The Philosophy of Freedom

by Caleb Nelson

  What about horrific working conditions and child labor? Such labor was due to inherited poverty from the feudal systems. This sort of labor was prevalent throughout most of mankind’s history. The Child Labor Public Education Project says that the “current causes of global child labor are similar to its causes in the U.S. 100 years ago, including poverty.” They estimate that of “215 million child laborers around the globe: approximately 114 million (53%) are in Asia and the Pacific; 14 million (7%) live in Latin America; and 65 million (30%) live in sub-Saharan Africa.”

  [281] If freedom and capitalism cause child labor, it would be logical to assume that the freest and most capitalistic countries would suffer from it the most. As we can see, this is far from the truth.

  Child labor was wiped out in the United States, not primarily by laws and unions, but by capitalism’s productivity which slowly made such labor unnecessary for a family’s survival and prosperity. This increase in productivity slowly started providing for people’s needs without them having to resort to such heart-breaking methods for survival. Keep everything in context and you will see that capitalism did not cause such things, but eradicated them in all but the most statist of modern countries.

  SLAVERY

  The founding principle of America—individual rights—contradicted the established institution of slavery, which had existed since the earliest recorded histories. That principle paved the way to a Civil War and eventually eradicated legalized slavery from America and from the earth.

  Abraham Lincoln claimed that a higher law superseded the statutory laws of slavery and found them in violation of a “nation conceived in liberty and dedicated to the proposition that all men are created equal.” As author Jean Elshtain observes, “Lincoln could not have made such a claim if he lacked the principles from which to challenge the abhorrent practice he condemned. Slavery was not a founding American principle. It was a repulsive practice that clashed with our principles and was therefore doomed.”

  [282]

  Lincoln said that the Black man was “entitled to all the natural rights enumerated in the Declaration of Independence, the right to life, liberty, and the pursuit of happiness . . . . In the right to eat the bread, without leave of anybody else, which his own hand earns, he is my equal and . . . the equal of every living man.”

  [283]

  George Washington foresaw that the existence of slavery, a European tradition that the Americans would have to wipe away, would threaten the future existence of the union: “I can clearly foresee that nothing but the rooting out of slavery can perpetuate the existence of our union, by consolidating it in a common bond of principle.”

  [284]

  Slavery in America only survived as long as it did, say historians Schweikart and Allen, because of political machinery put in place to protect it: “Ultimately slavery could exist only through the power of the state. It survived because political forces prevented the typical decay and destruction of slavery experienced elsewhere.”

  [285]

  The adoption of capitalism wiped out slavery in matter and in spirit.

  POOR FOOD/DRUG QUALITY

  A seller relies on his reputation to achieve long-term profits. Poor quality will send his buyers elsewhere, and fraudulent representation has always been illegal and is one of the reasons we need the protection of government. Goods never achieved such high quality in such a short period of time on earth as they did under capitalism’s partial reign.

  Quality slowly declines in a mixed economy. The public is lulled into thinking that since inspectors from the government are checking everything that their own judgment is unnecessary. Furthermore, once businesses have met a minimum standard set by government, they often have no incentive to produce higher quality products. Nor is the government capable of guaranteeing the safety and health of products in the first place, as can be seen in numerous cases of harmful drugs and contaminated foods that were approved or completely missed.

  POLLUTION

  “The word ‘pollution’ implies health hazards, such as smog or dirty waters.”[286] “As far as the issue of actual pollution is concerned,” Ayn Rand explained, “it is primarily a scientific, not a political, problem. In regard to the political principle involved: if a man creates a physical danger or harm to others, which extends beyond the line of his own property, such as unsanitary conditions or even loud noise, and if this is proved, the law can and does hold him responsible. If the condition is collective, such as in an overcrowded city, appropriate and objective laws can be defined, protecting the rights of all those involved—as was done in the case of oil rights, air-space rights, etc.”

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  It is well within the proper scope of government to protect people against harm from pollution.

  Unfortunately, it is a fact of our existence that you can’t make the delicious omelet which is our prosperity without breaking a few eggs. Industrial waste is an inescapable, yet minor side effect of industrialization. The only alternative is primitivization, where pollution is actually worse!

  The World Health Organization found that the amount of harmful “small particles” in the air of a hut where solid fuel is being burned is 12.5 times greater than even a roadside in Bangkok. Children and adults living in such primitive conditions have an incredibly high risk of developing, and dying from pulmonary and respiratory problems.

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  Statism is the cause of ongoing pollution problems. Despite decades of EPA regulations, pollution still occurs in significant amounts. “Regulations regarding sewage treatment have proven similarly impractical. Since 1972, the federal government has forced water utilities to spend billions of dollars upgrading water treatment facilities, and yet, during the past four years, record numbers of beaches have closed due to pollution from sewage. And the EPA predicts that by 2016 American rivers will be as polluted by sewage as they were in the 1970’s.”

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  Government controlled “public land” does away with the concern and responsibility that comes with the stewardship of owning private property. If waterways were privately owned, overfishing would not be the problem that it is today because the owners would have the incentive to act sustainably to insure their long term survival and prosperity.

  As with so many other problems caused by statism, pollution can be greatly reduced by protecting rights. The only entities with the finances, technology, and willpower to clean up are free and unfettered businesses, empowered by the restoration of stewardship and strengthened by the removal of crippling taxes.

  WAR

  This is a product of dictatorships which survive by looting others. Free countries seek to trade with others, unfree countries seek to dominate and leech resources from others. Free countries only attack to defend against objective threats.[290]

  GOVERNMENT CORRUPTION

  Business has no power to influence politics in a free market. Business and politics are only mingled in statist governments where the economy isn’t guided by principles. In capitalism, private business does not hold the monopoly on the retaliatory use of force—only government does. Therefore, any coercion against the public must, by definition, originate in government.

  Isabel Paterson asks, “Is it wrong to produce something or to process or exchange the products? No. Then it cannot impart corruption to anything else. Is it wrong to restrain, obstruct, or seize the goods of another? Yes. It is always wrong if done by initiating action . . . The potential corruption then lies in politics, not in business . . . . Now the sole remedy for the abuse of political power is to limit it; but when politics corrupt business, modern reformers invariably demand the enlargement of the political power.”

  [291] The Progressive solution to government corruption is to expand government control and power, rather than limiting it.

  CONTRADICTORY ATTACKS

  The contradictions among the most common attacks on capitalism are rarely used together in the same argument and are really quite embarrassing to see toget
her as a dichotomy—an opposite pairing.

  [292] That is, it’s embarrassing for anyone seeking to use reason as their guide. Many of these attacks are completely self-cancelling opposites, both sides of which are entirely false. Simply put, detractors will state A=B and then claim somewhere else that A≠B. Pragmatism tells them these contradictions are okay to use as long as they are effective. Let’s turn over the rocks and expose these fallacies to some sunlight.

  ATTACK #1

  Capitalism results in Coercive Monopolies

  vs.

  Capitalism results in Cutthroat Competition

  When people talk about monopolies, they usually mean coercive monopolies—monopolies which have such power as to bar any new entrants into the market, thereby being the only company providing a specific good or service, and the only place where consumers may go for that product.

  Despite all you have been taught to believe, it is impossible for a coercive monopoly to form or exist in capitalism. Such monopolies are only created, and have only ever been created, by governmental influence, mandate, subsidies, and intervention. In America, which has never known pure capitalism, there has never been the formation of a nongovernmental coercive monopoly for any significant period covering any significant geographical area.

  What about AT&T? For much of its history, AT&T and its Bell System functioned as a legally sanctioned, regulated monopoly. Essentially, when AT&T was broken up, the government broke up its own monopoly.

  [293]

  What about Northern Securities? It was neither coercive nor lasting for any significant period. Competitors were still free to enter the marketplace.

  What about Standard Oil? It doesn’t qualify as coercive either. “The fact that Standard Oil faced such stiff competition and was driven to expand output and lower prices ever further demonstrates the myth of Rockefeller’s ‘control’ of the market,” Alex Epstein, founder and director of the Center for Industrial Progress, explains,

  “Markets are not possessions that one can acquire or control. They are dynamic, evolving systems of voluntary association, in which competing producers have no ability to force customers to buy their product, nor any ability to prevent others from offering their customers superior substitutes. The expression ‘control a market share,’ translated into reality, means simply that at a given time one has persuaded a given group of individuals to buy one’s product—a state of affairs that can quickly change if someone offers a superior substitute.

  “Standard Oil enjoyed high market share because it produced a highly desirable product and offered it at a price that the vast majority of people were willing to pay. If someone else had made cheaper kerosene or a better illuminant than kerosene, or if Rockefeller had lowered his standards or raised his prices significantly, his customers would have purchased their goods elsewhere. Such is the nature of the so-called ‘monopolist’s’ control. And such is the nature of economic power.”

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  Contrary to popular belief, a free monopoly would be good thing. Keep in mind, we mean a monopoly in pure laissez-faire capitalism, not in any mixed economic system. Since a free-market monopoly has never existed, we can’t point to one as an example, but we can perform a thought experiment and exercise our brains on a conceptual level in order to see what one would be like.

  A FREE MONOPOLY: EXCHANGE, EMPOWERMENT, EFFICIENCY

  In a free market no one is forced to buy or sell anything. In such a case, how would a monopoly form without government influence? The only way would be if everyone, of their own free will and choice, decided to do business with a certain company, so exclusively and for such a long time, that all competitors dropped out.

  Why would people do that? What would cause people to be so fiercely loyal to one company? In a free market, the reasons range from the best price, to the highest quality, to the best service, to the most convenient, to the newest product. In other words, in a free market, a monopoly only exists if it is producing products or services less expensively, better, and more abundantly than its competitors. The only way for a company to get to the top and stay there is to consistently please its customers and do so better than competitors.

  The chances of such a situation ever occurring are infinitesimally small. It would be nearly impossible to be so superlative that no other companies could stand against you with comparable goods and services. Even if a company made great, affordable products, was ethical and responsible, even if they did everything right, what are the chances that a super majority would do business with them exclusively enough to sink the competition? But even if this were the case, this monopoly would still have no power to stop anyone from trying; anyone could go into business for themselves and compete against them.

  So what happens if this number one company, now with no real competition decides to raise prices, decrease quality, reduce wages, and cut the benefits of their employees? Just what you would expect to happen—employees will quit and alienated customers will go elsewhere for the product or not buy it at all. Start-up competitors would spring up, eager to carve out a share of the market.

  In a free market there are no government safety nets. Those who want to continue to make a living must continue to provide products and services that people want at a price they will pay.

  “But without regulatory agencies wouldn’t we get scammed by people trying to make a quick buck?” While there have been fly-by-night operations and scammers throughout history, they have been the self-destructive exception rather than the rule.

  Such scammers are rare because to act in such a way is ultimately self-destructive, stressful, and requires a lot more work than to make an honest living—at least in a free society. In general, business deals work well, transactions are ethical, people sell good products and get honest paychecks, and getting scammed is a rarity. This is not because government watchdogs are constantly foiling evil plots, but because it is naturally in people’s best interest to be honest and well-informed. After the success of the iPod, when it was time to roll out the next generation, did Steve Jobs trick us all and fill the insides of iPod 2.0 with sawdust and then flee with his billions to his secret, palatial moon base? No, Apple continues to make awesome products we think we can’t live without, and they continue to laugh all the way to the bank. Everyone wins.

  Despite all the regulatory agencies we currently have, the government is still unable to prevent fraud and crime. Even with the watchful and intrusive eyes of the Securities and Exchange Commission and their $906 million budget, Bernie Madoff was still able to commit eleven federal felonies and pull off the largest Ponzi scheme in history.

  [295] One, we should note, federal investigators believe began as early as the 1970’s. Despite the regulatory agencies, there are still private companies like Consumer Reports and Angie’s List because we value knowing which people are worth doing business with. We have seller reviews and buyer feedback on Amazon and Ebay. The government can’t help us decide who to trust.

  Why would a world without governmental economic regulations be better? First, it is a matter of principle—freedom is moral. Not infringing on people’s liberties is the right thing to do. Anything less is tyranny. That is the really the only justification capitalism needs. However, because it is morally in line with reality, there are naturally positive benefits that flow from such a situation, such as empowerment.

  Think about the psychological effects on the minds of people who don’t have to use their own judgment, who don’t have to rely on their own decision-making skills but instead have a paternalistic nanny-state to tell them what to do. It weakens the individual. It teaches them to be dependent, ignorant, uncritical, to not take responsibility for their lives and choices.

  How would we act differently without an FDA to tell us what to eat and what drugs were safe, without a Department of Commerce to tell us what to buy, without a Department of Consumer Protection to tell us who to trust, with no Department of Education to tell us what and how to teach our chi
ldren, no FCC to censor our media, no licensed barbers to tell us who can cut hair well, no licensed Realtors to show us houses, and no EPA to tell us which light bulbs to buy? We would have to fully embrace our personal sovereignty. It would force us to rely on ourselves, to become educated. We’d be more careful. We wouldn’t just buy the first thing we saw. If we were wise, we would make sure that the company we were thinking of dealing with was trustworthy and had a track record of excellence. We might consult a private consumer ratings organization or go to a website where consumers gave reports on businesses they had interacted with. We would consider the recommendations of people we knew and trusted. We would be wary of new companies, we would make them earn our trust, and they would have to fight hard to do so. Proven excellence would be our standard of judgment, not the blithe acceptance of a seal of a government approval—a seal which ensures companies must only meet minimum requirements and takes away their incentive to surpass it.

  Yes, there would still be ignorant citizens who make poor choices, buy poor quality products, and get scammed—but that happens with the regulations! Millions of dollars a year are still sent to email scams like the infamous Nigerian Prince. Laws can’t make us less naïve or less greedy.