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Chapter 135 of 142 · The Freeman 1990 by Foundation for Economic Education

You Missed the Point, Bernie; D. G. Smith

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And slowly, painfully slowly, the letters trickle in. The first ones talk of sadness at our leaving, of the routine events of the day. No mention of any thing political. And, from our best friends, no word at all. We didn't hear from Daniel after writing him two or three times-finally, we received a card at Christmas, with a funny picture and a cryptic mes sage: "I'll write you later, and THEN answer me." A few weeks later we heard from a friend: "You want to know about Daniel. I met him one month ago. He is o.k. now. But you had better don't write to him directly. He told me he had some trouble in June and July last year. He is afraid of writing to you and receiving your letter." She went on to ~omplain about the increased load of boring "political classes" the students were forced take. "I hate them," she wrote. And, finally, in February, a letter from one of our brave friends who had been active in the movement. He has passed the TOEFL and been accepted at a university in the U.S., but college officials won't release his educational records.

Afraid of further trouble, he sent the following words to us through an intermediary: I'm verypleasure for receivingyour Christmas card. It brought great comfort to me. I know there are my friends concerning with me on the other side of the world. We are not lonely. I had trouble in thepast days. I am on their list, and I refused to do what they told me. My health is not good for near two months. Perhaps that was my good luck, because it help me to pass those days. Thank you! Thank America! Be cause ofAmerica our situation is little better. Though there is no news on news report we know the news about East Europe. I believe that Mr. D will come to China early or late. D You Missed the Point, Bernie by Donald G. Smith M y friend Bernie is a socialist. Now Bernie would never admit to this-he likes to say enlightened liberal-but everything he favors seems to wind up with gov ernment ownership of something, so I cannot see Mr. Smith is a writer living in Santa Maria, California.

He is a frequent contributor to The Wall Street Journal. much distinction between his label and mine. Per haps I could be kind and say that Bernie is an enlightened liberal who just happens to favor a socialistic solution to all problems. One of Bernie's favorite arguments is actually a question: "Where in the U.S. Constitution does it say that we are to have a capitalistic economy?"

The implication, of course, is that we are not legally bound to any economic system, and therefore we should start forming committees at once to nation alize everything from U.S. Steel to the Girl Scouts. I had always dismissed the question/statement as totally irrelevant and never even gave it the dig nity of a serious counterthrust. In recent days, however, I have taken the time to consider the point, and I think that Bernie has really hit on something-an idea that negates every argument ever presented about the benefits of a planned economy. The Constitution is a document that deals with politicalfreedom and says nothing whatever about an economic system. This is highly significant because it presupposes that a free people willwork out a way of doing business that is consistent with the principlesof politicalfreedom. In short, capital ism was never planned-it just happened. It is the natural and inevitable result of political freedom.

Socialism, on the other hand, is necessarily the result of a planned economy. No society can ever install a socialistic economy without a massive planning effort. It is something that is born on the conference table, the unnatural result of planning boards pushing an economy in a direction that it doesn't want to go. Is it any wonder that the black market flourishes whenever a planned economy exists? The black market is an unplanned phe nomenon that moves like the winds and the tides and cannot be legislated out of existence. It is an illegal kind of unbridled cowboy capitalism that exists solely because it is needed and wanted. Unfortunately, the inevitability of capitalism in a free society is not recognized by people who look at chickens and see ducks. Karl Marx, for example, had no understanding of American capitalism, seeing the world as he did through the eyes of a 19th-century German. Lenin understood even less, always equating Tsarist Russia with capital ism, and the basis of his life's work was buttressed by this gigantic misconception. The man was unable to see any distinction between private own ership in an autocracy and t~e rights of a free peo ple to go as far as their talents and energies will take them.

In this regard, I have always been quite im pressed with a story told by Nikita Khrushchev during his 1959visit to the United States. Khrush455 chev said that as a small boy in the Ukraine he and some friends made a surreptitious visit to a nearby orchard to help themselves to some fruit. They were caught by the landowner, and all but the small Nikita managed to escape. He was unmerci fully beaten by his cruel captor and then violently thrown off the property and left to find his way home, if indeed he could still walk. This was to be Nikita Khrushchev's lifelong impression of private land ownership and, consequently, his concept of capitalism. One can only imagine how many times this mini drama was replayed throughout Tsarist Russia; how many times acts of similarcruelty were accept ed as the way the world works when people are allowed to own property. None of them-Marx, Lenin, Khrushchev, nor any of their compatri ots-could grasp the idea that private ownership in a despotic, oppressive government has no rela tionship whatever to a game in which anyone can participate.

Myoid friend Bernie doesn't even have this ex cuse because he has seen the capitalistic system at work, even benefited from it. Like most Ameri can males, he can look back to a boyhood in which he helped himself to a pilfered apple or orange along the way and received no corporal punishment for the transgression. Nor was he ever forced to work the lands or to clean the sta bles of the local patroon. With Bernie, I think, it is his sense of neatness that is offended. Socialism is perceived as a desir able thing because it is planned, which means that all of the bases are covered. Socialism is tidy and capitalism, to the Bernies of the world, is an uncontrolled messy thing that is badly in need of some grooming. The point that is missed, over and over again, is that this is the very strength of the system. It is not planned, it is not the law of the land, and it is not beholden to a central committee. Capitalism is a natural expression of a free people, the normal and inevitable outgrowth of political liberty. It is, in effect, left to us by the Bill of Rights because it is the only economic system that is compatible with these freedoms.

No, it doesn't appear in the Constitution, Bernie, and this is why it works. You, myoid and good friend, have missed the point completely. D 456 The Taproots of Political Corruption by William H. Peterson H oW prevalent has political corruption been over recorded historyand how did it originate? Quite an inkling as to its prevalence and origin can be found in a book writ ten by H. J. Haskell and published by Alfred A. Knopf in 1939. The book is The New Dealin Old Rome. Haskell, a newspaperman with the Kansas City Star, was both puzzled and inspired in the late 1930swhen he and his wife drove across the Pont du Gard, the stone bridge and aqueduct that soars 165 feet above the river bed near Avignon in southern France. This triumph of engineering and architecture was built by the Romans some two millennia earlier. It still stands, mute testimony to the genius of Rome. Yet it raises the question: What happened to the glory that was Rome?

The Freeman 1990

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