A Heartening Message from Youth; J. Davenport

Davenport Is author of The U.S. Economy and a frequent lecturer on political economy. "'Message from Youth ern and younger critics of capital ism have pitched their attack on its political and ethical defects. Capitalism, in short, still lacks a comprehensive and comprehensible moral philosophy. In this situation it is news, and good news of the first order, that there is a rising generation of young academic thinkers who understand that capitalism is something more than an "incredible bread machine;' important as that is, and who have the wit and learning to articulate a deeper faith. Confirmation of this new and immensely hopeful development is to be found in a slim volume of essays titled Free Enterprise-An Imperative, published in 1975,1 As 1 Available at $2.00 from the Herbert Hoover Presidential Library Association, Box 359, West Branch, Iowa 52358. 631 632 THE FREEMAN October might be expected, the book re ceived little notice from the Liberal press, but it should be on the desk of every businessman who has been suffering under the barbs of his Galbraithian, Naderite, and Marx ist critics. For it contains the work of nine young authors who have obviously taken the measures of the detractors of the free market, and have in their different ways shown that capitalism, whatever its defects, does have philosophic cre dentials of the first order.

A Vulnerable Doctrine In explicating these credentials it is noteworthy that only one of the young essayists relies heavily on the venerable but highly vulnerable doctrine of Utilitarianism as devel oped by Jeremy Bentham and other neo-classical economists. For it is precisely the association of capital ism with utility and material pro gress which has turned off a whole generation of youth from perceiving the free market's deeper contribu tion to our civilization. Its basic contribution is that it promotes and buttresses freedom or personal self determination, which as pointed out by Verna Harrison, a student of philosophy and theology at The University of Oxford, "is a precondi tion for any morality whatever:' This is true from the point of view of orthodox Christianity, which allows man to choose between good and evil, or from a Kantian perspec tive which makes the free will central to its ethical system.

In viewing freedom both as a val ue in itself, and as a precondition of realizing other ends and values, the essayists are careful to guard against claiming too much or too little for capitalism. As Alan Stock man, a twenty-five-year-old gradu ate of Ohio State University, puts it: "No economic system can auto matically guarantee a good society lmeaning that individuals will necessarily choose the right ends]' but some may have effects on peo ple's values and behaviors which make the achievement of a desira ble society more difficult:' Where government owns the means of production or "plans" all economic activity, it is obvious that freedom is constricted, and that coercion by the state flourishes. By contrast the market system of economy expands the options of man, the consumer, and man, the bread-winner and producer, since in effect each has a role in voting· as to what shall be produced and in what quantities-a vote that is denied under any system of collectivism.

Similarly, private ownership of the means of production, and the sanctity of private property, rein force, and indeed are the precondi tions of the maintenance of higher political liberties, including freedom of the press and freedom of 1976 A HEARTENING MESSAGE FROM YOUTH 633 inquiry. This does not insure that all of man's choices will be good. The point is that without freedom of choice, and the diminution so far as possible of coercion, the good can never be realized. The second test of an economic system is how far it engenders order and social collaboration, and here the detractors of capitalism have obviously sought to confuse dis course. The doctrine of laissez faire is equated to dog-eat-dog or to just plain chaos, whereas the fact is that by definition the market requires collaboration. As pointed out by most of the essayists, it is impossi ble to earn a living in a market economy without producing in the form of goods or work something which another person wants. Seller and buyer are thus bound together in a collaborative effort as are workers who, each seeking his own reward, collaborate in the output of a farm or factory. This is the underlying wisdom of Adam Smith's doctrine of the "invisible hand" which leads man "to promote an end which was no part of his intention:' but which may be of benefit to society as a whole.

The Wisdom of the Market The doctrine, much vilified in our day by the critics of enterprise, is in fact highly relevant precisely be cause the modern world is so com plex' and because the knowledge of anyone man is by definition limited. The socialist planner assumes that the government bu reaucrat is not only omnipotent but omniscient. In fact such omniscience does not exist. Indeed a third and potent argument for the enterprise system lies precisely in recognition of this fact. As Roger Michener, a young instructor at The University of Chicago, puts it: "It is because every individual knows so little, and, in particular, because we know hardly ever who knows best, that we trust to independent and competi tive efforts for the emergence of what we shall want when we see it:' So the market econ0ply is grounded in certain facts and requirements of human nature itself. But is it a just system? Here the argument is more complicated precisely because such an economy distributes its rewards and emolu men ts not according to the needs or merits of individual workers but according to the needs and require ments of consumers and employers who bid directly or indirectly for the worker's services. The wages paid to a ditch digger are relatively low because the potential supply of ditch diggers is large, whereas demand for this kind of work may be relatively small. The reward of a doctor or lawyer is high because there are relatively few men of such specialized training in relation to demand.

634 THE FREEMAN October Granted that the law of supply and demand leads to increased and efficient production and use of avail able resources, does this really create a fair and a just distribution of income and satisfactions in the body politic? Or, as Marxians claim, does it lead to the exploitation of the masses by the classes - the men and women of superior ability? It is the merit of the young essayists of this symposium that they do not attempt to shove this oldest question of philosophy and ethics under the rug but to meet it head on. In the process, as might be expected, they come up with different answers. Equality and Justice Justice, according to Plato, is the "giving to each man his due:' Tak ing off from this definition of justice, essayist Karl Keating points out that the just society will al ways be in opposition to an egalitarian society since men are obviously endowed by nature (and inheritance) with widely different capacities. "Enforced equality;' he wri tes, "means a violation of the dignity of men, for when we try to enforce something that is incapable of fruition, we necessarily violate nature and do violerice to ourselves:' Having disposed of egalitarianism, he then argues that capitalism pro duces justice because it takes account of man's true nature and condition since it allows each man to use his talents and his property as he sees fit and hence "allows him to follow his own inclinations in attempting to become a more humane man:' Others in the symposium are not quite so sure of the justness of the market's decisions. John H. Beck, who holds degrees in both economics and mathematics, em phasizes that income distribution in a market economy mayor may not accord with merit and skills, and that in some cases entrepreneurial profits may come from just plain luck. Still, he shrewdly points out that incomes are the resultant of prices. Prices in their turn are the essential means of communication between consumer and producer as to what is wanted and what should be produced. If we tamper with the price system we shall be left with out guide or rudder as to how production and hence incomes should flow.

In a brilliant essay, David Kelley, assistan t professor of philosophy at Vassar College, carries this essen tiality of the market one step further in examining Marx's famous proposal of "from each ac cording to his ability, to each ac cording to his need." For how does the Marxian really determine need? In posing this question Kelley points out that in his early writings at least Marx made the egregious 1976 A HEARTENING MESSAGE FROM YOUTH 635 mistake of completely separating the "spiritual value" of work from the hard business of earning a living by producing what other peo ple want. On this assumption, man works or should work only to satisfy his inner ego or Self. But, writes Kelley, this injunction really boils down to the mindless injunction of "Do your own thing" - the battle cry, it should be noted, of the New Left as it emerged in America in the late sixties. Such subjectivism will not do. Critical to man's happi ness is "a sense of self-esteem;' and one source of self-esteem lies pre cisely in entering into the produc tive process of a society. (Note the difference in attitude of a boy who gets his first job as compared to one who remains unemployed or only works for fun!) Sums up Kelley: "The best way to alienate man would be to force him to live in a perfect communist society, where he can have no idea whose efforts are holding him in existence, while he tries vainly to express a self he has had no way of acquiring :' This is a difficult thought but nevertheless a profound one which makes hash of those who deride the market system as inhumane on grounds that it disregards the high er nature of man. The truth of the matter is that while the market profi t economy may not render per fect justice, however such justice be defined, it comes closer than any al ternati ve system for allowing men to be just in their dealings with one another. It cannot, as noted in the beginning, produce good men, but it can by fostering freedom allow men to be good. And in an imperfect world, that is quite an accomplish ment.

It is also quite an accomplish ment that the young authors, whose writings are here under review, have been able to see through the pre tenses of those who would write off capitalism as a defunct economic system in favor of leading us into some Utopia of their own choosing. The best in this case, as in many others, is the enemy of the good. The distinction of Free Enterprise-An Imperative is that its authors have winnowed the chaff from the wheat in our political thinking, that in stressing the vir tues of capitalism they have not neglected its shortcomings, and that they have in one small volume brought philosophy to bear in its ultimate defense. What more can one want of serious academics? What more can one want of the coming generation? (!) A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN Herbert Hoover: Presidento[the UnitedStates THE DEMOCRATS, not content with defeating Herbert Hoover in 1932, campaigned more or less successful ly against him for a generation.