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Thursday, May 31, 2012


Foundation of Economic Education

It is not the right of property which is protected, but the right to property. Property, per se, has no rights; but the individual—the man—has three great rights, equally sacred from arbitrary interference: the right to his life, the right to his liberty, the right to his property. . . . The three rights are so bound together as to be essentially one right. To give a man his life but deny him his liberty, is to take from him all that makes his life worth living. To give him his liberty but take from him the property which is the fruit and badge of his liberty, is to still leave him a slave.

    U.S. Supreme Court Justice


  Tricky phrases with favorable meanings and emotional appeal are being used today to imply a distinction between property rights and human rights.

  By implication, there are two sets of rights—one belonging to human beings and the other to property. Since human beings are more important, it is natural for the unwary to react in favor of human rights.

  Actually, there is no such distinction between property rights and human rights. The term property has no significance except as it applies to something owned by someone. Property itself has neither rights nor value, save only as human interests are involved. There are no rights but human rights, and what are spoken of as property rights are only the human rights of individuals to property.

  Expressed more accurately, the issue is not one of property rights versus human rights, but of the human rights of one person in the community versus the human rights of another.

  Those who talk about two sets of rights apparently want to discriminate between property income and labor income—with the implication that the rights to rental and investment income are inferior, as a class, to the rights to income from wages and salaries. Actually, this is an unwarranted assumption. It must be evident that all persons have rights which are entitled to respect. Safeguarding such rights is essential to the wellbeing of all. This is the only just principle. Thus, the problem is not to establish priorities on human rights in the community, but rather to determine what the respective rights are in the particular cases under dispute. This is the real problem in human relations, and it is one that calls for the exercise of wisdom, restraint, and true administration of justice under law.

  What Are “Property Rights”?

  What are the property rights thus disparaged by being set apart from human rights? They are among the most ancient and basic of human rights, and among the most essential to freedom and progress. They are the privileges of private ownership, which give meaning to the right to the product of one’s labor—privileges which men have always regarded instinctively as belonging to them almost as intimately and inseparably as their own bodies.

  The ownership of property is the right for which, above all others, the common man has struggled in his slow ascent from serfdom. It is the right for which he struggles today in countries emerging from feudalism. The sense of this right is so deep-rooted in human nature, so essential as a stimulant of productive effort, that even totalitarian regimes have been unable to abolish it entirely.

  It is a mistake to belittle the importance of property rights. Respect for these rights is basic to organized society, and the instinct of individuals to acquire property is at the root of all economic progress. Unless people can feel secure in their ability to retain the fruits of their labor, there is little incentive to save and to expand the fund of capital—the tools and equipment for production and for better living. The industrial development of this country, which has given us the highest standard of living in the world and has made possible a miracle of production in war and peace, is dependent upon the observance of property rights. Who is going to work and save if these rights are not recognized and protected?

  The right to own property means the right to use it, to save it, to invest it for gain, and to transmit it to others. It means freedom from unreasonable search and seizure and from deprivation without due process of law or without just compensation. It might also be fairly taken to imply a limitation upon taxation because “the power to tax involves the power to destroy.” For a like reason, it should imply assurance against governmental dilution of the money whereby the government takes property which otherwise could be claimed by wage and salary checks and other credit instruments. Further, it should insure against other measures so burdensome or restrictive as to prevent the employment of savings in legitimate productive enterprise with a reasonable prospect of gain. Violation of any of these rights can nullify, in whole or in part, the right to property.

  The Bill of Rights in the United States Constitution recognizes no distinction between property rights and other human rights. The ban against unreasonable search and seizure covers “persons, houses, papers, and effects,” without discrimination. No person may, without due process of law, be deprived of “life, liberty, or property”; all are equally inviolable. The right of trial by jury is assured in criminal and civil cases alike. Excessive bail, excessive fines, and cruel and unusual punishments are grouped in a single prohibition. The founding fathers realized what some present-day politicians seem to have forgotten: A man without property rights—without the right to the product of his own labor—is not a free man. He can exist only through the generosity or forbearance of others.

  These constitutional rights all have two characteristics in common. First, they apply equally to all persons. Second, they are, without exception, guarantees of freedom or immunity from governmental interference. They are not assertions of claims against others, individually or collectively. They merely say, in effect, that there are certain human liberties, including some pertaining to property, which are essential to free men and upon which the state shall not infringe. . . .

  What Are “Human Rights”?

  Now what about the so-called human rights that are represented as superior to property rights? What about the “right” to a job, the “right” to a standard of living, the “right” to a minimum wage or a maximum workweek, the “right” to a “fair” price, the “right” to bargain collectively, the “right” to security against the adversities and hazards of life, such as old age and disability?

  The framers of the Constitution would have been astonished to hear these things spoken of as rights. They are not immunities from governmental compulsion; on the contrary, they are demands for new forms of governmental compulsion. They are not claims to the product of one’s own labor; they are, in some if not in most cases, claims to the products of other people’s labor.

  These “human rights” are indeed different from property rights, for they rest on a denial of the basic concept of property rights. They are not freedoms or immunities assured to all persons alike. They are special privileges conferred upon some persons at the expense of others. The real distinction is not between property rights and human rights, but between equality of protection from governmental compulsion on the one hand and demands for the exercise of such compulsion for the benefit of favored groups on the other.

  The “Right” to a Job

  To point out these characteristics of the so-called human rights is not to deny the reality nor belittle the importance of the social problems they represent. Some of these problems are real and important. They are also complex, and in this further respect they are different from the rights guaranteed by the Constitution.

  There is no great difficulty nor danger in declaring that certain individual rights shall not be tampered with by the government—and in adhering to that principle. It is quite another matter to say that the government shall seize the property or curtail the freedom of some of its citizens for the benefit, or the supposed benefit, of others. To adopt this view is to cast both the government and the citizen in radically new roles, with far-reaching effects on economic behavior, political practices, and individual character.

  Consider, for example, the so-called right to a job. This is a fine-sounding phrase that evokes an emotional response. It creates a mental image of an unemployed worker and his family suffering hardship through no fault of their own. No one would deny the reality nor the seriousness of that, especially when the unemployed worker is multiplied by millions. To find the best remedy, however, is a difficult matter, and it is not made easier by the use of such misleading catchwords as the “right” to a job. One man’s “right” to a job implies an obligation on the part of someone else to give him a job. Who has any such obligation?

  An economy of private enterprise functions by means of voluntary contracts entered into for the sake of mutual advantage. Jobs arise from such contracts. The obligation to fulfill his contract is the only right any person can have to a job. Both sides of the contract have to be fulfilled. The employer’s job—his side of the contract—is to anticipate what the consumers will want in the market place. His capacity to offer jobs to employees depends upon how well he understands the market pattern of consumer preferences. He has no right of control over the market. There is a limit to his capacity to provide jobs. And in the final analysis, an employee’s so-called right to a job is determined by what consumers think the product or service is worth to them.

  As with the “right” to a job, so with the other so-called human rights. These are not rights in the constitutional sense of respect for privacy; they are, instead, social programs which the government has undertaken or has been asked to promote. These programs, unlike true rights, are selective, coercive, complex, and experimental. Hence, they need to be carefully considered each on its own merits with due regard to the serious threats they may involve to the real and basic human rights that have enabled free men to build a society with the highest level of material well-being ever achieved anywhere.

  Triple Threats to Private Property

  On the economic side, the gravest threat is that productive enterprise will be so burdened and impeded by high taxes, prohibitions, red tape, and controls that industry will stagnate. Without the products of industry, social programs of any kind become empty promises. New political powers and functions increase the cost of government and drain manpower from farms and factories into administrative bureaus. The great bulk of the money for benefit payments to favored groups must be taken from those who produce by putting forth their own efforts or by investing their savings. Min-imum-wage rates wipe out the entire lower range of job opportunities in the business world. Only the government, with the power to tax, can pay more for labor than it is worth. Maximum-hour laws further limit the opportunity to be productive. Artificially pegged prices and wage rates interfere with the normal market process of gearing production to the maximum satisfaction of consumer wants.

  On the political side, the increase of power multiplies the opportunities for the abuse of power and the harm that can be done by such abuse. High tax rates expose taxpayers and collectors to strong temptations. The disbursement of billions of dollars in public funds opens new avenues for favoritism and corruption. This system of political distribution of the wealth of a nation encourages government by pressure groups, with the favors flowing toward the groups with the most votes. Demands for more liberal benefits on the one hand and for tax relief on the other converge upon the public treasury. Deficit financing and currency depreciation tend to become national habits which feed upon the savings of individuals and wipe out the means of production and progress.

  On the human side, the individual citizen discovers that it is increasingly difficult to get ahead by enterprise and thrift—increasingly profitable to join in the scramble for governmental favors and handouts. The sense of relationship between services rendered and payment received grows weaker. Personal initiative and self-reliance give way to an attitude of: let the government do it. Free citizens tend to degenerate into wards of the state.

  These are not imaginary effects, but real ones. They are visible here and now. They are the consequences of placing social programs, mislabeled “human rights,” above the real human rights, disparagingly called “property rights,” which underlie the productive strength of free men.

Wednesday, May 30, 2012


Foundation of Economic Education

Pioneer life was hard for a man with two children but no woman to care for them, nor to help with the chores at home. Thus Thomas Lincoln remarried about a year after the death (1818) of his first wife, Nancy Hanks, Abrahams mother. The new “mother” was a widow, Sarah Bush Johnston, with three youngsters of her own. According to historians, Abraham Lincolns stepbrother, John D. Johnston, five years Lincolns junior, turned out to be shiftless and lazy. The following letter was written to his young stepbrother when Lincoln was 39 years old and a U. S. Congressman from Illinois.

  Washington, December 24, 1848 Dear Johnston: Your request for eighty dollars I do not think it best to comply with now. At the various times when I have helped you a little, you have said to me, “We can get along very well now,” but in a very short time I find you in the same difficulty again. Now this can only happen by some defect in your conduct. What that defect is, I think I know. You are not lazy, and still you are an idler. I doubt whether since I saw you, you have done a good whole day’s work, in any one day. You do not very much dislike to work; and still you do not work much, merely because it does not seem to you that you could get much for it. This habit of needlessly wasting time, is the whole difficulty; and it is vastly important to you, and still more so to your children, that you should break this habit. It is more important to them, because they have longer to live, and can keep out of an idle habit before they are in it, easier than they can get out after they are in.

  You are now in need of some money; and what I propose is, that you shall go to work, “tooth and nails,” for somebody who will give you money for it. Let father and your boys take charge of things at home—prepare for a crop, and make the crop; and you go to work for the best money wages, or in discharge of any debt you owe, that you can get. And to secure you a fair reward for your labor, I now promise you that for every dollar you will, between this and the first of next May, get for your own labor, either in money, or on your own indebtedness, I will then give you one other dollar. By this, if you hire yourself at ten dollars a month, from me you will get ten more, making twenty dollars a month for your work. In this, I do not mean you shall go off to St. Louis, or the lead mines, or the gold mines in California, but I [mean for you to go at it for the best wages you] can get close to home in Coles County. Now if you will do this, you will be soon out of debt, and what is better, you will have a habit that will keep you from getting in debt again. But if I should now clear you out, next year you would be just as deep in as ever. You say you would almost give your place in Heaven for $70 or $80. Then you value your place in Heaven very cheaply, for I am sure you can with the offer I make you get the seventy or eighty dollars for four or five months work. You say if I furnish you the money you will deed me the land, and, if you don’t pay the money back, you will deliver possession. Nonsense! If you can’t now live with the land, how will you then live without it? You have always been [kind] to me, and I do not now mean to be unkind to you. On the contrary, if you will but follow my advice, you will find it worth more than eight times eighty dollars to you.

  Affectionately your brother,

  A. Lincoln

Tuesday, May 29, 2012

PROPERTY - James Madison

Foundation of Economic Education

This term, in its particular application, means “that dominion which one man claims and exercises over the external things of the world, in exclusion of every other individual.”

  In its larger and juster meaning, it embraces everything to which a man may attach a value and have a right, and which leaves to every one else the like advantage.

  In the former sense, a man’s land, or merchandise, or money, is called his property.

  In the latter sense, a man has a property in his opinions and the free communication of them.

  He has a property of peculiar value in his religious opinions, and in the profession and practice dictated by them.

  He has a property very dear to him in the safety and liberty of his person.

  He has an equal property in the free use of his faculties, and free choice of the objects on which to employ them.

  In a word, as a man is said to have a right to his property, he may be equally said to have a property in his rights.

  Where an excess of power prevails, property of no sort is duly respected. No man is safe in his opinions, his person, his faculties, or his possessions.

  Where there is an excess of liberty, the effect is the same, though from an opposite cause.

  Government is instituted to protect property of every sort; as well that which lies in the various rights of individuals, as that which the term particularly expresses. This being the end of govern-ment, that alone is a just government which impartially secures to every man whatever is his own.

  According to this standard of merit, the praise of affording a just security to property should be sparingly bestowed on a government which, however scrupulously guarding the possessions of individuals, does not protect them in the enjoyment and communication of their opinions, in which they have an equal, and, in the estimation of some, a more valuable property.

  More sparingly should this praise be allowed to a government where a man’s religious rights are violated by penalties, or fettered by tests, or taxed by a hierarchy.

  Conscience is the most sacred of all property; other property depending in part on positive law, the exercise of that being a natural and unalienable right. To guard a man’s house as his castle, to pay public and enforce private debts with the most exact faith, can give no title to invade a man’s conscience, which is more sacred than his castle, or to withhold from it that debt of protection for which the public faith is pledged by the very nature and original conditions of the social pact.

  That is not a just government, nor is property secure under it, where the property which a man has in his personal safety and personal liberty is violated by arbitrary seizures of one class of citizens for the service of the rest. A magistrate issuing his warrants to a press-gang would be in his proper functions in Turkey or Indostan, under appellations proverbial of the most complete despotism.

  That is not a just government, nor is property secure under it, where arbitrary restrictions, exemptions, and monopolies deny to part of its citizens that free use of their faculties and free choice of their occupations which not only constitute their property in the general sense of the word, but are the means of acquiring property strictly so called.

  What must be the spirit of legislation where a manufacturer of linen cloth is forbidden to bury his own child in a linen shroud, in order to favour his neighbour who manufactures woolen cloth; where the manufacturer and weaver of woolen cloth are again forbidden the economical use of buttons of that material, in favor of the manufacturer of buttons of other materials!

  A just security to property is not afforded by that government, under which unequal taxes oppress one species of property and reward another species; where arbitrary taxes invade the domestic sanctuaries of the rich, and excessive taxes grind the faces of the poor; where the keenness and competitions of want are deemed an insufficient spur to labor, and taxes are again applied by an unfeeling policy, as another spur, in violation of that sacred property which Heaven, in decreeing man to earn his bread by the sweat of his brow, kindly reserved to him in the small repose that could be spared from the supply of his necessities.

  If there be a government, then, which prides itself in maintaining the inviolability of property; which provides that none shall be taken directly, even for public use, without indemnification to the owner, and yet directly violates the property which individuals have in their opinions, their religion, their passions, and their faculties—nay, more, which indirectly violates their property in their actual possessions, in the labor that acquires their daily subsistence, and in the hallowed remnant of time which ought to relieve their fatigues and soothe their cares—the inference will have been anticipated that such a government is not a pattern for the United States.

  If the United States mean to obtain or deserve the full praise due to wise and just governments, they will equally respect the rights of property and the property in rights; they will rival the government that most sacredly guards the former, and by repelling its example in violating the latter, will make themselves a pattern to that and all other governments.

Monday, May 28, 2012


Foundation of Economic Education

The possessions one accumulates are a reflection of his values. What a man owns—what is his own—is what he is. One’s personality and property reflect his subjective values.

  But few of us care to live in isolation. We prefer to exchange ideas and goods and services with others. And the problem is to work our strictly personal values into a price or value structure for purposes of peaceful trade. The question to be answered is, how does the subjective theory of value determine the market price?

  Here it is: The exchange value of any loaf of bread, of any painting, of any days work, or of any good or service is whatever another or others will offer in willing exchange.

  When Mrs. Smith swaps a shawl for Mrs. Jones’ goose, the value of that shawl is that goose and vice versa. Yet, each lady gains in her own (subjective) judgment. Were this not a fact, neither would have willingly exchanged.

  Value can make no sense except as it is subjectively determined, that is, as utility or gain is judged by self. Gain or value cannot be determined for anyone by another. What has value for one may have more or less value to someone else: there are those who prefer a chinchilla coat to a college education and vice versa, a freedom library to a vacation and vice versa, the theater to a TV performance and vice versa, ad infinitum.

  Assume that I am an artist and do a painting each month. Unfortunately for me, no one wants “a Read.” The value of my work? Zero! Now, assume that a change occurs in the minds of buyers (in each instance, subjective); “Reads” become a popular whim to the point that each will bring $1,000. The value of my work? $1,000! For the sake of this illustration, there was no change in the quality of the paintings. Buyers changed their minds and, thus, the value of my work.

  It is perfectly plain that the practice of subjective evaluations is the practice of individual liberty or, if you prefer, personal freedom of choice.

  It is also easily demonstrable that freedom of the press, freedom of religion, freedom of speech, freedom of assembly are impossible in the absence of economic freedom.

  This correct theory of value is opposed by the objective theory, that is, by arrangements where someone else, by some standard of evaluation other than your own, attempts to determine the value of goods and services to you. An understanding of the fallacious objective theory and an ability to identify it in its many manifestations helps to accent the importance and the validity of the subjective theory in practice.

  Prior to 1870 no one had formulated the subjective theory. Nor was it invented. Three economists—Menger, Jevons, and Walras—from different countries and without collaboration, formulated the theory almost simultaneously. Their enlightenment came by merely observing how common people behave—produce and exchange—in the absence of governmental or other interference. Thus, before 1870 when there was no understanding of the subjective theory, objective methods of arriving at value predominated.

  The classical example of the objective theory of value is the labor theory of value. This theory merely affirms that value is determined by cost of production or, stated another way, by the amount of energy expended. While some classical economists knew the theory to be wrong, they were not certain as to what was right.

  Pursuing the labor theory to its logical and absurd conclusion, a mud pie would have the same value as a mince pie, provided that they were produced by equal expenditures of energy. If a pearl diver came up with a pearl in one hand and a pebble in the other, they would be of equal value!

  Of course, people will not exchange as much for a mud pie or a pebble as for a mince pie or a pearl. So, how does this theory find expression in practice? Simply use the power of government to take from the mince pie makers and give to the mud pie makers! Karl Marx gave the formula: “from each according to his ability, to each according to his need.”

  However, even the Russians no longer are strictly addicted to the labor theory of value. Yet, they largely rely upon objective standards of one kind or another. That is, self-determination is at a minimum; the government arbitrarily prices nearly everything. Willing exchange is not the mode; individual freedom of choice is substantially taboo; the subjective theory is less used in Russia than elsewhere.

  Note that there is no freedom of the press, of speech, of religion, of assembly in Russia. It is because economic freedom is denied; and economic freedom is impossible unless subjective value judgments are respected.

  One of the most important points to keep in mind is that the amount of effort exerted or the cost of production does not determine exchange value. It is determined by individual evaluations of personal utility. The market price or value is somewhere within the range of these evaluations.

  We who are interested in individual liberty and, thus, in the observance of subjective value judgments, must know that the objective theory is antithetical to our welfare, and we should be able to identify its many practices, regardless of how cleverly disguised they are.

  Actually, we need only keep our eyes on unwilling as distinguished from willing exchanges. All unwilling exchanges rest on objective and not on subjective value judgments.

  Would you willingly exchange your income or capital for farmers not to grow tobacco, to rebuild someone else’s downtown, to put men on the moon, to underwrite power and light for the people of the Tennessee Valley, to pay people not to work? If your answers are negative, you can take the political applications of the objective theory from there. Examples abound by the thousands.

  It is a gross understatement of the case to say that freedom rests on the practice of the subjective theory; subjective value judgments, when honored, are freedom!

Sunday, May 27, 2012

THE UNKNOWN QUANTITY - Madelyn Shepard Hyde

Foundation of Economic Education

Perhaps one of the best arguments against attempts to equalize the fruits of human labor under a collectivist society is the infinite variety of human nature. It should be obvious that each person’s desires and aspirations defy measurement—in both quality and quantity—by any other person. And since it is impossible to equate what cannot be measured, the collectivist society must fail in this announced objective.

  It is perfectly possible, of course, to divide a pound of steak equally between two persons. That is a task requiring only a pound of steak, a set of scales, and a knife—and someone to do the dividing. It is also possible to decree that the two individuals shall have a certain number of leisure hours each day. But it is quite another matter to measure the relative value that two persons will place upon steak and upon leisure, for one is certain to be more fond of steak—or leisure—than the other. What satisfies the soul of one person may have little or no appeal to another—certainly not to the same degree.

  Now suppose the purveyor of equality realizes that equal portions of steak will not accomplish this equality which he has set out to attain. He might then undertake to divide the steak unequally by weight, and to reapportion the total number of leisure hours, so that both individuals would be satisfied to exactly the same degree. By what means could he determine what quantity of leisure for one is equal to a certain quantity of steak for the other? At this point, he will have to abdicate from his collectivist throne, realizing that he has no scale by which he can measure any value for any other person.

  If it is impossible for a third party to solve even this one simple equation for two persons, it is fantastic to believe that he could solve the infinitely more complex problem of equally satisfying all the desires of all the people. This egalitarian objective could be attained only if all people wanted the same quantities of all things in life. But they do not. Our forefathers sought to preserve the freedom of each individual to pursue, to the best of his ability, the satisfaction of his own particular set of desires—known only to himself. They had the wisdom to realize that in designing a society in harmony with this variation in human wants they were working with, rather than against, a principle of nature.

  Those of us who wish to assist in a reversal of the present trend away from individual liberty must, among other refinements of the mind, understand, believe in, and be able to explain the subjective theory of value, as forbidding as that term sounds. Except as we understand and apply this correct theory of value, individual liberty is out of the question.

Saturday, May 26, 2012


Foundation of Economic Education

If Socrates were resurrected, I suspect he would call attention again to what was written about 25 centuries ago: Know thyself; if you know a lot about other things and are ignorant of yourself, this is ridiculous.

  We in this advanced and scientific age have never taken Socrates seriously on this point. I maintain that we are being ridiculous; we seek to plan and yet are not informed about ourselves for whom we plan. Of course, we know something about ourselves, but science has never undertaken a serious job of understanding people—a multidisciplinary undertaking. We have not tackled the job of understanding ourselves with one-tenth of the fervor we have shown in our research in outer space.

  One of the most important facts about ourselves we have not grasped: All of us are basically and inevitably individuals in many important and striking ways. Our individuality is as inescapable as our humanity. If we are to plan for people, we must plan for individuals, because that’s the only kind of people there are.

  In what ways are we individuals? First as to our bodies. These ways are tangible and not subject to argument. Each of us has a distinctive stomach, a distinctive heart and circulatory system. Each of us has a distinctive muscular system, distinctive breathing apparatus, and an endocrine system all our own. Most surprising and significant perhaps, each of us has a distinctive set of nerve receptors, trunk nerves, and a brain that is distinctive in structure and not like other brains.

  We are individuals also with respect to our minds. We do not all think with equal facility about the various things that can be thought about. Einstein was an extremely precocious student of mathematics, but on the other hand, he learned language so slowly that his parents were concerned about his learning to talk. William Lyon Phelps, the famous English professor at Yale, on the other hand, confessed that in mathematics he was “slow but not sure.” There are at least forty facets to human minds. Each of us may be keen in some ways and stupid in others.

  The importance of this individuality in minds would be hard to exaggerate. Because of it two or more people agree with each other only in spots, never totally. The grandiose idea that all workers of the world can unite and speak and act as a unit is wholly untenable because of individuality in the minds of the individual workers. Nor can all capitalists unite, and for the same reason. Neither can all Negroes, all Latins, all Chinese, all Jews, all Europeans, or all English-speaking peoples.

  It is often assumed that people disagree only because of self-interest and differences in their education. They also disagree because their minds do not grasp the same ideas with equal facility. Sometimes an individual has a specific idea which seems to him perfectly clear and potent. To him it seems certain that once this idea is expressed it will gain automatic acceptance. Practical trial shows, however, that it does not. To other individuals, because the patterns of their minds are different, this supposedly clear and potent idea may appear foggy, dubious, or even unsound.

  Failure to recognize individuality in minds is widespread and is a revelation of the fact that we are ignorant about the people for whom we plan.

  “Environmental Determinism”

  I do not know that anyone else has ever expressed it this way, but on a long walk with Al-dous Huxley about a year before he died, he decried to me the fact that the prevailing philosophy today may be described as “environmental determinism.” Environment is assumed to be the only factor in our lives; inborn individuality in body and mind are completely neglected. According to this philosophy, every child who is placed in a slum environment becomes a delinquent and a criminal. This, from the work of the Gluecks at Harvard and others, is manifestly untrue. Neither is it true that every child who is furnished with plenty becomes for this reason an honorable and upright citizen.

  Our “social studies” and “social science” teaching in all our schools and universities is permeated with environmental determinism which shows no interest in the crucial facts of individuality and quite inevitably tends to destroy all moral responsibility. A delinquent cannot help being a delinquent, we are told. Society should take all the blame. A criminal is that way because society has made him so, so society is to blame. This is blatant oversimplification in the name of social science! It disregards how human beings are built—their fundamental nature—and can by its short-sightedness lead to a breakdown of our civilization.

  What I have been saying does not in any sense deny the importance of environment. Environments are what we can control, and to study how to improve them is the essence of planning. But we, the people, are not putty; we are individuals, and we need to be understood.

  Individuality is Crucial

  To me it seems certain that the facts of individuality need to be taken into account. There are three areas, related to planning, in which I have some special knowledge. In all these areas individuality is crucial.

  Take for instance the area of nutrition and health. It would be relatively easy to produce economically in factories a “man-chow” which would supposedly be the perfect food for the average man. Laboratory experiences as well as wide observations show, however, that this “man-chow” idea is completely unrealistic. It will not work. Because of biochemical individuality we do not all like the same foods nor can we thrive on the same mixture. Many human beings are so built that they derive a substantial part of the satisfaction of life out of eating. Taking variety and choices from them would be depriving them of their pursuit of happiness. The best food planning devised involves supermarkets where thousands of kinds of foods in great variety are available.

  The Food and Drug Administration in Washington has, at least until very recently, done its planning on the basis of the hypothetical average man and has sought to regulate the marketing of medicinal substances, vitamins, and the like on this basis. This cannot work because of the hard facts of biochemical individuality. Real people—individuals—do not react in a uniform manner either to drugs or to nutritional factors such as amino acids, minerals, and vitamins.

  No planning in the area of nutrition and health can work on a long range basis unless the facts of individuality are taken into account. If we plan for people, we must plan for individuals, because that is the only kind of people there are.

  Another area of planning in which I have some special knowledge is that of education. I have recently completed my fiftieth year as a teacher. While I have in mind no pet schemes for reorganizing schools or universities, I have had for years a growing consciousness that no successful long-range planning can be done unless we recognize fully that every mind is a distinctive one and that every young person is endowed with peculiar aptitudes which need to be recognized, developed, and used. One of the worst lacks in modem education is the failure of youngsters to know themselves and to recognize their own strengths as well as weaknesses. Education for the hypothetical average child is no good. We must plan for individual children; that’s the only kind there are.

  Closely related to the problem of planning education is planning to curb crime, violence, racial hatred, and war. As Clement Attlee aptly pointed out years ago, the roots of war are to be found in the minds and hearts of men. The late Robert Kennedy pointed out when he was Attorney-General that peaceful relations between people cannot be enforced with guns and bayonets.

  In my opinion, we will get nowhere in planning to curb violence by thinking in terms of the city of Dallas killing John F. Kennedy, the city of Memphis killing Martin Luther King, or the city of Los Angeles killing Robert Kennedy. Of course, social factors enter into violence, but there are important individual factors, too.

  No informed person can think that curbing crime and violence is a simple problem. Because it is difficult, it is all the more important that we seek out—thoroughly—the root causes. I maintain that a great weakness which we exhibit in this modem scientific age is ignorance about ourselves.

  Finally, let me say that our love of liberty and freedom is based upon this individuality. If we all had the same kinds of stomachs, the same kinds of muscles, nerves, and endocrine glands, the same kinds of brains, planning would be simple. We would all like exactly the same things. We would all be satisfied to read the same books, have the same amusements, eat the same food, and go to the same church. In short, we would all live happily in the same rut.

  Planning is not that simple. We must plan for individuals—that’s the only kind of people there are.

Friday, May 25, 2012


Foundation of Economic Education

Biologically, each member of the human family possesses inborn differences based on his brain structure and on his vast mosaic of endocrine glands—in fact, on every aspect of his physical being. Each of us has a distinctive set of drives—for physical activity, for food, for sexual expression, for power. Each one has his own mind qualities: abilities, ways of thinking, and patterns of mental conditions. Each one has his own emotional setup and his leanings toward music and art in its various forms, including literature. All these leanings are subject to change and development, but there is certainly no mass movement toward uniformity. No one ever “recovers” from the fact that he was born an individual.

  When a husband and wife disagree on the temperature of the soup or on the amount of bed coverings, or if their sleep patterns do not jibe, this is evidence of inborn differences in physiology. If one child loves to read or is interested in science and another has strong likings for sports or for art, this is probably due to inborn differences in makeup. If two people disagree about food or drink, they should not disregard the fact that taste and smell reactions often widely differ and are inherited. If we see a person wearing loud clothing without apparent taste, we need to remember, in line with the investigations of Pickford in England, that each individual has a color vision all his own; some may deviate markedly from the pack.

  The inborn leanings of Mozart were evident by age three, and he began composing when he was four. Capablanca was already a good chess player—good enough to beat his father—when at age five he played his first game. For many centuries, Indian philosophers have recognized innate individuality, which they explain on the basis of experience in previous incarnations.

  Biology has always recognized inborn individuality. If this inborn distinctiveness had not always been the rule in biology, evolution could never have happened. It is a commonplace fact in biology that every living organism needs a heredity and a suitable environment. Unfortunately, in the minds of most intellectuals biological considerations have been pushed aside.

  Professor Jerry Hirsch, a psychologist at the University of Illinois, has protested in Science that “the opinion makers of two generations have literally excommunicated heredity from the behavioral sciences.” This neglect of the study of heredity has effectively produced a wide gap between biology and psychology. Biology deals with living things, and psychology is logically an important phase of biology.

  Bernard Rimland, director of the Institute for Child Behavior Research in San Diego, in reviewing my book, You Are Extraordinary in American Psychologist, wrote: “Since between-group differences are commonly a small fraction of the enormous, important, and very interesting within-group (individual) difference, psychology’s focus on average values for heterogeneous groups represents, as Williams indicates, a chronic case of throwing out the babies with the bath water. ‘Throwing out the babies’ is bad enough, but we psychologists have the dubious distinction of making this error not only repeatedly but on purpose.”

  Social solidarity exists and social problems are pressing, but we cannot hope to deal with these successfully by considering only generic man, that is, average values for heterogeneous groups. We need a better understanding of men.

  A Firm Foundation

  The basic problem of generic man is how to achieve “life, liberty, and the pursuit of happiness.” The writers of our Declaration of Independence were on solid ground, biologically speaking, when they took the position that each human being has inalienable rights and that no one has, by virtue of his imagined “royal blood,” the right to rule over another. In their emphasis on mankind as individuals, Jefferson and his co-authors were closer to biological reality than are those of our time who divorce psychology from biology and center their attention on that statistical artifact, the average man.

  Because each of us is distinctive, we lean in different directions in achieving life, liberty, and the pursuit of happiness. Happiness may come to individual people in vastly different ways, and so the human problem of achieving life and the pursuit of happiness resolves itself, more than it is comfortable to admit, into a series of highly individual human problems. We need to take this consideration into account in attempting to build an advanced society.

  In understanding the scope of human desires, it is worthwhile to consider briefly the problems that real—as opposed to theoretical—people face. These may be grouped under four headings: 1) making a livelihood; 2) maintaining health; 3) getting along with others; and 4) getting along with one’s self. These four categories, singly or in combination, cover most of the familiar human problems—marriage and divorce, crime, disease, war, housing, air and water pollution, urban congestion, race relations, poverty, the population explosion, the all-pervading problem of education, and the building of an abundant life.

  The importance of approaching the problem of making a livelihood from the individual’s standpoint lies in the fact that in our complex society a multitude of ways exist—an estimated 23,000—in which people can make a living. People are not by any means interchangeable parts in society. While some might function well in any one of a large number of capacities, many others might be highly restricted in their capabilities and yet be extremely valuable members of society. The idea that it is all a matter of education and training cannot possibly be squared with the hard biological facts of inborn individuality. This perversion of education perpetuates the banishment of heredity—an ever present biological fact—from our thinking. Fitting together people and jobs is just as real and compelling as fitting shoes to people. People sometimes suffer from ill-fitting shoes; they suffer more often from ill-fitting jobs.

  The maintenance of health—both physical and mental—involves individual problems to such a degree that it is difficult to exaggerate their role. Ever since the days of Hippocrates it has been known in a vague way that “different sorts of people have different maladies,” but we are only beginning to learn how to sort people on the basis of their inborn individual characteristics. When we have become expert in this area, vast progress will result, particularly in the prevention of metabolic and psychosomatic diseases, i.e., those not resulting from infection. As long as we dodge the biological fact of inborn individuality, we remain relatively impotent in the handling of diseases that arise from within individual constitutions.

  The problem of getting along with others is a very broad one, in which individual problems are basic. If husbands and wives and members of the same family always get along well together, we would have some reason to be surprised when squabbles break out within business, religious, or political groups. If all these kinds of squabbles were nonexistent, we would have a basis for being surprised at the phenomenon of war.

  Distinctive Qualities

  While self-interest and differences in training are vital factors in these common conflicts, another factor should not be overlooked: the inborn individuality of the participants. There is a mass of evidence to support the thesis that every individual, by virtue of his or her unique brain structure and peripheral nervous system, is psychologically conditionable in a distinctive manner. Thus, a person’s unique nervous system picks up distinctive sets of impulses, and because his interpretive apparatus is also unique he learns different things and interprets the world in a distinctive manner. Even if two individuals were to have exactly the same learning opportunities, each would think differently and not quite like anyone else. This is the basis for the observation by Santayana: “Friendship is almost always the union of a part of one mind with another; people are friends in spots.”

  In spite of our attempts to do so, individual minds cannot be compared on a quantitative basis. The minds of Shakespeare and Einstein cannot be weighed one against the other; there were many facets to the minds of each. At birth the two minds were equally blank, but as they matured, each saw, perceived, and paid attention to different aspects of the world around it. Each was conditionable in a unique way.

  Each Mind Unique

  The recognition of the uniqueness of human minds is essential to human understanding. By developing expertness in this area, psychology will eventually become far more valuable. In an advanced society with a growing population and closer associations, it is obviously essential that we learn better how to get along with each other. When we are unaware of the innate differences that reside within each of us, it becomes very easy to think of one who disagrees with us as a “nitwit” or a “jerk,” or perhaps as belonging to the “lunatic fringe.” When we appreciate the existence of innate differences, we are far more likely to be understanding and charitable. Strife will not be automatically eliminated, but tensions can be decreased immeasurably.

  Individual problems are at the root of the problem of crime. Many years ago, James Devon placed his finger on the crucial point. “There is only one principle in penology that is worth any consideration: It is to find out why a man does wrong and make it not worth his while.” The question, “Why does a particular man commit crime?” is a cogent one; the question, “Why does man turn to crime?” is relatively nonsensical.

  Since all human beings are individual by nature, they do not tick in a uniform way nor for the same reasons. Broadly speaking, however, many doubtless turn to crime because society has not provided other outlets for their energies. If we could find a suitable job for every individual, the problem of crime would largely vanish. The problem of crime is thoroughly permeated with individual problems; it cannot be blamed solely on social conditions, because as the studies of Sheldon and Eleanor Glueck have shown, highly respected citizens may come from areas where these conditions are the worst.

  A Race of Individuals

  Racial relations would ease tremendously if we faced squarely the biological facts of individuality. If we were all educated to know that all whites are not the same, that all Negroes do not fit in the same pattern, that all Latins are not identical, that all American Indians are individuals, and that all Jews do not fit a stereotype, it would help us to treat every member of the human race as an individual.

  It is no denial of the existence of racial problems to assert that individual problems need to be stressed more than they are. For individual Negroes and individual whites, the pursuit of happiness is by no means a uniform pursuit. Doubtless, although there are whites and Negroes who would think they had reached utopia if they had a decent shelter and were assured three meals a day, this would not satisfy millions of others for whom striving and a sense of accomplishment are paramount. “The Negro problem” or “the white problem”—depending on one’s point of view—is shot through with a host of individual problems.

  Learning to live with one’s self is certainly an individual problem, and will be greatly eased by recognition of inborn individuality. Much unhappiness and many suicides can be traced to misguided desire to be something other than one’s self. Each of us as an individual has the problem of finding his way through life as best he can. Knowing one’s self as a distinctive individual should be an important goal of education; it will help pave the road each of us travels in his pursuit of happiness.

  Dangers of Oversimplification

  Why have these facts of individuality not been generally accepted as a backdrop in every consideration of human problems? For one thing, many people, including scholars, like being grandiose and self-inflationary. To make sweeping pronouncements about “man” sounds more impressive than to express more limited concerns. Simplicity, too, has an attractiveness; if life could be made to fit a simple formula, this might be regarded as a happy outcome.

  One excuse for excommunicating inheritance from the behavioral sciences for two generations has been the fact that inheritance in mammals is recognized by careful students as being exceedingly complex and difficult to interpret. It is true that some few characteristics may be inherited through the operation of single genes or a few recognizable ones. But other characteristics—those that differ in quantity—are considered to be inherited in obscure and indefinable ways commonly ascribed to multiple genes of indefinite number and character. These multiple-gene characteristics include, to quote the geneticists Snyder and David, “the more deep-seated characters of a race, such as form, yield, intelligence, speed, fertility, strength, development of parts, and so on.” To say that a particular characteristic is inherited through the mediation of multiple genes is to admit that we are largely ignorant of how this inheritance comes about.

  Identical Twins?

  Recently, some light has been thrown on this problem by experiments carried out in our laboratories. These experiments involved armadillos, which are unusual mammals in that they commonly produce litters of four monozygous (“identical”) quadruplets that are necessarily all males or all females.

  By making measurements and studying sixteen sets of these animals at birth, it became evident that although they develop from identical genes, they are not identical at all. Organ weights may differ by as much as twofold, the free amino acids in the brain may vary fivefold, and certain hormone levels may vary as much as seven-, sixteen-, or even thirty-two-fold. These findings clearly suggest that inheritance comes not by genes alone but by cytoplasmic factors that help govern the size of organs (including endocrine glands) and the cellular makeup of the central nervous system. “Identical” twins are not identical except with respect to the genes in the nucleus of the egg cell from which they developed.

  One of the most interesting suggestions arising out of this study is the probability that individual brain structures, which have been known to have “enormous” differences since the investigations of Lashley more than twenty years ago, are made distinctive by the same mechanisms that make for differences in organ weights. The size, number, and distributions of neurons in normal brains vary greatly; this is biologically in line with the uniqueness of human minds. The further elucidation of this type of inheritance should help to focus more attention on heredity.

  If this line of thought is valid it makes even more ridiculous the invitation issued by the Ford Foundation to the biological sciences to stay out of the precinct of human behavior. The expression “behavioral science” came into being many years ago as a result of the formulation of the Ford Foundation-supported programs. Biochemistry and genetics, for example, were kept apart from the “scientific activities designed to increase knowledge of factors which influence or determine human conduct.”

  What can be done to bridge the gap between psychology and biology? More importantly, how can we develop expertise in dealing with the human problems that plague us but at present go unsolved?

  Differential Psychology

  A broad, long-range, and practical strategy for learning how to deal more effectively with human problems is to explore, problem by problem, the inborn human characteristics that are pertinent to each one. Differential psychology, for example, needs to be intensified and greatly expanded; this can probably be done most effectively in connection with a series of problem-centered explorations.

  Some of the specific problem-areas that require study from the standpoint of how inborn characteristics come into play are: delinquency and crime, alcoholism, drug addiction, unemployability, accident proneness, cancer, heart disease, arthritic disease, mental disease, and broadest of all, education. Each of these problems could be vastly better understood as the result of interdisciplinary study of the influences of inborn characteristics. Such study would include differential psychology when applicable, combined with extensive and intensive biochemical and physiological examinations, for example, of blood, saliva, urine, and biopsy materials. To expedite these investigations, automated equipment and computer techniques would be used extensively to help interpret the complex data.

  It is not likely that these explorations will find that some individuals are born criminals, others alcoholics, etc. Once we recognize the unique leanings that are a part of each of us, we will see how, by adjusting the environment, these leanings can be turned toward ends that are socially constructive. Every inherited factor can be influenced by an appropriate adjustment of the environment. All this should not be made to sound too easy; it may be more difficult than going to the moon, but it will be far more worthwhile.

  One of these specific problems—alcoholism—has been of special interest to me. After about twenty -five years of study, I am convinced that inborn biochemical characteristics are basic to this disease, but that expert application of knowledge about cellular nutrition (which is not far off) will make it scientifically possible to prevent the disease completely and to correct the condition if the application of corrective measures is not too long delayed.

  Inborn inherited characteristics have a direct bearing on the current revolt against the Establishment. If biology had not been banished from behavioral science, and if students and other intellectuals were well aware of the biological roots of their existence, it would be taken for granted that conformity is not a rule of life.

  If all that we human beings inherit is our humanity, then we all should be reaching for the same uniform goal: becoming a thoroughly representative and respectable specimen of Homo sapiens. There is rebellion against this idea. Revolters want to do “their thing.” The revolt takes on many forms because many unique individuals are involved.

  If nonconformity had a better status in the eyes of the Establishment (and it would have if our thinking were more biologically oriented), exhibitionism would be diminished and the desire of each individual to live his own life could be fostered in a natural way.

  Human beings are not carbon copies of one another. Students and others who are in revolt have found this out. Perhaps without fully recognizing it, they are pleading for a recognition of inborn individuality. This is essentially a legitimate plea, but it can take the form of disastrous anarchy. A peaceful means of helping resolve the ideological mess we are in is to recognize heredity by having a happy marriage of biology and behavioral science.

Thursday, May 24, 2012


Foundation of Economic Education

The words freedom and liberty signified for the most eminent representatives of mankind one of the most precious and desirable goods. Today it is fashionable to sneer at them. They are, trumpets the modem sage, “slippery” notions and “bourgeois” prejudices.

  Freedom and liberty are not to be found in nature. In nature there is no phenomenon to which these terms could be meaningfully applied. Whatever man does, he can never free himself from the restraints which nature imposes upon him. If he wants to succeed in acting, he must submit unconditionally to the laws of nature.

  Freedom and liberty always refer to interhuman relations. A man is free as far as he can live and get on without being at the mercy of arbitrary decisions on the part of other people. In the frame of society everybody depends upon his fellow citizens. Social man cannot become independent without forsaking all the advantages of social cooperation.

  The fundamental social phenomenon is the division of labor and its counterpart—human cooperation.

  Experience teaches man that cooperative action is more efficient and productive than isolated action of self-sufficient individuals. The natural conditions determining man’s life and effort are such that the division of labor increases output per unit of labor expended. These natural facts are: (1) the innate inequality of men with regard to their ability to perform various kinds of labor, and (2) the unequal distribution of the nature-given, non-human opportunities of production on the surface of the earth. One may as well consider these two facts as one and the same fact, namely, the manifoldness of nature which makes the universe a complex of infinite varieties.

  Innate Inequality

  The division of labor is the outcome of man’s conscious reaction to the multiplicity of natural conditions. On the other hand, it is itself a factor bringing about differentiation. It assigns to the various geographic areas specific functions in the complex of the processes of production. It makes some areas urban, others rural; it locates the various branches of manufacturing, mining, and agriculture in different places. Still more important, however, is the fact that it intensifies the innate inequality of men. Exercise and practice of specific tasks adjust individuals better to the requirements of their performance; men develop some of their inborn faculties and stunt the development of others. Vocational types emerge, people become specialists.

  The division of labor splits the various processes of production into minute tasks, many of which can be performed by mechanical devices. It is this fact that made the use of machinery possible and brought about the amazing improvements in technical methods of production. Mechanization is the fruit of the division of labor, its most beneficial achievement, not its motive and fountain spring. Power-driven specialized machinery could be employed only in a social environment under the division of labor. Every step forward on the road toward the use of more specialized, more refined, and more productive machines requires a further specialization of tasks.

  Within Society

  Seen from the point of view of the individual, society is the great means for the attainment of all his ends. The preservation of society is an essential condition of any plans an individual may want to realize by any action whatever. Even the refractory delinquent who fails to adjust his conduct to the requirements of life within the societal system of cooperation does not want to miss any of the advantages derived from the division of labor. He does not consciously aim at the destruction of society. He wants to lay his hands on a greater portion of the jointly produced wealth than the social order assigns to him. He would feel miserable if antisocial behavior were to become universal and its inevitable outcome, the return to primitive indigence, resulted.

  Liberty and freedom are the conditions of man within a contractual society. Social cooperation under a system of private ownership of the means of production means that within the range of the market the individual is not bound to obey and to serve an overlord. As far as he gives and serves other people, he does so of his own accord in order to be rewarded and served by the receivers. He exchanges goods and services, he does not do compulsory labor and does not pay tribute. He is certainly not independent. He depends on the other members of society. But this dependence is mutual. The buyer depends on the seller and the seller on the buyer.


  The main concern of many writers of the nineteenth and twentieth centuries was to misrepresent and to distort this obvious state of affairs. The workers, they said, are at the mercy of their employers. Now, it is true that the employer has the right to fire the employee. But if he makes use of this right in order to indulge in his whims, he hurts his own interests. It is to his own disadvantage if he discharges a better man in order to hire a less efficient one. The market does not directly prevent anybody from arbitrarily inflicting harm on his fellow citizens; it only puts a penalty upon such conduct. The shopkeeper is free to be rude to his customers provided he is ready to bear the consequences. The consumers are free to boycott a purveyor provided they are ready to pay the costs. What impels every man to the utmost exertion in the service of his fellow men and curbs innate tendencies toward arbitrariness and malice is, in the market, not compulsion and coercion on the part of gendarmes, hangmen, and penal courts; it is selfinterest. The member of a contractual society is free because he serves others only in serving himself. What restrains him is only the inevitable natural phenomenon of scarcity. For the rest he is free in the range of the market.

  In the market economy the individual is free to act within the orbit of private property and the market. His choices are final. For his fellow men his actions are data which they must take into account in their own acting. The coordination of the autonomous actions of all individuals is accomplished by the operation of the market. Society does not tell a man what to do and what not to do. There is no need to enforce cooperation by special orders or prohibitions. Non-cooperation penalizes itself. Adjustment to the requirements of society’s productive effort and the pursuit of the individual’s own concerns are not in conflict. Consequently no agency is required to settle such conflicts. The system can work and accomplish its tasks without the interference of an authority issuing special orders and prohibitions and punishing those who do not comply.

  Compulsion and Coercion

  Beyond the sphere of private property and the market lies the sphere of compulsion and coercion; here are the dams which organized society has built for the protection of private property and the market against violence, malice, and fraud. This is the realm of constraint as distinguished from the realm of freedom. Here are rules discriminating between what is legal and what is illegal, what is permitted and what is prohibited. And here is a grim machine of arms, prisons, and gallows and the men operating it, ready to crush those who dare to disobey.

  It is important to remember that government interference always means either violent action or the threat of such action. Government is in the last resort the employment of armed men, of policemen, gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating, killing, and imprisoning. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom.

  Liberty and freedom are terms employed for the description of the social conditions of the individual members of a market society in which the power of the indispensable hegemonic bond, the state, is curbed lest the operation of the market be endangered. In a totalitarian system there is nothing to which the attribute “free” could be attached but the unlimited arbitrariness of the dictator.

  There would be no need to dwell upon this obvious fact if the champions of the abolition of liberty had not purposely brought about a semantic confusion. They realized that it was hopeless for them to fight openly and sincerely for restraint and servitude. The notions liberty and freedom had such prestige that no propaganda could shake their popularity. Since time immemorial in the realm of Western civilization liberty has been considered as the most precious good. What gave to the West its eminence was precisely its concern about liberty, a social ideal foreign to the oriental peoples. The social philosophy of the Occident is essentially a philosophy of freedom. The main content of the history of Europe and the communities founded by European emigrants and their descendants in other parts of the world was the struggle for liberty. “Rugged” individualism is the signature of our civilization. No open attack upon the freedom of the individual had any prospect of success.

  New Definitions

  Thus the advocates of totalitarianism chose other tactics. They reversed the meaning of words. They call true or genuine liberty the condition of the individuals under a system in which they have no right other than to obey orders. They call themselves true liberals because they strive after such a social order. They call democracy the Russian methods of dictatorial government. They call the labor union methods of violence and coercion “industrial democracy.” They call freedom of the press a state of affairs in which only the government is free to publish books and newspapers. They define liberty as the opportunity to do the “right” things, and, of course, they arrogate to themselves the determination of what is right and what is not. In their eyes government omnipotence means full liberty. To free the police power from all restraints is the true meaning of their struggle for freedom.

  The market economy, say these self-styled liberals, grants liberty only to a parasitic class of exploiters, the bourgeoisie; that these scoundrels enjoy the freedom to enslave the masses; that the wage earner is not free; that he must toil for the sole benefit of his masters, the employers; that the capitalists appropriate to themselves what according to the inalienable rights of man should belong to the worker; that under socialism the worker will enjoy freedom and human dignity because he will no longer have to slave for a capitalist; that socialism means the emancipation of the common man, means freedom for all; that it means, moreover, riches for all.

  These doctrines have been able to triumph because they did not encounter effective rational criticism. It is useless to stand upon an alleged “natural” right of individuals to own property if other people assert that the foremost “natural” right is that of income equality. Such disputes can never be settled. It is beside the point to criticize nonessential, attendant features of the socialist program. One does not refute socialism by attacking the socialists’ stand on religion, marriage, birth control, and art.

  A New Subterfuge

  In spite of these serious shortcomings of the defenders of economic freedom it was impossible to fool all the people all the time about the essential features of socialism. The most fanatical planners were forced to admit that their projects involve the abolition of many freedoms people enjoy under capitalism and “plutodemocracy.” Pressed hard, they resorted to a new subterfuge. The freedom to be abolished, they emphasize, is merely the spurious “economic” freedom of the capitalists that harms the common man; that outside the “economic sphere” freedom will not only be fully preserved, but considerably expanded. “Planning for Freedom” has lately become the most popular slogan of the champions of totalitarian government and the Russification of all nations.

  The fallacy of this argument stems from the spurious distinction between two realms of human life and action, the “economic” sphere and the “noneconomic” sphere. Strictly speaking, people do not long for tangible goods as such, but for the services which these goods are fitted to render them. They want to attain the increment in wellbeing which these services are able to convey. It is a fact that people, in dealing on the market, are motivated not only by the desire to get food, shelter, and sexual enjoyment, but also by manifold “ideal” urges. Acting man is always concerned both with “material” and “ideal” things. He chooses between various alternatives, no matter whether they are to be classified as material or ideal. In the actual scales of value, material and ideal things are jumbled together.

  Preserving the Market

  Freedom, as people enjoyed it in the democratic countries of Western civilization in the years of the old liberalism’s triumph, was not a product of constitutions, bills of rights, laws, and statutes. Those documents aimed only at safeguarding liberty and freedom, firmly established by the operation of the market economy, against encroachments on the part of officeholders. No government and no civil law can guarantee and bring about freedom otherwise than by supporting and defending the fundamental institutions of the market economy. Government means always coercion and compulsion and is by necessity the opposite of liberty. Government is a guarantor of liberty and is compatible with liberty only if its range is adequately restricted to the preservation of economic freedom. Where there is no market economy, the best-intentioned provisions of constitutions and laws remain a dead letter.


  The freedom of man under capitalism is an effect of competition. The worker does not depend on the good graces of an employer. If his employer discharges him, he finds another employer. The consumer is not at the mercy of the shopkeeper. He is free to patronize another shop if he likes. Nobody must kiss other people’s hands or fear their disfavor. Interpersonal relations are businesslike. The exchange of goods and services is mutual; it is not a favor to sell or to buy, it is a transaction dictated by selfishness on either side.

  It is true that in his capacity as a producer every man depends either directly, as does the entrepreneur, or indirectly, as does the hired worker, on the demands of the consumers. However, this dependence upon the supremacy of the consumers is not unlimited. If a man has a weighty reason for defying the sovereignty of the consumers, he can try it. There is in the range of the market a very substantial and effective right to resist oppression. Nobody is forced to go into the liquor industry or into a gun factory if his conscience objects. He may have to pay a price for his conviction; there are in this world no ends the attainment of which is gratuitous. But it is left to a man’s own decision to choose between a material advantage and the call of what he believes to be his duty. In the market economy the individual alone is the supreme arbiter in matters of his satisfaction.

  Capitalist society has no means of compelling a man to change his occupation or his place of work other than to reward those complying with the wants of the consumers by higher pay. It is precisely this kind of pressure which many people consider as unbearable and hope to see abolished under socialism. They are too dull to realize that the only alternative is to convey to the authorities full power to determine in what branch and at what place a man should work.

  In his capacity as a consumer man is no less free. He alone decides what is more and what is less important for him. He chooses how to spend his money according to his own will.

  The substitution of economic planning for the market economy removes all freedom and leaves to the individual merely the right to obey. The authority directing all economic matters controls all aspects of a man’s life and activities. It is the only employer. All labor becomes compulsory labor because the employee must accept what the chief deigns to offer him. The economic tsar determines what and how much of each the consumer may consume. There is no sector of human life in which a decision is left to the individual’s value judgments. The authority assigns a definite task to him, trains him for this job, and employs him at the place and in the manner it deems expedient.

  The “Planned” Life Is not Free

  As soon as the economic freedom which the market economy grants to its members is removed, all political liberties and bills of rights become humbug. Habeas corpus and trial by jury are a sham if, under the pretext of economic expediency, the authority has full power to relegate every citizen it dislikes to the arctic or to a desert and to assign him “hard labor” for life. Freedom of the press is a mere blind if the authority controls all printing offices and paper plants. And so are all the other rights of men.

  A man has freedom as far as he shapes his life according to his own plans. A man whose fate is determined by the plans of a superior authority, in which the exclusive power to plan is vested, is not free in the sense in which the term “free” was used and understood by all people until the semantic revolution of our day brought about a confusion of tongues.

  The prevalence of student rebellions throughout the world makes one wonder just how effectively modem education relates to real human problems. To approach the problems of generic man from a biological standpoint may be far too superficial in this scientific age with its tremendous advances in technology; yet, could not the general weakness of human science be the basis for the comment by Robert Frost: “Poets like Shakespeare knew more about psychiatry than any $25-an-hour man”?

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