the

FreemanVOL. 19, NO. 12 • DECEMBER 1969

A Democratic Dilemma Morris C. Shumiatcher, Q.C. 707A cogent analysis of the weakness of opinion polls to find right answers tocomplex economic and political problems.

Pyrafttids All Over the Place Leonard E. Read 714A pyramid is a monument to man's pride built by the coerced labor of others.

Inflationism as Political Policy J. H. Peters 717A banker's translation of ideas on inflation, money, and credit as first set forthby ludwig von Mises.

The Price of Liberty Paul L. Poirot 725Concerning the vital importance of private property, voluntary exchange, marketprices, and sound money for rational human action.

Our Inalienable Rights Park Chamberlain 730A nice question concerning the means one may employ in self-defense.

Instinct and Ethics Edmund' A. Opitz 732The origin and development of our ethical code by man as a responsible humanbeing.

A Difficult Question Stanley Yankus 741How can a man value his life without a genuine purpose for living?

The Art of Iconoclasm Orien Joh'nson 744How to displace a fallacy without destroying the person who believed it.

Who Pays Taxes - and How?How various forms of taxes fall on individuals.

A Free Lance in the Free MarketAn author invites competition.

Lemuel R. Boulware

Robert G. Bearce

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752

Book Reviews:IICountdown to Chaos: Chicago, 1968: Turning Point in American Politics"

by Jeffrey Sf. JohnliThe Truth about Boulwarism" by Lemuel R. Boulware

Index for 1969

Anyone wishing to communicate with authors may sendfirst-class mail in care of THE FREEMAN for forwarding.

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the

FreemanA MONTHLY JOURNAL OF IDEAS ON LIBERTY

IRVINGTON·ON-HUDSON, N. Y. 10533 TEL.: (914) 591·7230

LEONARD E. READ

PAUL L. POIROT

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Managing Editor

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any article from this issue, providing customary credit is given, excep1

llinstinct and Ethics."

MORRIS C. SHUMIATCHER, Q.C.

A DemocraticDilemma

The following is from a recent television interviewmoderated by Mr. Gordon McGinnis on CKTV'sprogram, "Guest House," at Regina, Saskatchewan.Dr. Shumiatcher is a prominent Canadian lawyerand a staunch defender of the individualagainst the encroachments upon his rights by the State.What he says oj political affairs in Canadawould seem to describe pretty wellthe situation in most any democratic nationoj our time.

QUESTION: When we talk aboutdemocracy and rule by the major­ity of the people, what of the mi­nority who are causing a lot offriction in our society?

Democracy postulates rule bythe people and, generally, the prin­cipal rules are made by majorities.But, of course, democracy worksonly if both majorities and mi­norities are prepared to adhereto certain fundamental rules oflaw and practice. That is to say, amajority has the right to governbut it does not have the right todestroy or crush the minority. Bythat same token, the minority hasthe right to live and survive, butit does not have the right to dis-

rupt and destroy the ability of themajority to carry out its obliga­tions to govern.

The minority may, by disorder,by refusing to adhere to normalrules of democracy, destroy thewhole democratic structure. Butmajority rule does not mean sim­ply that if you have the power of agiant, you should use it as a giant.Power must be used with restraintand with all due regard for legit­imate minority rights. I want togive you an illustration. I haven'tthe slightest doubt if a poll hadbeen taken in Nazi Germany in1938 - let us say, as to whetherthe maj ority of people in Germanyat that time subscribed to the ra-

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cial superiority theories of Hitler- that the majority would havevoted in favor of the doctrine anda policy to give it effect. But sim­ply because the majority mightapprove it does not mean that itis right.

QUESTION: Is there a possibilitythat this sort of thing could hap­pen today?

It is quite possible. I think thatyou may have a majority that willdecide to take reprisals against aminority and in fact we have suchcases today. But I think you aremost concerned at the momentabout the right of 300 people inVancouver to disrupt or seek todisrupt a meeting of the PrimeMinister of Canada when he at­tends there on legitimate politicalbusiness, as was the case a fewdays ago. Of course, there is noright to stifle free· speech with·violence and threats of violence.As he said at the time, after theseunfortunate events last week inVancouver, democracy dependsupon the use of reason, of logic,of the right to persuasion. As soonas force or violence is used by aminority or a majority, as soon asa person says, "I alone have theright to talk. You have no rightto contradict or answer!" then thewhole foundation of democracydisappears. That is why the mi­nority and the majority both must

adhere to the rules which I spokeof earlier. These are gentlemanlyrules and they are based on cour­tesy and restraint. Because theydepend on good manners, the dem­ocratic fabric is a very delicateone. It is one that can be easilyruptured; it is one through whichviolence and brute force and self­ishness can break easily. Whenthat happens, men lose their dem­ocratic rights, and the strong andunscrupulous prevail. After all,there are very few places in theworld today where anything likea democratic system exists. De­mocracy is the exceptional formof government in the world todayas it has always been throughoutthe centuries. It is a freak, if youwill, and one which, because ofits fragility, must not only becherished, but jealously guarded.That, really, is what we say whenwe sing, "0 Canada : We stand onguard for thee."

QUESTION: Why is there today thisshabby attitude of Canadianstoward the office of the PrimeMinister? It does not seem to me,at least, that it has ever existedin this country before, certainlynot in my time.

Well, that is a very good anda very difficult question. I thinkone of the problems is this: OurPrime Minister is a highly intel­lectual and a very able man. Even

1969 A DEMOCRATIC DILEMMA 709

his detractors must admit this.What is more, he is accustomed todiscussion, to confrontation if youwill. His experience as a univer­sity law teacher schooled him inthe art of man-to-man debate. Hehas felt that he can take the pulseof the nation and determine itssentiment and disposition by go­ing out amongst the people anddiscussing with them matters thatare of national concern. That is avery worthy objective.

I think he must now have sec­ond thoughts on this programupon which he embarked a yearago, for the very simple reasonthat you really do not find thepulse of the people in the streetsat all. Those who are the respon­sible people of this country simplyare not the people who walk ormarch the streets - or who dem­onstrate or who appear in mobsor come forward in parades orcarry signs or shout slogans atthe Prime Minister or anybodyelse. That is not where the busi­ness of the nation is being car­ried on - whether by mechanicsor builders, tradesmen or produc­ers, or by any of the hundredsof useful callings and professionsthat serve the nation. The thought­ful people, the people that arereally concerned with the affairsof our nation, simply do not goout in the streets to air theirviews; and therefore, if the Prime

Minister wishes to take the pulseof the nation, I do not think hewill ever find it in the parks orat the curbstones of the cities atall. That is not wp.ere he will learnanything beyond the latest ob­scenities of the day. I think hehas come to realize that there isn'tmuch wisdom there - nor even awillingness to acquire it. That isthe first point, which is important.

Secondly, I think that those peo­ple who occupy the streets do notcome forward with a genuine de­sire to discuss anything at all withthe Prime Minister. They simplypress on in order to shout and todemonstrate. What they demon­strate most is their own ignoranceand arrogance. Can you think ofa more inane way of expressingan opinion on any issue of impor­tance? I do not care whether it ison Viet Nam, on taxation or med­ical care or pensions or Indians orwhatever else. Is there a moreinane way of expressing a viewon a difficult question of nationalpolicy than to carry around a signwith three or four words (one ortwo of which are probably ob­scene)? Or by shouting slogansor by marching? These are activi­ties fit for persons who are illit­erate, untrained, and incapableof articulating their views. Theintelligent person, on the otherhand, if he has views on a subject,may enter into a logical debate,

710 THE FREEMAN December

may write an article, a, letter, ormay speak with others interested.He will at least set his views outin some order and he will back hisviews with facts. But does a mob,confronting the Prime Minister,present facts or logical argu­ments? Of course not. They arejust there as so many bodies, mak­ing unpleasant noises and unat­tractive gestures, hoping to getsome publicity if possible - butcertainly not to advance the in­terests of the nation. Their moti­vation is disruption and destruc­tion, or so, I confess, it appears tome.

QUESTION: Let us talk about ourmembers of Parliament in OttO;wa,our governmental representativesjor any given area. They are se­lected by the people to go thereto represent them. Are the atti­tudes oj the electors mature, sen­sible, and logical toward the mem­bers that they select?

Some are and some are not. Ithink that the weakness lies in thevery point I sought to make earlierin relation to the Prime Ministerwho has been seeking the viewsof the people in the streets. Thetrouble today, it seems to me, isthat the role of a member of Par­liament has changed and becomeperverted from its original con­cept. The member of Parliamentnow says to the public: "If you

elect me, I will be your mouth­piece and speak for you." To themass of his constituency, he says:"Tell me what you want, and Iwill do whatever you tell me todo." This, of course, is quite ridic­ulous because the public cannotpossibly know all of the implica­tions of giving effect to "whatthey want." The complex facts, thedifficulties involved in any policy,are largely unavailable to the pub­lic. Take the question of wheatprices, of international trade, oftariffs. In any area, the complexi­ties of trade and commerce, inter­national agreements, and a hostof other considerations requirelong study. The public simplyhasn't the means of acquiring thefacts or the experience in makingrational judgments based on thosefacts.

So, it seems to me that thewhole role of the M.P. as repre­sentative of the people should bereconsidered. His proper role, Ibelieve, is that of delegate, wherethe candidate for office says tohis public: "If you have trust inme, you can elect me for three orfour or five years; I will bring myexperience and knowledge to bearon the problems that may ariseduring that period. I do not knowwhat they may be, but I will makemy decisions as I think the factswarrant from time to time; I can­not promise anything except that

1969 A DEMOCRATIC DILEMMA 711

I shall act reasonably and honestlyand to the best of my ability inconducting your affairs, and I willuse as much care in dealing withthem as I would in dealing withmy own." He must then make thejudgments himself. It is for him todo, not what he thinks is popularor what he believes may re-electhim, but what, in the light of factas he discovers it and his ownjudgment as the exigencies of thetime indicate to him, is right. Thepolitician who keeps his eye on thepublic opinion poll and his ear tothe ground and who engages inother interesting physical contor­tions cannot possibly make theright decisions.

The public opinion poll dependsupon picking ten or a hundred ora thousand people in the streets atrandom and asking them, off the

fcuff, "What do you think aboutthis? Should we recognize Com­munist China or not?" Now theperson questioned may never havegiven the matter the slightest con­sideration or thought. And so hecomes up with an instant answerbecause he feels he ought to havesome opinion on every subject orhe will be thought a fool if hedoesn't. But the chances are thatif he does give an answer - andmost people do say something­it will be a foolish answer. Andthe chances of getting collectivefoolish answers are even greater.

When the politician or the mem­ber of Parliament tries to deter­mine what the people want, if helooks at the result of the publicopinion poll, what is he likely toget? Is he getting the consideredviews of the most thoughtful andintelligent persons in the com­munity? Those who have ponderedthe questions or those who havestudied them and are truly con­cerned over them? Of course not!In effect, he will get the lowest­common-intellectual-denominatorin the community. That is whatthe public opinion poll is likely toreflect. And if that is to make ourcountry's policy, if that is to bethe basis of our position on suchissues as our currency, or devalu­ation, or trade relations with theUnited States and the hundredother odd countries we deal with,how can we hope to have rationaleffective results?

If you had a problem - I don'tcare if it is one in mathematics orchemistry or engineering or inany other field you care to name- and you wanted the answer,would you go out and ask the firstten people you saw on the street,"What is the solution to this prob­lem?" And when you tabulated theanswers you got, would you thentake the mean average of all ofthe answers you collected? If youdid that, you would be called in­sane! And yet, the problems we

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tackle nationally and internation­ally are no less complex; if any­thing, they are more so. Still, weseem to think that somehow, ifwe ask enough people and getenough answers, we are going tocome up with some profound solu­tion to the problems that bedevilus. I suggest that though we mayget answers, they are unlikely tobe reliable or useful answers. Thepublic opinion pollsters will nomore find the answers on thestreet than will the Prime Min­ister.

QUESTION: Is there a fear that ourenvironment of freedom in Qan­ada is being seriously threat­ened?

I do not think we should havefear. We should have apprehen­sions perhaps, and we shoUld bewatchful. We have all heard: "Theprice of freedom is eternal vigi­lance." But where is the vigilancein polling the public and askingthem what is popular? "What doyou want? Do you want annualguaranteed incomes?" If you areasked that, and if you have noother facts before you,it is likeasking if you are in favor ofmotherhood. It sounds like a goodthing. And so you say, "Yes - Iwant a guaranteed income, ofcourse!" So, it appears in a pollthat most people want it.

But what is not known or asked

is, "What price are you preparedto pay for it?" The price you arebound to pay will be a price reck­one~ in more government inter­ference, more confiscation of prop­erty by way of taxation, directand indirect, upon death, and ina dozen other ways. There will beless freedom of choice and of oc­cupation, because, let us face it: .the more state pension and secur­ity plans we have, the more we arehedged about by commitments tothese plans; the less mobility wehave; the less willing we are tomove and try something new.

Every time we subject ourselvesto a new measure of social secur­ity, each new security measurethat takes present earnings froma person in relationship to his jobon a promise of future benefits,deprives him of his willingnessand freedom to change, to move, -'i

to improve himself, to try some­thing new and .different. I can un­derstand this fetish for social se­curity in an old and tired culture;perhaps there was nothing else tohope for in a country like Englandafter the War. But the Beveridgecradle-to-grave security has gonea great distance in reducing theinventiveness and resourcefulnessof the English people and dimin­ishing the productivity of the pop­ulation; of that there is no ques­tion.

But we are a new nation here

1969 A DEMOCRATIC DILEMMA 713

in Canada. Weare just beginningto waken to our great nationalpotentialities. What a pity if, ata time when we should be stretch­ing our limbs and testing ourstrength as individuals and col­lectively straining our sinews asa nation - not just in the physicalor economic sense hut socially,culturally, spiritually - we crawlinto the confining shell of welfar­ism and seek a safe and unadven­turous life in the stagnant back-

" waters of the world!

QUESTION: Are those people thatare able, willing, and do in factexercise their right to vote - arethese persons more qualified to­day to make decisions than theywere say five or ten years ago?

I would say less so. I would saythe person who genuinely desiresto inform himself on public affairstoday has a great many more dif­ficulties in his way than peopleencountered, say, forty or fiftyyears ago, because the facts todayare so much more numerous andcomplex. It is so difficult to ac­quire the reservoir of informationthat is necessary to form any ra­tional conclusion, that the chal­lenge is considerably greater. But

simply because the challenge is sogreat, I think more and more ofus will be moved to accept it. It isnot that a tiny group of peopleand no others are capable of mak­ing the decisions. We all are. Weall have that capacity; but we canparticipate in the business of de­cision-making only if we are pre­pared to study the facts and issuesdiligently, continuously.

It is not enough to read theheadlines and slogans that we findin the press. It is not enough tolisten to what comes off the streeteven if it is dignified by a radioreport or a television broadcast.These are only the superficialsymptoms of our agitated times.You will learn nothing from themexcept that people are still capableof violent, irrational, angry acts.In order to form reasonable, work­able, helpful judgments, there isno shortcut even in our electronicage. We must be prepared to workand study, and to inform - not in­flame - ourselves and others.These are the prosaic, perhapsclumsy,paving stones that makeup the road that democracy musttravel. Construction may be slow- but there is no glamorous easyway. ~

PYRAMIDS

LEONARD E. READ

My ENCYCLOPEDIA explains that,"The true pyramid exists only inEgypt." The reference, of course,is to the familiar pyramidic con­figuration. Everyone knows thatthe pyramids of Egypt are pyra­mids!

But, aside from configuration,what, really, is a pyramid? Read­ing on, I find that "each monarchbuilt his own pyramid, in whichthe mummified body might bepreserved for eternity from hu­man view and sacrilege and intowhose construction went years oftime and measureless amounts ofmaterial and labor." Here we haveour functional cue as to the natureof a pyramid.

A pyramid is a monument toman's pride built by the coerced

714

labor of others. As with the Egyp­tian models, the materials andlabor must be assembled by extor­tion if a project is to qualify as apyramid. The rich man's mansionor mausoleum, if built at his ownexpense,· is not a pyramid. Nor doDisneyland and Fisherman'sWharf qualify as pyramids, fi­nanced as they are by consumerchoice in a free and open market.

The Taj Mahal - "It is deemedone of the most beautiful build­ings in the world" - is, by func­tional definition, a pyramid. Andit is beautiful only in the sensethat beauty may be skin deep. Forback of that pretentious fa~ade ofmarble and jewels is ugliness:slave labor, thousands upon thou­sands of slaves for many years. It

1969 PYRAMIDS ALL OVER THE PLACE 715

is a pyramid, a monument to thepride of the Mogul Emperor, ShahJehan.

The impulse to memorialize one­self - a monument to pride - runsstrong in many people; but this isof no special concern to others,insofar as it can be satisfied withone's own resources. That's thebusiness of the individual and ofno one else. But give these indi­viduals power to command the re­sources of others, and the impulseruns wild, often swelling intoboundless activities and assumingall sorts of forms, even to themonumentalizing of silly ideas inwhich the originators take pride.And this does, indeed, becomeeverybody's business!

It is easy enough to see thatBrasilia, hewed out of wastelandfar from where people live andlabor, is nota city built in re­sponse to the demands of Bra­zilians in a free and unfetteredmarket. It is no more a responseto their aspirations than the TajMahal represented a gratificationof the slaves who erected it. Bra­silia is a pyramid, pure and sim­ple, a monument to the pride of aman who had coercive power overthe resources of others - J uscelinoKubitschek.

It is also easy to see that Vene­zuela's steel mill is a pyramid. Thisis a monument to an idea quite assilly as the notion that we in the

U.S.A. should grow our own cof­fee. Were that mill abandoned tothe jungle and the steel importedinstead, with each worker givenseverance pay at the rate of hispresent wage - for the rest of hislife, Venezuelans would be moneyahead!

Some Home-Grown Examples

Should we not be able to identi­fy just as easily our own pyra­mids, such as the Gateway Archin St. Louis, the Fresno Mall, anda thousand and one other more orless conspicuous structures? Mostof the towns and cities in Americatoday can boast of similar monu­ments to pride!

For .instance, every Federal"urban renewal" project is a pyra­mid. Not one of these "develop­ments" is a response to free andwilling exchange. The people whoare now forced to pay for thesemonuments to ideological pridehave tended to desert the down­town centers for suburban shop­ping centers. These "renewals"have been made possible by thepower on the part of some tocommand the resources of others;American citizens have no morevolunteered their own income orcapital for such projects than thepeople of Egypt volunteered theirresources for one of their pyra­mids.

Every high-rise apartment in

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the Federal "slum clearance" pro­gram is a pyramid. There are nowso many other examples in everycity -even in towns - that a localresident would find it difficult toname them all.

Ideas that Enslave

But not every pyramid is madeof rock, brick, mortar, steel. Us­ing our functional definition, so­cial security, Medicare, the Fed­eral full-employment program, andcountless other ideological inno­vations are as much pyramids asBrasilia: monuments to man'spride made possible by the coercedlabor of others - the originator'spride in his ideas!

I repeat, the impulse on the partof so many people to memorializeself - one's ideas or accomplish­ments or whatever else - is be­nign so long as the gratificationis achieved solely with one's own

resources. It is harmless, and it isnone of anybody else's business.

The harmless memorializing im­pulse becomes the destructivepyramidic impulse when and onlywhen coercive power over the in­come and capital - resources - ofothers is permitted. Grant thispower to one and there is no prin­ciple by which it can be denied toeveryone - as we are now wit­nessing.

How about granting this co­ercive power to no one, that is, nospecial privilege for anyone? Thatwould be fair to everyone. Ourpyramids? Why not simply aban­don them now as grotesque, un­finished testimonials to the harshtyranny of the authoritarian way?Let each man build and do as hechooses with his own resources, solong as it's peaceful, and the resultwill be as high as any civilizationcan possibly rise. I

Inflationismas Political Policy

J. H. PETERS

The greatest mistake that can be made in economic investigation isto fix attention on mere appearances, and so to fail to perceive thefundamental difference between things whose externals alone aresimilar, or to discriminate between fundamentally similar thingswhose externals alone are different.

LUDWIG VON MISES, The Theory of Money and Credif

ATTEMPTS to penetrate the na­tion'seconomic future are engag­ing the attention of its businessand industrial leaders as neverbefore. They are avidly readingand consulting experts in thefields of economics and politics inan endeavor to interpret as ac­curately as possible all that is hap­pening today in terms of its im­plications for the future.

But to attempt to read our eco­nomic future in .projections basedon current developments and thoseof the recent past isa difficultand unproductive undertaking. Itis far more to the point to obtain

Mr. Peters left the presidency of the FirstNational Bank of Loveland, Colorado, to be­come for many years the editor of RandMcNally & Company's Bankers Monthlymagazine.

from the reading and contempla­tion of what has happened overan extended period of economichistory an improved knowledgeand understanding of what we maydo to give that future the shapeand direction we want it to take.Samuel Taylor Coleridge said itwell· sometime during the earlyyears of the nineteenth century:"If man could learn from history,what lessons it might teach US!

But passion and party blind oureyes, and the light which experi­ence gives us is a lantern on thestern which shines only on thewaves behind us."

We have an unexcelled oppor­tunity to avail ourselves of thelessons of economic history in themany writings of Ludwig von

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Mises, who predicted the inflationwhich followed World War I in a'Work entitled The Theory ofMoney and Credit, the first Ger­man-language edition of whichwas published in 1912.1 His writ­ings thus cover a period of nearlysixty years of experimentationwith the monetary and fiscal meas­ures invoked by governments intheir sundry endeavors to dealwith all manner of economic prob­lems. All that follows is based onthose of his observations whichhave a special bearing on thecauses of inflation,2 its conse­quences, and its sole remedy: stop-

1 The first English edition of a versionwritten in 1924 appeared in the 1930's,and the book, to which was added a thencurrent essay on "Monetary Reconstruc­tion," was last published in 1953.

2 Von Mises indicates a strong prefer­ence for the use of "inflationism" as theonly term that conveys the precise mean­ing intended. He defines "inflationism" as"that monetary policy that seeks to in­crease the quantity of money," whereas"inflation" is said to mean "an increasein the quantity of money (in the broadersense of the term, so as to include fiduci­ary media as well) ,that is not offset by acorresponding increase in the need formoney (again in the broader sense of theterm) so that a fall in the objective ex­change-value of money must occur." Hemakes the further point that inflationismmust occur on a very substantial scalebefore it will manifest as inflation in theordinarily accepted sense of the term."Inflationism," in other words, maybesaid to be the policy that tends to induce"inflation." In the present situation, thepolicy and its effect appear to be general­ly regarded as one and the same.

ping the arbitrary expansion ofthe money supply.

A Pernicious FallacyInvades Economic Thought

Perhaps the most perniciousidea that has ever invaded theeconomic thinking of this or anyother time is the one that seesinflation as a more or less harm­less device by means of which thewelfare of all or. some segment ofthe public may be effectively andpermanently advanced. And per­haps the most pernicious aspect ofthat idea lies in the readiness withwhich it lends itself to the pur­poses of demagogues who arequite content to promote·the adop­tion of inflationary measures as ameans of achieving some momen­tary political advantage, regard­less of what the more remote con­sequences of their expansionaryefforts may prove to be.

Time was when monetary infla­tion was achieved by employing asingle device for a single purpose:the coin of the realm was clipped,and the motive was profit. Thegovernment .needed financial helpand that was the only then knownmethod of tampering with the cur­rency as a means of satisfying thatneed. Questions of currency policyplayed no part in the deliberationsthat prompted it. There was nothought of influencing economictrends or the general price level

1969 INFLATIONISM AS POLITICAL POLICY 719

by manipulating supply and de­mand factors.

More recently, however, ourcurrency has been debased by anumber of devices for a numberof reasons, most of them poorlyconsidered and far more harmfulthan helpful, but nevertheless pur­portedly rooted in well-intentionedcurrency policy. The free coinageof &ilver, for example, was advo­cated by one group of proponentsas a means of increasing the priceof silver as a commodity, whilethe prime concern of anothergroup 'was to raise the generallevel of prices by increasing themoney supply.

It was through the efforts ofthe latter that paper inflationismcame to be advocated in manystates, partly as a forerunner ofbimetalism and partly in combi­nation with it. But the closely re­lated issues of monetary policyand. inflation were then inade­quately comprehended and poorlyunderstood by the public at large,a condition that is all too preva­lent to this day.

Although today's currency isnominally based on gold, it actual­ly consists in large part of creditand fiat money, the available quan­tity of which can be increased ordecreased almost at will by ourmonetary authorities for what­ever purposes happen to serve theneeds or expediencies of· the mo-

mente Every such change is pre­sumed to play a thoroughly con­sidered role in effecting somedesired change in the objectiveexchange-value of the money incirculation.

Indired Taxation

However valid or otherwise thecourse pursued to the end in ques­tion may be, there remains theproblem of the degree to whichthe prescribed remedy should beapplied. To this there can be noprecise answer because economistsand statisticians have the greatestdifficulty in isolating and identi­fying the determinants of thevalue of our money, and our Fed­eral agencies and lawmakers findit even more difficult, if not im­possible, to control them. Infla­tion, however, lends itself mostreadily to any effort to engage inpainless spending; and becausethe effects achieved, particularlyin the earlier stages of the proc­ess, are quite. unobjectionable toboth the payers and gatherers oftaxes, it has at such times gainedconsiderable unwarranted popu­larity.

Stated differently, the basiccause of inflation lies in govern­ment's unwillingness to raise thefunds it requires by increasingtaxation, or its inability to do soby borrowing from the public. In­flation as a means of financing

720 THE FREEMAN December

World War I, for example, had thegreat advantage of evoking an ap­pearance of both economic pros­perity and added wealth. Calcula­tions of every kind were thusfalsified, giving rise to distortionsin the figures upon which businessand industry relied for guidancein the conduct of their affairs.These distortions led, amongother things, to the taxing awayof portions of the public's capitalwithout its knowledge.

It is thus· that political consid­erations all too often interferewith the proper functioning ofone phase or. another of the eco­nomic process. Left to its owndevices, the economy has a way ofeffecting its own cures of malad­justments as they arise. If itspricing mechanism is permittedto reflect without outside inter­ference the extent and urgency ofthe needs and wants of the public,supply and demand will inevitablyarrive at a condition of balance.

It is generally supposed that in­flation favors the debtor at theexpense of the creditor, but thisis true only if and to the extentthat the reduction in the value ofmoney is unforeseen. Inflationarypolicy can alter the relations be­tween creditor and debtor in favorof the.latter only if it takes effectsuddenly and unexpectedly.

If, on the other hand, inflationis foreseen, those who lend money

will feel obliged to include in therate of interest they ask both arate that will compensate them forthe loss to. be expected on accountof the depreciation actually antici­pated, and as much more as mightresult from a less probable furtherdepreciation. And any who hesi­tate to pay this additional compen­sation will find that the diminishedsupply of funds available in. theloan market will compel them todo so. Savings deposits, inciden­tally, decreased during the infla­tion that followed World War Ibecause savings banks were notinclined to adjust interest ratesto the altered conditions createdby variations in the purchasingpower of money.

Supposed Benefits ofInflation Are Illusions

There are inflationists who,though they are admittedly quiteaware of the evils of inflation,nevertheless hold that there arehigher and more important aimsof economic policy than a soundmonetary system.. A failure onthe part of the public to compre­hend all· of the implications of theposition thus taken makes infla­tion a readily available politicalexpedient. When governments arerelieved of the necessity for mak­ing ends meet, socialistic trendsand other unpopular consequencesof a given policy are all too readily

1969 INFLATIONISM AS POLITICAL POLICY 721

concealed in order to win and holdthe required degree of public ac­ceptance; and having. arrived atthat point, arrival at a conditionof absolutism is only a questionof time.

There isn't a shred of validityin the proposition that continuedinflation is to be preferred to anysteps that might be taken with aview to counteracting it; in thenotion, for example, that increasedunemployment in any degree wouldbe too large a price to pay for astabilized price structure. Quiteignored in this view of the matteris the consideration that stabilizedor increased employment obtainedtemporarily at the price of infla­tion is a very poor bargain in­deed, and that the effect of thatcontinuing process can only be togive rise to an accumulation ofeconomic maladjustments thatmust eventually fall of its ownweight.

It will be recalled that the na­tion's economic situation in 1934was quite the reverse of today's.Employment was at a very lowlevel, but governments around theworld were dealing with it alto­gether unrealistically. Instead ofadjusting wages to the generallyprevailing low level of prices,they sought to ward off a fall inmoney wages and otherwise in­terfered with the processes thatwould have restored the economy

to a condition of equilibrium inthe natural course of events.

They ignored the unwelcometruth that by stabilizing wages atan arbitrarily high level they wereactually increasing unemploymentand perpetuating the dispropor­tion .then existing between prices,and costs and between outputsand sales, the predominant symp­toms of the crisis with which theywere contending. Just as an in­flated wage structure stood in theway of needed adjustments whenthe economy was at a low ebb, itwill inevitably be found to havemuch the same effect when at­tempts finally are made to curbthe malinvestments generated byboom conditions.

Subjective Value 01 Money

Contributing to the difficultiesjust cited are, first of all, the mul­titudinous factors that influencethe objective exchange-value ofmoney, popularly called its pur­chasing power. But its subjectiveexchange value is also important.Just as in the case of economicgoods, the economic valuation ofmoney is based on subjective esti­mates of individuals as promptedby their psychological reactionsto whatever circumstances andconditions may happen to obtainin their respective situations. Sub­jective value, therefore, cannot bedetermined with even a modicum

722 THE FREEMAN December

of accuracy, and any decisionsbased on an assumed ability to doso is sure to be highly conjectural,to say the very least.3

It is clear, therefore,. that infla­tion" functions quite inadequatelyas ,a .purely political instrument.Its, effects cannot be predictedwith any degree of precision, andif continued indefinitely it mustlead to a collapse. Its popularityis due in the main to the public'sinability to fully understand itsconsequences.

Barriers to Reversal

Standing in sharp contrast tothe great ease with which a policyof inflation may be used by thosein authority for their own pur­poses is the great difficulty of re­versing that process - of invokingand implementing a policy of re-

3 An article entitled "Psychology andthe Consumer," which appeared in theAugust, 1969, issue of Business in Brief,published by The Chase Manhattan Bankof New York, strongly supports thisview. The author variously described theconsumer as a "hero," a "villain," and a"victim," the respective roles played byhim in the (1) 1965-66 period of caution,(2) the period of excessive optimismwhich got under way at the beginning of1967, and (3) in the current year of dis­regard of the restraints on consumerspending which it was sought to imposeby the boost in Social Security taxes andthe tax surcharge. Notwithstanding thelatter, "for 1968 as a whole, consumeroutlays were 9.0% above 1967 - signifi­cantly contributing to inflationary pres­sure."

strictionism or restraint whichhas the effect of increasing thevalue of money. This maybe done'( 1) by reducing the supply ofmoney in a period of constant de­mand, or (2) by holding it at auniform level or one that is in­sufficiently high to meet anticipa­tions based on recent price trends.The latter, less' severe method con­sists in simply waiting for an" in­crease in the demand for a limitedsupply of money to manifest as acondition of restraint.

Adding to' the difficulty of pur­suing a policy of restraint arethese considerations:

1. Far from bringing to the na­tional Treasury the added dol­lar resources to which inflationtoo readily gives rise, restraintdiminishes them.

2. It tends to induce a scarcity ofsome economic goods by facili­tating exports and restrictingimports.

3. Taxation becomes more bur­densome.

4. Unpopular creditors, as a class,are thought to gain at the ex­pense of the far more numer­ous debtors. (Today in theUnited States, the large corpo­rations tend to be the debtors,while the creditors by and largeare numerous small savers withinsurance, savings accounts,and the like.)

1969 INFLATIONISM AS POLITICAL POLICY 723

Redeemability

But every inflationary policymust sooner or later be aban­doned, and there will then remainthe problem of replacing it withanother. It was the clear intentof the law in the first place·· topreserve the metal parity of ourcurrency, and that can be the onlylegally and morally acceptable ob;..jective of the new policy. Suspen­sion of co·nvertibility left thatpremise altogether unchanged.

The inflation made possible bythe suspension of convertibility,however, has already worked graveinequities in contractual relationsof every kind, and to abandonmetal parity in the formulation ofa new policy could only serve tomake bad matters worse.· Althoughthe consequences of inflation can­not be eliminated by a mere re­versal of policy, and existing in­equities would in large part re­main, metal parity would at leasthold more. promise· of future sta­bility than any available alterna­tive.

Even so, the value of our cur­rency will be too largely subject topolitical pressure, and it is to behoped that the electorate will seeto it that a preponderance of suchpressure is exerted in behalf of astable· currency. For· it is, afterall, no part of the proper functionof government to influence thevalue of the medium of exchange.

That is the function of the mar­ket, in the use and operation ofwhich government· is only one· ofmany participants. I t is to themarket itself that all must lookfor the means of establishing therelative exchange values of eco­nomic goods, and government has,or should have, little actual voicein the matter.

The result of any attempted in­tervention by government will bedetermined in large part by thesubjective values placed on goodsby the masses of participatingindividuals through the pricingprocess. While our monetary au­thorities have some knowledge ofthe factors that determine thevalue of money, they have no wayof determining the extent to whichsubjective estimates of value(prices) are affected by variationsin the quantity of money. Govern­mental intervention is thereforeconfronted with the impossibleproblem· of calculating the inten­sity with which variations in theratio of the supply of money tothe demand for it affect the mar­ket.

The Evils of Price Control

The adoption of price and wageceilings is frequently suggested asa means of controlling inflation,but history's case against thatcourse is devastatingly complete.Such ceilings would automatically

724 THE FREEMAN December

stimulate demand for and curtailproduction of the very goods thathappened to be in scarce supply.The mechanism of the marketwould no longer be effective inallocating available supplies, so itwould be necessary to bring otherforces to bear on the problem.These have historically led throughvarious intermediate stages, be­ginning with the rationing of· themost important necessities, to theeventual abolition of private prop­erty. There is no workable sub­stitute for the age-old laws ofsupply and demand.

And so it is with the balance ofinternational payments. If naturalforces are permitted to functionwithout interference, the tightermoney conditions which. will nor­mally prevail in the debtor coun­try will induce a reduction in itsprices, thus discouraging importsand encouraging exports, andthereby tending to bring about arestoration of equilibrium. Thegovernment in question can bestserve its own needs by refrainingfrom intervention of any kind.

The role of the speculator is afurther case in point. In times

long past the ···aetivity of specu­lators .was held to be responsiblefor the depreciation of money;but, here again, history makes itclear that prices are determinedin the market, and· that any at­tempt to alter them over a givenperiod by speculation is sure tofail; that the immediate effect ofspeculation is to reduce price fluc- \tuations rather than to increasethem. In the case of a steadilyweakening currency, however, theeffect of speculation will be tocause the expected depreciation todepart from its otherwise uni­form pattern, and to proceed byfits and starts, with intermittentpauses. But the framework will beset by the extent to which marketfactors are responsible for thedecline; and if inflation happensto be the cause of the difficulty, itis to the cure of that malady thatall corrective efforts must be di­rected.

We are faced with a choice be­tween the forces that make formonetary stability and those thatwill inevitably take us in the op­posite direction. We can't have itboth ways. I

IDEAS ON

LIBERTY

What You Should Know About Inflation

ONE of the most stubborn fallacies about inflation is the as­sumption that it is caused, not by an increase in the quantity ofmoney, but by a "shortage of goods."

HENRY HAZLITT

"ETERNAL VIGILANCE," advisedJohn Philpot Curran in 1790, isthe price of liberty; and numerousscholars have elaborated on thattheme. But the "price" to be dis­cussed here is of another order:the rate at which an item movesin trade.

Now, the price of liberty is notjust a figure an owner arbitrarilyselects to print on a tag. At hisfigure, buyers mayor may notappear. Nor is the price of libertya figure arbitrarily selected by aprospective buyer. Again, his bidmayor may not attract a seller.Rather, the price of liberty is thefigure or the ratio at which atrade occurs between a willingbuyer and a willing seller in opencompetition - without coercion orfraud on the part of either traderor any third party.

If the point seems belaboredhere that the price of liberty canonly be derived through voluntaryexchange, the excuse is that somany people act as if they hadmissed the point. The individualwho lacks sufficient self-respect to

PAUL L. POIROT

respect the dignity of every otherhuman being has missed the point.He who uses his own life or prop­erty in ways that violate the prop­erty rights of other individualshas missed the point. The personwho does not understand whyscarce resources must be privatelyowned and controlled if they arenot to be wasted has missed thepoint. Anyone who thinks thatbuying and selling, saving and in­vestment, production and con­sumption could occur in a logicalor orderly manner without the in­stitution of private property hasmissed the point.

The point is that unless there isprivate ownership and control ofproperty then voluntary exchangeor free trade between willing buy­ers and willing sellers could notoccur; one must hold full andclear title before he may transferthe right of possession and use.Furthermore, except as it is thusestablished through voluntary ex­change, the price for a commodityor service will not accurately re­flect the available supply of the

725

726 THE FREEM,f\N December

item or the effective demand forit - and will not serve as a ra­tional and reliable guide for pro­ducers or consumers. This is whythe price of liberty necessarilymust be the price determinedthrough open competition in afree market.

ProbablY by a process of trialand error and long experience,tradesmen invented or discoveredmoney - a universally traded, eas­ily recognized, readily acceptableitem such as silver or gold thatwould help to facilitate. the trad­ing of other goods and services.In any event, further discussionof the price of liberty requiresrecognition at this point of thevital role of money in the marketeconomy - money that not onlyoriginates as a result of voluntaryexchange but also serves as theessential unit of accounting andcalculation for those who wouldengage in production and trade.1

Money and the Market

The market process of voluntaryexchange, and that alone, givesvalue to money as a medium ofexchange and as a unit for pur­poses of economic calculation. Thevital information a trader needs

1 See "Money and the Market" in THEFREEMAN, August, 1969, page 464. See also"Value: the Soul of Economics" by W. H.Pitt, THE FREEMAN, September, 1969, page515.

concerning supply and demand isafforded only by the free-marketprice. Money serves as a commondenominator for pricing all kindsof goods and services, for com­paring the cost or value of onescarce resource with alternativesor substitutes, for deciding wheth­er to save or spend, produce orconsume, buy or sell. But to ef­fectively serve its purpose, moneymust originate in and derive itsvalue from the working of supplyand demand in free and open com­petition. Governmental declara­tions of legal tender or issues offiat money are useless at the verybest; and far more often than notthey lead to false price signalsand the waste of scarce resources.It is important to buyers and sell­ers to be able to express exchangeratios or prices of all items interms of money. But it is equallyimportant that the nature and val­ue of the monetary unit be estab­lished by willing buyers and sell­ers in the market rather thanarbitrarily by government edict.

Once again, why this repetitionor emphasis of the relationshipbetween money and the marketand the importance of money forthe purpose of business account­ing and economic calculation? Andthe reason again is that so manypeople act as if they had missedthe point. Among the top echelonof economists are those who would

1969 THE PRICE OF LIBERTY 727

possibly agree, if pressed, thatgold could serve as money but whoprefer instead to debate whetherthe government should print 2 percent or 5 per cent or 10 per centof additional fiat paper moneyeach year, >or whether SpecialDrawing Rights (SDR's) mightbetter serve the purposes of aWorld Bank than have other pa­per promises; those persons havemissed the point. Anyone who ad­vocates government spending forpurposes he is· unwilling to financewith his own resources (whichprobably means that others wouldrebel if directly taxed for suchpurposes -which in turn meansdeficit spending and inflation bygovernment) that person hasmissed the point. The point is thatwhen either the government or anillegal counterfeiter arbitrarily in­creases the supply of "money," themarket is flooded with deceptiveprices, economic calculation isthwarted, and the result must bea wasteful use of scarce and val­uable resources.

So, once more, liberty is per­sonal freedom of choice, and theprice of liberty is the market pricearrived at through voluntary ex­change between a willing buyerand a willing seller. The enemiesof· liberty are coercion and fraud,and the result of such interven­tion is a false and misleading sig­nal rather than the price of liberty

that accurately· reflects supply anddemand and upon which produc­ers and consumers may reliablybase their economic calculations.

Coercion Sends False Signals

Unfortunately, the prospectivetrader in the market is ordinarilyunable to distinguish· between theprice of liberty and the false pricesignals thrown forth by interven~

tionists. The "eternal vigilance"urged upon him must be directedtoward an identifiable cause of themisleading signal, toward the co­ercion that enters and disruptsthe market. It is the common dutyor responsibility of every would­be trader, of every citizen inter­ested in a free and viable economy,to help police the market. And thisis the principled role of govern­ment: to maintain the peace, todetect and discourage outbreaksof violence and fraud, to protectthe life and property of everypeaceful person and his right toenter unmolested into the proc­esses of production and voluntaryexchange.

The case for the limitation ofgovernment has been made overand over, and the only excuse fortaxing the reader's patience withthis repetition is that the vastmajority of people act as if theyhad missed the point. Business­men who advocate intervention toplace and hold them on a pro-

728 THE FREEMAN December

tected pedestal above the ordinarytrader in the market have missedthe point. Labor union leadersand followers who demand specialrights and privileges, unavailableto others competing for scarceresources, have missed the point.Would-be educators who advocatethe use of force to impose their"superior wisdom" upon othershave sadly missed the point. Hu­manitarians who would confiscatethe property of the thrifty andproductive to subsidize the shift­less have missed the point.Dream­ers who would populate the moonat the expense of those with theirfeet on the ground have missedthe point.

How Government Intervenes

The point is that the only justi­fication and appropriate role forgovernment is to protect and de­fend the dignity of the individualand the private property each hasearned; that government may notbe perverted· into an instrumentof plunder without destroyingman's best chance for life andlivelihood.

Whenever the individual relaxeshis vigilance and allows his dulyconstituted police force to clip thecoins or arbitrarily add to thestocks or decree an artificial. valuefor each monetary unit, the inevi­table cost he must bear is a loss ofliberty.

The minimum wage establishedby government edict always hasto be a false price signal; it is notthe market-established price ofliberty - it is a loss of liberty.The false wage or price creates anunmarketable surplus of that mostscarce of all resources, humanlabor; and such. a "surplus" issheer waste.

Rent control laws that holdrental ·rates below market levelsencourage the wasteful occupationof the scarce housing space thatalready exists and discourage theconstruction of additional hous­ing. This coercive intervention re­flects a false picture of supply anddemand; it disrupts economic cal­culation; it wastes resources; it isantisocial and a denial of liberty.The same is true of any and everyattempt at government price con­trol.

There is no end to the examplesthat could be cited to illustratehow intervention destroys life andproperty and liberty. What theyall illustrate, in effect, is that so­cialism cannot be made to work,no matter how brilliant the manin charge, because socialism dis­rupts the market, renders it im­possible to know the price of lib­erty or to make the economic cal­culations by which human beingscan rationally decide what to dowith themselves and their re­sources. "Irrational," "irresponsi-

1969 THE PRICE OF LIBERTY 729

hIe," "unaccountable," and "anti­social" aptly depict the socialist.And all he lacks is the price ofliberty.

Why Socialism Must fail

Karl Marx was a socialist whosemind was closed to the price ofliberty. "From each according toability and to each according toneed" is first and foremost a de­nial and denunciation of the insti­tution of private property. Thisnecessarily precludes voluntary ex­change. It closes the market anddeprives producers and consumersof vital information market priceswould otherwise reveal concern­ing the supply of and the demandfor scarce resources. How is any­one's "ability" or his "need" to beevaluated in the absence of freetrade and market prices?

So Marx, like most socialists be­fore and since, turned to the "cost­of-production" or the "labor"theory of value. And it's true thathuman labor is a scarce resourceand can be valuable; but it is ahalf-truth at best and a gross il­lusion at worst. What gives realvalue to a tool is not the amountof labor that can be used in pro­ducing the tool but the amount oflabor saved and the satisfactiongained through the production anduse of the tool - as against doingwithout it. And only through will­ing exchange in the market is

it possible for anyone to knowwhether to spend his time produc­ing this tool, or that, or neitherone. Marx could guess wildly, andenforce his edict if his police pow­er were strong enough; but hewould have no way to compare theresults with the alternatives un­der his system. For that compari­son, he would need the price ofliberty; yet, his basic premisesdenied the functioning of themarket.

This is why Soviet bureaucrats,if they stick rigidly to theirclosed system of coercion and con­trol, can never know whether toproduce spikes or tacks, tractorsor toys, human food or jet fuel,shoes or sputniks. Nor can anyother government force in theworld ever know how hard or howfar to push any project, relative tothe alternatives, once the projecthas been pulled out of the freemarket and out of the realm ofrational economic calculation.

That politicians, with their pen­chant for power over others,should stumble into such chaos isto be expected. But how can onecondone the utopian intellectual,whose noble aim is to help his fel­low man, but who insists thatsocialism is a reasonable means tothat end? Should not he be ex­pected to know the price of lib-erty? @

- Our I- b 1Ina lena eRights

Should government be limited in their defense?

PARK CHAMBERLAIN

IN NOVEMBER of 1965, in the Stateof New York, a man named Adri­an Cancil was sentenced to threeyears in prison for a crime whichhe did not commit. Pending ap­peal, he was released on a so­called certificate of reasonabledoubt. He put his free time toadvantage by discovering the nameof the guilty party, whereupon hebought a tape recorder and con­cealed it in hi,s clothing. Then hefound and engaged the guilty onein conversation, inveigled himinto admitting his guilt, took thetaped admissions to the districtattorney, and won back his free­dom.

A heart-warming story of a tri­umph for the rights of the indi­vidual, is it not? Or is it? Or isit actually a story of a seriouscrime perpetrated by Adrian Can­cil against a fellow citizen? Inthe eyes of the State of California,for example, it was the latter. In1967, in fact, the legislature of

Mr. Chamberlain·is an· attorney· in Los Altost

California.

730

that state (cheered on by theAmerican Civil Liberties Union)passed a law condemning actionssuch as that of Adrian as crimi­nal, and punishing them with athree years' prison sentence anda fine of $2,500!

The reader of THE FREEMAN willimmediately see the philosophical I

question involved, which .is this:To what extent should govern­

1nent interfere with a citizen'srights to clear himself of a chargeof crime?

To find the answer, let us re­state the principles underlying ourAmerican political philosophy,namely, first, that eyery citizen isendowed with inalienable rightsto his life and liberty, and second,that it is the prime duty of gov­ernment to preserve these rights.Reasoning from these premises,can we avoid the conclusion thatany governmental restraints .. uponthe citizen in this area should beminimal indeed, and, in fact, thathere is an area wherein govern­ment. should itself take positive

1969 OUR INALIENABLE RIGHTS 731

action, and with the most efficientweapons?

It must be agreed, of course,that Adrian Cancil should nothave been allowed to take violentaction to prove his innocence­such as, for example, a physicalassault upon the guilty man. Butwhy should he be forbidden to dowhat he did? Had he merely sur­reptitiously memorized the guiltyman's statenlent and reported itto the district attorney, he wouldhave committed no crime any­where.:.... but the district attorneymost likely would not have be­lieved him and he would haveserved out his wrongful sentence.But because he surreptitiouslytape-recorded the statement, hecommitted an action so fiendishthat in the eyes of the State ofCalifornia, at least, and perhapsin those of some other states, hewould have deserved an additionalthree years in jail!

And so let us suppose that Adri­an had been sentenced wrongfullynot in New York but in Califor­nia, and that while awaiting theresult of his appeal he had con­sulted his district attorney withrespect to his plans to clear him­self by use of the tape-recorder.That official must, of course,' havewarned him that any such activi­ties would be criminal. Suppose,then, that Adrian had urged thata plain clothes policeman be di-

rected to don the recorder and getthe evidence. In all probability(although the California law isnot perfectly clear) the districtattorney must have advised Adri­an that that too would be illegal!And so this innocent man wouldhave been totally deprived of anyuse of this excellent weapon forthe preservation of his basicrights!

Strange as it seems, there arethose who warmly approve ofAdrian Cancil's frustration, whowould· zealously ban the use ofsuch electronic devices by any­one, private or public, for anypurpose whatsoever. The Ameri­can Civil Liberties Union has infact commenced legal action tohave their use declared completelyunconstitutional. The success ofthis suit would mean not onlythat government should forbid usthe use of weapons most effectivein preserving our lives and liber­ties, but also that government it­self would not be able to defendour rights by such means. Or, toput it in general philosophicalterms, the outlawing of such de­vices would mean that govern­ment would be encouraged to enteran area where its activity' shouldbe minimal, and at the same timereduced in efficiency in the areawhere its activities should bemaximal. I)

EDMUND A. OPITZ

NEARLY EVERYONE is a moralistthese days, and a moralist in pop­ular caricature is one who alwaysviews with alarm. Even the self­proclaimed immoralists of ourtime fall into this. category, forthey denounce as "intolerant"any and all who look askance attheir weird "beat" deviations. Dis­agreements are sharp at all levels,among the viewers with alarm,but the primary breach is betweenthose who hold that the ultimatesanction for ethical standardsmust be sought in a supernaturalorder, and - on the other hand­those who assert that within thesocial and natural orders we mayfind the ingredients for a viableethic. The first position is theistic;the latter humanistic.

The Reverend Mr. Opitz is a member of thestaff of The Foundation for Economic Educa­tion. This is a chapter from a forthcomingbook, Reli~ion and Capitalism: Allies NotEnemies, to be published by Arlington House.

732

The humanists, if we may bepermitted this term for the sec­ond group, admit that the moralcode which prevailed in the Westuntil two or three generations agowas widely believed to have hadits origin and sanction in religion.But, as they view the matter, thetranscendent dimension has sucha weak hold upon modern manthat to insist on a metaphysicalsource of moral values in thesetimes is to weaken ethics by tyingit to a dead horse. Moral values,they assert, are autonomous ifthey are anything; let them there­fore stand on their own feet. De­tach ethics from religion, theyurge, in order that men may be I

virtuous for the sake of happi­ness! Men should not do right in I

a vain effort to please some deity,or because they believe that Godhas arbitrarily commanded cer­tain actions and forbidden others.

1969 INSTINCT AND ETHICS 733

These nontraditionalists tout a"scientific" or "rational" ethic.The opposite of "rational" in thiscontext is not "irrational"; it is"theistic," "customary," or "re­ceived." No one would admit thathis own ethical system or moralcode is irrational, and it is obvi­ous to everyone who has checkedinto the matter that there havebeen and are ethicists of severalschools who are powerful reason­ers. Every philosopher relies onreason, and not only rationalists;how,ever, reason does tell some menthat reason is not the exclusiveroute to knowledge of the complexreality that environs us.

A distinction which arises atthis point seems to elude many. Itis a distinction between reason asa means for achieving a norm, andreason itself as the norm. Perhapsthe point may be clarified by anal­ogy."How do you propose to goto Boston?" is a question whichdemands answers in two distinctcategories. "By car" is one an­swer, which informs us that themeans of transportation is nottrain, plane, foot, or horse. Hav­ing settled this point, we still needfurther information before the'question can be regarded as an­swered. "By way of the Taconic,north, to the western end of theMassachusetts Turnpike, theneast." This gives us the route, sothat we know that the car will not

proceed up the Merritt or over theNew England Thruway.

Now take the serious question,"How shall we validate ethicalnorms?" Those who answer, "Byreason," are really uttering a meretruism. "We're going to thinkabout it," they are saying. Andeveryone who thinks about theseor any other matters is using hisreason. This is our only means forfiguring things out, and it is nota means belonging exclusively torationalists; it is the commonmeans employed by everyone whophilosophizes. Using this means,we seek for answers to the ques­tion of how to validate ethicalnorms. This has to do with therealm where the sanctions mayfind anchorage, whether withinnature and society, or in a realmbeyond the natural and social or­ders. Reason is our tool for operat­ing on the problem posed; it isnot itself the answer.

Experts at Debate

There are dogmatists on bothsides of this controversy, and theskilled among them can and do ex-,pose weaknesses in their oppo­nent's position. The humanistmight charge his opposition asfollows: The moral code is an ac­quired characteristic; it has to belearned anew by each generation.It is difficult enough to establishthis code theoretically, even if we

734 THE. FREEMAN December

treat it .as self-evidently useful tosociety and necessary for harmonyin human relationships. Why,then, compound these difficultiesand force things out of focus byinvolving .. ethics with metaphys­ics ?The uncertain, in this or, anyother area, is shpred up by relat­ing it to the certain; but whenyou hook ethics up with meta­physics, you relate it to the evenmore uncertain, to the dubious!We don't need· a transcendentsanction in order to validate orprove a down-to-earth ethic.

To which the theist .might re­spond: If you appeal to Nature tosanction human conduct, youhaven't looked very far· into Na­ture. Not even Kropotkin with hismutual aid theories denied theDarwinian struggle for existence;he merely desired to point outthat it was not the whole story.But it is part of the story, and alarge enough part so that we arejustified in saying that Naturegives a mandate to the powerful,the fleet, the unscrupulous to liveoff the weaker, the slower, the in­nocent. And if you think to drawyour ethical sanctions from soci­ety, whose society are you talkingabout? .A society. of headhunters?Nazi society? Communist society?The Great Society? As a matterof fact, if a significant number ofpeople can be made to believe thatmoral conduct is merely that

which is sanctioned by the societyin which. they live, then moralityis subverted, into merely custom­ary behavior and mere legality.Furthermore, you are confusingsanctions with consequences. Anethical code resides somewhere be­hind the sanctions advanced tovalidate it, and the consequencescited to justify it. If the code isput into practice, the consequencesmay well be personal happiness,interpersonal harmony, and aprosperous society. But these re­suIts do not constitute a set ofsanctions; the sanctions are onthe other side of the code, in therealm of philosophy..Once' we areintellectually convinced that ourmoral code is valid,· then musterenough will power to practice it,then - and only then - do we geta bonus in the form of well-beingin society. But you have the thingturned around! So much for thepreliminary give and take.

AWay Through the Dilemma

Evidently, each side has a casewhich might be spelled out atlength. Is .it a deadlock, or do wehave here· an instance' of an im­passe due to the hardening of thecategories on either side to thepoint where their usefulness asconceptual tools has been. im­paired? And, if this is so, is therea way between the horns of thedilemma? There might be such a

1969 . INSTINCT AND ETHICS 735

breakthrough if we could - byadopting a ·new perspective- poseand develop a thesis which mightavail itself of certain strong pointsin both positions. Here's such athesis: The moral. code'; plays arole in the .life of man comparableto. the role of instinct in the lowerorganisms, in that each functionsto relate the inner nature of therespective organism to the fullrange of its environment.

The recently published HarperEncyclopedia. of Science says· that"the scientific study of instincthas increased greatly in recentyears, and the concept itself hasregained an academic respectabil­ity it has not had since the timeof Darwin." At the forefront ofthis research, much of it underfield conditions, are. Tinbergen,Lorenz, Thorne and Barrends; Eu­ropeans all. "It now seems clear,"the entry continues, "that instinctand intelligence are two quite dif­ferent ways by which animalsmeet .life's problems. Instincts areessentially prefabricated answers."In a word, an organism's in~tinc­

tual equipment. adapts it optimallyto its normal environment. Ani­mals - along with birds, insects,and fish - are equipped . with akind .' of internal servomechanism,or automatic pilot, which keepsthem effortlessly on the beam. In­stincts align the animal with theforces of life, or with the laws of

its own nature. Organism and en­vironment are thus kept "in play"with' each other- except when en­vironmental changes are so catas­trophic that the automatic adjust­ment equipment fails,. the organ­ism perishes, and perhaps a spe­cies becomes. extinct.

The very perfection of auto­matic, instinctual adj ustment mayprove the undoing of orgflnismsrelying on this device; when sur­vival, depends on a creative re­sponse to novel environmentalchanges, something other than in­stinct is needed. This is, of course,intelligence. Instinct cis not a mereprecursor of intelligence, nor isintelligence an outgrowth of in­stinct; they are radically different.In order for intelligence in manto have an opportunity to flourish,the instincts had to be suppressed.

The Absence of Instincts

Human beings are virtuallywithout specific instincts. There isno servomechanism in men whichautomatically keeps the humanorganism or the species within thepattern laid down for human life.Men have to figure things out and,by enormous effort, learn to con­form their actions' to the relevantnorms in the various sectors oflife. This absence of instincts inman constitutes the ground forman's radical inner. freedom, thefreedom of his will. Animal lives

736 THE FREEMAN December

are fixed to run in narrow, con­stricted channels; they obey thewill of God willy-nilly. Men, how­ever, vary enormously from eachother at birth, and the differenceswiden as individuals mature eachinto his specialized individuality.And each person has the gift of afreedom so radical that he candeny the existence of the creativeforces which produced him. Thisfreedom of his makes it not onlypossible but mandatory that mantake a hand in the fashioning ofhis own life. No man creates him­self, but every man makes himself,using the created portions of hisbeing as his resources. This iswhat it means to say that man isa responsible being.

A magnificent animal like Man0' War is not a natural horse; heis the product of generations ofhuman breeders and trainers ofhorses. They are mainly respons­ible for his superiority, not he.Of all the orders of creation onlyman is a responsible being; ev­erything else, every horse, dog,lion, tiger, and shark is what it is.Only man is, in any measure, re­sponsible for what he is. Manmakes himself, and therefore eachperson is morally responsible forhimself. This is possible becauseman has escaped from the straitjacket of instinct.

Let me quote from a once well­known Dreiser novel, Sister Carrie,

which appeared in 1900~ "Amongthe forces which sweep and playthroughout the universe, untu­tored man is but a wisp in thewind. Our civilization is but awisp in the wind, scarcely beast,in that it is no longer wholly guid­ed by instinct; scarcely human, inthat it is not yet wholly guided byreason. On the tiger no responsi­bility rests. We see him alignedby nature with the forces of life- he is born into their keepingand without thought he is protect­ed. We see man far removed fromthe lairs of the jungles, his innateinstincts dulled by too near ap­proach to free will, his free willnot sufficiently developed to re­place his instincts and afford himperfect guidance. He is becomingtoo wise to hearken always to in­stincts and desire; he is still tooweak to always prevail againstthem."

Dreiser makes full use of a nov­elist's liberties here, but his point­er is in the right direction. Some­thing within the tiger causes it toobey the laws of its inner natureunconsciously and easily, and, byso doing, the beast is in harmonywith outer nature as well. Butman's case is radically different.Does he have a true nature deepwithin him, visible when the en­vironmentally imposed camouflag­es are peeled off? And, if so, whatare its mandates? Once man

1969 INSTINCT AND ETHICS 737

knows the laws of his own being,how shall he muster sufficient willpower to obey them while avoid­ing distractions and temptationsthat emanate from other facets ofhis complex nature?

My thesis is that the roleplayed by instinct in the lowerorder - keeping the organism ontarget - is assumed in man by theethical code. Animals have in­stincts but no morals; men havemorality but no instincts. An ani­mal's instincts guarantee that hewill neither disobey nor deviatefrom the law of his being; a fishdoes not seek the dry land, a robindoes not try to burrow in theground, a gibbon does not yearnto swing on the North Pole. Butman fulfills the law of his beingonly with the utmost difficulty­if then - and the only means athis disposal to align him with theforces of life is his ethical code. Itis this code, and this alone, whichmay provide him with a life-giv­ing, life-enhancing regimen.

A Single Ethical Code

Let me anticipate two quibbles.Instinct is sometimes contrastedwith intelligence, and it is the lat­ter, some say, on which man mustrely. Or reason, as Dreiser sug­gests above. This is a play onwords. We rely on intelligence toimprove transportation, but we ac­tually ride in automobiles or air-

planes, which are the end result ofapplying intelligence to the prob­lem of getting from here to there.Similarly, it is intelligence thatdiscovers, analyzes, frames, andselects the ethical code. Whichbrings up the second quibble. Whythe ethical code? Are there notmany conflicting codes ? Well, no- to be dogmatic! There is a hardcore of similarity, almost identity,in everyone of the world's devel­oped moral codes. This is the Tao,the Way, referred to by the greatethical and religious teachers inall cultures. Without it, man ceasesto be man. (For an expansion ofthis point the interested reader isreferred to C. S. Lewis' The Ab­olition of Man.)

This begins to move us awayfrom the humanistic ethics re­ferred to earlier. Do we need topart company, and if so, by howmuch? The two most prominentschools of naturalistic ethics arethe utilitarians and the pragma­tists. It was John Stuart Mill whoinvented the name and argued thecase for the former. He describedit as "the creed which accepts asthe foundation of morals, utility,or the Greatest Happiness Prin­ciple." It "holds that actions areright in proportion as they tend topromote happiness, wrong as theytend to produce the reverse of hap­piness. By happiness is intendedpleasure, and the absence of pain;

738 THE FREEMAN December

by unhappiness, pain, and the pri­vationof pleasure."

Pleasure and happiness are de­sirable indeed, and we wish· moreof them for everyone. But toequate "pleasure producing" with"right" at the outset of a pro­posed ethical inquiry is to beg thequestion. There is undoubtedly aconnection here, for doing theright thing has a high degree ofcorrelation with happiness, butthe connection is along the linesof the intelligence-automobile il­lustration above. It is as if theutilitarian were asked, "What isthe temperature of this room?"and he answered, "I feel chilly."Now there is some relation be­tween this question and the an­swer, but the answer is not direct­ly responsive to the question. Itevades the question, implying thatthere is no way of finding out thetemperature. There is no ther­mometer, perhaps. Mill and theutilitarians do not really get atthe ethical question. They thinkthey are talking about ethicswhen, in fact, they are discussingsomething else. Similarly, thepragmatists.

Why Does It Worle?

The pragmatists are mainly con­cerned with workability; it's rightif it works. Here is a map of theNew England states. The pragma­tist follows it and drives to Bos-

ton without getting lost. "Whereinlies the virtue of this map?" youask him. "This map is good be­cause it works; it got me to whereI wanted to go." "Why," you pur­sue, "do you suppose this map gotyou to your destination?" "That,"says our pragmatist, "is a meta­physical question of the sort Icannot be bothered with." So, wehave to answer the question forhim. The map "worked" because itwas not just any old map; it wasa map which corresponded to theterrain over which our pragmatisttraveled.

An eminent British philosopherof a generation or two ,ago, W. P.Sorley, neatly wraps up and dis­poses of utility-workability theor­ies. "It may be allowed," he writes,that the "relation between theoryand practice does not necessitatethe pragmatic explanation that thetruth of the theory simply consistsin its practical utility. The corre­spondence between theory andpractice can also be explained onthe view that the knowledgeproves itself useful in its applica­tionsbecause it is true: the utilitydoes not make it true; its truth isthe ground of its utility. The for­mer explanation is open to thefatal objection that it tends to dis­credit itself; for, according to it,the truth of the view that truthconsists in utility must consist inthe utility of this view. It would

1969 INSTINCT AND ETHICS 739

be difficult to show any practicalutility which the explanation pos­sesses; but if we did succeed inshowing such utility, it. would beformulated in yet another propo­sition, whose truth again wouldhave to consist in some practicalend supposed to be served by it,and so on indefinitely. But if thetruth of·. the proposition does notconsist in or depend upon its util­ity, then we may hold that its util­ity depends upon its truth: it isuseful because it expresses realityor real relations in the form ofknowledge; and this brings themwithin the range, and possiblywithin the power, of the humanmind."

Objective. Moral Values

And now what about the weak­nesses in the case for the theisticethics, as that case is usually put?Fundamental to this position isthe conviction that moral normsand standards are as much a partof the ultimate nature of thingsas the fact of the specific gravityof water. It might be convenient,at times, if water had other char,..acteristics, but wishing won't al­ter the facts. Likewise, moral val­ues.Honesty is right, and most ofthe time it may also be the bestpolicy. But there are times whendishonesty would pay, where hon­esty makes us mighty uncomfort­able; there is a conflict between

what I want to do and what Iknow 1. ought to do. In order tomaintain the integrity of themoral.life, the .ethicist ·championsthe view that moral values are"out there," objective, as. impervi­ous to human tampering as anyother fact of nature. Emphasis ontheir objectivity seems to implythat moral values are alien to hu­man nature, and, if alien, hostileto man. If they are equated withGod's will, God comes to seem anOriental. despot inflicting arbi­trary and· perverse· rules upon hiscreatures for his pleasure andtheir. frustration~ This syndromeis, of course, a caricature.

Moral values are. said to be ob­jective in the sense that their val­idityis part of the system andorder of the universe, of that sameuniverse. which is manifested alsoin persons. Neither is alien to theother, because both are part ofthe same reality. Sorleygoes astep further. "The objective moralvalue is valid independently of meand my will, and yet it is some­thing which· satisfies my purposeand completes my nature." Theethical code may come into con­flict with our superficial self onoccasion, precisely because it takesits orders from our real self. Innerconflicts area part of living, andwe encounter them in all the ven­tures of life.

Take any sport played to win.

740 THE FREEMAN December

It becomes a day and night preoc­cupation, with hours given overday after day for years to strenu­ous workouts. But this is only thevisible part of the story. There isalso a perpetual conflict with theimpulse that wants to break train­ing, to goof off, to lead a morenormal life. Then there is theagony of the contest itself wherethe will to win takes over andpushes the athlete beyond hispowers of conscious endurance in­to collapse the moment after hisvictory. His deepest will had at­tached itself to a regimen for op­timum functioning, overcomingthe continuous static and rehellionfrom other facets of his person­ality. Similar experiences are en­countered in the intellectual life,and in the moral life.

Check out the latter with a me­dieval theologian. Thomas Aquin­as says: "If virtue were at oddswith man's nature, it would not hean act of the man himself, but ofsome alien force subtracting fromor going beyond the man's ownidentity." Go back to St. Paul. TheGentiles do not have the Mosaiclaw, he writes in his Epistle tothe Romans, but "they show thework of a law written in theirhearts." And Moses himself, asrecorded in Deuteronomy, com­mends the keeping of God's com­mandments in order that thereshall be flourishing life. "Choose

life," he says. Where is this com­mandment, he asks rhetorically;is it up in heaven or beyond thesea? No, he declares, "the word isvery nigh unto thee, in thy mouthand in thy heart, that thou mayestdo it." What are we to understandThomas, Paul, and Moses to besaying? Are they saying that toobey God's will for us is equiva­lent to following the laws of ourown being? It's pretty close tothat. And that is precisely whatan animal's instincts do for him.The difference is that we are freeto ignore or disobey the laws ofour being, whereas no animal hasthat power.

Tested by Time,the Human Potential Emerges

In the course of several thou­sand generations of human be­ings a slow deposit has accumu­lated as the result of individualshere and there successfully realiz­ing a portion of the human poten­tial. The recipes they left behind,tested and winnowed over the cen­turies, form the hard core of theethical code. This is not a pre­scription for a life of power-seek­ing, or one of money-making, ora life devoted to fun and games,or to fame. These things are notintrinsically evil, but an inordi­nate attachment to anyone ofthem breaks training, so to speak.Proper use of them, on the other

1969 INSTINCT AND ETHICS 741

hand, is part of life's schoolingprocess.

What are we being schooled for?A clear-cut positive answer tothis question is impossible, for itoutruns human experience. But apretty clear hint comes throughwhen we contemplate the alterna­tives. Wealth, pleasure, power, andeven knowledge, when sought asends in themselves, begin to sendup signals that they are, in real­ity, only means to ends beyondthemselves. The space scientists"build redundancy" into theircapsules,more of everything than

normal requirements would everdemand. Man, too, is overbuilt, inthat each person has a wide rangeof potencies and a reservoir ofuntapped energy at his disposal,more than any of us ever use. Noris man left on dead center with allthis latent power. He has a chartcontaining the salient landmarks,and this chart is the ethical code.Let him begin to use this chartand the pieces fall into place, bitsof the great design begin to em­erge, the person fulfills his des­tiny. "The event is in the handsof God." @

1\ Difficult QuestionSTANLEY YANKUS

WHAT did you talk about at thedinner party last night? Chancesare you discussed the weather,your favorite TV show, sports, astory in the news, and similar tri­via. We don't often discuss ourdeepest concerns; how often do weengage in a conversation about thepurpose of life? It's not that fewpersons care about life's meaning;everyone wants to know what it's

Mr. Yankus moved to Australia from Michi­gan in protest against government interventionin agriculture, but knows that it is not asufficient purpose for his life.

all about. Conversations about thepurpose of life are rare becauseone difficult question leads to an­other and no one likes to admithe's stumped.

Why do we need a purpose inlife anyway? Should not life, afterall, be lived spontaneously and ad­venturously? Let the philosophersthink about life; the rest of us arecontent to live it! But can we livelife to the full - and not m8'relyexist - unless our lives have direc­tion? The effort to discover the

742 TH·E FREEMAN December

purpose of life is. to provide uswith a goal, lacking which we arehopelessly lost. No wind serveshim who has no destined port,runs an old proverb.

You own a clock to tell the time;a pen to write with, a chair to siton. Catalogue your possessionsand isn't it true that every one ofthem is owned to some purpose?When something has served itspurpose - your purpose really­you discard it. Things which donot serve some purpose of oursare without value to us; but whatpurpose do we serve ? We don'tvalue any object except as itserves some purpose, and a manwill not value his own life unlesshe discovers a genuine purpose forliving. The higher level· his pur­pose, the more will he value thedays of his life.

Man Needs a Purpose

Beyond Primary. Survival Needs

Let's pose a basic question:Why do we need anything at all?In imagination, abandon all yourpossessions, then observe whatneeds come first to the fore. Be­fore the day is out we'll experiencediscomfort and perhaps pain;hunger pangs and the sharp edgeof the north wind make it clearthat our primary survival needsare for food, clothing, and shelter.If you wish to go on living, oldmother nature doesn't offer you

any alternatives at this level; meetthese primary needs or die! Butonce these needs are met and yoursurvival assured, then you areconfronted by the need to findsomething to do with your lifethat will give meaning to survivalby challenging your powers anddrawing out the best that is inyou.

Some men have said . that thenoblest purpose in life is· to serveour fellow man. Suppose someonededicated to the ideal of servingothers knocked on your door say­ing, "I have decided that I knowwhat is best for you. You aremaking some horrible mistakes inyour life and I have come to con­vert you. to the .... correct way ofliving." Such a caller would geta cold reception. Every man has aright to live his own life, and menwhose professed purpose it is toserve others deny this right tothose others. Besides, the man whois busy serving others cannot beengaged in his own self-improve­ment. And if his own self is un­improved, how can he improveothers?

There are many choices open toanyone who tries to select the bestpurpose in life. Choice itself is thefoundation of every such purpose;life would be meaningless in theabsence of any choice. If somebureaucrat had the power to de­cide how you should think and act

1969 A DIFFICULT QUESTION 743

in every situation, there would benothing in your life you could callyour own, not even your life pur­pose.

The Liberty to Choose

The greatest opportunity in lifegiven to man by his Creator is freewill-the liberty to choose whathe likes to do and reject what hedoes not like to do. Many men lettheir lives be governed by theirlikes and dislikes. However, whata man likes to do and what isright are not always identical, asI shall demonstrate.

Children at play will alwayschoose what they like to do.Watchful mothers forbid theirchildren to play with electricity,matches, poisonous drugs, andother harmful substances becausethe consequences can be injuriousor even fatal, no matter how muchthe child may enjoy such play. Oneof the aspects of growing to ma­turity is a recognition that our ac­tions have consequences for whichwe are responsible.

Many men believe the circum­stances in their lives occur by luckor chance. Such men deny thatcause and effect operate in theuniverse. It is self-evident that aman is free to choose what helikes to do, but he cannot choosethe consequences of his actions.These are determined by the na­ture of things.

For example, a man is free totouch a red-hot stove with his barefinger and he is free to tell lies toall of his friends, but he is notfree to choose the results. Hisfinger will get burnt and hisfriends will despise him for hisuntruths. The results of these ac­tions and. of every other action inlife are determined by the naturallaws, whether man likes these re­sults or not. His likes and dislikeswill not turn his mistakes intovirtues.

What is a law of nature, any­how? The laws of nature, the lawsof God, the laws of Creation aresimply phrases used to describethe way things are and the waythings work. The laws of naturecannot be canceled, bribed, orevaded. If you seek liberty, goodhealth, or success in any otherworthy endeavor, look for the lawsof nature underlying all things.As I see it, man's chief purposein life is to discover the laws ofnature so he can harmonize his ac­tions with them and achieve goodresults in whatever he wishes todo with his life. Such a purposein life excludes no one. It is opento everyone, no matter what hiscircumstances may be.

By seeking the laws of naturein all things, a man best servesGod, his fellow men, himself, andthe cause of liberty. ~

The Art of Iconoclasm

ORIEN JOHNSON

My FIRST experience in iconoclasmoccurred one afternoon after ahard day at the office. My four­year-old son greeted me with theannouncement, "I can fly, Daddy;I can fly."

Not wishing to squelch the vividimagination I saw developing inhis fertile brain, I went alongwith him and allowed him to rattleon in great enthusiasm about hisnew idea. Then I saw what I wasdoing. I was building him up fora grand let-down, psychologicaland perhaps even physical- forour second-story sun deck was hisfavorite play spot and I had vi­sions of him trying a take-offwhich might have disastrous· ef­fects on his little bones. So Iknew I must point out the falla­cies in his cherished belief inorder to prevent possible harmlater.

Mr. Johnson, of Palo Alto, California, is acounselor in public relations and fund raising.

744

Iconoclasm is the practice oftearing down idols or false con­cepts and ideals which people holdto tenaciously. At first glance thisseems a negative position to take,but I am suggesting that it is agood· and helpful technique to em­ploy and an art which should becultivated.

For untold centuries menthought the world was flat, andsuch a belief didn't matter as longas our transportation needs wereconfined to a continent or two.But the iconoclasts, the early ex­plorers and scientists, took awaythis ancient belief and replaced itwith a concept more compatiblewith the world in which we live.Iconoclasm, in this case, proved abeneficial practice for the good ofall mankind.

When we move from the areaof the physical sciences into thatof the social sciences we find amultitude of theories and prac-

1969 THE ART OF ICONOCLASM 745

tices being taught and held withgreat passion. My particular con­cern in this paper is the so-calledrevolutionary ideals and hypoth­eses being disseminated amongcollege and university students. Ina sense the tired old men of theEstablishment have had a· hardday at the office and the younggeneration is saying, "We can fly,Daddy; get out of the way."

Highly idealistic young peopleare dreaming grand dreams aboutchanging the nature of man andliberating the world from all op­pression. Many are evidently onlyconcerned with rebellion againstthe established order and seekonly to disrupt and destroy it.Some are so certain they will suc­ceed in the complete overthrow ofthe present order that they arewondering what they will put inits place. At this point a few aredragging in Marxism and othervariations of faded socialisticdreams and holding them up as ifthey were innovations on the so­cial scene. They can't understandwhy everyone doesn't see the light,and are quick to label all unbe­lievers "racists" or "fascists."They are like the little boy whofound a dead cat in the garbagecan and said to his mother, "Lookat the perfectly good cat I found,"then was puzzled at his mother'sattitude when she refused to sharehis enthusiasm.

It is time for parents, teachers,and others who have any contactwith youth to learn the gentle artof iconoclasm. We must discoverhow to carefully point out thefallacies in their theories beforethey are severely disillusioned andirreparably hurt.

I use the term "gentle art" andurge the careful approach as op­posed to the confrontation andpolarization tactics of the youngradicals. Men only use these lattertactics when they won't take thetime to learn how to communicateor wish only to impose their willon others with displays of power"

Blueprint for IILiberation U

The following quotations arefrom a program written by sev­eral "Berkeley Liberation Com­mittees" as examples of theoriesand ideals being adopted and dis­seminated by certain radical stu­dents, professors, dropouts andfellow sympathizers in one uni­versity community. From thesewe might be 'able to formulate anapproach for parents and edu­cators who would establish com­munication with those who followsuch leadership.

"We shall create a genuinecommunity and control it to serveour material and spiritual needs."

I had to look for this statement.I wanted some point of agree­ment, some common point from

746 THE FREEMAN December

which to say, "Here we stand to­gether. Now where do we go fromhere?" Can we not commend youngpeople for their desire to providefor man's material and spiritualneeds? I'm sure we could all agreethat such needs can only be met incommunity. Now our only ,problemis to seek feasible ways to 'ac­complish the goal we both desire., There is one word in that quotewe 'should probably clarify first.Exactly what is meant by "con;'trol"? Are we not all concernedwith liberty? Are we not con­cerned with restrictions and con­trols that inhibit the fulfillmentof our material and spiritualneeds? We must know the natureof this new "control" before weshake off present "controls" or wemay' Iive to regret the change injailors.

"We will create an Internation­al Liberation School in Berkeleyas a training center for revolu­tionaries,"they say. "We 'will unitewith other movements throughoutthe world to destroy this racist­capitalistimperialist system."

We dare not snort at such bra":'vado or flinch when they throw ina few four-letter words. This isall part of the calculated shock­treatment intended to create fearand confusion. We exercise greatrestraint and inquire further.

"Wewill create malls, parks,cafes and places for music and

wandering. Higk quality medicaland dental care, including labor­atory tests, hospitalization, sur­gery, and1nedicines will be madefreely available. 'Child care col;..lectives staffed by both men andwomen, and' centers "for the careof strung-out souls, ,the old andthe infirm will be established'.Free legal services will be ex-:­panded. Survival needs such ascrash pads, free transportation,s'witchboards, free phones, andfree food will be met."

And Who Will Pay?

Here are some points we canrespond to with sincere interest.This is a positive program. Wecan commend them on their con­cern for these urgent humanneeds. But we must ask, "How willthese services be paid for 1" Andthe "Berkeley people" have anidea.

"Bus'inesses on the Avenueshould serve the humanist revolu­tion by contr'ibutingtheir profitsto the community." Indeed. Andwhat if they don't?

"Berkeley cannot be changedwithout confronting the indus­tries, banks, insurance companies,railroads, and shipping interestsdO'ininating the Bay Area. We willdemand a direct contribution frombusiness, including Berkeley's big­gest business - the University, tothe cornmunity until a nationwide

1969 THE ART OF ICONOCLASM 747

assault· on big business is success­ful."

We force our,selves to hear themout, then probe some more. "Whatif confrontations and demandsdon't bring in enough money?Would more violent means then beattempted ?"

"Through rent strikes, directseizures of property and otherresistance campaigns, ,the largelandlords, ,,' banks and developers'who are gouging higher rents andspreading ugliness will be drivenout. We shall force them to trans­fer housing control to the com­munity, making decent housingavailable according to people'sneeds."

Transferring Title

Now weare beginning to getthe picture. They propose to seizeproperty by force and drive outthe present owners. Would it bepossible for us to point out thatwhen this occurs they will thenbecome the oppressors and theformer owners would become thepoor people with the same prob­lems they seek to solve by meansof this violence. Will these newpoor people then have to startanother revolution and wrest thepower back again in order to meettheir needs? Perhaps this is whatthey have settled for, an endlesssuccession of oppressions and rev­olutions in which the power mon-

gers use the "needs of the down­trodden masses" as a psychologi­cal weapon by which to gainsympathy for their cause. Oncethey are in power another powerstructure will form and hope togain the upper hand. And theslogan-symbols for such a pro­gram are "peace and love."

It should be easy for us topoint out that political revolu­tions are comparatively easy toprecipitate. They have beenoc­curring quite regularly for manycenturies. The manuals tell how itis done. You march, you demon­strate, you protest, you writeclever slogans on signs, you resist,you propagandize,You destroy.These are easy to do because youcan always point your finger atthe "bad guys" and keep at it untilyou cut them down. And I'm suremany young people have settledfor this exciting prospect and areready to die for such a short­sighted goal.

Innocent Victims

But there are many morethoughtful young people who aregenuinely concerned about socialissues. Yet some of these will getcaught up in the excitement andgo along on the destruction jagjust for the ride. They think thisis the only way to fly, and are notprepared for the crash that in­evitably occurs at the end of such

748 THE FREEMAN December

utopian dream flights. These arethe ones in which we must investspecial time and interest in ouriconoclastic pursuit.

A skillful iconoclast knows thata person will not give up a cher­ished belief until he finds a betterone. The reason some people holdso strongly to false concepts isbecause of a basic insecurity.They are usually deeply concernedabout life and its problems andsincerely want to have some partin change for the better. Theyhave become disillusioned with thecliches and the slogans of suc­cessive political platforms andtheir inability to live up to theirmany promises. Some have settledfor the fanatical destruction phi­losophy as a last desperate attemptto level the status quo and buildagain on the. ruins.

We must remember that thesehighly motivated young peopleare not basically diabolical andevil. Most of them sincerely de­sire good to come of their actionshowever radical they may seemto some.

They are like the possum whichcrawls farther and farther out ona limb when a hunter climbs thetree after him. The more thehunter shakes the limb, the tighterthe possum clings to his insecureposition. He will only leave thistenuous position by sheer physicalforce; or when the pressure is

off, he will find his way back to amore secure position.

So the skilled iconoclast doesnot begin by shaking limbs, butcarefully shows and demonstratesa better way. In a sense we aresaying, forget all these grandioseprograms aimed at healing all theills of the world. Give freedom achance. The social problems ofmankind are much too sophisti­cated· for any simplistic plan tocure. None of these ideologies isworth defending with all the pentup emotions that divide men andcause an eternal succession ofbloody conflicts and wars.

On a Person-to-Person Basis

But there is something we cando about the needs of men. Thereis a positive program to which wecan subscribe. But it is a programwe design ourselves and one thatcan only be implemented by us asindividuals or by others withwhom \ve voluntarily cooperate.

We create our own social revo­lution by doing something revolu­tionary whenever we see a fellowhuman suffering. According to theancient parable, two-thirds of themen who saw the wounded man ly­ing beside the road passed him by.Only the Samaritan did somethingabout the situation. The two whowere too busy to respond that daywere busy men dedicated to workfor mankind through the respected

1969 THE ART OF ICONOCLASM 749

institutions of their day. Theywere so busy serving "humanity"that they failed to notice a suf­fering human.

This hypocrisy hasn't escapedthe notice of sensitive young peo­ple who see the same attitude re­flected in many of our moderninstitutions. So the cry goes outto renounce allegiance to all thetraditional institutions and to cel­ebrate this new freedom withsinging and dancing in thestreets. And in the alleys behindthose streets are the cheap flatswhere rats gnaw on baby's toesand old people live in solitaryloneliness with no one to care.

The climate of opinion whichthe young radicals have createdcalls for renunciation of the in­humanity of computerization andthe depersonalization of automa­tion. It calls for globe-encompass­ing plans to liberate the masses.It calls for a new terminology

which makes extensive use of thewords love, peace, brotherhood.Yet it makes no realistic provi­sion for the brother in the alleywho is an epileptic and can't en­joy the music in the streets.

How revolutionary must a pro­gram be to attract today's youth?Is this one radical enough to teara few of them away from thesinging and dancing long enoughto read a book to a blind personin a smelly hovel? Or listen to thewoes of a gin-soaked mother, es­pecially if she happens to be theirown?

There's more to the art of icon­oclasm than meets the eye. It isnot so much a philosophy to ex­pound and argue as it is a radicalway of life. This kind of philoso­phy is caught rather than taught,but it is probably the only way tosave our youth from utter cyni­cism and at the same time to saveour own sanity. ,

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LEMUEL R. BOULWARE

EVERYONE is demanding a rapidlyrising level of living. And mostcitizens expect their take to mountmuch faster than their contribu­tion ... with government payingthe difference.

They seem vaguely to assumethat government will recover mostof its costs from a very .few in­dividuals or from the owners ofbusiness or from future genera...tions or from some magic source.Public servants in both parties, asthe· price of getting and stayingin office, are forced to appear tobe getting a lot done, and tryingto get a lot more done, in this di­rection demanded by the majority.But most citizens - including mostcollege graduates - seem not toknow where the money is to comefrom~

Government can and does getmoney in only two ways. The first

Mr. Boulware, now retired, is noted for his edu­cational approach to industrial relations atGeneral Electric. This article is excerpted bypermission from The Truth About Boulwarismreviewed on page 760. '

750

is from current taxes· assessed astaxes. The second is from whatappears to be borrowing againstfuture taxes. But most all suchborrowing now turns promptlyinto the very current tax of .in­flation.

Government collects this moneythrough both direct and indirecttaxes. Both kinds wind up beingpaid almost entirely by consumers.But taxing consumers directly andvisibly is unpopular and very badpolitics. The electorate keeps forc­ing government to minimize directtaxes and collect its major rev­enue indirectly through taxes hid­den in prices and collected fromconsumers in two ways.

The first is through the levieson business which are erroneouslybelieved by most citizens to helevies on the owners. These taxesare not and cannot be paid by theowners in any business that sur­vives. They are merely collectedfor government by business inprices which have had to be in­creased enough to cover the hid­den indirect tax.

The second way governmentcollects money indirectly throughconsumer prices is by inflationwhich,· historically and now, issimply a tax of the most deceitful,most brutal, and most debilitatingkind. How it comes about is this:

Government does not dare taxto equal expenditures, because that

1969 WHO PAYS TAXES - AND HOW 751

would require disillusioning themajority of voters who believesomething-for-nothing can be ob­tained for the many through gov­ernment or other gang force.

So government borrows. If itcan borrow from individuals­with a .. proven history of payingback loans - this would not nor­mally be inflationary since thearrangement is self-correcting. Butgovernment quickly finds it can­not borrow enough from individ­uals since they know governmentis on an inflationary course andwill not pay back as much valueas it borrows.

So government is forced to bor­row from the banks. The moneyis put on deposit. This results increation of new money to matchthe amount of the borrowing butnot matched by any new supplyof goods. This is politely called"monetizing debt." Actually, it isjust printing worthless moneywhich is added to the existing sup­ply and dilutes the value of exist­ing dollars by just that much. Theconsumer pays his part of this asa·· hidden tax in every purchasethereafter.

So, who pays taxes? Everybodydoes. No few do or could supplythe enormous sums which govern­ment is spending and which longsince exceeded the total incomeof everybody west of the Missis­sippi.

Such huge taxes cannot be sup­plied from any few consideredwealthy. Even the best-off 10 percent of all families - down to in­clude the $1,000 a month level­pay only 28 per cent of the na­tion's tax bill. The rest has tocome from the remaining 90 percent of the population. These 180million persons - while as a groupreceiving 85 per cent of benefitsto individuals - have generally noidea they are themselves supply­ing 72 per cent of everything gov­ernment spends.

The further down the income,savings, and even the relief scalea citizen is - that is, the poorerhe is - the greater is the relativeimpact on him of the taxes leviedon business and of the tax of in­flation levied on him through gov­ernment cheapening his money.

Consumer tax and price prob­lems are not solved by what ap­pears to be a shift of the burdento business. Borrowing hardly de­lays at all their impact to the con­sumer. The only remedy to stopinflation is at its source. The bestway to start is to cut out the futileand wasteful part of the govern­ment spending and to tax openlyto match the remaining expendi­'tures. Public servants will do thisonce they become convinced thata majority of their constitutentsknows the facts and wants it done.

;

DURING my freshman year of highschool, I took upon myself thatpatriotic but arduous task of mak­ing myself a. fervent anticommu­nist. Books pertinent to the sub­ject were studied with more zealthan were algebra and worldgeography, and I proceeded toaccumulate a voluminous libraryexposing that most evil monsterformulated by Karl Marx. Com­plex numbers, the binomial the­orem, and the main waterways ofEurope held but a secondarystatus in my education. My ener­gies were channeled toward moreprofound subj ects - dialecticalmaterialism, slaughter of the ku­laks, and Comintern policy.

Mr. Bearce promised to try an article whenhe recently subscribed for The Freeman. Hereit is.

752

A FREE ,LANCE

IN THE FREE MARKET

ROBERT G. BEARCE

One of my first priorities wasto really know what communismwas, that is, what it was that Iabhorred with so much enthusi­asm. This was accomplished bywriting a definition compiled fromdictionaries, various encyclopedi­as, and literature on Marxism­Leninism. I labored on this mo­mentous undertaking for a fulltwo weeks, using in the processat least two score sheets of note­book paper. Only after the mostscholarly and diligent study wasI able to gloat over the final draftdefining communism in two orthree precise, hard-hitting para­graphs.

Since that period of shrewdstudy into Bolshevism eight yearsago, I have lost my prized defini­tion, not only in material fact but

1969 A FREE LANCE IN THE FREE MARKET 753

also from my memory, for I didhave it memorized. Remember, Iwanted to prepare myselfade­quately for the opportunity to en­lighten unwary Americans aboutthe threat of the Red Horde.

Quite frankly, my enlighten­ment as to the horrors of com­munism was nothing more than anaive, emotional response. It hadnothing to do with a penetrating,conscious understanding of thereal nature and threat of com­munist theory.

But in this type of involuntaryhypocrisy, I doubt that I standalone. I fear that today I havemany comrades-in-arms who arezealous defenders of capitalism,the free market system, free en­terprise, and the like, withoutpracticing what they preach. Theirdevotion to the integrity of the in­dividual is a deceiving accumula­tion of words, cliches, and bookson capitalism, not a day-by-dayliving example of that belief.

Several days ago, on my way tosee my physician, I spotted a bul­letin board outside a church whichgave wee words of wisdom topassers-by.

The message: "Preach by yourACTIONS and not by yourWORDS!"

Amen and ditto! We have a badhabit of cloaking ourselves inself-contented pride concerningour intentions and thoughts with-

out ever taking positive steps for­ward in proof of our faith.

I've seen a lot of my physicianthese past few years. During mysenior year of high school, I hadto drop out due to illness. I· amnow twenty-two, and still haven'trecuperated enough to permit myattending a bastion of higherlearning, that is a college, wheresome of my colleagues are sitting,cursing, marching, burning, andrioting. Yet, I have gained duringthis time a better understandingnot only of communism but ofmany other areas of life as well.Despite my lack of a degree andmaterial-physical assets that manyclaim necessary for security andaccomplishment, I have rolled upmy sleeves and entered into thatstimulating proving ground forprogress - the free market.

Rugged Competition

No, I'm not an industrialist,public relations man, or supermar­ket proprietor. I'm a free-lancewriter, a financially embarrassedone to be certain, but a writer,nevertheless. It is in this field ofjoy and disappointment that I havelearned to appreciate free enter­prise, and only when I began tounderstand this system did I reallyattain any knowledge of whatcommunism is. I claim no morethan an elementary understandingof the American economic system,

754 THE FREEMAN December

but what I have learned on thepositive side of capitalism provesto me that socialism has alwaysfailed, that it will always fail, andthat it works contrary to the free­dom with which man is endowedby God.

Take away the hammer andsickle, the workers' parades withred banners, the brute force, andthe concentration camps so char­acteristic of Soviet communism,and what do you have? Nothingbut a miserable, freedom-chokingsystem known as socialism. In­deed, if you removed the bruteforce, you wouldn't have socialismat all, since the system surviveson totalitarian coercion bolsteredby occasional transfusions of goodold capitalism.

But I do not mean to wanderinto a slough of despond over theevils and sins of the socialist statein the Soviet Union. My testimonyis one of optimism regarding myexperience in the free marketrealm of editors and rejectionslips.

finding. the Market

I am my own man, left to myself-discipline, individual initia­tive, and personal responsibility.I've. no desire to write pornog­raphy, so I have no state interfer­ence or regulation. The only re­strictions imposed upon my workare those I place on myself -lazi-

ness, conceit, inefficiency - andthose placed on me by magazineeditors.

Now, magazine editors are hu­man - a fact that I doubt oftenbut one that gains credibility whenthe postman brings me a check inreturn for an accepted story. Edi­tors are guided primarily by whattheir readers want, whether it betrue confessions, murder mysteries,or essays on economic philosophy.This public demand is temperedby editorial innovations and ex­periments. For example, the pub­lic might not be in a mood for theharsh realities concerning air pol­lution. An energetic editor,though, will use the informativepower of his periodical to print aforceful article on the subject, eventhough his readers might possiblyenjoy reading more about rattle­snake hunting in Oklahoma.

My Writer's Market lists some4,000 markets fora free-lancewriter. Imagine! Four thousandopportunities to sell the productof my ingenuity and initiative­articles that might range from·aswashbuckling tale of the sea toan account of the young men andwomen working in Honduras withAmigos de las Americas. The pos­sibilities open to me include artmagazines, trade journals, naturemagazines, travel magazines, andgarden magazines. Those aren't all.There are calendar magazines, as- i

1969 A FREE LANCE IN THE FREE MARKET 755

trology magazines, poetry maga­zines, and western magazines, notto speak of detective magazines,aviation magazines, and automo­tive magazines.

Suppose, for example, that Isubmit a brief article describing acertain druggist's participation incivic affairs to Drug Topics, atrade journal catering to the phar­maceutical profession. As often isthe case, my submission is reject­ed. What do I do? I have at leastthirteen other trade journals inthe drug business that might findmy article suited to their publish­ing needs. I submit to them.

What does this mean? Freemarket capitalism and free com­petition! The market is there, andit is open to me, unbridled by stateinterference.

faith in freedom Plus BasicPolitical and Economic Rights

It is in this field of writing thatI have come to appreciate freedom.I can't really define this word; Idon't need to, for I know that itworks in men's lives. Freedom isa living faith to me, and I don'tneed to have a precise definitionof it. Besides the political rightsto freedom of speech and press, Ihave these five basic economicrights:

1. to work in callings and locali­ties of my choice.

2. to bargain with my employers.

3. to go into business, compete,make a. profit.

4. to bargain for goods and serv­ices in a free market.

5. to be free of arbitrary gov­ernment regulation and control.

One lesson writing has taughtme, with no Iittle pain on my part,is that men definitely are not equalin some respects.

Our Declaration of Independ­ence states: "We hold these truthsto be self-evident, that all men arecreated equal. ..." What does thismean as we take it in the contextof the remaining portions of theDeclaration? Simply that each ofus has the constitutional right torise to any level of achievement inthis world consistent with his in­dividual capabilities and ambi­tions.

Nowhere in the Constitution· orDeclaration of Independence do wefind the Founding Fathers propos­ing that government must assureits citizens equal standards of liv­ing, equal intellectual achieve­ment, or equal job status. HenryVan Dyke stated the thought quitenicely: "Democracy declares thatmen, unequal in their endowments,shall be equal in their right to de­velop these endowments."

Basic to the above documents ofindividual freedom are the be­liefs that man is not perfect andthat only God is divine. It followsthat all utopian plans for chang-

756 THE FREEMAN December

ing society through coercive legis­lation against the integrity of theindividual - all in the name of ul­timate perfection-are predestinedto failure and are contrary to thewill of God.

This ambitious notion that statelegislating will change man's en­vironmental conditions and thusachieve utopia without poverty,discrimination, hatred, envy, andthe like, is the pleasant reverie ofsocial scholars in a dream world.The heart of the problem lieswithin man's heart. Only whenman's inner self-seeking, rebel­lious nature is changed can he sethis mind to overcoming covetous­ness, jealousy, and racial hatred.

Man Is Responsible

Man is responsible for his ac­tions and thoughts- envy, hypoc­risy, and yes, love for his fellowman. Assuming that some statecould achieve an all-encompassingequalization of wealth - withouttotalitarian force - and a societywith a minimurn of disease, I daresay we would still witness theproduct of man's inner nature­greed, pride, and all the rest.

Again, men are responsible,each individual endowed withvarying ambitions and capabili­ties.

Frequently in my writing, myambitions sag, and I must admit,humbly so, that my capabilitiesremain at a fairly consistent lowlevel. Thus it is that I receive tenrejection slips for each sale that Imake. That's a discouraging bat­ting average. Alas, do you not feelfor the plight of the downtroddenfree-lance writer in America!

I doubtless could make a casewith today's compassionate hu­manitarians and utopians whowould demand that the state sub­sidize me! My rightful share ofthis nation's wealth would bedoled out to me! I could join thelegions of other Americans whoare daily relinquishing personalresponsibility in return for great­er authority over their lives! Iwould be on the road to blissfulstate security!

No, thank you. I'm content torise and fall, and rise and fallagain according to my own ambi­tions and abilities. I have a cer­tain amount of satisfaction inknowing that when I'm up, it isdue to my own efforts, and thatwhen I'm down, it is due to myown failure.

Success or failure, I am respon­sible for my own - and free topreach what I practice. ~

A REVIEWER'S NOTEBOOK JOHN CHAMBERLAIN

JEFFREY ST. JOHN, author ofCountdown to Chao8: Chicago,1968: Turning Point in AmericanPolitics (Nash Publishing Corp.,9255 Sunset Blvd., Los Angeles,Calif., $6.95), is among the proph­ets. He has been the bearer of badtidings, predicting the Yippie polit­icalizing of the Hippie movement,and telling us of the leftist cam­paign to substitute street brawl­ing for Constitutional legislativeprocedures, long before any of ithappened. But he also has his con­structive side: he hopes to turnthe forthcoming 200th anniversaryof the Republic which is comingup in 1976, into a real celebrationof the philosophy of the FoundingFathers, which included a prin­cipled acceptance of libertarianeconomics as well as the politicsof limited government and sepa­ration of the powers.

In its opening chapters Count­down to Chaos deals with the newsin a special way, seeking to deter­mine the continuity of Leftistplanning that connects such thingsas the Democratic 1968 conventionweek in Chicago with what had

gone before it and what has comeout of it. It was a fortnight beforethe Students for a Democratic So­ciety and the Yippies had de­scended on Mayor Richard Daley'sChicago that Mr. St. John, in col­laboration with Williamson Good,told Barron's Financial Weeklysubscribers precisely what was go­ing to happen on the Chicagostreets during the convention.

The whole thing had been set inmotion early in 1966 with the for­mation of a Chicago Project Com­mittee by the National Mobiliza­tion Committee Against the Warin Vietnam, headed by a middle­aged radical named David Del­linger. Rennard (or Rennie) Davis,a chief planner for somethingcalled the Center for Radical Re­search, was put in charge of theProject Committee. Tom Hayden,a founder of Students for a Demo­cratic Society, and Jerry Rubin,the creator of the Yippies, both ofwhom had collaborated on themarch on the Pentagon in 1967,threw in their lot with Dellingerand Davis, and a meeting was heldin March of 1968 at an unsuspect-

757

758 THE FREEMAN December

ing YMCA camp in northern Il­linois to coordinate plans for mov­ing the members of some eighty­five Leftist organizations to Chi­cago for the "battle of the cen­tury" against Mayor Daley's"pigs" and, incidentally, the wholeAmerican political process.

In brief, Chicago was anythingbut spontaneous, even though the"political riot" attracted many in­nocent youngsters who had put inappearance just because they feltit the "in thing" to do to "makethe scene."

If the media had really tried toget at the truth of what happenedin Chicago, there would have beenno need for Mr. St. John's recapit­ulation of events. But the TV cov­erage, as was perhaps inevitable,zeroed in on violence with no at­tempt to explain its genesis. Whatwe got from the news media wasan unmotivated story. We saw thepolice "reacting" to events; welearned nothing very much aboutthe' long-planned provocation de­signed to turn the week of the Chi­cago Democratic Convention intothe opening salvo in a revolution­ary war.

Mr. St. John is an excellent re­porter who tried to delve belowthe surface of immediate happen­ings. But he is much more thana reporter; he is also a student ofliberty in the Leonard Read sense.The second half of his book takes

an unexpected turn when he makesthe announcement that "regularDemocrats and Republicans haveno idea of the real aim of theNew Left." The Convention Weekevents in Chicago of 1968, he triesto tell the "regulars" of bothparties, were "part of an attempt,such as that in Germany in the1920's and 1930's, to carry thecountry beyond the welfare state."And with this Mr. St. John is offinto a description of how the wel­fare state becomes a "bridgeheadto the police state."

Mr. St. John is worried aboutcertain historical parallels. Quot­ing Dr. Leonard Peikoff of Brook..lyn College, he notes that the pe­riod of the German welfare stateunder Bismarck and the comingto power of Hitler and NationalSocialism· was "roughly forty-fiveyears." The period spanning thebirth date of the New Deal in1933 to the "violence and dis­orders" of the Democratic 1968Convention is "roughly thirty-fiveyears." More ominous still, in Mr.St. John's opinion, is the collapseof latter-day Liberalism (notreally Liberalism) in the 1960'sand the emergence of aNew Leftradicalism similar to that whichengulfed Europe prior to bothWorld Wars. The New Left an­archists echo the syndicalist Sorelon violence; the hippies recall theVandervogel German youth of the

1969 WELFARISM AND BEYOND 759

Weimar Republic who dressed innonconformist clothing, strummedguitars, and moaned around theircamp fires that the "older genera­tion would not let them be 'free'.'"

Far from making them happy,the welfare state and the "mixedeconomy" encourage the young intheir contempt for the whole sub~

ject of economics. The need forsavings is not understood when aminimum is seemingly guaranteedwithout regard to one's contribu­tion to production. Mr. St. Johnnotes that the appearance of the"mixed economy"· and the welfarestate was followed by dictatorshipin Russia and Poland (1917),Italy (1922), Spain (1923),Turkey (1923), Chile (1927),Greece (1928), Japan (1929),Brazil (1930), the Dominican Re­public (1930), Argentina (1931),Guatemala (1932), Uruguay(1933), Austria (1933),· Germany(1933) and Mexico (1934). In allcases the retreat from capitalismwas followed by an abandonmentof democratic government.

Mr. St. John quotes Hayek: "Itis now often said that democracywill not tolerate 'capitalism.' If'capitalism' means ... a competi­tive system based on private prop­erty, it is far more important torealize that only within the systemis democracy possible." No doubta certain amount of state wel­farism can be tolerated for a time

in the richer nations without arelapse into dictatorship. But theattrition of democracy beginswhen enough people, responding tothe demagogues, begin demandingmore from the central governmentthan is compatible with maintain­ing a rate of savings sufficient tokeep production expanding as thepopulation itself increases. Infla­tion and taxation, the source ofwelfare funds, require compulsionto make them acceptable. And, asHayek has said, "the worst getson top," for only the "worst" iswilling to use the clubs that arenecessary to compel the producersto yield what ought to be regardedas the seed corn for future crops.

To save the U.S. from the anti­capitalist "counterrevolution" thatbegan in the nineteen thirties, Mr.St. John suggests that we insti­tute an "Age of Reform and Re­peal." In 1976, he says, "we willobserve the 200th anniversary ofthe signing of the Declaration ofIndependence." Unfortunately theplans for celebrating the anni­versary are not taking off fromthe individualism of the FoundingFathers. The Boston BicentennialCommission, says Mr. St. John,"is stressing the Liberal andleft-wing premise of 'interdepend­ence' . . . and completely ignoresthe affirmative aspects - and thevery existence of the AmericanRevolution and of the subsequent

760 THE FREEMAN December

Industrial and Technological Rev­olutions." And the PhiladelphiaBicentennial Commission will havea hard time commemorating theFounders' principles if formerDemocratic Senator Joseph Clark,an enemy of the original doctrineof the separation of the powers,uses his membership on the Com­mission to put forward his ownanti-Federalist point of view.

As a description of the eventsleading to the "political riot" atChicago Mr. St. John's book isfirst-rate. But its greater im­portance may derive from its in­sistence that we revive our oldtraditions in preparation for the200th anniversary of the Republicthat will be here before we knowit.

~ THE TRUTH ABOUT BOUL­W ARISM by Lemuel R. Boulware(Washington, D.C.: The Bureauof National Affairs, 1969, $7.50cloth, $2.85 paperback. 190 pp.)

Reviewed by Edmund A. Opitz

PIONEER investigators of electricalphenomena are memorialized bythe terms in which later genera­tions discuss the science. Everytime we talk about amperes, ohms,volts, and watts we pay tribute toA. M. Ampere, G. S. Ohm, Alessan­dro Volta, and James Watt. Itseems fitting, therefore, that anew approach to industrial rela-

tions should turn up in the elec­trical industry as "boulwarism,"after Lem Boulware, now retiredfrom General Electric.

The term boulwarism was coinedas an epithet; it is now part of thevocabulary as a label for the ef­forts of a business or industry tofill voluntarily its five-fold obliga­tion to: Employees, Customers,Shareholders, the Community, andGovernment. For General Electricthis involved an extensive programof education which began in 1947,under Mr. Boulware's direction. Sosuccessful was this operation thatGeneral Electric suffered littlefrom the union problems whichplagued other industries. The un­ions gave us the word when theyblamed their failure on "boulwar­ism."

Precisely what did Mr. Boul­ware do? The book under reviewtells the story in broad outline andit reproduces some of the messagesand illustrations used in companypublications at the time. Simply,the campaign was designed to tellthe story of how the business sys­tem operates, the nature of thefree market, and the limited roleof government. The story of howthis was done has been admirablytold here, making this book a handymanual for people in personnelwork as well as a lively account ofan important incident in businesshistory. ~