A Declaration of Independence; E. P. Smith

[206 ] technically in fact a labor union, and granted certain powers by law in employer-employee relationships. As such, and I think you will agree with me, SPEEA is, by legal definition, a labor union, regardless of what high aspirations it may have in the way of professional status and recognition. Historical Background Recent study on my part has brought me to a re-eval uation of the moral and economic validity of the labor movement. An examination of the historical background of the labor movement is most enlightening in this respect. We are, of course, forced to look at history through the eyes of historians. This introduces a seemingly incal culable margin for possible error, the interpretation of historical events by the historian. Opinions involved in the relating of events must, of necessity, reflect the judgment and experience of the historical writer, which accounts for the divergent opinions we so often find as to the fact and the interpretation of history.

I believe that such historical interpretation of the events that gave birth to the labor movement is a case in point. The early Industrial Revolution era was a time of extreme hardship for the laboring man, when he was faced with notoriously poor working conditions, long hours, and low pay. Conditions of work were, by our present-day standards, intolerable. Such, I believe, is fact, contested by virtually no one. [207 ] One must be 'careful, however, in evaluating cause and effect. We are told, and it is the classical interpretation of our day, that these were arbitrary and unjust circumstances, capriciously visited upon mankind by unrestrained capitalists who submitted humanity to unbearable indignities in their power and greed for unearned profits. This is an oft-told story which, in one form or another, we have all heard many times. The justification for the rise in the labor movement is based upon this interpretation of events, and the continuation of the labor movement. is similarly defended upon the proposition that, given the chance, economic power in the hands of the unscrupulous would again exploit the laborer and reduce him to the status of a mere pawn of the entrepreneur.

Looking Beneath the Surface We must remember, however, that basic and funda mental causation for a given phenomenon often lies far below the surface. For example, it is very easy to con clude that the crash of the stock market caused the depression of the early thirties. We completely ignore the root of the problem, however, by failing to ask, "What caused the stock market to crash?" To evaluate fully the circumstances in question, we must carefully consider the whole story. What were the conditions of employment and the relations of the la borer to society prior to the Industrial Revolution? What was the impact on the status of the laboring man of [208 ] the readjustments in economic relationships caused by the Industrial Revolution? It is in this light that we find that the classical interpretations have grossly ignored so much relevant data as to completely distort the fact. Rather than being a time of idyllic conditions of peace and goodwill, of happy economic circumstances in which the common man enjoyed a relatively. stable and useful life, we find that the pre-industrial era was a time of infinitely worse conditions. There was virtually no place for the common man. Instead of widespread opportunities for gainful employment, there was a bare minimum of subsistence for most of the populace. Many were doomed to debtors' prisons, workhouses, or com munal relief. Even under the relatively democratic free doms of pre-industrial England, life was but slightly improved over that which existed under former auto cratic and totalitarian despots.

A Tremendous Improvement By contrast, the Industrial Revolution, with its poor working conditions, long hours, and low pay, was in fact a tremendous improvement in the worker's status over that which existed prior to that time. For the first time, the common man had a decent opportunity to pay his own way instead of living by the grace of charity, and to make a real and respectable contribution to the cause of humanity. It would seem to me wholly incongruous to condemn an era for having immensely improved the lot of the laboring man. [209 ] When we compare the working conditions of any past era to the conditions of today, we must consider the fact that before one can run, one must learn. to walk, and before one can walk, one must learn to stand. In climbing a ladder from the very bottom, one must, of necessity, start with the bottom rung. To consider that the conditions of any past era were poor by today's standards as an indictment of the free enterprise system, is to ignore the fact that the productivity rate of the laboring man also started at the bottom. The capital investment per worker and his productive capacity in the year 1800 were only a mere fraction of the capital invest ment and the productive capabilities of the worker of today. We would be extremely foolish to think the laborer could have sustained himself with even the barest necessities of life as we think of them on an eight hour day, five-day week with paid vacations and numer ous other "fringe" benefits in the year 1800. It is patently impossible to withdraw from the economic cornucopia more than has been deposited therein. The low produc tivity level meant that the economic valuation of each worker's ·contribution was therefore low.

It is undeniably true that fortunes were made during this period, and that the distribution of wealth was very uneven. We might assume from the popular interpreta tion of events that all capitalists and entrepreneurs were living in the lap of luxury, that all who ventured into capitalistic activity were rewarded grandly. When we examine the total picture, we find contrarily that relatively few made the grade, that the overwhelm[210 ] ing majority suffered mediocre success or total failure. And which ones did attain the most success? Those that survived that we might hear about them, those that supplied the public needs most effectively and efficiently, as determined by the overwhelming vote of confidence given them by the consumer in the market place. Privileged Classes To state that the producers became rich at the expense of the poor is again contravariant with fact. What was the distribution of wealth prior to the Industrial Revolu tion? It was virtually all in the hands of-not capitalists who were producers of economic goods-but in the hands of economically impotent purveyors who thrived solely by government favor. For the common man we find an almost total famine of wealth. The Industrial Revolu tion, instead of making the rich richer and the poor poorer, created an entirely new wealth that was dis tributed according to the voluntary exchanges evidenced in the operation of the market place. The new wealth went into the hands of those that produced it, in propor tion to the degree in which each contributed to the production of that new wealth. The laborer now received something instead of nothing, and the distribution of wealth was solely based upon the market evaluation of each service rendered.

The market for this new production of the industrial era must, of necessity, be the mass market of the people. Mass production without mass consumption is a contra[211 ] diction in terms. Mass production can· be sustained only by the satisfaction of the needs of the mass market, which, in turn, can purchase only with the wages for the labor used in that production, and paid by the owners of the productive means. Thus, to say that the rich became rich at the expense of the poor becomes com pletely ambiguous and contradictory. And the laborer has continued to earn an increased share of that wealth in proportion to his productivity. The necessary balance between production and con sumption dictates that this must be so. Real wages must, of necessity, increase as the productivity increases, otherwise the market could not possibly absorb the gross output of that production. Conversely, it is impOSSible for real wages to increase faster than productivity be cause it is impossible to consume that which has not been produced.

Union membership has shifted purchasing power from one labor group to another; it cannot in toto increase the laborers' share of the wealth. Labor can derive an increased share of the wealth only with increased pro ductivity. But, aside from psychological factors, this can be attained only by increased capital investment to provide more and better tools. We enjoy our high stand ard of living then, not because of labor unions, but because of our high productivity per worker, in spite of labor unions. Such are the economic facts of life, Karl Marx and Samuel Compers notwithstanding. In regard to the fortunes that were made, we may assume that they were made honestly or dishonestly. [212 ] If they were made honestly, it would mean that the consumer spent his dollar voluntarily and without coer cion where he felt it benefited him most, and those who profited were those who best satisfied the consumer needs in the most efficient and economical manner then mown. If we assume that the fortunes were made dis honestly, then coercion in the market place and a viola tion of individual rights must have taken place. Certainly the consumer would not have willingly parted with what little hard-earned money he had to feather the nests of the already rich without value received.

The System Not To Blame Let me make it understandably clear that·I hold no brief for business management as a perfect example of pure free enterprise inaction, who can commit no wrong. I have no doubt that many indiscretions of moral judgment did take place then and still 'continue to take place today. This is an indictment of persons, however, and not of a system based on economic law. Certainly we know that management has curried special favor from government at the expense of those nonfavored, and I would wholeheartedly agree that such favoritism cer tainly does not contribute to our national well-being. We must continually be aware, however, that under our capitalistic system, which is just a shorthanded way of saying the right of individuals to seek their place in society as determined by the free market value of their services rendered to society, we have benefited from a [213 ] growth in living standards that is enjoyed nowhere else on earth.

The Rights of the Individual To be free, one must be able to seek an honest deter mination of the value of his contribution to society. In order that each may do this, our government was con ceived that the inalienable rights of man shall be pro tected from predation and trespass from others, who shall enjoy the same but no greater rights of protection. This, then, is the rightful position of government in our affairs, to maintain with all the vigilance it can command, the protection of these inalienable rights of the individual. When management or any other group seeks special favor of the exercise of government power for displace ment of equal privilege, it is the duty of every individual to maintain with equal vigilance command of govern ment to prevent such inequity of rights from taking place. We cannot expect, in view of the vagaries of human nature, that all persons in our complex civilization will practice to an acceptable degree the precepts of Judeo Christian ethics. It is for the purpose of protecting these ethical and moral concepts from predators without moral compunction that a moral society resorts to government.

Certain powers of protection are delegated to lawful agencies so that the energies of mankind can be freed to concentrate on constructive pursuits. When government extends its coercive power to the [214 ] granting of favors" however, freedom must necessarily suffer. Governments can grant favor to one group only by equal denial of favor to another group. If it granted equal favor to all, how can it be considered a favor? It is a matter of historical record that we have all too often sought short-range goals of economic advantage without considering the long-range effects of the policies pursued. Disruption of the market for short-range advan tage of one group has invariably resulted in economic disadvantage in the long run as the market seeks to adjust to the artificial strain placed upon it. We would both agree, I am sure, that management has no right to exert coercion in the market, something that it cannot do without trespassing upon the rights of indi viduals, something it cannot do lawfully without gov ernment favor to permit such -trespass.

It is my firm conviction, however, that two wrongs never, under any circumstance, make a right. I must, therefore, deny that any individual, or group of individ uals, has the right to exert 'coercion on any other indi vidual or group of individuals. Yet, this is precisely what our current labor legislation is designed to do, to grant government favor upon "organized" labor by permitting it to exert coercion upon the market for labor. This is as morally wrong as any other fonn of coercion. From a purely economic standpoint, it is as futile as it is wrong. The standard of living, rather than being raised, is merely shifted from one pressure group to another; in aggregate it is actually lowered because of the waste in manpower, the loss of production, and over[215 ] head costs of supporting all of the economically unpro ductive machinery necessary to implement and control such coercive powers.

Does this mean that I deny the right of labor to· organ ize? Certainly not. Labor has every right to organize by voluntary contract, but its justification for so doing and its entitlement to recognition should be based upon its ability to contribute to the economic good. The only proof of positive economic contribution can be by the voluntary acceptance of the market of value received. Where coercive power exists, it is impossible to deter mine to what degree acceptance is voluntary and to what degree it is forced. It is in this light that I cannot further justify support of SPEEA. I cannot by free choice belong to an organi zation which derives its powers of existence under coer cive law. To do so is to give tacit support and approval to laws that I consider morally wrong. Should SPEEA renounce all rights under these protective laws, disaffil iate with any similarly protected organization, and base its justification for existence upon free and voluntary acceptance of the value that it may be capable of con tributing to both management and its members, I shall be most happy to rejoin and give SPEEA my full support.

Under such voluntary association without protection of coercive law, it could not exist except that it should be capable of making a worth-while contribution to all parties concerned. Yours very truly, Elwood P. Smith [216 ] EVERYMAN'S DOSSIER "THIS"> said Benjamin Disraeli in 1857, "I believe to be the age of statistical imposture." Unfortunately, mortality prevented the Victorian statesman from seeing 1957. It is signifIcant that the growth of statistics and data has coincided with the steady, gradual expansion of the state and its powers. Today the life of the average citizen, Everyman, is carefully recorded in a multitudinous series of files and statistics ranging from Washington to his home precinct. In working and maintaining the processes which fill the dossier of Everyman, we emulate in our endeavors the destructive and all-embracing methods of Nazi Germany and Soviet Russia; but this emulation does not deter us from increasing as fast as possible the already swollen dossier. The invasion of privacy is an accepted procedure. Privacy, once the inalienable right of every American, is dead! Long live privacy.