Wednesday, April 17, 2013

#B.2 NEW APPROACH TO FREEDOM – E. C. Riegel

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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