CHAPTER
1
What
is Freedom?
SELF
PRESERVATION is the first law of nature, and self advancement is the
second. We cannot quarrel with this natural order even if we would.
But one can pay lip tribute to the natural law and at the same time
rob words of their full meaning. Do we realize that when we salute
the natural law, we honor the so-called capitalistic or private
enterprise system and accept it as the sole possible way of life?
Unfortunately,
the terms capitalism and private enterprise are interpreted as the
pursuit of segments of the community rather than the whole. An
employee is as much a private enterpriser as an employer and as much
a capitalist, because he strives for self advancement and owns tools
of production and things of consumption. Because of the bias
attaching to the quoted terms, we shall henceforth use the term
personal enterprise, or personal enterprise system, since all
enterprise, all profits, all consumption are personal.
Man
is induced to personal enterprise by hope of gain, but this hope may
be inspired by illusion as well as reality. He may be "educated"
to accept a detour to his objective rather than taking the direct
route, but he is always inspired by his acquisitive
instincts—personal gain. Socialism, communism, fascism and all
other forms of state interventionism are but unintelligent methods of
pursuing the personal enterprise system. There is but one productive
way of life, and that is the personal enterprise system. But to date,
it has always been encumbered by the delusion that the state can
intervene helpfully. The personal enterprise system has never had to
be "sold" to man, and that very fact proves that it is
natural and not synthetic. Conclusive proof of its basic truth is the
invariable appeal to the citizen's self interest by every advocate of
state intervention, however deceptive the means proposed of
attainment be.
Not
only is man beset by the delusion that the state is or can be his
helper in his pursuit of gain, but his acquisitive instincts are
attacked on moral grounds as selfish. Selfishness is confused with
greed, which is the antithesis of selfishness. For a greedy person
covets the property of others, and thus sets up against himself a
resistance that defeats his hope of unfair gain. Selfishness in its
various gradations constitutes the cultural ladder by which man
ascends from the brute to the most refined civilization. It can
become so sublimated that it may seem like unselfishness, yet it
follows a straight line, becoming ever more intelligent and gaining
gratification from ever widening orbits of social indulgences.
Yes,
man is selfish, for his first law is self-preservation and his second
is self advancement. Therefore selfishness is the sublime law of
being. But to be intelligently selfish, man must win the respect and
cooperation of his fellows, and here is where the social order stems
directly from the individualistic. Before man can win cooperation, he
must be able and willing to give it, and to do so he must develop
himself materially and spiritually. Until he has attained the selfish
level of cooperation with his fellows, no social order exists.
Society could not have got started on the socialistic principle,
“from each according to his ability;" it began and develops on
the principle "to each according to his ability".
Cooperation
comes into existence when men are able to gratify one another's
desires, and this ability arises when they can produce more of a
given thing than they have immediate use for. In other words,
cooperation finds its expression in exchange. Whatever promotes
exchange promotes cooperation and economic and social advancement.
Conversely, whatever impedes exchange is anti-social. Exchange, then,
is the criterion of social and economic progress. The growth of
freedom is entirely the growth of unhampered exchange.
Man
is civilized to the exact extent that he has developed his exchange
facilities. A people enjoying free exchange are a liberated people,
and such have never yet existed, due largely to the interference of
the state. Beginning on a barter basis, man slowly raised the social
order until an escape from the limitations of barter became
necessary. Then he invented money, which, properly understood and
utilized, removes all limitations to progress.
The
secret of productivity is in the specialization of labor, i.e.
concentration upon a particular task regardless of the individual's
immediate or remote need for the product thereof. Obviously, the
value of such product is dependent upon its exchangeability, or as we
say in a money economy, upon its salability. Just to the degree of
salability is it feasible to pursue the production of a given
commodity. So we see that exchange limits or expands production in
accordance as it (exchange) is facile, and this facility is governed
by the intelligence or ignorance that prevails over the monetary
system. If man would be liberated, he must master money.
Natural
law, inspiring personal enterprise, induces man to help himself by
helping others. To advance himself, he must contemplate and gratify
the wants of others, who in turn gratify his wants through the
process of specialization of labor and exchange. Thus we see that
personal enterprise is cooperative and social. The individual cannot
determine his vocation or activity in contempt of the wishes of his
fellows, for it is they who decide the value to them of such activity
and reward him accordingly. Every man is the servant of every other
man. This is the law of life. Therefore the most intelligently
selfish individual is the most socially minded, productive, creative.
THE
ENFORCER OF THE NATURAL LAW
Nature
does not make a law without a policing agency. The natural law has a
natural enforcer. In the process of exchange, there is the rule of
competition, or comparison, whereby equity is established. Buyers, on
one side of the trading line, compete with each other, and sellers,
on the other side, compete with each other. Thus both buyers and
sellers are assured of a square deal.
Competition
compels cooperation, for he who will not deal fairly is defeated by
his competitor. Therefore, that exchange that operates under the
freest competition is the fairest. Such stigmatic phrases as
unbridled competition and cut-throat competition reflect on the user
rather than on the principle of competition, for no such conditions
can possibly exist. Competition always maintains the perfect balance,
since buyer restrains buyer and seller restrains seller. The market
price under free competition is above criticism, for no higher
judgment can possibly be invoked than the composite will of those who
trade.
Under
a money economy, competition is particularly essential, since values
are expressed in terms of the monetary unit, or value unit, and
values would not be determinable without the comparison process of
competition. Thus competition is indispensable to the operation of a
monetary system.
The
natural phenomena of the personal enterprise system are
specialization of labor, exchange, and competition. No man planned it
so; it is purely natural, and any man-made laws professing to support
them or thwart them are the purest profanation. All spring out of the
acquisitive instincts, guided by natural intelligence.
The
regulatory power of competition is all-pervasive when left to natural
operation. Any effort to thwart it by monopoly is self-defeating if
the state does not intervene, first to bias exchange and, later, to
"outlaw monopoly." Under free competition, any trader who
tries to escape its discipline may make a temporary gain, but when
the reaction sets, finds himself suffering a loss. This is the
penalty for violating the natural law of the personal enterprise
system.
Competition
subserves the law of progress and brings society to ever higher
living standards. This it does by withholding patronage from the
obsolescent and bestowing it upon the modern or improved. Competition
is constantly regrouping buyers so as to bring the majority into
support of the better. Thus it carries on a constant elective process
that carries the democratic principle far beyond its political
operation. It establishes majorities without tyranny over minorities.
Everyone may patronize the product or maker of his choice by paying
the price that its category merits.
Competition
is social insurance. It is constantly operating for the benefit of
society as a whole and against the individual's impulses of greed. By
restraining the avarice of each, it works for the benefit of all, and
by thus defeating the anti-social impulses brings greater benefit to
each member of society. Man could not progress in the social scale or
sustain his progress, but for the law of competition.
It
is not given man to think socially. He thinks only individually,
which is in accordance with the law of his being. But governing him
against self-destruction is the law of competition, or enforced
cooperation.
Man
does not govern himself; he is governed by his fellows. Each man
polices every other man, thus reciprocally keeping each within the
bounds of equity and decency, or, as a penalty for transgression,
imposing economic or social ostracism. Thus there is among men a
natural government, unheralded by proclamation or formal
constitution.
This
government is far more effective in maintaining an orderly society
than is political government. In fact, as we shall see, the latter is
a disturber to a much greater degree than it is a harmonizer. The
reason why the natural government is more pervasive and persuasive is
not only that it is taxless, but that it actually pays dividends to
its constituency by reason of the social advancement that its laws
procure. It governs by positive good, and punishes only negatively,
by diminishing that good through fellow reaction to unpopular
conduct.
No
man can enjoy life without the respect, patronage and society of his
fellows, and he need not be tried and convicted in any formal
procedure to lose these. He can be punished more severely by silence
and avoidance than by any positive penalty. From fellow judgment
there is no appeal; it is a court of first and last resort.
Specialization
of labor, exchange, and competition, the triune principle of the
personal enterprise system and the sublime law of nature, cannot be
improved. Hence any plan of the political planners may be looked upon
as an attempt at subversion and an effort to advance the planners at
the expense of society. Any plan to "protect," "improve,"
or "curb" the personal enterprise system is perversive,
though this does not imply that the private or personal enterprise
system is operating perfectly or has ever done so, because it has
never been free of political perversion. It has always been the
victim of political planners.
THE
BREAKER OF THE NATURAL LAW
The
motive of the individual is to get as much and give as little as
possible. But for this motive, man could never have lifted himself
above the brute. It causes him to invent methods of reducing labor,
and, thus, with a given amount of energy expenditure, he constantly
increases his productivity and raises his standard of living. But the
get-much give-little motive not only leads to greater production, it
also tempts man to take the production of others. Therefore, man must
be governed for the social good. The law of competition is this
government.
Competition
is a world government. It reigns wherever there are exchanges and
social relations among men. It has no capitol, but operates in every
market place and over every counter. It detects the non-cooperator
and the cheater and swiftly metes out condign [Appropriate to the
crime or wrongdoing; fitting and deserved] punishment. It is the acme
of fairness. It disciplines the rich as well as the poor, the great
and the humble, with even-handed justice. This irks the would-be
lawbreaker.
Generally
speaking, competition is liked by buyers and disliked by sellers.
Since all of us are both sellers and buyers, it may be seen that none
of us counts the law of competition an unmixed blessing. We are not
divided fifty-fifty, however, in our support of, or our aversion for
the law, because some of us act more often as buyers and others act
more often as sellers. A wage or salary worker may sell his services
in a single sale covering a period of weeks, months or years, while
he is a buyer several times a day. Naturally he is more
buyer-conscious, and is generally called a consumer. Employers and
merchandisers buy services or goods in larger quantities—fewer
transactions—than they sell them. Hence they are more seller
conscious, and among them are the greatest number of would be
breakers of the law of competition.
Now,
how does the law-breaking impulse find an escape from the strict and
impartial law of competition? Paradoxically, it finds it in that
which is commonly regarded as the law enforcing agency: political
government. Through the centuries, the state has masqueraded as the
upholder of law and order. But in fact, it is the great propagator of
lawlessness and disorder. It would appear as the palladium of our
liberties, whereas its laws and enactments tend continuously to
destroy them. It is to the capitols of the world that the would-be
breakers of the natural law look for devices to bias exchange in
their favor. Being the supreme monopoly in its realm, the state is
the mother of all other monopolies that plague mankind. But for its
intervention in the economic affairs of men, no monopoly could endure
but a brief period and at heavy cost to the projectors. Yet here,
again, it presents itself as the protector of the people against
monopoly. Does it not enact anti-monopoly laws to prove it to the
unthinking? It does not reveal, however, how, through its power to
tax, grant patents, licenses, subsidies, tariffs, preferentials, and,
above all, by its control of the monetary system, it restrains
competition and, thereby, establishes and maintains monopolies.
Through
its power to bias exchange in favor of pressure groups, the state
attracts the lobbyists and special pleaders who do not like the
natural law of competition applied to themselves. Their example is
followed by more and more groups until, ultimately, unless curbed or
thwarted, they must impair the personal enterprise system to the
point of paralysis, with consequent dictatorship and social
devolution.
The
process is insidious, because it is only the minority among the
citizenry who are seller conscious and tend to utilize the state in a
conspiracy against competition. To organized groups within this
minority, the politician looks for election, because they can marshal
votes or supply campaign funds. Usually, not more than half the
qualified electors go to the polls, thus making it possible for
approximately one quarter of the total to decide the election.
So-called democracy—in the political sphere—functions, not by the
rule of the majority, but by the rule of organized minorities. Among
these minorities are, of course, many dupes, who gain no special
advantage therefrom, but fall in the class of the great majority who
are exploited thereby. Thus it is possible for minority groups within
the minority to prostitute the state and render it the enemy of the
natural order.
These
attacks upon the personal enterprise system are invariably made under
the pretense of aiding it. Witness the statement of President Truman
in his message of July 30, 1948, to the Congress:
We
are now challenged to carry out the pledge to the American people
contained in the Employment Act of 1946 that it shall be the policy
of our Government to "utilize all its plans, functions and
resources...to promote maximum employment, production and purchasing
power" in an economy of free enterprise.
Here
is stated in concise language the purpose of Congress and the
Executive to deliver the kiss of death to competitive enterprise,
since every measure to “promote” competitive enterprise acts but
to further distort it. There would be no unemployment or failure of
production or purchasing power but for the intervention of government
in free and competitive enterprise.
It
is difficult to explain the obsession of the public mind favorable to
the state, in view of its present and historic record of practices
adverse to the public interest.
In
the complex interlacing of the effects of the state's intervention in
commerce, it is invariably able to deflect blame from itself to
business for the bad consequences, all the time posing as a friend of
free, competitive enterprise. It even succeeds in stigmatizing as
black marketeers those who keep competitive exchange alive in the
face of laws of the state to suppress it.
Whatever
may be the real or professed ideals of those who organize and conduct
political governments, the record shows that all that has been
accomplished thus far is the concentration of power—power which
invariably is captured by self-seeking and often secret groups who
use it to thwart the operation of natural laws. It stands in the
midst of natural men as a ready-made mechanism useful for
conspiracies against the public interest and available to those who
wish to gang up against the people to exploit and mislead them.
There
appears to be no safeguard against this but to drastically curb the
power of the state. This book is designed to show a heretofore unused
implement for this purpose—a new approach to freedom.
SELF
GOVERNMENT
Self
government is a cliché of political democracy, which latter phrase
is the name of a fiction. Democracy and self government begin and end
in commerce. Once power is delegated to the state, self government
is, to that extent, surrendered. The only self government man can
enjoy is that which he reserves to himself and does not delegate to
others. The highest attainment of "political democracy" and
"political self government" can only be the minimization of
interference with the operation of actual democracy and self
government that is natural to man through his bargaining power in the
market place.
Man
has not yet devised a scheme of living that permits full self
government. He has ever been under the illusion that the goal can be
attained by political processes, whereas these processes are the very
ones that obstruct him. The best that he can hope for from the state
is the least obstruction.
The
natural government of man is the free market. Here alone equality,
democracy, and self government obtain, because the exchange system
offers free choice to everyone and automatically rewards for service
and punishes for disservice. The synthetic checks and balances that
constitution builders so laboriously and futilely construct in
political government are present in natural form in the free market,
for seller restrains seller and buyer restrains buyer under the
beneficent law of competition, which is the law of cooperation. For
every evil manifestation in the free market there is a natural
corrective, and this corrective power flows directly from the
individual and merges with that of other individuals similarly
disposed. Thus there arises automatically and instantly a juncture of
the virtuous forces to overcome the vicious.
The
common concept of the market is that it is purely a materialistic
mechanism where avarice must be governed by an outside force. But it
is the most spiritual agenda possible to contrive. It contains within
it the power to amalgamate the idealism of itsmembers
in invariable triumph over evil, and it is the only such agency
available to man. The free market can bring to earth an
approximation of the kingdom of heaven, for it would enforce the
golden rule.
Man
has never enjoyed a free market, because political government has
always interfered with its benign operation. The imbalance between
traders thus created has induced man to seek compensatory
interferences, thus progressively magnifying political government
intervention and reducing democracy and self government.
The
market place is the only realm where man can be sovereign, and the
so-called self government of the state is but a curbing of that
sovereignty. Every power of the state is a diminishment of the power
of the individual—a reduction of self government. If man could
realize that every enactment of a political law means the repeal of a
natural law, and that it is by the latter alone he can govern, and
that the free market is the ideal government for which he yearns, the
trend toward statism would be reversed and liberty gained.
The
most effective political law by which the state invades self
government and democracy is that which enables it to counterfeit the
citizen's money ballot by which alone he can exercise his sovereignty
over the market and govern government. Until man denies to the state
this invasive power, the pursuit of freedom is useless, for with his
money power lost he is doomed to subjection. We must govern through
the market or be governed by the state, as nature abhors a vacuum.
Where democratic government ends, there tyrannic government begins.
If we will not govern ourselves democratically through the exercise
and protection of our money ballot in the market place, the political
ballot becomes a mockery as an instrument of democratic defense
against tyranny. Our concern over the growing apathy among the
citizenry in the exercise of their political franchise should be
directed toward assuring the integrity and power of the people's
money ballot, for our money ballot and not our political ballot is
our instrument of democracy and self government.
Indeed,
a people that do not know the difference between money created by
personal enterprise and mock money created by the state, have not the
qualification for self government in these modern times when the new
method of counterfeiting through bank "loans" is resorted
to so freely by political governments. We shall explore this at
greater length. For now, let it suffice that monetary illiteracy
disqualifies the voter in the only democracy wherein he can exercise
self government. It leaves him with the delusive political ballot,
which he vainly casts in an effort to stay the progressive
enslavement that results from the corruption of his money ballot.
All
the declarations of freedom and magna cartas of history, devoted to
winning and protecting the political ballot, could not equal the
liberating power of a declaration of the separation of money and
state, entailing as it would, the free exercise of an incorruptible
money ballot.
WHAT
IS FREEDOM?
Freedoms
may be numbered from four to forty, but these are but branches of the
trunk freedom which is unrestricted exchange. Freedom, on the
civilized plane, began with exchange and has expanded as exchange has
expanded.
We
are free in the degree that we are able to enjoy social intercourse.
This enjoyment is measured by our mental and material wealth, which
in turn depends upon our productivity, and this depends upon our
exchange facility, since we produce for ourselves only indirectly
through exchanges with our fellows. Thus exchange is the neck of the
bottle of freedom and enjoyments.
So-called
political freedom is negative in that its maximum is attained by the
least intervention in our affairs which leaves us free to enlarge our
freedom by our cooperative efforts with our fellows. This ideal state
has never been attained, as the state has always impeded exchange and
thus impeded freedom. Constitutional guarantees, in so far as they
are effective, are merely restraints upon the state's powers of
invasion of human rights. They bring no freedom. They merely
undertake to curb the state and leave unimpeded our pursuit of
freedom. There are no political methods for gaining freedom.
To
gain freedom, we must invent methods of maximizing our productivity
and minimizing our labor expenditure therefore. But it is useless to
strive for this, except in so far as we develop our exchange
capacity, since it is through the reciprocal action of exchange that
production is digested. Our ability to invent methods of labor saving
and increasing production has thus far outrun our ability to
facilitate exchange. This deficiency stands astride our path of
progress.
All
the impediments to exchange spring from the state, for which man in
his ignorance of natural laws is to blame. The state's perverseness
does not arise from the design of statesmen, but from its receptivity
to the schemes of pressure groups and the lack in the minds of its
constituency of a true concept of the bounds of proper state
activities. There is a deep superstition in the citizens' minds that
projects the state as the supreme instrument of progress and
prosperity, and thus man gives moral support to plans and schemes
that subvert both the state and the economy.
This
belief in the efficacy of political intervention in the personal
enterprise system, with resultant increasing political perversion and
restriction of freedom, is a force running counter to the liberating
power of mechanical inventiveness seeking to reduce the labor price
of production and enlarge freedom. The former has greatly retarded
the latter, and, if the trend continues, will gain the ascendancy and
reverse the social movement into devolution. The danger of this is
very real, because as increasing intervention by the state causes
greater distortion of personal enterprise, blame falls, not upon the
true cause, but upon the seeming malfunctioning of business, the
remedy for which is wrongly thought to be greater and greater
political control, until dictatorship results.
From
this false diagnosis of economic maladies spring the so-called
ideologies of socialism, communism, fascism, and so forth. No one
ever ideologizes personal enterprise; it has no ideology .It is not a
way of life; it is the way of life. It is unplanned and springs from
the natural impulses of man. It is not even necessary that it be
understood, because man naturally and instinctively engages in it.
But it is necessary to understand what is inimical to it. That which
is inimical to it is inimical to freedom.
Consider
whatever intercourse you may desire with your fellow man, and you
will find that it is facilitated or retarded by the extent to which
you and he have enjoyed freedom of exchange, even though there be no
material exchange in the particular intercourse you visualize. Life
is constituted in freedom of intercourse and mutual agreement, and
exchange is the touchstone of mutual agreement because it implies
satisfaction to both parties. Anything that impedes free exchange is
a force against harmony and mutuality and an antisocial influence.
All political laws controlling exchange limit man's right of
untrammeled choice and strike at the very base of his freedom.
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