankful that the federal government doesn't yet ac tively produce anything, except elec tricity in Tennessee and money in its mints.) But somewher~ along the line, our essentially free economy must drift into an essentially controlled econ omy, if the present trend continues.

That will be the end of human free dom in the United States, and prob ably in the world. All other free doms-press, speech, franchise, religion-must necessarily disap pear with the loss of the free econ omy. For the fact remains: In a to tally controlled economy, it is not the economy but the people who are to tally controlled. @R) THE LAW by Frederic Bastiat The law, it has been said, is nothing more than the will of tyrants. So it has been many times in history. But just laws depend upon a law which under lies the law passed by legislatures or declared by rulers. It is a law which provides the framework of liberty. Emancipation from the doleful theories of the compulsive state awaits discerning readers of this brief treatise. This remarkable volume, translated in 1950 by Dean Russell,has been a best seller since then-one of the most clear and concise ar guments of the case for limiting government in the cause of freedom.

76 pages Cloth Paperback $3.50 $2.00 Special offer: 60 cents each for 100 or more copies (paperback) to a single address. Order from: The Foundation for Economic Education, Inc. Irvington-on-Hudson, NY 10533 (Postage paid on prepaid orders; otherwise $2.00 per order for billing.) Clarence B. Carson A Credit Expansion WE have a penchant for naming things around my house. For exam ple, at one time we owned two Chev rolet Impalas. The more ancient of the two we dubbed The Old Impala, and the one of more recent vintage The New Impala, though the latter was only "new" by comparison. These names evolved as a shorthand for distinguishing between the cars. Of course, we name any pets who take up with us,.though lately we ap pear to be running out of names. At present, we have an all white tom cat, whose name is Kitty, and a ter rier ofsome sort whose name is Mutt. Dr. Carson has written and taught extensively, spe cializing In American Intellectual history. He Is the author of several books, and currently Is working on the third of a five-volume text, A Basic History of the United States.