file: /pub/resources/text/contemp: roche.freedom.txt ---------------------------------------------------- The Road to Freedom George Roche President, Hillsdale College This speech is derived from a lecture Dr. Roche gave at the 20th annual Ludwig von Mises Lecture Series. The speech was given sometime in 1993, and is printed in IMPRIMIS, July 1993 (Volume 22, Number 7). The IMPRIMIS version of the speech has been further edited for brevity. REPRINTED BY PERMISSION OF IMPRIMIS, THE MONTHLY JOURNAL OF HILLSDALE COLLEGE. For a free subscription, call 1-800-437-2268. MORALITY ACCORDING TO KARL MARX The biggest story of our times is this: Communism is dying. But perhaps the most striking feature of its demise is that it is not accompanied by much of a celebration of the triumph of capitalism in the West. ... You would expect a massive intellectual defense and explanation of capitalist ideas - and perhaps some crowing about how much better they are. ... The near-silence is ominous. It is as if we had achieved great ends with evil means and ought to be ashamed rather than exultant at our success. This guilty feeling is itself a communist hangover. We should be rid of it once and for all, or Marx will have the last laugh. Moreover, we must seek to understand the cause of the communist demise. Until we understand the cause, we will not be able to heal the frightful wounds communism leaves behind, and we will ourselves remain in peril of repeating the same mistakes. We do know that without a doubt the economic performance of communism has been dismal everywhere it has been tried. ... But it was not the economic failure that really killed communism ... We would be greatly mistaken if we assumed that people in closed societies only wanted more consumer goods. ... After all, they have from the beginning endured economic disaster and terrible deprivation. Ultimately, the death of communism has been brought about by its own spiritual failure. The triumph of "capitalism" is equally a spiritual victory, but we in the West have been slow to recognize it as such. ... [E]veryone is pretty much agreed about its Marxist and principle meaning: a free market system based on the ownership of private property and the free exchange of good. I am happy to accept this meaning, and insofar as I use the term, that is what I mean by it. When I say capitalist ideas are better, I mean precisely in their spiritual dimension. Of course they are more efficient; everybody knows that. ... What few see, however, is their moral goodness. We have been blinded by ... "the theory of surplus value" that has ... stood moral law on its head. .... It is summarized ... as follows: "Profit is unpaid labor appropriated by capitalists as a consequence of the institution of private property." In other words, according to Marx, the capitalist system alone causes poverty (by paying low wages), unemployment and periodic depressions. Private property is bad. Rent and interest are stolen from workers. Capitalists are all greedy, grasping, mean, and exploitative. By extension, wealth is considered ill- gotten and tainted. ... We need only document real cases of nasty capitalists and exploited workers, ignoring everything else, to make the case seem valid. But it is nonsense .... Marx's theory is the perfect _excuse_ for every personal failure in the market. With it, you can blame anything on the capitalist (your boss, your foreman, society, the system). ... But there is a price: To believe it, you have to learn how to hate. The "bourgeoisie" is ... the hate object used to "unite the people." Totalitarianism always requires a permanent enemy, a group to hate. ... It is little remembered now, but Marx first advertised his theories are more economically efficient. They got nowhere. ... Only when they lost the argument against efficiency did Marx and the communists turn to a moral argument, saying that capitalism was unjust. Only then did they prevail, for there was no rebuttal in moral terms. .... MORALITY IN ECON 101 But capitalism is not unjust, nor is it unnatural or immoral; its structure and rules are as ethical as they are efficient. It is communism ... that is unjust, unnatural, and immoral, as is finally becoming clear after ... a century when nearly 170 million people sacrificed their lives, mainly on the altar of statism and socialism or communist ideology. Whereas socialism and communism appeal to hatred and envy, capitalism not only appeals to our moral instinct to help others, but harnesses our energies to that purpose and rewards most those who do the most for humanity. All of us, you see, live in a whirl of activity that involves the transfer of goods and services. Well sell our labor and produce, or rent and invest our capital, for money. With our money we buy food, clothing, shelter, and the niceties of life. And there are only two ways goods can be transferred. The first is one-sided and involuntary to one of the parties: One party takes what the other has, without giving anything of value for it. This is called stealing (or in some cases, taxes). .... The second kind of transfer is two-sided. ... Its key feature is that it is freely chosen. ... When we see why both parties agree, we have the key to the whole of modern economic science. It is simply human nature. ... We each have a scale of values for what we want, how much we want, and what we will do to get it. ... We each know what is the best thing to do according to our particular needs at a given moment, and we act on our self knowledge ... No two of us ever have quite the same scale of values directing what we do. You can easily see this theory in operation at a well- stocked cafeteria: Rarely will two people choose exactly the same meal. ... We make different exchanges because we value things differently. You exchange your dollar for a loaf of bread because you value the bread more than the dollar. The baker agrees to the exchange because he values the bread less than the dollar. Such is the nature of all exchanges in the market .... It is invariably a matter of people trading something they value less for something they value more. The principles we derive from this fact are so important that they figuratively make the world go round. First, both parties gain from the exchange. This refutes the notion that there is only so much wealth to go around and if somebody gets some of it, he has to take away from someone else. .... Second, the goods or services freely exchanged increase in value, because both parties value them more highly. .... Free exchanges are a constant process of moving goods, capital, and labor to where they are most useful, making us all richer in the bargain. The third principle is incentive. When we make a good exchange and are rewarded for it, we have a greater motive to do it again. .... But when we are cheated out of what we earn or own by crime or confiscatory taxes, we lose interest in working so hard. ... But we don't necessarily abide by these principles here in the U.S., and that ought to serve as a warning to those in the postcommunist world who want to imitate us. By mid-1992, federal, state and local governments were consuming 45 percent of the national income. .... We are still a wealthy people, but no nation can survive forever so great and systematic an assault on its ability and incentive to produce. .... The worst part of the whole tax-thy-neighbor system that is so addictive - it feeds on itself. When so much of our money is taxed away, we feel cheated and lose all moral qualms about getting to the trough ourselves. .... All we are doing is resorting to the same means that cheated us in the first place and we are giving overweening government its strongest hold on us. A BRIGHTER ROAD AHEAD There is a far brighter road ahead, though, as evidenced by the fall of communism in Eastern Europe and the former Soviet Union. Against seemingly impossible odds, country after country has thrown off its communist yoke. .... Here [in Berlin], too, all saw that communism was no longer a potent idea contending for the minds and hearts of men. It was just one more instrument of power, naked power of men over men, such as we have seen countless times before in history. Its last pretensions as an idealistic moral philosophy were broken. ... To the inquiring souls among the younger generation, communism must seem like some evil, forgotten sect whose incantations and chants were like witch doctors shaking bones. ... Those of us who have been through more of the struggle may find these events more like awakening in surprise and immense relief as an awful nightmare ends. In Prague, Warsaw, Budapest, and even in Moscow, the celebration of the triumph of capitalism that has been so conspicuously lacking in the West has been loud, exuberant and unrestrained. ... In fact, there was a poll taken among ordinary Moscow citizens with this question: "Which system do you think is superior to the other, capitalism of socialism?" The response was: capitalism, 51 percent; socialism, 32 percent. I'm glad they didn't poll Harvard. In this vein, my favorite story is one about the huge Institute of Marxism-Leninism in Czechoslovakia. It was disbanded as soon as the communist rulers were tossed out, except for its Department of Bourgeois Economics, which had been set up to study our ideas in order to use them against us. The staff in this department had secretly become capitalists through reading the works of Ludwig von Mises, F.A. von Hayek, Milton Friedman and other defenders of the free market. .... Events in the postcommunist world - and here I am not even talking about political events or the violence that has erupted in Bosnia, Azerbaijan, and elsewhere - are still swirling and changing too rapidly to foresee how they will end. It is not going to be easy for citizens in the new republics to rebuild their decimated economies or to learn the ways of entrepreneurial capitalism after decades of suppression. But they have three things going for them that give them great hope. First, they have their churches back - churches that were, in fact, highly instrumental in the downfall of communist rule, by their teaching and moral leadership. Second, they know at least the theory of free markets ... and they certainly have experience in how not to run an economy. Third, in large measure, they have their freedom back. Freedom is what makes everything work. .... [W]e can be confident that they will find ways to make things work. Something else I've noticed that hasn't been mentioned anywhere is how direct and blunt the new leaders in Eastern Europe and Russia are. They ... use none of the evasions or nuances of politicians. And they tell us incredible things. All this time, they say, they were cheated. Communism was a hoax. It wasted their hard labor. ... Worse, it made war on their spirit and left behind "a decayed moral environment," in the words of Czech President Vaclav Havel. Back in 1984, an East German girl, wise beyond her years, sadly told a visitor from the West: "It doesn't make any difference what we become when we grow up. We will still always be treated by children." She was saying, like Havel, that the very fulfillment of life through adult responsibility and moral choice was impossible under communist suppression. Others ... have said the same thing with jokes. Here is the wry assessment of an East German on "the six miracles of socialism." * There is no unemployment, but no one works. * No one works, but everyone gets paid. * Everyone gets paid, but there is nothing to buy. * No one can buy anything, but everyone owns everything. * Everyone owns everything, but no one is satisfied. * No one is satisfied, but 99% of the people voted for the system. WHAT FREE MEN KNOW For nearly a century, the Left in this country has claimed that socialism, whether represented by Soviet-style communism or European-style socialism, is morally superior to our market-based capitalist system. ... They have compared our "failures," real and imagined, with their utopian pipe dreams. Through the testimony of those forced to live under communism and socialism, we know that the truth is exactly the opposite of all the promises. ... [The party bosses] created a ruling class, the nomenklatura, more autocratic and exploitative than the tsars. ... So shamelessly did the nomenklatura bleed workers that, by some of their own calculations, it was estimated that 86.5 percent of the Soviet population were dirt poor. ... The promises were all frauds. "Power to the people" turned out to be totalitarian power in the hands of a tiny, highly privileged ruling class. "Economic justice" turned out to be rank exploitation. Recent years have been bad for the nomenklatura and good for the people. ... Today, for the first time in history, a greater number of the world's people are free than not. ... Free men know what tyrants never learn, that the ultimate economic resource is the mind and energy of a free person. ... It is said that we now live in an information economy. This is true enough, but it is not the whole picture. Add to it an unprecedented mobility for the movement of economic resources - assets as well as data. Thought and data can and do travel almost anywhere in a split second, too fast for the plodding state to catch up. It is this mobility and versatility that gives individuals the upper hand at last. There is no turning back. The growing power of the global marketplace is bringing this fact home everywhere. Its power has exposed the weaknesses of socialism and communism and has helped tear down the Iron Curtain. Its power is fundamentally moral and as such deserves all the moral support we can give it. The message of the postcommunist newcomers to the marketplace is directed toward every would-be tyrant: "We are not things to be used by you, but free people with inalienable rights. In the market, it does not matter how we came into the world but what we make of ourselves. We join in cooperative effort for the good of all. If you interfere, you harm all people. If you oppress us, you will lose all that we have to offer and become poor. Throw away your chains and your barbed wire; they are useless now." TOMORROW'S AGENDA As I said at the outset, communism is dying, but we need no more than the unrepentant Left to remind us that the war of ideas is not over. .... The rejection of communism leaves a vacuum for that other "isms" and ideologies will rush to fill. Certainly among them will be milder forms of socialism that build the power of the state. It is the business of all who stand for individual rights in a civilized order to refute these efforts and make our own ideas heard. The answer to bad ideas is good ideas. Let us never forget that the war of ideas is a real war, with real casualties should we fail. One cannot predict the politics and perils of tomorrow exactly, but the enemies of the moral order change little. We know them. We can in some measure anticipate their assaults by their beliefs and goals and plan our own strategy accordingly. ... They will take positions against the traditional and the normal, against home and family, against distinction between man and woman, against human nature itself: positions which, on analysis, will treat people as mere conveniences to somebody's plans, not as individuals of infinite worth. Whatever they seek, they will be armed with ideological formulations and warped words. Above all, they will try to force their schemes on us, using the power of government. Such resort to government "solution" always seems to me a giveaway that something wrong or dishonest is involved. In freedom, persuasion - not coercion - is the way to get one's ideas across, and the only way. Imposing them by law denies to others their liberty, their dignity, their right to their own opinions. It is, in fact, an act of contempt toward them and an act of pride in oneself - a claim to know better than we what is best for us. In the view of Nobel laureate F.A. von Hayek, this is the "fatal conceit." It the Judeo-Christian view, it is sin. Deep down, it implies a false, secularist view of life .... It is precisely that kind of thinking that has collapsed due to hard experience in Eastern Europe and Russia; but it is still rampant here. We need not know the whys and wherefores of a given statist scheme to realize that it serves bent thinking and bad purposes. It will, of course, be made to sound good, as if it were correcting injustice instead of creating it, or helping the needy instead of making them dependent and helpless. It will, of course, have the support of all the familiar "opinion makers" ... But it is going to cost us dearly, not only in taxes and liberty but in moral values. Certainly in the coming years we will have to deal with liberalism, a set of once-noble ideas that sold its soul to statism decades ago and now grows more decadent every day. It remains strong, but as a reflex. .... The reflex the Left constantly encourages is: Uncle Sam is there to do what individuals can't or won't accomplish on their own. If we agree with this reflex, we forget the basic facts of life. Government can't do anything for us without first taking from us the means to do it. Government's only tool is force, and force is usually the worst possible tool to apply in social matters. ... Running to Uncle Sam with our problems only takes away from our own freedom and resourcefulness. We have, I'm afraid, lost our fear of big government, and we had better regain it soon. ... Our survival is at stake. ... Will a springtime of liberty bloom into a full summer of peace? Or will our hopes collapse before some new peril? ... We can play our part in shaping the world now emerging, or we can stand aside and be overrun. The other side is working against us. We have to be better. We have to lead with the right ideas. Ideas, not armies, rule the world. We believe too easily that tanks, barbed wire, secret police and instruments of thought control and totalitarian power were decisive and that slaves could never be free. The events of the last several years have proved us wrong. It was false belief, not barbed wire, that enslaved. In the end, the wire was cut and the Iron Curtain broken by simple human choice, not arms. Those who had been trapped behind the barricades said "Enough!" and were freed. _______________________________________________________________