Again, without controls, free enterprise can work to the benefit of everyone. "If [industry] is left to itself, [it] will naturally find its way to the most useful and profitable employment" (Hacker 115). This fact is what makes free enterprise free.
It has been proven, time and time again, over the course of the history of America and every democratic nation on earth, that government intervention in economic matters (set aside many other matters that government has no business in) only hampers performance and productivity in the long run and just as often, minus a few extraordinary circumstances, in the short run. Mind, though, that even in those circumstances where government intervention seemed to help, a free market economy would have helped better, more productively, faster, and would have protected everyone’s individual rights.
Belknap begins his declaration of the uselessness of government tampering by stating that the crippling of the free market by the government is morally wrong. Interference with its orderly working may have sometimes seemed justified by a national emergency but certainly a continued interference as a political principle leads to the plundering of one class of citizens for the profit of others. When political control of prices is substituted for the free market, costs are increased for some, and everybody pays higher taxes, including those receiving the monetary assistance. The general welfare becomes secondary to getting more votes in the bag. (61)
He also provides a current example of how government is dangerously disrupting the capitalist economic balance:
Government defiance of the free market for farm products is steadily approaching a national catastrophe. It ignores the economic law of supply and demand and is a waste, a great expense, and a discrimination against the American people. The government is now swamped with many billions of dollars’ worth of food. Instead of selling this surplus at cost to the American people, who have paid for it in taxes [already], the government either lets it rot in storage or tries to force it on foreign countries as a gift or at less than cost. This complicates our relations with other nations who are producing the same food and are seeking world markets for it. (61-62)
This case concerning the agriculture problem earlier this century raises an interesting question. If we would all do better off with absolutely no government tampering, what would have happened to the farmers of America? This is a very complex problem and I think that more research would have to be done to determine the original cause of the food shortages. A quick fix isn’t always a good fix. To make a medical analogy, a good doctor will not prescribe medication to cure symptoms, he or she will try to determine the cause of a problem and treat the cause. That’s good medicine, and a good economic system would operate in the same way. To quote Thomas Jefferson once again, "I would rather be exposed to the inconveniences attending too much liberty, than those attending too small a degree of it."
What about inflation? Doesn’t the government need to control inflation? Shouldn’t the government set price controls on all those "evil" businesses out there trying to make a buck? Well, the honest truth is, most inflation and major price fluctuations are caused by this "benevolent" government by sudden tariffs, previous price precautionary measures, and other laws and statutes.
Many economic advisors in the government advocate price and wage controls as cures for a rising inflation. This, though, merely provides more governmental interference in the havoc it has already wrecked upon the healthy operation of the economy. The Committee for Economic Development reports (Belknap 124):
Experience in the United States and in other countries has demonstrated that general price and wage controls and rationing is not an effective solution to inflation. Even while controls are in effect, price increases break through in black markets, in deterioration of quality, and in the disappearance of low priced goods. Prices and wages are than determined by a political bargaining process which favors the most powerful politically. This constant leapfrogging of prices and wages has disastrous effects on the security of the nation. And when the controls finally come to an end, the dammed-up inflationary pressure breaks out in open inflation. (Belknap 124-125)
Two-hundred nine years ago, long before the rationing during the world wars and long before price and wage controls in the early nineteen hundreds, it was realized that government controls were not in the best interest of the people. The American Continental Congress adopted the following formal resolution in 1788 in response to observations of economic controls: "It hath been found by experience that limitation of the prices of commodities is not only ineffective
for the purpose proposed, but likewise productive of very evil consequences, to the great detriment of the public service and grievous oppression of all individuals" (Belknap 125).
What might these "evil consequences" be that the Congress spoke of? Today, in my opinion, we suffer from the beginnings of these consequences. We suffer from the uncompetitiveness of government controlled monopolies by paying high prices for utilities. We suffer from the price floors and ceilings that government directly or indirectly imposes by creating "inflationary precautions", temporary or permanent price fixes that supposedly halt inflation. We suffer from drastic price increases and a worldwide uncompetitiveness due to government tariffs on particular items including imported cars, exported grains, etc. We suffer from a lack of invention and innovation due to unfair and unfounded regulations and taxing on highly productive scientific research organizations.
In conclusion on the discussion of governmental intervention, Samuelson states well the proper ideals of both government and a capitalistic economy: "To work well, government needs to be used with restraint. To work well, capitalism needs to retain its central features – including the freedoms to fail and get rich" (Samuelson).
For those supporting capitalism, there is a definite philosophy. It is the individualistic philosophy – all men have the right to their own life, property, and products of their productive efforts, but what philosophy do those opposing capitalism have? What philosophy do socialists and communists have? That philosophy is called collectivism. The term collectivism "under any name, means the subjugation of the individual to the group. The group may be culture, society, economic, political, or military. The welfare state, socialism, and communism represent ascending powers of collectivism" (Belknap 106-107).
Karl Marx, the said-founder of socialism, states his opinion in probably the most destructive, collectivist statement ever contrived by man, "it is not the consciousness of men which determines their existence, but, on the contrary, it is their social existence which determines their consciousness" (Ebenstein 3). This thought directly implies that man is solely an outcome of his part in society – that he is only an integral part of the whole that he comprises. Such a statement is the ultimate human degradation. This statement is the heart of the philosophy behind a collectivist-created, socialistic or communistic society.
For those supporting Socialism and Communism, there really is more than just a "philosophy." Just as individualism has its roots in free enterprise capitalism, collectivism is the foundation for a socioeconomic system as well. "Economic collectivism is socialism, the political and economic theory of social organization based on governmental ownership and management of the essential means of production and distribution of goods – land, mineral resources, basic industries, railroads, [and] public utilities" (Belknap 150).
If collectivism is the foundation for socialism and communism, do these systems uphold "collective rights"? As Ayn Rand states here, there is no logical definition of "collective rights":
The notion of ‘collective rights’ (the notion that rights belong to groups, not to individuals) means that ‘rights’ belong to some men, but not to others – that some men have the ‘right’ to dispose of others in any manner they please – and that the criterion of such privileged position consists of numerical superiority. Nothing can ever justify or validate such a doctrine – and no one ever has. Like the altruist morality from which it is derived, this doctrine rests on mysticism: either on the old fashioned mysticism of faith in supernatural edicts, like ‘The Divine Rights of Kings’ – or on the social mystique of modern collectivists who see society as a super-organism, as some supernatural entity apart from and superior to the sum of its individual members. (120)
We just stated the socialism and its principles are based on collectivism, but what does socialism really involve, and how does a country progress to such a horrid state? Alexander Solzhenitsyn says that socialism begins by making all men equal in material matters only (this, of course, requires coercion; the promoters of all brands of socialism agree on this point). However, this logical progression towards a so-called "ideal equality" ultimately entails the use of various kinds of force. What's more, it means that the basic factors of personality – those factors which display too much variety in terms of education, ability, thought, and feeling – must themselves be leveled out to that of the "ideal equality". (qtd. in Davis 235)
A system such as this reminds me of story I read once called Harrison Bergeron. In this work, all people in the society were brought to one level. Everyone was created truly equal. Those who were more beautiful were created ugly by masks, and those talented were forced to wear crippling devices that subjugated their specific talents and abilities. True, this story was a parody, but it is an extremely helpful analogy to the concepts behind collectivist systems. Could a system based on these principles exist today in our world of free choice? Could such a system be evolving in our own country? Surely not!
Socialism, and especially communism, restricts individual rights completely. This includes property rights, the right to keep what one earns, and, in most cases, the right to one’s very life. As Ayn Rand states, "The essential characteristic of socialism is the denial of individual property rights. Under socialism, the right to property (which is the right of use and disposal) is vested in ‘society as a whole’ i.e. in the collective, with production and distribution controlled by the state, i.e., by the government" (100).
What’s so important about personal freedom? Couldn’t we just let the government run everything? They surely represent our individual needs. Absolutely NOT! Belknap states our rights very well here:
We believe that every man is born with certain natural, unalienable rights, rights that no other men have the right to take away. This is the basis of the philosophy of free economic enterprise. Personal freedom is the most important of the unalienable rights. Socialism and Communism are basically wrong because they abolish personal freedom. Personal economic freedom cannot exist without a free economic system which makes a free market. (164)
As Berger states very simply, "there can be no effective market economy without private ownership of the means of production" (215). This statement is obviously true. Socialism has never and will never be proven to be productive in any sense of the word. A nonproductive society is always bound to fall, for it is a natural expression of all conscious beings to become productive and create values. The ability to produce values equals happiness. When people are not happy, revolution will undoubtedly occur. This fact has been seen in all of history, most recently with the fall of the USSR and the rise of capitalist Russia. "Instead of prosperity, socialism has brought economic paralysis and/or collapse to every country that tried it. The degree of socialization has been the degree of disaster. The consequences have varied accordingly" (Rand 101).
If it is so logical, natural, and rational to advocate the use of capitalism, what must drive those who advocate its polar opposite? Again, I must quote Rand:
When one considers the spectacular success, the unprecedented prosperity, that capitalism has achieved in practice (even with hampering controls) – and when one considers the dismal failure of every variety of collectivism – it should be clear that the enemies of capitalism are not motivated, at root, by economic considerations. They are motivated by metaphysical considerations – by a rebellion against the human mode of survival, a rebellion against the fact that life is a process of self-sustaining and self-generated actions – and by the dream that, if only they can harness the men who do not resent the nature of life, they will make existence tolerable for those who do resent it. (146)
Socialism advocates that each individual would do his share and everyone would reap the benefits of a "sharing" society. Such a society is contradictory to the nature of "progress" itself.
Progress can come only out of men’s surplus, that is: from the work of those men whose ability produces more than their personal consumption requires, those who are intellectually and financially able to venture out in pursuit of the new. Capitalism is the only system where such men are free to function and where progress is accompanied, not be forced privations, but by a constant rise in the general level of prosperity, of consumption and of enjoyment of life. (Rand 97)
Socialists guarantee that everyone would succeed and there would be a "classless" society. Such a system, though, would take away all of people’s personal freedoms (individual rights). If I own property, and I decide to build a truck stop in the middle of the field, it should be my right to do so. Who is this "government" to say what I should and shouldn’t do with my hard earned money? "True political freedom implies that a man has a right to fail as well as to succeed; the right to sacrifice his own security for other objectives if he so desires" (Cooke 130).
Today’s system in America is what economists would call a "mixed economy." But in a mixed economy, there is still an unbalance of power. In such a system as ours, ultimately, it must fall completely into a free choice, laissez-faire, free enterprise, individual right system, or revert to a dictatorship, Lenin-type, government-rule-all system. So, what roads are we taking today in this system to insure that we continue into a world of free enterprising individuals? By the look of it, there’s not much if anything being done.
The ideology of socialization (in a neo-fascist form) is now floating, by default, through the vacuum of our intellectual and cultural atmosphere. Observe how often we are asked for undefined ‘sacrifices’ to unspecified purposes. Observe how often the present administration is invoking ‘the public interest.’ Observe what prominence the issue of international prestige has suddenly acquired and what grotesquely suicidal policies are justified by references to matters of 'prestige.’ Observe that during the Cuban crisis – when the factual issue concerned nuclear missiles and nuclear war – our diplomats and commentators found it proper seriously to weigh such things as the ‘prestige,’ the personal feelings and the ‘face-saving’ of the sundry socialist rulers involved. (Rand 106)
"I see some socialist actions in our government, but what does a little hurt?" one may say to oneself. Well, "a little" may just hurt "a little," but "a little" was done long ago. It set precedent, and what is going on now is pure, socialistic, collective, anti-individual rights economic and social planning – one gigantic leap in the wrong direction. Rand hits it on the head again by stating that here is no difference between the ideals, policies and practical results of socialism – and those of any historical or prehisorical totalitarianism. Socialism is merely a democratic absolute monarchy – a system of dictatorship without a fixed head, open to a seizure of power by all corners, by any ruthless Lenin-type dictator, revolutionary or thug. (106)
"A pure system of capitalism has never yet existed, not even in America; various degrees of governmental control had been undercutting and distorting it from the start. Capitalism is not the system of the past; it is the system of the future – if mankind is to have a future" (Rand 37).
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Copyright © 2001 Tim Fisher