Freedom Follows the Free Market; D. Russell

FREEDOM THE FREE FOLLOWS MARKET MANY of my conservative and libertarian friends are of the strong conviction that we are in danger of losing our freedom to the Russian communists. I do not agree with them, even though I am fully aware of the international communist plot and of the fact that there are many Rus sian agents in our country. I am convinced that the pri mary threat to freedom in the United States is no~ Rus sian communism but democratic socialism and the ero sion of our free market economy-an erosion that has been increasingly accepted, supported, and encouraged by the overwhelming majority of the American people for the past 35 years. The Russian communists and their American agents have had almost nothing to do with this trend. We, the people ourselves, must bear the full responsibility. Thus, those of us who value freedom would be well advised to use our money and energy to fight the immediate and increasing danger of democratic socialism at home in stead of the potential danger of totalitarian socialism from abroad.

Before we can do that, however, we must first under198 FREEDOM FOLLOWS THE FREE MARKET 199 stand how freedom in general can be lost even when various specific freedoms are increasing-as is the case in the United States today. For example, you can now write and publish at your own expense anything you wish, and (subject to our reasonable libel laws) the police will protect your freedom to do so. You can speak and worship as you please. And you are free to vote for any person or proposal that appeals to you. It is clear to me that freedom is at its high point in the United States today in almost all areas of human activity except one-the free market economy, the volun tary exchange of our goods and services. In that area, freedom has been declining steadily in our country for the past three decades. It is still declining. And it is my firm conviction that therein lies the primary threat to human freedom.

Economic Freedom the Key My thesis is that the free market economy is the key to all freedoms. In fact, the market and freedom are really synonymous terms. If the market is totally free, each person has complete freedom of speech, press, and religion. But if the market is totally controlled, there is no freedom in those or any other areas. That statement is a truism. It cannot be otherwise. For ex~mple, let us apply that idea to three nations wherein the economies are currently almost totally con trolled-Russia, Spain, and Cuba. There is no freedom of action of any kind in any of those nations today.

200 DEAN RUSSELL While certain actions by the people do have the appear ance of freedom of choice, we must remember that those actions are permitted by the governments, and can be rescinded arbitrarily tomorrow. In those unfortunate countries, no person can write what he pleases and send it through the mails without police interference. Nor can persons worship there as they please, or speak, or establish an opposition newspaper or political party. The situation cannot be otherwise when the economy is totally controlled. But imagine, if you will, what would be the inevitable results if the government could exercise no control of any description over any peaceful economic activity-in short, imagine a market economy in those nations. Publishers and editors could then be either for con trols over the economy or against them. If the market were free, and the editors were in favor of keeping it that way, obviously the government would not interfere with the newspapers' support of what existed and had the support of government. Further, any editor favoring a controlled economy would be free to say so-if the market were free. The people in general would doubt less denounce the authors of such proposals but, in a market economy where the presses are privately owned and are not controlled by government, there is nothing more they could do about it. Nor would the government do anything about it or, for that matter, even want to.

Again this is a truism-and it is always difficult to try to explain and prove the obvious. I can only repeat that the press cannot possibly avoid being free in a free market.

FREEDOM FOLLOWS THE FREE MARKET 201 Now reverse the situation and imagine that the gov ernment owns and operates all the newspapers, or com pletely controls them; imagine that the market economy has been totally abolished. Obviously, there cannot be a free press under that arrangement. It isn't a case of wanting or not wanting it; the situation presents a physi cal and intellectual impossibility for a free press. If the government owns the newspapers, obviously it cannot question its own actions, or advocate the reverse of what it is doing; otherwise, the government wouldn't be doing it in the first place. If the government leaves the presses under nominal private ownership but exercises complete control, the same situation necessarily prevails. Since the officials of government must necessarily make the decisions in a controlled economy, obviously they cannot deliberately make mutually contradictory deci sions. They cannot use compulsions in practice and then question the compulsions in print. Such a procedure would be illogical and unthinkable nonsense. Again, it is a truism that there can be no freedom of any descrip tion in a totally controlled economy, and there must necessarily be complete freedom in a market economy.

As another example, try to imagine the existence of freedom of religion in a controlled economy. From the comfort of your armchair, you can easily deduce the re ception in Russia and Spain today that must necessarily be accorded to the advocates of the religious tenets of, for example, the Latter Day Saints (Mormons). For' the most part, those people preach personal responsibility for one's own economic welfare, the private ownership 202 DEAN RUSSELL of property, the free market economy, and the responsi bility of individuals and of the church (not the govern ment) voluntarily to feed "the hungry and clothe the naked. That religious philosophy cannot possibly be per mitted unrestrained expression in any nation with a completely controlled economy. If it were permitted to flourish, that subversive idea could easily lead to the overthrow of government. The public utterance of the free market philosophy could no more be tolerated as a religion than as an editorial policy in a totally con trolled economy. Nor is it possible even to imagine a religion that in no way takes any interest in the use, own ership, and exchange of property. Thus, there can be no positive and active freedom of any kind (including re ligion) when the market economy is destroyed.

The same reasoning holds true for speech, vote, and family life, as well as for every other peaceful human activity. Freedom follows the market. All the history I have yet been able to read bears witness to that truism. And I can find no other answer in logic. Meaningless Legalities Nor can any constitution or bill" of rights permanently stop the inevitable verdict. No legalities concerning freedom of press, speech, and religion have ever been able to stand permanently against the realities of an econ omy completely controlled by government. Obviously, the judicial branch of government cannot long be perFREEDOM FOLLOWS THE FREE MARKET 203 mitted to pursue a course in direct opposition to the legislative and administrative branches of government, even in the unlikely event it wanted to. In one way or another, there must necessarily be at least a rough bal ance of agreement among all branches of government; otherwise, there could be no government.

We should remember that the Soviet Constitution clearly guarantees freedom of press and speech, as do the constitutions of other nations where the market econ omy has been abolished. In that situation, however, con stitutional guarantees are without meaning. It cannot be otherwise. For no totalitarian government can offer its presses and auditoriums to persons who are in total disagreement with government policies. The evidence in support of this thesis is clear for the totally controlled and the totally free economy. But what about the so-called welfare state or mixed economy, such as that of the United States? Do I have valid grounds for stating that freedom is in peril in our own country? Well, let's examine the situation. rrpeople"Controls First, we should never forget that the only thing gov ernments can control is people. For example, govern ments never control prices, just people. A can of beans doesn't care what its price is. But people care-the peo ple who grow the beans, can the beans, sell the beans, and consume the heans. And that's all that price controls can ever mean-people control. It is another of those 204 DEAN RUSSELL truisms that most of us never see, or choose to ignore.

The phrase, "price control," generally brings a picture of government action to help people. But when we give the process its correct descriptive title, "people control," quite another picture comes to mind. For obviously, when the government controls people, it necessarily de prives them of their freedom. So there we have it again. Price controls are auto matically destructive of the market economy where peo ple buy and sell on mutually acceptable terms. And when this process is abolished, people automatically lose their freedom-to whatever extent the prices are controlled. It cannot be otherwise. With the possible exception of thinking without act ing, all freedoms of all descriptions are finally based on the market economy. Government controls over peo ple almost always involve compulsions and prohibitions against their ownership, use, and exchange of goods and services. Control of the press, speech, and religion neces sarily follows the controlled market, because,~ in one way or another, all of them also directly concern the use of property. If the presses, auditoriums, and church build ings are owned or controlled by government, it is child ish to imagine that there can be any freedom of press, speech, and religion. And only an underdeveloped mind could imagine that the presses, auditoriums, and church buildings could be free in the traditional sense when the rest of the economy is controlled.

Just as the government cannot control prices, so also is it absurd to imagine that the government can support FREEDOM FOLLOWS THE FREE MARKET 205 prices. Without exception, the only thing that govern ment can ever do is to control people-to prevent them from doing what they wish to do, or to compel them to do what they do not wish to do. Thus, it follows that the government's price support program for agricultural products necessarily deprives farmers (and others) of their freedom. The Case Against Price Supports Here is a harsh and little understood fact: Because of price supports, freedom of agriculture in the United States no longer exists. That is, you can no longer grow what you wish to grow on your own land. I once made that statement to a group of fine people in Illinois. A farmer in the audience became so annoyed with me that he stood up and interrupted my speech. He denounced me roundly. He defended the farmers as the backbone of American freedom. And he dramatically announced that he could grow any amount of anything he pleased on his land-except wheat, which happened to be the price-supported product of most concern to him.

I couldn't possibly have planned a more convincing affirmation of my thesis that freedom follows the market, that the government can never support a price but only can control people, that the traditional American free dom of a person to be his own master on his own land is now a thing of the past in the United States. And I said so to that audience.

206 DEAN RUSSELL The incensed farmer then shouted at me, "But we, the people, voted for itl Don't you believe in democracy?" Thus he offered dramatic support of my position that the communists haven't done this to us, but that we have done it to ourselves. We have used our hard-won fran chise as the means to destroy the market economy and thus to vote away our freedom. I explained to my audi ence that, in my opinion, such a procedure makes it all the worse; that if some tyrant had done this to us, we would eagerly draw straws to determine which of us would have the privilege of shooting him down; that when we democratically vote away our freedoms, they are gone just as surely as if they had been taken from us by conquest. If you have any doubt that freedom of agriculture is now a thing of the past in the United States, try this experiment: On any land that will grow tobacco, plant a half-acre of it without asking the permission of govern ment. If you do so and persist in your naive belief that a man can grow what he pleases on his own land in this "land of the free," you will be fined and jailed for your antisocial action. Again, freedom follows the market.

A few persons were aware of this direct relationship between the market and freedom when the government first moved into the area of agriculture to help the hard pressed farmers, and those few protested vigorously. But they were called "extremists," were forced to conform, and were soon forgotten by the vast majority of us who have "never had it so good." But this undeniable truism remains: It is never prices and things but only people FREEDOM FOLLOWS THE FREE MARKET 207 who are controlled, and supported, and subsidized, and maximized, and minimized by government. We Ameri can people don~t even have the excuse of Esau-hunger for selling our birthright of freedom for the pottage of government paternalism. Apparently, our primary rea son for doing it is merely sheer greed for more and more. And so ~t is with tariffs, subsidies, and all other gov ernment interferences with freedom of exchange. In every case, peaceful persons are deprived of their free dom to exchange their goods and services on mutually agreeable terms. In every case we are deprived of a bit more of our freedom.

To Join or Not To Join All of us also have lost our hard-won freedom to join or not join organizations of our own choice. Currently, some 17 million Americans must belong to labor unions, whether the individual member likes it or not. Our gov ernment also has made it legal for union leaders to tax us for their alleged services, whether or not we want them. That is, union dues are deducted (like taxes) from our pay checks before we get them. The fact that you, yourself, may not now belong to a union is purely academic and perhaps merely tempo rary; the essential principle of no freedom of choice in the matter has now been firmly established and written into the law of the land. It is legally enforced by strikes, threats, and bloodshed against those who are still naive enough to imagine that employers and employees in the 208 DEAN RUSSELL United States are still free and responsible persons. Per haps you will better understand the fearful danger we are in when you contemplate the implications of this fact: Compulsory unionism is broadcast to the world by our State Department's "Voice of America" as the very essence of freedom itsel£.

Let it be recorded that the card-carrying members of the Communist Party did not, and could not, do this to us, even though they surely wanted to. It was done pri marily by our best people-our ministers, our teachers, our editors, our businessmen, and our most honest legis lators. And it was inspired by the best of all reasons that is, the human desire to help one's fellow man. Those good people forgot, however, that the only thing any government can ever do, even in its proper function of preserving the peace, is to control people to compel them to do what they do not wish to do, and to prevent them from doing what they want to do. That procedure is, of course, the proper way to stop murderers and thieves and frauds; for clearly, the police powers of government should be used to prevent those antisocial people from imposing their wishes upon others by vio lence and misrepresentation. But when the same powers are used against peaceful persons in their peaceful ac tivities, freedom is always and undeniably infringed.

For example, every American has lost his freedom to save or to spend his earnings as he pleases. Our govern ment compels all of us to "save" a portion of our wages and salaries-that is, the government deducts a portion and promises to give it back at some later date. This FREEDOM FOLLOWS THE FREE MARKET 209 compulsory scheme is called Social Security, and it is generally cited as the essence of true freedom for the people. Perhaps as many as 95 per cent of the American people are now in favor of this loss of personal choice (freedom) and would categorically oppose any suggestion to return to a situation in which each person is responsi~ hIe for his own welfare in a market economy.1 And so it goes-through hundreds and thousands of government prohibitions and compulsions in the peace~ ful economic affairs of men. Without exception, every one of them is a direct loss of freedom of choice and responsibility.

frlt Can't Happen Here" Again, the only control that any government can ex~ ercise is people control. Any attempt by government to control things must necessarily involve the control of people, and that is undeniably a loss of freedom. Most of the editors in the United States scoff at my fears. "We will always preserve freedom of the press," they say, as they advocate additional government com~ pulsions and prohibitions in the market, including postal subsidies to themselves. In their sermons, most of our ministers promise us that "our hard~won freedom to worship as we please will never be lost." At the same time, they suggest that the police powers should be used to perform still another 1 See "The Social Security Program" by Paul L. Poirot, The Freeman, November, 1962.

210 DEAN RUSSELL charitable service that was once the direct responsibility and pride of our churches. And invariably, as the legislator demands still another interference in the market place, he thunders this fa miliar theme: "The people will never lose their right to vote as they please." And true enough, as I have already stated, those four precious freedoms of press, speech, franchise, and re ligion appear to be stronger than ever in the United States today, even though freedom itself is in great danger. That seeming contradiction is explained by this fact: We still operate within the framework of a market economy. It still survives in spite of the increasing at tacks upon it. In spite of the fact that government now taxes and spends more than one-third of the combined incomes of all persons, the market processes of competi tion, pricing, profit and loss still generally prevail. In spite of the fact that government controls over the eco nomic affairs of all of us are steadily increasing, the long-established order of the market still prevails to a large extent.

Must History Repeat Itself? But somewhere along the line, our essentially free economy must drift into an essentially controlled econ omy, if the present trend continues. That will be the end of human freedom in the United States, and proba bly in the world. All other freedoms-press, speech, fran chise, religion-must necessarily disappear with the loss of FREEDOM FOLLOWS THE FREE MARKET 211 the free economy. For the fact remains: In a totally con trolled economy, it is not the economy but the people who are totally controlled. The empirical proof of that truism is so obvious that one can only be astounded that so few of us see it. Ex amine anywhere at any time the degree of freedom that has existed in highly controlled economies versus less controlled economies over a significant period of time. Always the answer is the same: Where the economy is, frees t, there also is the highest degree of freedom of press, speech, and religion.

Even a comparison of slave economies will bear wit ness to the validity of this thesis. For example, it is true that slavery was still practiced during the Golden Age of ancient Athens. But that evil institution was preserved in an otherwise generally free economy wherein even many of the slaves themselves could earn wages, own property, and buy their freedom. In that city-state, the economy was far less controlled than were the economies in the neighboring states which also endorsed the prac tice of slavery. "The essential characteristic of landed [and other] property was that it was private and in dividual. The restrictions placed in some cities and at various times on the full exercise of the right of owner ship did not alter this essential character."2 Thus the citizens of Athens were far more free than their neigh bors to develop a society that was rich in both culture and material progress. And it is my contention that the 2 Jules Fran~ois Toutain, The Economic Life of the Ancient World (New York: Barnes & Noble, Inc., 1951), p. 109.

212 DEAN RUSSELL decline and fall of that culture and economy were largely foretold when the free citizens forgot their orig inal philosophy of a strictly limited government and be gan to vote for more controls over the peaceful activities of the people. And the fact that, in the United States today, it is we ourselves who are voting to restrict and to destroy the market economy is entirely outside of the issue here be ing discussed. Freedom stands or falls with the market, regardless of the mechanism used to maintain or to de stroy it. Mr. Khrushchev has stated that Russian communism will bury us. That threat is arrant nonsense, and I sus pect that Mr. Khrushchev knows it. But he also made another statement that is far more significant. He prom ised that our grandchildren will live under socialism. That could easily come true-not because of Russian rockets but, as Mr. Khrushchev also predicted, because we American people will eventually choose socialism over the market economy.

I am an optimist, however, and I predict that Mr. Khrushchev's prediction will not come true. For most fortunately for us and our grandchildren, this final fact remains : We are the direct heirs of the long tradition of Anglo-American common law and the vital idea that every individual has rights above and beyond the ma jority decisions of the group. That principle will die hard among a people who have lived with it (and died for it) for so many hundreds of years. Fortunately, our economy is still more free than conFREEDOM FOLLOWS THE FREE MARKET 213 trolled, and thus we still have the precious freedoms of press, speech, religion, and franchise. There is still time to use them to advocate and to vote for a return to a completely free market economy. Admittedly, it will be a difficult process at this late date, but we can do it if enough of us understand it and want it. The fundamental and vital choice is "people control,"

or the market economy. We cannot have it both ways. The decision rests with you, as it should. NOTE: This article is available as one of a series of LP records (33% r.p.m.). For prices and a list of these records write to the FoundatIOn for Economic Education, Irvington-on-Hudson, N. Y.