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Ten Tenets of Freedom, Part 1

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Even while resisting the steady erosion of liberty in America, it is important that we keep in mind an overall vision of what a free society looks like. For if people lose sight of the “big picture,” the risk is that they end up settling for — and even celebrating — an unfree society whose controls have simply been modified or reduced.

This two-part essay will discuss ten tenets toward which we must continue to strive in our efforts to restore freedom to our land. Part 1 of the essay will cover the first five tenets and Part 2 will cover the other five tenets.

1. Income taxation

Repeal all taxes on income and, better yet, enact a constitutional bar to imposing income taxes. That includes taxes on wages, on capital gains, and on estates. People have the moral right to keep everything they earn and to do whatever they want with it, including saving their money and passing it on to their designated beneficiaries.

How can a person be considered truly free if the state has the power to take whatever percentage of income it wants from him? Whether the state sets the percentage at 5 percent or 100 percent, the principle remains the same: By wielding the power to set the percentage, the state effectively becomes the master of the people, who in turn become the servants.

Thus, it shouldn’t surprise anyone that for most of the first 125 years of our nation’s history, Americans lived without a federal income tax. Our American ancestors understood that income taxation and individual freedom were in contradiction to each other.

It should be noted that one of the keys to rising standards of living, especially for the poor, is the absence of income taxation. For one thing, through hard work and thrift, poor people are more easily able to break into the ranks of the middle class and wealthy. After all, it’s much easier to do that when one is free to keep everything he earns. Moreover, when incomes are tax-free, people tend to save more, increasing the amount of productive capital. With higher productivity come higher wage rates.

Finally, the more money that people have, the more generous they tend to be. When income is barely sufficient for survival, there will be fewer donations to churches, museums, soup kitchens, and other causes. When people have lots of disposable income, they are able to give more freely to their favorite causes.

2. Free trade

Freedom entails the unfettered right of people to enter into mutually beneficial exchanges with anyone anywhere in the world. When two people enter into an exchange, each benefits, from his own individual perspective. How do we know that? Because in every trade, both parties are giving up something they value less for something they value more. Otherwise, they would not enter into the trade.

Suppose John has 10 apples and George has 10 oranges. What would be a fair exchange? Five apples for five oranges? Not necessarily. Value is subjective. It lies in the eyes of the beholder. If John and George enter into a trade in which John gives 7 apples to George in return for 3 oranges, each side has raised his standard of living. The reason, again, is that they have both given up something they value less for something they value more.

Thus, people in society can raise their standards of living through the simple act of exchange. And the more people there are to exchange with, the better chance they have to make beneficial trades.

The corollary is obvious: To the extent that government interferes with the ability of people to trade with others, it is bringing about lower standards of living for the populace. That’s why such government interventions as international sanctions and embargoes harm not only the people they purportedly target but also those Americans who could have raised their standard of living through trade with the citizens in the targeted country.

From the standpoint of individual freedom, why shouldn’t people be free to trade their money and other property with others, anywhere in the world? It’s their privately owned property, right? It doesn’t belong to society, or to the majority, or to the state. They earned it. It belongs to them. By freely entering into trades with others from around the world, they are not only exercising an important right, they are also improving their economic lot in life.

3. Welfare

Repeal it all. No reforms. No modifications. No ridding the programs of waste, fraud, and abuse. Abolish every single program in which people receive largess from the government. That includes Social Security, Medicare, Medicaid, farm subsidies, education grants, food stamps, small-business loans, bailouts, and every other welfare-state program.

The welfare state has been a disaster for the American people. For more than a century, Americans were characterized by such values as self-reliance, independence, and voluntary charity. That was the era in which there were no paternalistic or socialistic programs.

Why did they reject welfare-state programs? Because they understood the fundamental immorality of forcibly taking one person’s money from him in order to give it to another person. They understood that for a private person to engage in such conduct was thievery. In their minds, for the state or the majority to do it was no less an immoral act.

By and large, our American ancestors were a religious people. They subscribed, for example, to God’s commandment “Thou shalt honor thy mother and father.” When their parents became old, ill, or poor, they would take it upon themselves to take care of them. That’s what family values were all about.

But our ancestors also understood the fundamental wrongfulness of having the state enforce that commandment. The thought that parents should be taken care of by the state, through coercive tax impositions and an old-age retirement welfare program, would have been considered anathema to them. To them, a decision to obey God’s commandment to honor one’s parents was a personal one, not one that should ever be mandated by the state.

The same is true with respect to health care. Our American ancestors would never have tolerated such socialistic programs as Medicare and Medicaid. Health care, like food, clothing, education, employment, vacations, transportation, and retirement, was considered a personal or family responsibility.

Moreover, there was an unbounded faith in the power of a free market to provide the best possible goods and services in society. It is not a coincidence that the United States once had the finest health-care system in the world, a system notable for its lack of government welfare and regulation.

Not so anymore. A society where self-reliance, independence, and private charity were the hallmarks has been converted into a nation of frightened, dependent wards of the state. That’s what the welfare state has done to America and to Americans. Hardly a day goes by without some American declaring that he could never have made it without his Social Security, Medicare, Medicaid, public housing, food stamps, education grants, farm subsidy, small-business loan, or some other welfare program.

In fact, the sense of dependency is so deeply rooted that many welfare recipients remain steadfastly opposed to abolishing the welfare program, notwithstanding the burden it is placing on the young.

All across America, young couples are struggling to raise a family, to make ends meet, to make mortgage payments, to save for college expenses. If the tax burden on them were lifted entirely — that is, no more income tax, Social Security tax, Medicare/Medicaid tax, or capital-gains tax — most of them would be much more able to handle their financial difficulties.

The irony of all this is that if every single welfare program were abolished today, everyone would be fine tomorrow. No one would starve to death. No one would die from inadequate health care. Instead, the American people, who all of a sudden would have lots of additional money in their pockets, would respond generously to those in need, including their parents, friends, acquaintances, and others.

The problem, however, is that all too many people no longer believe in themselves or in others. Or they think, “I would help others but no one else would.” Thus, a restoration of freedom entails not only an understanding of the principles of freedom and the virtues of a free market, it also entails a heightened sense of self-worth, self-esteem, and faith in freedom.

4. Economic regulations

Ditch them. Get rid of them all, including minimum-wage laws, price controls, rent controls, antitrust legislation, licensing laws, insider-trading laws, banking regulations, product-safety regulations, and stock regulations. In fact, the best thing would be to enact a constitutional amendment stating, “No law shall be passed respecting the regulation of commerce or abridging the free exercise thereof.”

What actually is meant by the term “free enterprise”? It means enterprise that is free of government control or regulation. “Free” means free, as in no control and no regulation. If economic enterprise is controlled or regulated, it is not free enterprise. It is controlled or regulated enterprise.

That concept shocks lots of Americans, which is not surprising given that regulated economic activity has been the norm throughout the ages. For example, during the age of mercantilism — the age that preceded 19th-century America — the government regulated the most minute aspects of people’s economic affairs. The idea was that government regulation was needed to protect the poor from greedy and exploitive businessmen, employers, and speculators.

Then in 1776 came Adam Smith, a Scottish philosopher who amazed the world with one of the most shocking economic doctrines ever promulgated. Government regulations impeded people’s ability to coordinate their efforts with others, Smith argued, and harmed the very people they purported to help, i.e., those at the bottom of the economic ladder. No regulatory officials or planning boards for the economy are necessary, he said. When markets are free of government regulation and control, people will be led as if by an invisible hand to bring about positive outcomes in the marketplace. Among these benefits, he contended, were higher standards of living, especially for the poor.

As Smith’s revolutionary ideas were being developed by 19th-century economists, such as Jeremy Bentham, David Ricardo, and John Stuart Mill, the American people of the 1880s were applying Smith’s free-enterprise philosophy here in the United States. While there were, of course, exceptions, by and large for the first time in history people were free to engage in economic enterprise free of government control or regulation.

Imagine: No licensing laws, not even for doctors, lawyers, or farriers (makers of horseshoes). No price controls. No rent controls. No antitrust laws. No anti-speculation laws. No insider-trading laws. No minimum-wage laws. No child-labor laws.

Whatever one might say about 19th-century America, what no one can deny is that it was the most free-enterprise society in history. And no one can deny either that it was a radically different economic philosophy that guided America during that era, as compared to that which guides modern-day America.

5. Open immigration

Every American living today takes it for granted that Americans are, by and large, free to cross borders from one state to another without governmental interference. The reason I say “by and large” is that in the Southwest and West, Americans traveling east and west are now required to submit to document checks and vehicular searches at the hands of the U.S. Border Patrol, an agency charged with stopping the flow of people illegally crossing the international border into the United States.

I would think that few American would ever call for immigration checkpoints between the respective states. The right to travel from state to state is as ingrained in the American psyche as freedom of speech, freedom of religion, and freedom of the press.

What’s interesting is that hardly anyone gives this entire phenomenon a second thought. Except for Mexican-Americans traveling along the U.S-Mexico border or out-of-border regions, who have to carry their passports or other proof of U.S. citizenship with them, the average American never thinks about taking any proof of citizenship with him when he travels from state to state. Many Americans would be outraged if someone were even to suggest such a thing, even if the measure were intended to protect them from terrorists, drug dealers, or illegal aliens. Freedom of travel as a fundamental right is deeply engrained in the American people.

But what many Americans don’t realize is that our American ancestors felt the same way with respect to the movements of people across international borders. That’s why, for most of the 19th century, there were virtually no restrictions on the freedom of people to immigrate to the United States.

Sure, at Ellis Island there was a cursory health inspection to ensure that people didn’t have tuberculosis or some other similar illness. But except for that, everyone in the world was free to come to the United States, no questions asked. And in the Southwest and West, there wasn’t even that cursory health inspection. For decades after the Treaty of Guadalupe Hidalgo was signed (1848), whereby the United States absorbed the entire northern half of Mexico, people were free to cross back and forth between Mexico and the United States, to visit, tour, open businesses, and invest their money. It was all considered as normal as crossing state borders. The reason? People considered that freedom of travel was a fundamental right with which no government could legitimately interfere, whatever the particular borders people were crossing.

Of course, we should keep in mind that 19th-century Americans didn’t believe in passports either, which is why they lived passport-free.

Ironically, what 19th-century Americans discovered was that open immigration contributed to the enormous rise in the standard of living of the American people in the 1800s. While having no income taxation, no welfare state, few trade restrictions, and no economic regulations was a critical factor in improving the economic status of people, open immigration also played an important role. Immigrants brought a vitality and an energy that were immeasurable, not to mention the benefits that came from the division of labor they provided.

Why didn’t most 19th-century Americans consider open immigration to be unusual? Because they understood that the free movements of people across borders were simply another aspect of economic liberty and free markets, a philosophy that they were applying to other parts of American life. Immigrants were doing nothing more than exercising the fundamental rights that Americans believed inhered in all men — the right to sustain and improve one’s life through labor, the right to engage in economic enterprise free of government control or regulation, the right to enter into mutually beneficial exchanges with others, the right to accumulate unlimited amounts of wealth, and the right to do whatever one wants with his own money.

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    Jacob G. Hornberger is founder and president of The Future of Freedom Foundation. He was born and raised in Laredo, Texas, and received his B.A. in economics from Virginia Military Institute and his law degree from the University of Texas. He was a trial attorney for twelve years in Texas. He also was an adjunct professor at the University of Dallas, where he taught law and economics. In 1987, Mr. Hornberger left the practice of law to become director of programs at the Foundation for Economic Education. He has advanced freedom and free markets on talk-radio stations all across the country as well as on Fox News’ Neil Cavuto and Greta van Susteren shows and he appeared as a regular commentator on Judge Andrew Napolitano’s show Freedom Watch. View these interviews at LewRockwell.com and from Full Context. Send him email.