Welfare States at War; H. Sennholz

Absence of individual freedom and free en terprise makes for economic nationalism and international conflict. By fundamental nature and objective, the Welfare State controls pri vate property and limits individual freedom in order to distribute economic spoils and privi leges to pressure groups. . . . Pressure groups of producers expect the gov ernment to increase the prices of their products or services, with utter disregard for the eco nomic interests of the vast majority of their own countrymen and of many foreign pro ducers. In most cases of welfare legislation the favored group's foreign competition is either eliminated entirely or severely curtailed. This is economic nationalism, the most important source of international conflict. ... In sharp contrast to the international conflict between socialist governments in this Mid eastern affair is the peaceful coexistence of Dr. Sennholz heads the department of economics at Grove City College in Pennsylvania.

This article is excerpted from The Freeman of February 1957. "Welfare States at War," in its entirety, appears in Free Trade: The Necessary Foundation for World Peace, the first volume in FEE's Freeman library series. laissez-faire nations, which realize the ideals of personal freedom of choice, private ownership and control of property, and peaceful exchange in a competitive market. Under this concept, the sole function of government is the protec tion of its own people from domestic peace breakers and from foreign aggressors. Such a government would wage war only to defend the lives and property of its own citizens. This means that it should not participate in foreign wars that grow out of economic nationalism. For such warfare only destroys and does not protect life and property. While an individual peacebreaker can easily be punished and isolated in a penitentiary, a collectivist nation conducting policies of eco nomic nationalism can be disciplined and sub jugated only through a full-scale war and sub sequent occupation of its territory. To disci pline a nation that refuses to embrace the doctrines of freedom and free enterprise is an endless and hopeless task.

A citizen of a free country who goes abroad should know that he travels at his own risk. Crossing the border of his state and entering so cialist or interventionist territory is to leave law and order behind. He risks transgressions by the foreign state upon his life, liberty, and property. A businessman who invests his funds in collectivist territory must consider the risks of expropriation, foreign exchange control, confiscatory taxation, and many other "wel fare" measures. He is·beyond the protection of his capitalist government. He is on his own.

104 THE FREEMAN. MARCH 1987 The Principles of World Leadership Despite curbs and checks on its power, and its inaction in a world of conflict, a government designed for freedom is a natural leader. The creative power of a free nation by far excels that of socialist or interventionist countries of similar size. And it is productive strength that lends the position of leadership to a country in a world that is always fighting or preparing to fight. But leadership that exerts potent influence toward world peace and prosperity springs from a more important source than material and mili tary might. True leadership grows out of im peccable behavior and moral conduct. . . . Above all, such a nation must refrain from any act of economic nationalism. It must not harm any other nation through "welfare" poli cies of its own. It must adhere to its own design for freedom. To reprimand other nations for policies of economic nationalism while waging economic war upon its own neighbors would be hypocrisy and sanctimony. . . .

A leading nation must also reject the im moral principle that one act of economic na tionalism by one government sanctions the na tionalistic policies of all other governments. This is the principle that crime becomes righ teousness if a previous crime has remained un punished. But this very assumption underlies many prevailing notions concerning foreign af fairs. From Peace to War World leadership demands that we should openly judge world events and explain the fal lacy of every act of economic nationalism. If a foreign government contemplates or embarks upon economic aggression through "welfare" legislation, we should call attention to the inev itable harm inflicted upon other nations. We need not intervene forcibly, for nations cannot be coerced to peaceful coexistence. Only a change in political and economic outlook can bring this about. Naturally, we would sign no treaty with a government that has disregarded its own agree ments and torn up its own charters. Nor would we assist any government that nationalizes pri vate industries, for then we would be helping to promote collectivism and ultimate destruction.

There could be no point in our extending diplo matic recognition to any government that in dulges in economic nationalism. Finally, world leadership requires that we constantly defend the principles of individual liberty and free enterprise. At every opportu nity we should call out to the world that only competitive private enterprise can lead to peace and prosperity. We have a glorious history of individual freedom and safety of property - the absence of nationalization and confiscation by an omnipotent state. Our recent excursions to ward the Welfare State endanger our record and ourselves. But if we will correct that trend, then with pride we can demonstrate to the war ring world that individual liberty is the only du rable foundation for peace and prosperity. D IDEAS ON LIBERTY T o the extent that a society limits its government to policing func tions which curb the individuals who engage in aggressive and criminal actions, and conducts its economic affairs on the basis of free and willing exchange, to that extent domestic peace prevails. When a society departs from this norm, its governing class begins, in effect, to make war upon the rest of the nation. A situation is created wherein everyone is victimized by everyone else under the fiction of each living at the expense of all. Power differentials in society are increased and aggravated, popular discontent mounts, and the ruling group seeks for a device to restore "unity." War is, of course, the time-honored national unifier.

-EDMUND A. OPITZ 105 The Morality of Good Intentions by Robert James Bidinotto C ultural commentators have long re marked on the enormous generosity and compassion of the American people. Significantly, it was the era of laissez-faire capitalism which saw the rise of the great phi lanthropies. Not only were men more inclined to feel benevolent; with the unleashing of the wealth-producing power of free markets, many men, for the first time, possessed the means to help others if they wished. Meanwhile, the cap italist system has led to an enormous increase in living standards worldwide, precisely to the extent it has been permitted to exist. It is no exaggeration to say the poorest areas on earth are those most insulated from the benefits of individualism and capitalism. Judged by consequences alone-absolutely or comparatively - the capitalist system would have to be regarded as a magnificent historical success.· Thus there has been, in recent de cades, a significant retreat from anticapitalistic arguments based upon its allegedly negative consequences. This does not mean that attacks upon the free society have ceased-only that the grounds for them have been subtly shifting.