Probably near the top of the left’s list is what they see as a failure by libertarians to take seriously the pervasiveness of power relationships in human interaction. By power, I mean the ability of one person to direct the activities of another, whether explicitly or subtly. One way of framing this criticism is that we only see power as political and are either blind to or dismissive of it in other arenas, especially the market.  One of my prized possessions is an autographed copy of Murray Rothbard’s book Power and Market.  He inscribed it with a little note that captures this view concisely:  “For the market and against Power.”  That inscription, as well as the very title of his book, suggests that there is a dichotomy between markets and power, with the latter being absent from the former and present only in politics.

Power Omnipresent

This view seems to me to fly in the face of the reality of the market, where power is also omnipresent.  It also ignores a variety of other realms of human interaction where power is present, for example, within the family and romantic relationships.  In the market the relationship between employer and employee certainly involves the exercise of power.  Libertarians look at situations where employees are unhappy yet don’t leave jobs (or where spouses are abused yet don’t leave their relationships) and often too quickly say, “Well, that’s their voluntary choice,” ignoring that the dynamics of the workplace or the family may involve exercises of power that lie outside the realms of politics or physical violence.

Rather than ignore non-State forms of power, libertarians should readily acknowledge those realities but then use the items on our list of what the left overlooks to ask what the implications are.  First, the existence of “private” power does not necessarily make “public” power the appropriate solution.  Many on the left might argue that firms exercising power undercompensate their employees and therefore government should pass minimum-wage and/or mandatory-benefits laws.  But does this exercise of public power solve the problem?  The standard economic analysis of such laws would suggest not, once we consider the unintended consequences, such as more unemployment or reduced hours (as well as reductions in noncovered benefits already provided) among the very people the law is supposed to help.

Monopoly Power

By its very nature political power is centralized and monopolized, and this makes it difficult to fine-tune.  By contrast the power at play in markets is decentralized and competitive, although no less real.  It’s true that firms exercise real power over their employees, but it is no less true that employees have alternatives, however weak, not to mention that competition among employers checks the power of any individual firm.  The left has to explain why employees are ever bid away if private power cannot be checked by the profit-seeking of other firms. Such competitive checks on power are far weaker in the political realm, even in a federalist system.

Moreover, to theorize that public power is a check on private power rather than its handmaiden ignores centuries of evidence of the role governments have played in serving the interests of the economically powerful.  As I have argued before, this is a feature not a bug of government intervention.  When John Kenneth Galbraith argued in the 1950s that government regulation could serve as a “countervailing power” against large corporations, he was either naïve or ignorant of the corporatist origins of much regulation already in existence.

The ultimate countervailing power is not the State but the combination of market competition and social activism.  In a free society unions can play a countervailing role as well, though not in partnership with the State.  Offering alternatives, organizing collectively, and using boycotts, ostracism, and other forms of social pressure are all ways of limiting power exercised problematically in the market. And as Ludwig von Mises argued, in a market economy it is consumers who hold the real power because their preferences direct the behavior of resource owners.

No society can ever be free of power.  The question for the left should be the comparative one: Under what set of institutions will private power do the least damage?  Asking that question recognizes the reality of private power and provides libertarians a way to respond to the left without dismissing their legitimate concerns.

Take a simple price ceiling, such as a maximum price for gasoline or maximum rent for Manhattan apartments.  People who support such laws think that somehow those who are selling or renting the good have the power to charge a higher price than what is perceived as fair or just, and that legislating a maximum below what would be charged must therefore protect consumers.  The traditional economic analysis rightly shows how this causes shortages and various other undesirable unintended consequences.

Buyers Limited Too

The point I want to make is that such laws also limit the behavior of buyers (or renters). In a genuinely free market, sellers who wish to maximize profits cannot charge any price they wish. They must be attentive to the intensity of consumer demand at various prices.  Ultimately the price of a given good is high because buyers find the product very valuable.  Price control says, “Sorry, buyers, you cannot express to sellers just how valuable you find this good, and therefore those of you who value it most highly will be unable to gain access to it.”  So rather than view price ceilings as laws to protect hapless buyers from ruthless sellers, we would be more accurate in seeing them as laws that prevent motivated buyers from outcompeting other buyers and communicating to ignorant sellers just how intensely they value the good.

We can make the same argument about price floors, or minimum-price laws such as farm price supports or the minimum wage.  Minimum-wage laws are normally couched in terms of protecting powerless sellers of labor against ruthless buyers, who have so much power, they can drive wages down to near-poverty levels.  Again, we know how the minimum wage causes all kinds of problems, most importantly high levels of unemployment among the least-skilled workers.  (In fact, many early proponents of the minimum wage recognized this, but saw it as a feature not a bug: It was a way to impoverish and eliminate the eugenically undesirable [pdf].)

However, like maximum-price laws, these laws really limit the other side of the market.  A minimum wage does not just prevent employers from “exploiting” workers at “too low” a wage; it also prevents workers from offering their services at wages they think will make them employable.  For lower-skilled workers, a minimum-wage law is effectively a minimum-productivity law that undermines their ability to outcompete other workers by offering to work for less when they can’t produce as much per hour as the minimum wage.  And this is precisely the feature of the law that higher-skilled workers like: It enables them to shut out competition from other workers.

Who Competes?

The key is to remember that market competition is not between buyers and sellers, but rather among buyers and among sellers.  As a result, all laws that limit prices necessarily limit the ability of both sides of the market to compete, regardless of how the law is framed or who its proponents say it will “limit.”  All price controls choke off market communication by preventing the competitive process on each side of transactions from telling the other side how much goods are valued.

The next time someone tells you that price controls or minimum-wage laws put the brakes on powerful firms that sell necessities at too high a price or buy labor at unfairly low wages, don’t believe it.  Those laws limit consumers and workers, especially lower skilled ones, at least as much as they limit powerful firms.

In some ways, being thankful for what we have is tougher than usual in 2010.  We remain, judging by the sluggish unemployment rate, mired in perhaps the worst recession since World War II.  We are approaching $14 trillion in government debt without any idea how its growth will be slowed, much less how it might get reduced.  We have an out-of-control Federal Reserve that is so worried about “the deflation” that its leader, the great “Ben Bernank,” thinks we need another $600 billion in new bank reserves on top of the more than $1 trillion he’s already given us.  And we now have a new health care system that looks to be way worse that the horrifically broken previous one.

As though that weren’t enough, if you try to get on a plane to get away from it all, you may first have to survive a TSA “pat down” that would get anyone not wearing a uniform arrested.

So what exactly is there to be thankful for?

Well, despite all of that gloom and doom, there’s still plenty of good news to be found.  Even with government sanctioned gropings, we still live in a society in which government largely obeys the rule of law and in which individuals have a large degree of freedom to read, write, speak, and think what they wish.  To a large extent, our most intimate and meaningful decisions — for example, those involving whom we marry, how many kids we have, what belief systems we hold — are still ours to make, and the Internet has opened people’s eyes around the world to the variety of “experiments in living” that are part of the broad human family.  These are still real and meaningful freedoms.

The market manages to move forward, even as we keep burdening it with heavier and heavier ankle weights of destructive government intervention.  The smart phones that so many of us hold in our hands are little miracles that improve our lives in myriad ways, including bringing us closer to our friends and family.  Medicine continues to advance, with diseases that killed our parents and grandparents being conquered and life expectancies, at least in the relatively free parts of the world, continuing to rise.  We can always do better, but infant and child mortality is increasingly a thing of the past, and a smaller percentage of the world goes to bed hungry every night.

Commonplace Luxuries

The things our grandparents considered luxuries here in the United States are now more commonplace among the poor than they were for the average American a generation ago.  The typical poor American’s house has machines and gadgets that were either available only to the rich or not even in existence a generation or two ago.  And these are not just toys like LCD TVs and iPhones;  they are lifesavers like air-conditioning, medicine, smoke detectors, and burglar alarms.

The bounty that the market has given us can desensitize us to the marvels that are all around us.  I spent several hours earlier this week flying through the sky in a chair in a long silver tube in an environment more comfortable than many homes a few generations ago.  I can talk to my wife at home from the middle of a park in Atlanta or send my daughter a picture of my fried-apple-pie-with-bacon dessert.  I can come home in a car that will last for well over 100,000 miles and settle into bed to watch an endless variety of movies before I go to sleep.  And I can wake up in the morning knowing that my food for the day is safe in my refrigerator/freezer, which uses much less energy than those of my parents or grandparents.

I can also take a moment to realize that for all the marvels that the market has made available that we could not have imagined when we were little, the world that my kids will inhabit in the next generation will be full of even cooler marvels, longer and healthier lives, and improving living standards for all the world.

Even as the overbearing State burdens the market, I still believe that human ingenuity and our desire to progress will win out.  We’re a hardy and resilient bit of fauna, after all.  On Thanksgiving it’s worth taking a few moments to recognize this and to give thanks to both the institutions of the market and the humans whose ingenuity has provided us so much.

I’m inclined to think of George Orwell and F. A. Hayek at the same time. Both showed great courage in writing the truth, undaunted by the consequences. Both valued freedom, though they understood it differently.

Orwell, a man of the “left,” could not remain silent in the face of the horrors of Stalinism. Twice—during the Spanish Civil War and again at the dawn of the Cold War—he refused to permit his comrades to blind themselves to where their collectivism had led and could lead again. For his favor he was called a conscious tool of fascism, a stinging accusation considering he had gone to Spain to fight fascism. (But for a few inches, the bullet that penetrated Orwell’s neck in Spain would have denied us the latter warnings, Animal Farm and Nineteen Eighty-Four.)

Hayek, a man of the “right,” risked ostracism and worse in 1944 by publishing The Road to Serfdom. Writing in England at the height of World War II, this Austrian-turned-Briton warned that central economic planning would, if pursued seriously, end in a totalitarianism indistinguishable from the Nazi enemy. That couldn’t have been easy to write at that time and place—central planning was much in vogue among the intelligentsia. While a good deal of the reception was serious and respectful, a good deal of it was not. Herbert Finer, in Road to Reaction, called Hayek’s book “the most sinister offensive against democracy to emerge from a democratic country for many decades”; it expressed “the thoroughly Hitlerian contempt for the democratic man.”

Not surprisingly, The Road to Serfdom brought Orwell and Hayek together in print. Orwell briefly reviewed the book along with Konni Zilliacus’s The Mirror of the Past in the April 9, 1944, issue of The Observer. The man who would publish Animal Farm a year later and Nineteen Eighty-Four five years later found much to agree with in Hayek’s work: “In the negative part of Professor Hayek’s thesis there is a great deal of truth. It cannot be said too often—at any rate, it is not being said nearly often enough—that collectivism is not inherently democratic, but, on the contrary, gives to a tyrannical minority such powers as the Spanish Inquisitors never dreamed of.”

But true to his left state-socialism, Orwell could not endorse Hayek’s positive program:

[H]e does not see, or will not admit, that a return to ‘free’ competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State. The trouble with competitions is that somebody wins them. Professor Hayek denies that free capitalism necessarily leads to monopoly, but in practice that is where it has led, and since the vast majority of people would far rather have State regimentation than slumps and unemployment, the drift towards collectivism is bound to continue if popular opinion has any say in the matter.

It’s disappointing to see Orwell give such short shrift to Hayek’s positive thesis. He is glib and dogmatic, which is unbecoming a serious intellectual such as Orwell. His ignorance of economics leaps from the page.

“[A] return to ‘free’ competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the State.” It’s hard to believe that someone so familiar with Stalinism could have written that. Even without knowing much economics, could he really have thought that what goes on in market-oriented societies, even during depressions, could be worse than the famine Stalin inflicted on the Ukrainians, the show trials and executions, or the labor camps in Siberia?

“The trouble with competitions is that somebody wins them.” In a market producers compete to better serve consumers. The losers in that competition are not exiled or executed. They find other ways to serve consumers, just as producers are trying to serve them.

“Professor Hayek denies that free capitalism necessarily leads to monopoly, but in practice that is where it has led. . . .” Where has monopoly arisen without the aid of the State? We find no market-generated monopoly in England or the United States. There, major business interests actively promoted protectionism and other interventions precisely to tamp down competition and protect their market shares.

“[T]he vast majority of people would far rather have State regimentation than slumps and unemployment. . . .” But that’s a false choice. Slumps and unemployment, as Hayek and his mentor Ludwig von Mises taught, are products of central-bank manipulation of money and interest rates—that is, of government, not of the free market.

I must pause here to focus on Orwell’s disgraceful use of the word “regimentation.” I say “disgraceful” because he committed the sin he himself so eloquently condemned in his justly famous essay “Politics and the English Language”: the sin of euphemism. Regimentation is the least of the State’s crimes.

One wonders how Orwell avoided despair. He misidentified the free market with state capitalism and rejected it, and he saw the totalitarian tendencies of socialism up close. Yet he could write, “There is no way out of this unless a planned economy can somehow be combined with the freedom of the intellect, which can only happen if the concept of right and wrong is restored to politics” (emphasis added).

Hadn’t he just read chapter 11 of The Road to Serfdom, “The End of Truth,” in which Hayek described how a serious commitment to central planning must produce “contempt for intellectual liberty”?

“The word ‘truth,’” Hayek wrote, “itself ceases to have its old meaning. It describes no longer something to be found, with the individual conscience as the sole arbiter of whether in any particular instance the evidence (or the standing of those proclaiming it) warrants a belief; it becomes something to be laid down by authority, which has to be believed in the interest of unity of the organized effort and which may have to be altered as the exigencies of this organized effort require it.

“The general intellectual climate which this produces, the spirit of complete cynicism as regards truth which it engenders, the loss of the sense of even the meaning of truth, the disappearance of the spirit of independent inquiry and of the belief in the power of rational conviction, the way in which differences of opinion in every branch of knowledge become political issues to be decided by authority, are all things which one must personally experience—no short description can convey their extent.”

But of course Orwell had experienced those things in Spain and knew how it was in Russia. He certainly put a heavy burden on that word “somehow.” How restoring the concept of right and wrong to politics would make central planning either decent or practical is a mystery no one has solved. Mises had shown long before that socialism could not be practical because without prices arising out of the exchange of privately owned means of production, the socialist planner could not make rational calculations with respect to what should be produced, in what manner, and in what quantities. As for decency, Hayek addressed that in chapter 10, “Why the Worst Get on Top.”

Law and commerce were indelibly linked in the thought of David Hume, who argued that it is commerce itself that gives rise to notions of justice between people and peoples.  Although commerce is today typically seen as something which is proactively enabled by law, it is much more accurate historically to see law as something which emerges because of its vital importance in commerce – and particularly commerce involving foreigners.  Within the Roman Empire, it was the ius gentium, the “law of nations,” derived from custom rather than legislation, and applying specifically to noncitizens, that governed most types of commercial transactions.The modern notion that law is inseparable from the will of a ruler or ruling body, antithetical to the idea of a universal natural law or a ius gentium, has, in parts of the world and during epochs where it has actually been applied, been devastating to economic development.

–Benn Steil and Manuel Hinds, Money, Markets, and Sovereignty

Hat tip: Don Boudreaux, Cafe Hayek

The market is a complex order. A thief needs only violence to get rich; a cattle trader needs more things, such as order and justice; in other words, an environment where transactions can be safely completed. The market does not obey “the law of the jungle”—just the opposite: The law of the jungle prevails where there are no markets. Peaceful exchange with secure property rights is more productive than widespread robbery, but many criticize the rich regardless of the path they followed to opulence, as if they all had achieved their wealth illicitly. Apparently, George Bernard Shaw’s fallacious quotation still rules the day: “I am a gentleman: I live by robbing the poor.”

The most common way to make a fortune in a free market is organizing a successful company. How can this company succeed and pay handsome salaries? In a free market there is only one answer: by making something consumers appreciate. Under such circumstances, the businessman’s wealth is linked to the social utility of his labor, a utility proved by consumers who buy because they too benefit from the deal.

Of course, one can always make money breaking the law, as thieves and swindlers do. And there is also another method that, while unjust, does not always appear that way: to become rich by avoiding competition or gaining other privileges that only the state can grant.

Monopolies and protectionism exemplify these strategies. Both became the enemies of classical liberals, who argued in favor of the free market and against the privileged groups that injured the majority of the population by imposing high prices and limiting the ability to choose.

Alongside the state’s expansion during the past century, opportunities to profit from using the state to avoid competition have proliferated. Through the apparatus of government, lobbying groups have obtained power over their markets, subsidies, and every other kind of anticompetitive protection.

Blocking market activity breaks the connection between social needs and the supply of goods and services aimed at satisfying them. But it may turn out to be profitable: Fortunes have originated in anti-competitive privileges bestowed by political power or made possible by its regulations. In such cases it is fair to distrust the wealthy.

Often, however, no distinction is made when it comes to criticizing rich people. They all appear reproachable, and few dispute the need to impose on them specific burdens and progressive tax scales aimed at dealing with the “problem” of inequality. The state must force-fit all of us into a Procrustean bed.

Internal Robin Hood Service

Many thus would have the state play Robin Hood, robbing from the rich (no matter how they got the money) and giving to the poor. I do not dispute that this legend is open to several interpretations, including a plausible libertarian one. Robin Hood can be seen as an enemy of tyranny and the abuse of law, a friend of the people, a man who robbed tax collectors and privileged aristocrats, returning the money to the victimized peasants. This is a very appealing version of the story. My objection, however, is directed exclusively at the danger of casting the modern state in the powerful image of a hero seeking redress and justice. It uses this image to legitimize its vast distribution operations and to show its supposed liberality.

The notion of the state playing Robin Hood has two weaknesses. First, there is no way to prove that if the authorities take a dollar by force from a rich person and give it to a poor person, the collective happiness increases. As Anthony de Jasay says, the only way to solve the problem of comparisons between individuals is for the state to impose its preferences on the community. The outcome of these operations, in the words of Bertrand de Jouvenel, is not a redistribution of income from rich to poor but from everyone to the state.

The second weakness in the state-as-Robin-Hood argument is that it only works if the treasury is small. The state in the days of Robin of Locksley was limited, but when it takes on modern proportions, no matter what Barack Obama may say, it can no longer finance itself only by taking money from the very rich, who are by definition a minority. The state might pretend to do this, but in practice its only financing option is to take money from everyone.

One of the main arguments for the growth of the modern state is the fight against inequality. Some claim that without the state’s intervention, human beings would abandon the poor to their own devices and charity would prove both insufficient and insulting.

The allegation that, without the state’s helping hand, people would ignore their fellow human beings in poverty can’t stand even a cursory analysis. From the dawn of civilization, examples to the contrary abound. Voracious tax increases have not managed to extinguish the humanitarian impulse.

Charity is a noble and deep human feeling. Why is it dismissed and devalued? Why is it deemed humiliating, while state aid is viewed as a display of compassion?

Virtue Requires Liberty

Helping our fellow man and political distribution are very different actions. Let us take as an example the noble conduct of the Good Samaritan, a beautiful portrait of humanitarianism. A basic assumption—in truth, an essential element—of the parable is liberty. The Good Samaritan’s virtue stems from the fact that he acts voluntarily; if a centurion forced him to help the poor Jew, beaten and abandoned in the road, the parable would have made no sense. Virtue, in effect, demands liberty.

In this example, we see the demoralizing effect of state expansion. Many nongovernmental organizations, particularly in Europe, do not ask citizens to freely and voluntarily hand over a fraction of their income. Instead, they ask the state to extract sums from taxpayers’ pockets. Amazingly, the sacrifice of liberty and responsibility on the altar of political power is praised, while providing free and voluntary aid to one’s fellow man is dismissed as humiliating charity.

The fact is that where markets are permitted to work, fewer people need economic assistance of any kind. The centuries since Adam Smith wrote The Wealth of Nations have provided ample evidence to support his message: Free trade and security in one’s rights are the pillars on which individuals can improve their condition. Despite this, many people criticize the market economy and allege that it encourages marginalization. It is common to read statistics showing great poverty and accusations that market-oriented countries like the United States are infernos of inequality.

Not Condemned to Poverty

The problem with such statistics is that they are based on surveys that fail to track the same people through time. Thus they cannot provide the most important piece of information: Are the poor condemned to poverty or are they able to rise out of it? The statistics, in short, rarely measure social mobility. But when they do, they show that the poor have large possibilities of escaping the lowest percentile of income distribution. It is in fact more probable that a very poor person in America will climb to the highest income rung than that he will remain in poverty. One could argue that the data indicate mobility but not improvement, given that there is always a poorest 20 percent. Incomes in an advancing society like the United States, however, are not constant but rather are increasing—despite pervasive government interference—and this, not welfare, offers everyone the opportunity and the incentive to progress.

State-Sanctioned Inequality

Socialists and interventionists of all parties have reluctantly ended up accepting the market, but they claim government intervention is necessary to tackle inequality. However, inequality is only objectionable if there is a lack of competition and freedom. The modern state’s onerous and inefficient distributive structures, ostensibly built to wipe out inequality, have had perverse effects and a demoralizing impact on society, pushing different groups to fight over public favors. It is an out-of-control process in which, as the German liberal Ludwig Erhard said, everyone puts his hand in the pocket of everyone else.

The clamor from interventionists against inequality morphs into a clamor for a larger and larger state. This path leads to the loss of liberty and a distortion of both democracy and justice. It distorts democracy because, by attempting to solve inequality, it removes limits to power and expands the field of state action. It distorts justice because the only way to solve inequality politically is for the state to have the power to treat individuals unequally. Thus the struggle to eliminate inequality ends up destroying the most important form of equality for an open society: equality before the law.

Any mortal bearing The Truth may be right, but it is best to be cautious and skeptical

Too bad you never knew the Grand Street “coffee saloon”; it was quite an institution before World War I. The coffee served was mostly milk—or it might be tea with lemon, served in a glass but the chunk of sponge cake which came with it was quite liberal and filling. The cost was a dime, and thrown in free gratis, whether you liked it or not, was a dissertation on Truth. You always got it, in polysyllabic dosage, from some co-customer who had established himself as the Custodian of Truth in this particular “coffee saloon.”

Grand Street, on New York’s Lower East Side, was no mere thoroughfare; it was the symbol of an era. Before Tovarisch Lenin had himself boxcarred into dictatorship over the proletariat, and thence into mummified immortality, Grand Street typified the eternal search for the Absolute—the Holy Grail containing the positive specific of the Good Society. In one “coffee saloon” the Sir Galahad of dialectical materialism would dilate on its inevitability to those who were already convinced of it, while next door a Knight of Kropotkin would diagnose the case for “direct action.” Each eating place had its own philosophy—which was the Only Truth in every case—giving the impression that the philosophy and not the food was its stock in trade.

Characteristic of the Grand Street era was the certainty of each protagonist that only his doctrine was on the side of the angels, that all others were frauds, to say the least. Objectivity was looked down upon as a weakness of character, and questioning was regarded as a manifest expression of innate sinfulness. All of which gave life exhilaration and charm. People who are sure of themselves—downright sure—are always exciting. It is only when they abandon argument and proceed to “do something about it” that they become dull. In the Grand Street days, there was a lot of talk about action; but you got the impression that for these delightful exponents of Truth, action would be the most distasteful thing in the world. They enjoyed talking too much. Action does to a philosophy what a kitchen does to a beautiful woman, and then there is nothing to talk about. Action ruined Grand Street.

Every doctrinaire dreams of “doing something about it”—of demonstrating his Truth in the field of human affairs. If only he could try it out! There is no question that the Good Society is guaranteed by his mosaic of words, for he has checked and cross-checked it at every point and nowhere has he found a logical leak. It must work. It is Truth. The obstinacy of selfish, ignorant, and sinful people who deny it is all that stands between the cure-all and the sick world.

Well, something was done about it in Moscow. To be historically exact, Grand Street, the era of dreams and discussion, was murdered on the battlefields of World War I; for there was nothing to palaver about after the Brest-Litovsk Treaty. The time for action had come. Truth would now prove itself.

Thirty-eight years of experience have somewhat diluted the Truth according to Marx; the promise of Grand Street has not been fulfilled, for Moscow seems to have fallen short of the expected Eden. Evidently there was a flaw in the mosaic.

When we go back over the argument, applying the Moscow experience to it, we find that the neglected and defective element in it is the Human Being. The basic assumption of the Moscow Truth is that the Human Being is absolutely and indefinitely malleable. There is nothing in him that can resist the force of environmental influences. When he is fitted into the Ideal Mold, the institutional pattern of Truth, he will come out the Ideal Man. He is the putty, not the sculptor.

From this assumption follows another, which is never expressed but always implied. And that is that some Sculptor of Society is needed. Who shall fill the bill? Quite obviously, one whose capacity for understanding Truth automatically raises him above the level of Human Being. He is something special, endowed with gifts that are denied the run-of-the-mill anthropoid, picked by nature to do the work of Truth. His anointment both qualifies him and places upon him the obligation to “do something about it.”

These two assumptions, absolutely necessary to make the Truth stand up, tend to show up its deficiency when put to the test. At

Moscow, the Absolute Truth met its comeuppance simply because the Sculptors did not measure up to the assumption of infallibility, while the Human Being denied the assumption as to his plasticity.

The Sculptors themselves proved to be incapable of shedding the inadequacies which the Human Being was supposed to shed in the ideal environment chiseled out by the Sculptors. They themselves demanded special privileges and advantages over their fellow men, including their fellow Sculptors. So did the Human Being! He was not malleable to the decrees and edicts of the Sculptors, at least not in his inclination to hold on to what he produced. The Human Being proved it by lying down on the job when his claim to property was denied. And the Sculptors lost all their lofty pretensions simply because their resignation from the human race was not accepted. They too were Human Beings, after all.

The spirit of Grand Street lingered on after World War I, even though sickish and apologetic, and kept crackling that “something ought to be done about it.” Between wars, the Truth underwent some alterations, in the light of its European experience; and its perfection was undertaken by the intellectuals—including many college professors. Statistics replaced coffee-and-cake. But the intellectuals held onto the two assumptions that had defied Truth; that was necessary, for if it is recognized for a moment that the Human Being is endowed with implacable instincts, or that the oracles of the Good Society may be in error, how can one make “progress”?

After World War II, when the consequent confusion gave them the opportunity to “do something about it,” the Park Avenue successors to Grand Street set up their refurbished versions of Truth in London and Washington. For the selfsame reason that Truth failed in Moscow, Rome, and Berlin, it is proving itself quite fallible in a “democratic” locale. Far from bringing about the Good Society, it is again turning out to be a pattern for disharmony. Even its advocates admit by constant revision that it is not what it is cracked up to be in the erudite “Grand Streets.”

But the spirit of Grand Street is eternal; it never dies. For it is man’s treadmill search for the key to happiness, his yearning for the monistic principle of the good life. Every one of us, deep down, is certain that the “mess we are in” could be cleaned up with one application of the Perfect Formula, and so anxious are we to get at it that a good peddler has only to buttonhole us at the propitious moment to make a sale. We are suckers for the Infallible.

Seeing how the market is never oversold, this writer, a confessed Ancient Mariner, comes at you with, believe it or not, the Truth and nothing but the Truth. It is all wool and a yard wide and carries the money-back-if-not-satisfied guarantee. It is called—Freedom. Now counterfeiters have helped themselves to this label only too often; and since you have been fooled before, you may be inclined to pass my booth with a sneer. However, if you will but listen to a short sales talk, a hundred or so words, you will realize that my elixir is genuine and entirely different from the ersatz you have tried.

First, I am compelled to violate the first principle of good salesmanship; I must talk about my competitors’ products, by way of contrast. Take them all down the line—socialism, anarchism, communism, single tax, prohibition, monetary reforms, controlled economics, ad nauseam—and you find a common essential ingredient: Political Power. In that respect they are all alike; not one of them can stand on its own feet; not one can work without a law. When their proponents say, “Let’s do something about it,” they mean, “Let’s get hold of the political machinery so that we can do something to somebody else.” And that somebody else is invariably you.

Freedom makes concessions to the law, as a matter of necessity, but always with the reluctance of a child taking castor oil. It should be obvious that a free society is one in which the law concerns itself with minimizing the interferences of men in one another’s affairs, and never presumes to intervene in their daily lives; which stamps Freedom as quite unlike the various reforms that are being peddled on any “Grand Street.” Every one of them is labeled with “legal directions for taking,” while Freedom is not even bottled.

Freedom is essentially a condition of inequality, not equality. It recognizes as a fact of nature the structural differences inherent in man—in temperament, character, and capacity—and it respects those differences. We are not alike and no law can make us so. Parenthetically, what a stale and uninteresting world this would be if perfect equality prevailed! When you seek the taproot of reform movements, you find an urgency to eradicate these innate differences and to make all men equal; in practice, this means the leveling-off of the more capable to the mediocrity of the average. That is not Freedom.

We must not, however, be too hard on the spirit of reform; for the impulse of reform usually is to root out envy, cupidity, and ignorance. But experience has shown that the law is ineffective in that purpose; that the law is in fact the instrument by which these evils are frequently imposed upon everyone within a society.

The necessary reforms will come of themselves, automatically, when we learn to assume the responsibility for our own behavior. That is Freedom. Then we will ask no favors and seek no advantages over our neighbors. We will get along with the capacities with which nature has endowed us and make the best of it. In the final analysis, Freedom is an individual experience. []

Welfare State And The Eskimos

A few years back, a story came out of Florida which related the difficulties the seagulls around one of the shrimping towns were having.

It was reported that the shrimp boats had stopped going to that particular port and the seagulls were in a bad way because there were no more discarded shrimp to feed upon. The older gulls had forgotten how to forage for themselves and the younger gulls had never learned, so all of them were starving.

This story was widely used as an illustration of the dangers of the welfare state, and some commentators even said that it proved that all social welfare was bad.

Possibly it was only an allegory. But it can happen to people, as our Mr. McKenna tells us from Ottawa in his report of the effect of the welfare state programs on the Eskimos. There aren’t any fables in his story.

The fact showed that the Eskimos aren’t hunting seals or fishing like they used to. They are eating flapjacks now instead of the meat and oils of their catches which gave them the proteins and vitamins they needed. So their resistance has been lowered, and they are more susceptible to diseases they pick up from the white man at the trading posts where they get their government payments. And they are dying off. The 1941 census—taken before welfare handouts began—showed 13,000 Eskimos living in the Canadian Arctic. The 1951 census showed only 8,000.

A government report admits: “The cumulative effect of government aid such as family allowances and old age and blind pensions has made the Eskimos aware of the fact that they now have two sources of income. Their independence has been weakened in some areas by the knowledge that government agencies will come to their assistance and that there is little need to take the risks of obtaining the produce of the land.”

Editorial, The Wall Street Journal, December 2, 1952

On entering Paris, which I had come to visit, I said to myself—Here are a million of human beings who would all die in a short time if provisions of every kind ceased to flow towards this great metropolis. Imagination is baffled when it tries to appreciate the vast multiplicity of commodities which must enter tomorrow through the barriers in order to preserve the inhabitants from falling a prey to the convulsions of famine, rebellion and pillage. And yet all sleep at this moment, and their peaceful slumbers are not disturbed for a single instant by the prospect of such a frightful catastrophe. On the other hand, eighty departments have been labouring today, without concert, without any mutual understanding, for the provisioning of Paris. How does each succeeding day bring what is wanted, nothing more, nothing less, to so gigantic a market? What, then, is the ingenious and secret power which governs the astonishing regularity of movements so complicated, a regularity in which everybody has implicit faith, although happiness and life itself are at stake? That power is an absolute principle, the principle of freedom in transactions. We have faith in that inward light which Providence has placed in the heart of all men, and to which He has confided the preservation and indefinite amelioration of our species, namely a regard to personal interest—since we must give it its right name—a principle so active, so vigilant, so foreseeing, when it is free in its action. In what situation, I would ask, would the inhabitants of Paris be if a minister should take it into his head to substitute for this power the combinations of his own genius, however superior we might suppose them to be—if he thought to subject to his supreme direction this prodigious mechanism, to hold the springs of it in his hands, to decide by whom, or in what manner, or on what conditions, everything needed should be produced, transported, exchanged and consumed? Truly, there may be much suffering within the walls of Paris—poverty, despair, perhaps starvation, causing more tears to flow than ardent charity is able to dry up; but I affirm that it is probable, nay, that it is certain, that the arbitrary intervention of government would multiply infinitely those sufferings, and spread over all our fellow-citizens those evils which at present affect only a small number of them. []

This extract is from Social Fallacies, Register Publishing Company edition, 1944.

Do you not see, first, that—as a mental abstract—physical force is directly opposed to morality; and, secondly, that it practically drives out of existence the moral forces? How can an act done under compulsion have any moral element in it, seeing that what is moral is the free act of an intelligent being? If you tie a man’s hands there is nothing moral about his not committing murder. Such an abstaining from murder is a mechanical act; and just the same in kind, though less in degree, are all the acts which men are compelled to do under penalties imposed upon them by their fellow-men. Those who would drive their fellow-men into the performance of any good actions do not see that the very elements of morality—the free act following on the free choice—are as much absent in those upon whom they practice their legislation as in a flock of sheep penned in by hurdles. You cannot see too clearly that force and reason—which last is the essence of the moral act—are at the two opposite poles. When you act by reason you are not acting under the compulsion of other men; when you act under compulsion you are not acting under the guidance of reason. The one is a force within you and the other is a force without. Moreover, physical force in a man’s hand is an instrument of such brutal character that its very nature destroys and excludes the kindlier or better qualities of human nature. The man who compels his neighbor is not the man who reasons with and convinces him, who seeks to influence him by example, who rouses him to make exertions to save himself.

Auberon Herbert (1838-1906)