In the early decades of the 20th century, the political ideal on every one’s lips was socialism, and the economic vision before every one’s eyes was that of the planned economy. The capitalist system, with its institutions of private property and free enterprise, would soon be a thing of the past In the future, the State would guide the economy, direct the use of resources, and produce a material bounty that would leave poverty and want nothing more than the bad memories of a bygone era.
Now at the threshold of the 21st century, it is socialism and the planned economy that are the relics of a disastrous experiment in State-managed “social engineering.” Whether in the Soviet Union, China, eastern Europe, Cuba, or Vietnam, socialism has brought nothing but political tyranny, economic stagnation, and social decay. Even the high priests of Marxist ideology admit the obvious: political and economic collectivism have been absolute failures that have given the world nothing but death and destruction. And the socialist rulers now say that “true socialism” requires private property, individual freedom, and free market competition.
In the West there is a deep sense of satisfaction that the values and institutions of a capitalist system are being rediscovered in the very heart of the “evil empire.” The tragedy is that while governments and intellectuals in America and Europe praise the Soviets and the Chinese for following the “capitalist road,” those same governments and intellectuals often seem to have no real conception of what truly free market capitalism is all about.
In a society that proclaims the benefits of free enterprise, numerous American industries are shielded from the competition of foreign producers through the use of tariffs and import quotas; some American farmers, unable to make a profit in the market on their own, turn to government for financial subsidies and land-use controls; many workers, who proclaim the value of America as a land of opportunity, deny that opportunity to others by supporting coercive trade unions and calling for tougher immigration barriers; a large number of people, who usually speak of the character-building qualities of self-responsibility and self-reliance, endorse and demand a massive welfare state that has, in fact, created a permanent economic and social underclass dependent upon a paternalistic government for its material sustenance and drained of any spirit of individual initiative or vision of an improved self-made future.
In other words, Americans have lost a full understanding of what a free society means in the realm of economic activity. The communist experience has reminded us that only where there are privately-owned printing presses can there be freedom of the press; only where material resources can be privately-owned can people completely express their creative and entrepreneurial potential, without prior approval of the government.
But we seem to have forgotten that economic freedom also means and requires the individual right to buy from and sell to whomever one desires on any terms voluntarily agreed upon by the traders themselves; that real “equal opportunity” in the job market means the individual right for the employer to hire whomever he desires, and for the potential employee to offer himself for work at any wage he finds acceptable and attractive; it means the individual right to make and keep profits honestly earned on the market but it also requires the bearing of the losses from investment decisions that have failed to pan out; it means the individual right to start up any business, large or small without government licensing or regulation; and it means the right of free men to use any money or financial medium they find useful or preferable in their voluntary transactions with others in the local, national, and increasingly global marketplace.
Individual freedom in the economic arena means, in other words, “anything that’s peaceful.” As long as the transactions in the marketplace do not involve either force or fraud, the economic slogan of the free society must mean, and can only mean, laissez-faire.
The Future of Freedom Foundation sees human liberty as an indivisible whole. Liberty cannot be divided into separate compartments of “civil liberty,” “political liberty,” “economic liberty,” from which one or two can be chosen while ignoring or denying another. Each is dependent upon the others, and none can last in the long-run without the others. Just as a man cannot be spiritually, physically, or intellectually dismembered without losing portions of what make him a human being, neither can the social, political and economic institutions that form the foundation of a free society be dismembered or denied without diminishing the potential of every man to attain the cultural, intellectual and material possibilities that reside in the human being.
The collectivist horrors of the 20th century may be coming to a close. But what will replace the socialist nightmare is still uncertain. I hope you will join us at The Future of Freedom Foundation in rediscovering the meaning and heritage of human liberty.
