T. S. Eliot said, “Humility is the most difficult of all virtues to achieve; nothing dies harder than the desire to think well of oneself.”

If you’re not sure what humility is, these lyrics from an old Mac Davis tune will at least remind you of what it’s not:

Oh Lord it’s hard to be humble when you’re perfect in every way.

Oh Lord, it’s hard to be humble!

I couldn’t disagree more with those words. It’s not hard to be humble if you stop comparing yourself to others. It’s not hard to be humble if your focus is building your own character. It’s not hard to be humble if you first come to grips with how little you really know. “The wise person possesses humility. He knows that his small island of knowledge is surrounded by a vast sea of the unknown,” noted Harold C. Chase.

One of the greatest teachers and theologians of our day, Pastor Timothy Keller of Redeemer Presbyterian Church in New York City, makes this keen observation: “Until the twentieth century most cultures, including ours, held that having too high an opinion of oneself was the root of most of the world’s troubles. Misbehavior from drug addiction to cruelty to wars resulted from hubris or pride—a haughtiness of spirit that needed to be deterred or disciplined. The idea that you were bigger or better, or more self-righteous, or somehow immune from the rules that govern others—the absence of humility, in other words—gave you license to do unto others what you would never allow them to do unto you.”

These days, however, it’s a different story. Being humble rubs against what millions have been taught under the banner of “self-esteem.” Even as our schools fail to teach us elemental facts and skills, they somehow manage to teach us to feel good in our ignorance. We explain away bad behavior as the result of the guilty feeling bad about themselves. We manufacture excuses for them, form support groups for them, and resist making moral judgments lest we hurt their feelings. We don’t demand repentance and self-discipline as much as we pump up their egos.

Don’t get me wrong. Humility doesn’t mean thinking less of yourself. It means thinking of yourself less. It means putting yourself in proper perspective. It means cultivating a healthy sense of your limitations and the vast room you have to grow and improve. It means you don’t presume to know more than you do.

Fifty-three years ago this month (December 1958) Leonard Read’s essay “I, Pencil” made its debut. Let me summarize it for you here: No one person—repeat, no one, no matter how smart or how many degrees follow his name—could create from scratch, entirely by himself, a small, everyday pencil, let alone a car or an airplane.

A mere pencil—a simple thing, yet beyond any one person’s complete comprehension. Think of all that went into it, the countless people and skills assembled miraculously in the marketplace without a single mastermind—indeed, without anyone knowing more than a corner of the whole process. It’s impossible not to think of the huge implications of this lesson for the economy and the role of government.

It is in fact a message that humbles the high and mighty. It pricks the inflated egos of those who think they know how to mind everybody else’s business. It explains in plain language why central planning of society or an economy is an exercise in arrogance and futility. If I can’t make a pencil, holy cow, I’d better be careful about how smart I think I am.

Big Plans, Broken Shells

Maximilian Robespierre blessed the horrific French Revolution with this chilling declaration: “On ne saurait faire une omelette sans casser des oeufs.” Translation: “One can’t expect to make an omelet without breaking eggs.” He worked tirelessly to plan the lives of others and became the architect of the Revolution’s bloodiest phase: the Reign of Terror. Robespierre and his guillotine broke eggs by the thousands in a vain effort to impose a utopian society with government planners at the top and everybody else at the bottom.

That French experience is one example in a disturbingly familiar pattern. Call them what you will—socialist, interventionist, collectivist, statist—history is littered with their presumptuous plans for rearranging society to fit their vision of the common good, plans that always fail as they kill or impoverish people in the process. I’ve said it in this magazine before but I’m happy to say it again: If big government ever earns a final epitaph, it will be, “Here lies a contrivance engineered by know-it-alls who broke eggs with abandon but never, ever created an omelet.”

None of the Robespierres of the world knew how to make a pencil, yet they wanted to remake entire societies. How utterly preposterous and mournfully tragic!

The destructive acts of pride don’t always come from brash and fiery revolutionaries or egotistical tyrants full of pompous and hateful rhetoric. More often they come cloaked in benevolence and disguised as the wisdom of the elders, who have only the best of intentions for the whole community. An outstanding example of this type of hubris is the political philosophy in Plato’s Republic, in which he maintains, with breathtaking vanity, that the world would be a harmonious and prosperous place if only philosophers like himself were given absolute authority to run it as they saw fit!

We would miss a large implication of Leonard Read’s message if we assume it aims only at the tyrants whose names we all know. The lesson of “I, Pencil” is not that error begins when the planners plan big. It begins the moment one tosses humility aside, assumes he knows the unknowable, and employs the force of government to control more and more of other people’s lives. That’s not just a national disease. It can be very local indeed.

In our midst are people who think that if only they had government power on their side, they could pick tomorrow’s winners and losers in the marketplace, set prices or rents where they ought to be, decide which forms of energy should power our homes and cars, and choose which industries should survive and which should die. They make grandiose promises they can’t possibly keep without bankrupting us all. They should stop for a few moments and learn a little humility from a lowly writing implement.

So humility, in my book, is pretty important stuff. It may well be the one virtue of strong character that is a precondition of all the others.

My family’s number was TI3-8597. The letters were meant to honor a man I never knew of or appreciated until long after the switch to all digits—Samuel J. Tilden. He deserves to be much better remembered as something other than part of a defunct phone number. A strong case can be made that he was, as the subtitle of a recent book by screenwriter Nikki Oldaker suggests, “The Real 19th President.”

Tilden was born nearly two centuries ago on February 9, 1814, in New Lebanon, New York. After studies at Yale and New York University, he became a successful lawyer, a shrewd investor, a wealthy man, and a promising politician in the Democratic Party. A crusader against the corruption of the infamous Tammany Hall political machine in New York City, Tilden was catapulted from the New York state assembly to the governorship in 1874. From that perch he quickly earned a national following and gained the Democratic Party’s nomination for president in 1876.

No Democrat had occupied the White House since James Buchanan passed the office to Abraham Lincoln in 1861. Fifteen years later the country was ready for a change. Tilden comfortably beat Ohio Republican Rutherford B. Hayes in the popular vote, 51 to 47.9 percent, but a nasty political battle resulted in a dubious deal. Behind closed doors Hayes was awarded enough disputed votes in the Electoral College to edge Tilden there by one vote. In exchange the Republicans agreed to withdraw federal troops from the South and end Reconstruction. Tilden remains one of only four presidential candidates in U.S. history to win the popular vote but lose the Electoral tally—the others being Andrew Jackson (1824), Grover Cleveland (1888), and Al Gore (2000).

Tilden was known for assessing policy options according to right and wrong versus the typical political (and Machiavellian) rule of what can get you elected and reelected. “Successful wrong never appears so triumphant as on the very eve of its fall,” he once said. “We must believe in the right and in the future. A great and noble nation will not sever its political from its moral life.”

Hayes turned out to be a clean and decent one-term president, but Tilden just might have shined as one of our best. I’ve come to admire him because he was rigorously committed to all the right things: limited government, sound money, free trade, and low taxes—which is to say that he’d have a hard time getting to first base today, particularly within his own party. Most 21st-century libertarians would be very comfortable with the 1876 Democratic Party platform on which Tilden ran.

Money. The big money questions of the 1870s were 1) what to do with the hundreds of millions of paper dollars (“greenbacks”) issued during the Civil War; and 2) whether to subsidize and re-monetize silver as a means of inflating the currency. Tilden and the Democrats were the country’s leading advocates of fulfilling the original promise to redeem greenbacks in gold and in opposing subsidies for silver. As advocates of sound money they had no interest in monetary expansion to goose the economy and help debtors because they believed it was fundamentally dishonest.

“Reform is necessary,” asserted the Tilden platform, “to establish a sound currency, restore the public credit, and maintain the national honor. We denounce the failure for all these eleven years of peace to make good the promise of the legal tender notes (the greenbacks), which are a changing standard of value in the hands of the people, and the non-payment of which is a disregard of the plighted faith of the nation.” Taking direct aim at the Republicans, it went on to declare: “We denounce the financial imbecility and immorality of that party which . . . has made no advance towards resumption—no preparation for resumption—but instead has obstructed resumption by wasting our resources and exhausting all our surplus income.”

Tariffs: Taxes on imported goods were the primary source of federal revenue for most of the nineteenth century. Since Lincoln, the Republican Party stood for high tariffs not just for the revenue but also for the “protection” of domestic industries. The free-trade Democrats saw protectionism for what it really is: an attack on consumers for the benefit of producers with political connections. The Tilden platform’s critique of it is as relevant today as it was in 1876:

We denounce the present tariff, levied upon nearly four thousand articles, as a masterpiece of injustice, inequality, and false pretence. It yields a dwindling, not a yearly rising, revenue. It has impoverished many industries to subsidize a few. It prohibits imports that might purchase the products of American labor. It has degraded American commerce from the first to an inferior rank on the high seas. It has cut down the sales of American manufactures at home and abroad, and depleted the returns of American agriculture—an industry followed by half our people. It costs the people five times more than it produces to the treasury, obstructs the processes of production, and wastes the fruits of labor. It promotes fraud, fosters smuggling, enriches dishonest officials, and bankrupts honest merchants. We demand that all custom-house taxation shall be only for revenue.

Government spending: Virtual one-party (Republican) dominance since 1865 had produced huge increases in federal expenditures, largely for pork-barrel projects. Tilden denounced the spending explosion, and his people inserted strong language against it in the 1876 platform: “Since the peace, the people have paid to their tax-gatherers more than thrice the sum of the national debt, and more than twice that sum for the federal government alone. We demand a rigorous frugality in every department, and from every officer of the government.” The Tilden Democrats were squarely in the tradition of their Jefferson-Jackson forebears and light-years apart from their Democratic descendants of today. It was a tradition that would continue through the last great Democratic president, Grover Cleveland, only to be thoroughly forsaken by the next (and arguably the worst) Democratic president, Woodrow Wilson.

On many other vital issues of the day Tilden and the Democrats staked out the moral high ground. They opposed an imperialistic foreign policy and favored Civil Service reform to minimize political patronage and corruption. Because they respected the rights and sovereignty of free individuals, they fought against sumptuary laws to regulate personal behavior. They denounced the use of government power to advantage one group over another. And they pushed to treat the southern states once again as equal partners in the Union.

Today dozens of streets, townships, libraries, and schools from Wichita Falls, Texas, to Washington, D.C., bear the Tilden name. A statue of him and his home, both in New York City, still stand. But otherwise, sadly, the memory of this man who stood for liberty and should have been president is fading as surely as my old phone number.

What was this book, and who was its author? It was called, simply, Self-Help, and its author was a man named Samuel Smiles.

When he died at the age of 86 in 1904, only Queen Victoria’s funeral cortege three years earlier was said to have surpassed in recent memory that of Samuel Smiles. He was loved not only for his book but also for a wealth of other works that celebrated the virtues of independence, thrift, civility, character, and hard work.

Robert L. Bradley, in his 2009 book Capitalism at Work: Business, Government and Energy, calls Smiles “the father of the self-improvement movement.” Bradley notes:

Motivational self-help books were not new, but Smiles’ 400-page opus was systematic, combining age-tested wisdom with knowledge of the industrial present, and profusely illustrated with stories of individuals-made-good in industry, engineering, the arts, and music. Samuel Smiles, a medical doctor turned newspaper editor/political reformer turned businessman/moralist, would become the Adam Smith of applied commercial capitalism.

The cover of the 2002 Oxford University Press edition of Self-Help declares that the book “is the precursor of today’s motivational and self-help literature” and that it “awakens readers to their own potential and instills the desire to succeed.” In his lifetime the author inspired riots in Belgrade, carnivals in Milan, and plaudits from leaders the world over. But sadly, just a century since Smiles died, he is largely unremembered in his native Scotland. Needless to say, decades of the British welfare state have not been kind to a man who preached personal independence and entrepreneurial capitalism.

Dipping into the pages of Self-Help is a curious experience. You travel back in time to Smiles’s mid-nineteenth-century experiences and perceptions. To Smiles, the son of a poor farmer, human nature was both timeless and locationless. It is as good, he felt, for a Japanese man of commerce to exhibit the plain virtues of honesty, punctuality, diligence, and energy as it is for a Swede or an American.

Self-Help, which appeared in 1859, had the most humble of origins. It began as a series of evening lectures to apprentice engineers in Leeds. A kind of Victorian Dale Carnegie, Smiles thumped his message home in a way that moved and inspired almost everybody of his time. Live and trade with integrity and you lift all you meet, not just yourself, he argued. Character, the sum of one’s choices and actions, is of paramount importance; indeed Smiles called it “the crown and glory of life” and the very thing on which “the strength, the industry, and the civilization of nations” depend.

To Smiles the road to riches was not paved with overreaching ambition, disregard for others, or cutting corners when it came to matters of truth. It didn’t mean securing favors from government at the expense of the competition.

Welfare and Poverty

The welfare state was anathema to Smiles. He felt it was a woefully ineffective substitute for personal charity. “The value of legislation as an agent in human advancement has usually been much over-estimated,” he wrote. “No laws, however stringent, can make the idle industrious, the thriftless provident, or the drunken sober.” What he said about poverty legislation a century and a half ago would be a fitting description of the results of the welfare programs of today:

We have tried to grapple with the evils of [misery] by legislation, but it seems to mock us. Those who sink into poverty are fed, but they remain paupers. Those who feed them feel no compassion; and those who are fed return no gratitude. There is no bond of sympathy between the givers and the receivers.

The books of Samuel Smiles are full of inspiring stories of nineteenth-century entrepreneurs who often rejected the easy path of unprincipled compromise and the fast buck, and instead treated others according to the Golden Rule and went to their graves with their character and integrity intact.

In painstaking detail he explained why keeping high our standards of speech and conduct was not just worthwhile but also an indispensable ingredient of freedom and progress. Life to him was not an ego trip. It was not about calling attention to oneself but rather about being the best one can be in all endeavors. The fame and fortune that might follow were secondary and imposed additional responsibilities to foster virtue in others.

The final chapter of Self-Help is titled “Character—The True Gentleman.” It’s full of examples that illustrate Smiles’s belief that nothing is worth sacrificing one’s character. From proper manners to truthfulness to self-respect, Smiles laid forth the attributes that, if pursued widely and personally one individual at a time, would surely produce a far better world. Here’s a passage most readers will especially appreciate:

There are many tests by which a gentleman may be known, but there is one that never fails—How does he exercise power over those subordinate to him? How does he conduct himself toward women and children? How does the officer treat his men, the employer his servants, the master his pupils, and man in every station those who are weaker than himself? The discretion, forbearance and kindliness, with which power in such cases is used, may indeed be regarded as the crucial test of gentlemanly character.

Samuel Smiles—both the man and his message—epitomized the best of the capitalist spirit of the nineteenth century. This fact largely explains why he went from a well-known and respected figure by 1890 to a forgotten man by World War I. The rise of statist ideas at the turn of the century and the subsequent decline of individualism meant that a champion of such antiquated notions as self-help and responsibility had to be tossed into the closet.

Smiles’s message cries out for a new hearing in our times. Scandalous headlines and television spectacles that depict degraded standards suggest we would all benefit by dusting off the work of Samuel Smiles and learning again what we should never have forgotten.

Here’s a hint: In the same speech, this candidate promised to “reduce the cost of current Federal Government operations by 25 percent.” He was elected President three weeks later.

Ronald Reagan? Wrong. Calvin Coolidge? Wrong again. The correct answer is Franklin Delano Roosevelt—in a campaign speech in Pittsburgh, Pennsylvania on October 19, 1932.

But how could this be, you ask? FDR was running against Herbert Hoover, the president our teachers and textbooks told us was a heartless skinflint who twiddled his thumbs as the economy fell into Depression. How could Roosevelt assail a supposedly laissez faire administration for its “reckless and extravagant” record of boosting federal spending by 50 percent in just four years?

The better question to ask is, “Why did my teachers and textbooks tell me something that just wasn’t true?” But that’s a story for another occasion. (See “The 1932 Bait-and-Switch” and “Great Myths of the Great Depression”.)

The fact is, what Roosevelt said about the Hoover administration in his Pittsburgh speech was precisely right. It’s a pity he proved to be an even bigger taxer and spender than Hoover was, thereby prolonging the Depression by at least seven years.

President Obama says he admires FDR, but which FDR—the candidate who promised one thing or the President who did the opposite? Clearly, it’s the latter. Obama’s policies imitate what Roosevelt actually did as president, which his New Deal confidant Rexford Tugwell admitted was just Hooverism on steroids.

Instead of the speech he read from the teleprompter last Thursday before Congress, Obama should have given something like the FDR Pittsburgh speech. Perhaps on the day after the markets would have soared but as we all know, they tanked. Markets know something (actually, a whole lot) that Obama doesn’t.

Imagine if Obama had spoken these words from FDR’s Pittsburgh speech instead of the ones some staff members wrote for him:

“The credit of the family depends chiefly on whether that family is living within its income. And that is equally true of the Nation. If the Nation is living within its income, its credit is good. If, in some crises, it lives beyond its income for a year or two, it can usually borrow temporarily at reasonable rates. But if, like a spendthrift, it throws discretion to the winds, and is willing to make no sacrifice at all in spending; if it extends its taxing to the limit of the people’s power to pay and continues to pile up deficits, then it is on the road to bankruptcy.

“For over two years our Federal Government has experienced unprecedented deficits, in spite of increased taxes. We must not forget that there are three separate governmental spending and taxing agencies in the United States–the national Government in Washington, the State Government and the local government….[A]ll three of our governmental units became reckless….

“It was all very merry while it lasted. We did not greatly worry. We thought we were getting rich. But when the Crash came, we were shocked to find that while income melted away like snow in the spring, governmental expense did not drop at all…..Can we stand that? I do not believe it. That is a perfectly impossible economic condition. Quite apart from every man’s own tax assessment, that burden is a brake on any return to normal business activity. Taxes are paid in the sweat of every man who labors because they are a burden on production and are paid through production. If those taxes are excessive, they are reflected in idle factories, in tax-sold farms, and in hordes of hungry people, tramping the streets and seeking jobs in vain. Our workers may never see a tax bill, but they pay. They pay in deductions from wages, in increased cost of what they buy, or—as now—in broad unemployment throughout the land. There is not an unemployed man, there is not a struggling farmer, whose interest in this subject is not direct and vital. It comes home to every one of us!”

This is not the FDR of the typical history book. But it is certainly the FDR of the 1932 election. The Pittsburgh speech was not an anomaly. He repeated these charges throughout the campaign. The Democratic Party platform on which he ran contained the very same promise of a 25% reduction in government spending. FDR’s running mate, John Nance Garner, echoed the theme by declaring that Hoover “was leading the country down the road to socialism.” Roosevelt and Garner won the election and proceeded to lead the country down the same road at warp speed.

More from candidate Roosevelt:

“The most obvious effect of extravagant Government spending is its burden on farm and industrial activity, and, for that, nearly every Government unit in the United States is to blame. But when we come to consider prodigality and extravagance in the Federal Government, as distinguished from State or local government, we are talking about something even more dangerous. For upon the financial stability of the United States Government depends the stability of trade and employment, and of the entire banking, savings and insurance system of the Nation.”

Then there was this nugget. Attacking the Hoover administration for predicting surpluses but producing deficits, Roosevelt pronounced, “There is something much more than mere error in that kind of thing. Our people and the world are entitled to reasonable accuracy and reasonable prudence; and above all they are entitled to complete frankness. They have a right and a duty to place in retirement those who conceal realities, those who abuse confidence.”

Roosevelt quoted this statement signed by Calvin Coolidge: “All the costs of local, State and national Government must be reduced without fear and without favor. Unless the people, through unified action, arise and take charge of their Government, they will find that their Government has taken charge of them.” FDR’s very next sentence was, “Every word of that warning is true; and the first and most important and necessitous step in balancing our Federal budget is to reduce expense.”

On September 8, 2011, we were treated to a campaign speech but it wasn’t anything like the FDR campaign speech of October 19, 1932. Instead, we got more of what FDR actually delivered but didn’t work and what Bush and Obama gave us that isn’t working any better. Sadly, the joke is on the rest of us, which gives me the opportunity to close with one:

A bus filled with politicians was driving through the countryside one day, on the campaign trail. The bus driver, caught up in the beautiful scenery, loses control and crashes into the ditch. A farmer living nearby hears the horrible crash and rushes out to discover the wreckage. Finding the politicians, he buries them.

The next day, the police come to the farm to question the man. “So you buried all the politicians?” asked the police officer. “Were they all dead?”

The farmer answered, “Some said they weren’t, but you know how politicians lie.”

Lawrence W. Reed is president of the Foundation for Economic Education, with offices in Irvington, New York and Atlanta, Georgia.

Dear Sir: Thanks for sending me your thoughts lamenting the idea of cuts in arts funding by state and federal governments. In my mind, however, the fact that the arts are wildly buffeted by political winds is actually a powerful case against government funding. I’ve always believed that art is too important to depend on politicians, too critical to be undermined by politicization. Furthermore, expecting government to pay the bill for it is a cop-out, a serious erosion of personal responsibility and respect for private property.

What Multiplier?

Those “studies” that purport to show X return on Y amount of government investment in the arts are generally a laughingstock among economists. The numbers are often cooked and are almost never put alongside competing uses of public money for comparison. Moreover, a purely dollars-and-cents return—even if accurate—is a small part of the total picture.

The fact is, virtually every interest group with a claim on the treasury argues that spending for its projects produces some magical “multiplier” effect. Routing other people’s money through the government alchemy machine is supposed to somehow magnify national wealth and income, while leaving it in the pockets of those who earned it is somehow a drag. Assuming for a moment that such preposterous claims are correct, wouldn’t it make sense from a purely material perspective to calculate the “average” multiplier and then route all income through the government? Don’t they do something like that in Cuba and North Korea? What happened to the multiplier in those places? It looks to me that somewhere along the way it became a divisor.

What if, for instance, “public investment” simply displaces a certain amount of private investment? (Arts subsidy advocates never raise this issue, but I know that I personally am far less likely to make a charitable contribution to something I know is on the dole than to something I know rests on the good hearts of willing givers). What if “public investment” brings with it some baggage like political manipulation that over time erodes the integrity of the recipient institutions? How does that fit into the equation? What if I, as a taxpayer who earned the dollars in the first place, could keep what the government would otherwise spend on the arts and invest it in my kid’s college education and end up getting twice the return on my money that the government would ever get on the arts?

If simply getting a good return qualifies an activity for public investment and government involvement, then I can think of hundreds of companies and industries that government “should” have spent tax money on—from silicon chips to Berkshire Hathaway. The Constitution’s framers could have dispensed with all that rigmarole about rights of citizens and duties of government and stopped with a preamble that said only, “We the People, in order to get a high return on our tax money, establish this government to do whatever anybody can show will fetch a hefty payback.”

Sometimes those of us who put faith in such things as the individual, private property, and the marketplace are accused of focusing solely on dollars and cents. But actually, it’s those on the other side who are more guilty of this. The arts funding issue is a case in point. Advocates of government funding focus on dollars—more of them, always more of them—and no matter how much government funding of the arts we have, it’s never enough.

Meaningful Money

Those of us who wish to nurture the arts privately stress other, far more important values. I believe, for example, that money which comes voluntarily from the heart is much more meaningful than money that comes at gunpoint (which is ultimately what taxes are all about). You’ve won so much more when you convince people to do the right thing, or support the right causes, because they want to instead of because they have to. For that reason I don’t believe in shotgun marriages either.

I can think of an endless list of desirable, enriching things, very few of which carry a tag that says, “Must be provided by taxes and politicians.” A rich culture consists, as you know, of so many good things that have nothing to do with government, and thank God they don’t. We should seek to nurture those things privately and voluntarily because “private” and “voluntary” are key indicators that people believe in them.

The surest way I know to sap the vitality of almost any worthwhile endeavor is to send a message that says, “You can slack off; the government will now do it.” That sort of flight from responsibility, frankly, is at the source of many societal ills today: Many people don’t take care of their parents in their old age because a federal program will do it. Most parents these days shirk their duties to educate their kids because government schools are supposed to do that (even though many of them do a miserable and expensive job of it).

What’s Important

I know that art is just about everything to some people, especially those whose living derives from it. But as adults we have to resist the temptation to think that what we are individually doing is somehow the greatest thing since sliced bread and that therefore it must receive more than what people willingly give it.

I think what my church does is important, but I don’t want government giving it money. I think what we do at FEE is important, but we’d go out of business before we’d take a nickel of somebody’s money against his will. I might even like certain nongovernment-funded art forms more than the ones that are politically well connected enough to get a grant, but I don’t want to corrupt them with a government check. As children we want what we want and we want it now, and we don’t care where it comes from or even if somebody has to be robbed for us to get it. But as discerning adults who put a higher premium on mutual respect and building a culture that rests on creativity and persuasion over coercion, we should have different standards.

Lots of things are important in life. Spare us the sanctimonious and self-serving nonsense about taking other people’s money for the art you happen to think they should pay for.

The battle for the preservation and advancement of liberty is a battle not against personalities but against opposing ideas. The French author Victor Hugo declared that “One resists the invasion of armies; one does not resist the invasion of ideas.” This is often rendered as, “More powerful than armies is an idea whose time has come.”

In the past ideas have had earthshaking consequences. They have determined the course of history.

The system of feudalism existed for a thousand years in large part because scholars, teachers, intellectuals, educators, clergymen, and politicians propagated feudalistic ideas. The notion “once a serf, always a serf” kept millions of people from ever questioning their station in life.

Under mercantilism, the widely accepted concept that the world’s wealth is fixed prompted men to take what they wanted from others in a long series of bloody wars.

The publication of Adam Smith’s The Wealth of Nations in 1776 is a landmark in the history of the power of ideas. As Smith’s message of free trade spread, political barriers to peaceful cooperation collapsed, and virtually the whole world decided to try freedom for a change.

Marx and the Marxists would have us believe that socialism is inevitable, that it will embrace the world as surely as the sun will rise in the east tomorrow. As long as men have free will (the power to choose right from wrong), however, nothing that involves this human volition can ever be inevitable! If socialism comes it will come because men choose to embrace its principles.

Socialism is an age-old failure, yet the socialist idea constitutes the chief threat to liberty today. As I see it, socialism can be broken into five ideas.

1. The Pass-a-Law Syndrome. Passing laws has become a national pastime. Business in trouble? Pass a law to give it public subsidies or restrict its freedom of action. Poverty? Pass a law to abolish it. Perhaps America needs a law against passing more laws.

Almost invariably a new law means: a) more taxes to finance its administration; b) additional government officials to regulate some heretofore unregulated aspect of life; and c) new penalties for violating the law. In brief, more laws mean more regimentation, more coercion. Let there be no doubt about what the word coercion means: force, plunder, compulsion, restraint. Synonyms for the verb form of the word are even more instructive: impel, exact, subject, conscript, extort, wring, pry, twist, dragoon, bludgeon, and squeeze.

When government begins to intervene in the free economy, bureaucrats and politicians spend most of their time undoing their own handiwork. To repair the damage of Provision A, they pass Provision B. Then they find that to repair Provision B, they need Provision C, and to undo C, they need D, and so on until the alphabet and our freedoms are exhausted.

The Pass-a-Law Syndrome is evidence of a misplaced faith in the political process, a reliance on force, which is anathema to a free society.

2. The Get-Something-from-Government Fantasy. Government by definition has nothing to distribute except what it first takes from people. Taxes are not donations.

In the welfare state this basic fact gets lost in the rush for special favors and giveaways. People speak of “government money” as if it were truly free.

One who is thinking of accepting something from government that he could not acquire voluntarily should ask, “From whose pocket is it coming? Am I being robbed to pay for this benefit or is government robbing someone else on my behalf?” Frequently the answer will be both.

The end result of this “fantasy” is that everyone in society has his hands in someone else’s pockets.

Everyone Else’s Problem

3. The Pass-the-Buck Psychosis. Recently a welfare recipient wrote her welfare office and demanded, “This is my sixth child. What are you going to do about it?”

An individual is victim to the Pass-the-Buck Psychosis when he abandons himself as the solver of his problems. He might say, “My problems are really not mine at all. They are society’s, and if society doesn’t solve them and solve them quickly, there’s going to be trouble!”

Socialism thrives on the shirking of responsibility. When men lose their spirit of independence and initiative, their confidence in themselves, they become clay in the hands of tyrants and despots.

4. The Know-It-All Affliction. Leonard Read, in The Free Market and Its Enemy, identified “know-it-allness” as a central feature of the socialist idea. The know-it-all is a meddler in the affairs of others. His attitude can be expressed in this way: “I know what’s best for you, but I’m not content to merely convince you of my rightness; I’d rather force you to adopt my ways.” The know-it-all evinces arrogance and a lack of tolerance for the great diversity among people.

In government the know-it-all refrain sounds like this: “If I didn’t think of it, then it can’t be done, and since it can’t be done, we must prevent anyone from trying.” A group of West Coast businessmen once ran into this snag when their request to operate barge service between the Pacific Northwest and Southern California was denied by the (now-defunct) Interstate Commerce Commission because the agency felt the group could not operate such a service profitably.

The miracle of the market is that when individuals are free to try, they can and do accomplish great things. Read’s well-known admonition that there should be “no man-concocted restraints against the release of creative energy” is a powerful rejection of the Know-It-All Affliction.

5. The Envy Obsession. Coveting the wealth and income of others has given rise to a sizable chunk of today’s socialist legislation. Envy is the fuel that runs the engine of redistribution. Surely, the many soak-the-rich schemes are rooted in envy and covetousness.

What happens when people are obsessed with envy? They blame those who are better off than themselves for their troubles. Society is fractured into classes and faction preys on faction. Civilizations have been known to crumble under the weight of envy and the disrespect for property it entails.

A common thread runs through these five socialist ideas. They all appeal to the darker side of man: the primitive, noncreative, slothful, dependent, demoralizing, unproductive, and destructive side of human nature. No society can long endure if its people practice such suicidal notions.

Consider the freedom philosophy. It is an uplifting, regenerative, motivating, creative, exciting philosophy. It appeals to and relies on the higher qualities of human nature such as self-reliance, personal responsibility, individual initiative, respect for property, and voluntary cooperation.

The outcome of the struggle between freedom and serfdom depends entirely on what percolates in the hearts and minds of men. At the present time the jury is still deliberating.

Perhaps this is fine for grade-school gym class, but it would make for rather boring Olympic games. And were it imposed on production and trade, it would condemn millions to poverty and early death. Let’s review some fundamental principles.

In economics competition is not the antithesis of cooperation; rather, it is one of its highest and most beneficial forms. That may seem counterintuitive. Doesn’t competition necessitate rivalrous or even “dog-eat-dog” behavior? Don’t some competitors lose?

In my view, competition in the marketplace means nothing less than striving for excellence in the service of others for self-benefit. In other words, sellers cooperate with consumers by catering to their needs and preferences.

Many people think that competition is directly related to the number of sellers in a market: The more sellers there are, or the smaller the share of the market any one of them has, the more competitive the market. But competition can be just as fierce between two or three rivals as it can be among 10 or 20.

Moreover, market share is a slippery notion. Almost any market can be defined narrowly enough to make someone look like a monopolist instead of a competitor. I have a 100 percent share of the market for articles by Lawrence Reed, for example. I have a far smaller share of the market for articles generally.

Not so long ago, XM and Sirius were the only two satellite-radio providers in the United States. For a year and a half the federal government prevented the two from merging, fearing that a harmful monopoly would result. Economists argued that XM and Sirius were competing not only with each other but as two of many companies in a huge media marketplace that includes free radio, iPods and other MP3 players, Internet radio stations, cable radio services, and even cell phones—all of which, along with likely new technologies, would continue to compete even after the merger. Ultimately, economic reasoning prevailed and the merger was allowed.

Governments don’t have to decree competition; all they have to do is prevent and punish force, violence, deception, and breach of contract. Enterprising individuals will compete because it is in their financial interest to do so, even if they’d prefer not to.

Competition spurs creativity and innovation and prods producers to cut costs. You wouldn’t think of stopping a horse race in the middle and complaining that one of the horses was ahead. The same should be true of free markets, where the race never ends and competitors enter and leave continuously.

Theoretically, there are two kinds of monopoly: coercive and efficiency. A coercive monopoly results from a government grant of exclusive privilege. Government, in effect, must take sides in the market to give birth to a coercive monopoly. It must make it difficult, costly, or impossible for anyone but the favored firm to do business. The U.S. Postal Service is an example. By law no one else can deliver first-class mail.

In other cases the government may not ban competition outright but simply bestow privileges, immunities, or subsidies on one or more firms while imposing costly requirements on all others. Regardless of the method, a firm that enjoys a coercive monopoly is in a position to harm consumers and get away with it.

An efficiency monopoly, by contrast, earns a high share of a market because it does the best job. It receives no special favors from the law. Others are free to compete and, if consumers so will it, to grow as big as the “monopoly.” Indeed, an efficiency monopoly is not much of a monopoly at all in the traditional sense. It doesn’t restrict output, raise prices, and stifle innovation; it actually sells more and more by pleasing customers and attracting new ones while improving both product and service.

An efficiency monopoly has no legal power to compel people to deal with it or to protect itself from the consequences of its unethical practices. An efficiency monopoly that turns its back on the very performance which produced its success would be, in effect, posting a sign that reads, “COMPETITORS WANTED.”

Antitrust Law

Where does antitrust law come into all this? From its very inception in 1890, antitrust has been plagued by vagaries, false premises, and a stagnant conception of dynamic markets.

The Sherman Antitrust Act of 1890 put the government on record as officially favoring competition and opposing monopoly without ever coming close to any solid definition of either term. It simply made it a criminal offense to “monopolize” or “attempt to monopolize” a market without ever saying what kind of actions qualified.

The first lawsuit the government filed ended disastrously for the Justice Department: The Supreme Court ruled in 1895 that the American Sugar Refining Company was not guilty of becoming a monopolist when it merged with the E. C. Knight Company. The evidence suggested that the merged companies would have made for a very strange monopoly indeed—one that substantially increased output and greatly cut prices to consumers.

In The Antitrust Religion (Cato, 2007), Edwin S. Rockefeller explains how the self-serving legal community invented sinister-sounding terms for quite natural phenomena and at the same time enjoys a feeling of self-righteousness in “protecting” the public from those evils. Such terms include “reciprocity” (“I won’t buy from you unless you buy from me”); “exclusive dealing” (“I won’t sell to you if you buy from anyone else”); and “bundling” (“Even though you only want Chapter One, you have to buy the whole book.”) Another work I strongly recommend on this subject is a classic by economist D. T. Armentano, The Myths of Antitrust.

In a free market unencumbered by anticompetitive intrusions from government, these factors ensure that no firm in the long run, regardless of size, can charge and get any price it wants:

• Free entry of newcomers to the field, whether they be two guys in their garage or a giant firm that sees an opportunity to expand into a new product line.

• Foreign competition. As long as government doesn’t hamper international trade, this is always a potent force.

• Competition of substitutes. People are often able to substitute a product different from yet similar to the monopolist’s.

• Competition of all goods for the consumer’s dollar. Every business competes with every other business for consumers’ limited dollars.

Bottom line: Consider competition in a free market not as a static phenomenon but rather as a dynamic, never-ending leapfrog process in which the leader today can be the follower tomorrow.

In late February gasoline prices across America were surpassing $3 a gallon. Forecasters are advising us to expect $4 by summer, maybe higher. So be prepared for something else with it all: the broken-record rhetoric of anti-market types about “gouging.” It’ll be coming from a lot of the same people who block the drilling for oil just about anywhere and who think it’s always better to be gouged by the taxman to subsidize noneconomic “green energy” than to pay a price for gasoline that might reflect real market conditions.

Economist Thomas Sowell, speaking of big-government “liberals,” put it well when he said that asking them where wages and prices come from is “like asking six-year-olds where babies come from.” You’ll certainly never hear them admit that even at $4 a gallon, gasoline is cheaper today (in inflation-adjusted terms) than it was when President Reagan decontrolled oil 30 years ago.

If you’re expecting me to offer the economic argument for government to get out and stay out of energy markets, you’ll have to wait. There’s a moral argument that takes precedence.

Suppose someone offers to buy my house for twice what I paid for it a year ago and I refuse. It’s my house, and I really don’t want to move, but I announce that if someone wants to give me ten times what I paid, I’ll take it.

Am I “gouging” somebody? Most people would say no, but they would be hard put to explain what the difference is between my action and that of those unpopular villains who produce and sell gasoline.

It’s true that my house is private property, but so is gasoline. When it’s in the underground tank at the gas station, it’s the private property of that station until somebody else buys it. It’s not public property. It certainly doesn’t belong to people who never took a risk and invested a nickel in it—and that includes all the bellyaching demagogues who will try to further their careers by bashing wealth-creators.

If it’s wrong to sell gas at $3 or $4 a gallon, what if the owner of a gas station decided not to sell it at any price? Wouldn’t that be even more wrong? Only if one distorts the concept of private property to mean that it’s really not yours if somebody else wants it.

There are plenty of people in the world who will scoff at any defense of oil companies or gas-station owners on the basis of the “antiquated” notion of property rights. But of course those same scoffers will defend their own property without hesitation; it’s only other people’s property about which they can afford to be cavalier.

So if it’s not yours, don’t claim it. If it doesn’t belong to the politicians, don’t demand that they jigger its price. This is a moral issue; people of moral fiber should rise to the occasion and resist the temptation to steal.

Stockpiling and “Gouging”

Now a little economics, rooted in experiences of a decade ago. When news spread on September 11, 2001, of the terrorist attacks in New York and Washington, many people panicked. Not knowing whether this was the start of something much bigger, they did what seemed to make sense given the extraordinary situation—they began to “stockpile” gasoline because a world crisis could easily disrupt fuel supplies. Long lines formed at gas stations all over the nation by mid-afternoon. Demand, in other words, soared. Just like Econ 101 was supposed to teach us, prices rose.

If the crisis had indeed slashed world fuel supplies, then the initial reaction of the public would have been both smart and prescient. Buying more would have pushed up prices. As prices rose they would have encouraged people to restrict their use of gas to their most important purposes, leaving more for others.

And the higher prices would have sent a powerful signal for somebody to find new supplies quickly. This is the way a free price system works—in gasoline, coffee, or anything else.

It became apparent within a day or two that the events in New York and Washington had not produced disruptions in the flow of oil or in the production of gasoline. Then the market effectively worked its magic. People shopped elsewhere or found ways to do with less while prices were high. Folks eventually calmed down, and the lines at the gas stations evaporated. Suppliers rounded up more supplies. Prices fell. The upward spike set into motion the market forces that solved the “problem.”

Saber-Rattling and Bad Laws

Nonetheless, politicians ignorant of marketplace economics rattled their sabers and piled bad law on top of previous bad law. State officials cried foul and threatened “price gougers” with prosecution.

Ohio’s attorney general went after 27 retailers that charged $4 or more, decrying the price hikes as “unconscionable acts.” He forced the culprits to give refunds to customers and make donations to the American Red Cross or face fines of up to $25,000 per violation.

Any stations in Wisconsin that simply changed prices more than once in a 24-hour period were threatened with fines of up to $200 for each customer they “overcharged.”

In Florida, authorities declared that stations which raised prices by more than a dime a gallon were in violation of the Sunshine State’s emergency rules and could face penalties of $25,000 per day. Two weeks after the terrorist attacks, Missouri’s attorney general sent letters to 48 gasoline retailers telling them that if they had boosted prices for any grade of gas above $2.49 after September 11, they would have to pay fines of “triple any gas-gouging profits, or $750, whichever was greater, plus investigative costs of $250.”

My home was in Midland, Michigan, at the time. A woman there named Sonja Sturgeon managed Bobbie’s Point Citgo, a gas station targeted by the state’s attorney general for gouging. Sturgeon readily admitted to the local paper that the store boosted prices to $3 at about 8:30 p.m. on September 11 because she wasn’t expecting a new supply until later in the week. “The whole point of raising the prices was to send customers down the road to buy gas,” she said. “It had nothing to do with gouging the customers.”

Perhaps the attorney general would have advised Bobbie’s Point Citgo to behave as though nothing had changed in the wake of September 11. Keep prices the same or raise them no more than 10 percent. Would that have done anyone a favor? Surely, the lines would have been many blocks longer, and station after station would have run out, leaving people at the back of many lines without any hope of getting a drop.

Let’s see, which is better? Gas at $3 after a 15-minute wait, or no gas at $2 after sitting in line for an hour? This is not rocket science.

Brace yourself for another round of gasoline price hysteria. It’s going to be déjà vu all over again.

In early May 2010, FEE opened a branch office in downtown Atlanta. Located in Atlanta’s financial district, the office currently houses four staff members and is just three blocks from the site of five of FEE’s summer 2010 student seminars, the Georgia-Pacific building.

While FEE’s headquarters will remain in Irvington, there are many good reasons for a branch office in Atlanta. Local support is strong, and we are broadening our long-term geographical base. Operational costs are low, so we can be a better steward of donor dollars. Opportunities for FEE programs in the region are great, thanks to a major airport hub and the easy accessibility of the city.

FEE staff is already reaching out to the local community, working with local groups to spread the message of liberty and free enterprise into the schools and colleges in the region. One of many new lecture programs will be an occasional “Evening with FEE,” fashioned after the successful “Evening at FEE” programs at the Irvington headquarters.

The opening of this branch office is a testimony to FEE’s new growth and strong future. Our funding base is growing, our programs are reaching a record number of young people, our media exposure is soaring, and now we have a new office from which we can extend our reach. Supporters of FEE, such as yourself, are responding to our unique approach of combining free-market economics with the necessity of personal character, and we thank you. We hope you will continue your support as we enter this new phase of FEE’s exciting future.

See you in New York and Georgia!

Mel Gibson’s epic film Braveheart, released in 1995, introduced many non-Scots to one of our greatest heroes, William Wallace. A fierce and uncompromising Scottish patriot, Wallace gave English invaders fits for years until his capture on August 5, 1305. He was hauled to London to face charges of insurrection, found guilty, and brutally executed by Edward I seven centuries ago, on August 23, 1305.

Edward was deservedly known as the “Hammer of the Scots.” His designs on Scotland were apparent shortly after he ascended to the English throne in 1272, when Wallace was but two years old. While the Scottish people themselves may have been staunch in their desire to retain their own national identity, many of their nobility were unprincipled opportunists who connived with Edward to allow English encroachment in exchange for political favors. More than a dozen of them claimed the Scottish throne in 1290 and then invited Edward’s arbitration to settle the question.

The English king chose John Balliol to be his royal puppet in exchange for the Scottish king’s oath of loyalty to England. But in 1296 Balliol found the spine to differ with Edward over an important issue, and the two nations went to war.

Young Wallace emerged early as a Scottish patriot of special mettle, leading his countrymen to a smashing victory at the Battle of Stirling Bridge on September 11, 1297. “All powerful as a swordsman and unrivalled as an archer,” John D. Carrick wrote in his classic Life of Sir William Wallace of Elderslie, “his blows were fatal and his shafts unerring: as an equestrian, he was a model of dexterity and grace; while the hardships he experienced in his youth made him view with indifference the severest privations incident to a military life.”

Wallace’s courage united Scotland, but 11 months after Stirling, the Scots were outnumbered at Falkirk and dealt a crushing blow. His forces scattered, Wallace took his campaign for independence to the courts of Europe in search of foreign alliances. When he returned to Scotland in 1303, he was the most-wanted fugitive in the country, and he was betrayed to Edward in the summer of 1305. The evidence is strong that it wasn’t commoners who broke faith with him, but highly placed Scottish officials who sold out to Edward. In London he was hanged and then drawn and quartered while still alive. Before his torture and execution, he responded to the charges against him with these words:

I cannot be a traitor, for I owe him no allegiance. He is not my Sovereign; he never received my homage; and whilst life is in this persecuted body, he never shall receive it. To the other points whereof I am accused, I freely confess them all. As Governor of my country I have been an enemy to its enemies; I have slain the English; I have mortally opposed the English King; I have stormed and taken the towns and castles which he unjustly claimed as his own. If I or my soldiers have plundered or done injury to the houses or ministers of religion, I repent me of my sin; but it is not of Edward of England I shall ask pardon.

Avenging Wallace’s death became a rallying cry in the years thereafter. Edward died in 1307 with Scotland still simmering in revolt. Under Robert the Bruce, the forces of Edward II were decisively defeated at Bannockburn in 1314. Six years later, a group of Scottish leaders issued the famous Declaration of Arbroath in hopes that the Pope would convince the English to leave Scotland alone. This declaration, written a full four and a half centuries before the American Declaration of Independence, enunciated the principle that a king must rule by the consent of the governed, who in turn have a duty to get rid of him if he doesn’t. It includes these stirring words: “It is not for honors or glory or wealth that we fight, but for freedom alone, which no good man gives up except with his life.”

The crowns of England and Scotland were united in the early seventeenth century and the parliaments were merged a hundred years later (see Stephen Davies), but Scotland retains a strong national identity within the United Kingdom. Wallaceite rugged individualism was apparent in the ideas of the Scottish Enlightenment, which produced Adam Smith, David Hume, and other eighteenth-century thinkers committed to limited government, self-reliance, freer markets, and personal freedom. William Ewart Gladstone, one of Britain’s greatest prime ministers and an ardent opponent of excessive government, had deep roots in Scotland.

Though my Scottish blood and love of liberty make me proud of this heritage, I worry that Scots in more recent decades have forsaken their history. The spirit of Wallace and the contributions of Hume, Smith, and Gladstone are perfunctorily recognized, but in practice Scottish policymakers seem wedded to the coercive nanny state. The great Scots of the past would probably be shocked to know how extensively their descendents now depend on the largess of government. As Alexander Hamilton, an American of Scottish ancestry, once wisely warned, “Control of a man’s subsistence is control of his will.”

Modern Reality

“Scotland is the most socialist part of Britain,” says John Blundell, former director of the Institute of Economic Affairs in London. “It even has strong credentials as the most socialist part of the European Union. Its public sector, including municipal agencies, consumes more of the [gross domestic product] than in any other OECD nation.” The romantic, noble image of proud and independent Scots has given way to a very different reality: a heavily subsidized population that overwhelmingly supports political candidates who demand even more subsidies.

Still, 705 years after the death of William Wallace, Scots know who Wallace was and admire him. Many seem to know instinctively something very fundamental to the greatness of their past and their distinction as a people: Their proudest heritage is one of keeping government at bay, not granting it broad power over their lives and livelihoods. As a Scot in America, that’s what I celebrate every chance I get. I hope someday the Scots of Scotland will do so once again as well.