The United States, like all new countries, started poor in capital and badly in debt. Although other nations have often had equal access to natural resources, the United States slowly but consistently forged ahead. Today, with only 7 percent of the world’s population and 6 percent of the earth’s territory, the United States has acquired through peaceful industry nearly 50 percent of the world’s developed wealth. Each year its citizens grow, build, sell, buy and use more goods and services than any other country in existence.
With a population of 180 million (1962) the U.S. has succeeded in approaching the economists’ dream of total employment by providing jobs for 63 people while approximately 37 million of its youth been enrolled in school. Each year the people of the United States spend more than 200 billion dollars on personal goods and services. This means a per capita income of $1,453 which is twice the per capita income in Britain, five times the per capita income in Russia, and seven times the per capita income in Italy.
According to the American Automobile Association, the people of the United States spend more than 9 billion dollars vacations each year. Individual savings amount to 17 billion dollars annually, and 3 out of 4 families are covered by life insurance. Of the 50 million dwelling units in the nation, 60 percent are occupied by their owners. The millions of acres of developed farm land produce more food than its citizens can eat. The productive capacity of the United States is the largest in the world. It owns 30 percent of the world’s railroad mileage, 76 percent of its automobiles, 51 percent of its trucks, 47 percent of its radios, 42 percent of the electric power output, and 47 percent of its steel.
Each year the United States produces 51 percent of the world’s output of petroleum and about 30 percent of its coal. The U.S. merchant fleets have replaced Britain’s as the rulers of the seas with the greatest volume of foreign trade.{227}
The Pattern for Abundant Living
World travelers or people who have lived abroad can appreciate the abundant living of the United States better than the average American. The table on the opposite page illustrates how little time it takes an American citizen to earn the necessities of life and why he is able to spend so much of his income on travel and items of commerce which foreign citizens would call luxuries. This table shows how many minutes the average citizen of leading countries must work to pay for one pound of the various items listed.{228}
TABLE: Minutes of Work Required in Various Countries to Earn One Pound of Food
Food U.S. France Germany Ireland Italy Norway Sweden Russia
1 lb. Wheat Flour 4 20 15 6 15 6 18 27
1 lb. Macaroni 8 - - - 20 17 - 45
1 lb. Rice 6 33 - - 17 17 16 91
1 lb. Bread 6 9 12 8 13 7 7 14
1 lb. Beef 31 126 - 72 128 58 - 132
1 lb. Pork Chops 32 91 87 68 124 59 97 220
1 lb. Veal 48 120 94 - - 48 100 -
1 lb. Leg of Lamb 31 133 - 76 - 61 85 140
1 lb. Fish 18 33 31 42 55 18 - 135
1 lb. Butter 30 135 150 83 162 63 115 270
1 lb. Cheese 22 140 - 60 109 38 35 -
1 lb. Fresh Milk 8 16 15 16 20 9 12 42
1 lb. Eggs 32 118 125 109 126 82 97 187
1 lb. Fresh Apples 4 19 16 - - - 9 89
1 lb. Cabbage 2 7 - - - 5 6 37
1 lb. Carrots 5 9 8 - - 12 7 9
1 lb. Potatoes 2 3 3 5 5 3 4 9
1 lb. Oleomargarine 13 64 39 55 - 19 - 152
1 lb. Sugar 4 21 21 9 37 7 14 110
In this list the statistics for potatoes may be used as an illustration of what has been happening in the world. Russia, for example, produces more potatoes than any other country in the world, but a Russian must work four times as long as an American to buy one pound of potatoes. And observe that a Russian must work twenty-seven times as long as an American to buy one pound of sugar; twelve times as long as an American to buy one pound of oleomargarine. In the United States by 1951 there were 105 million radios.
It took the average citizen 1 day and 2 hours to earn enough money to buy an average radio. In France it requires 7 ½ days of toil to pay for an average radio, in Italy 15 days, in Russia 27 days.{229}
In the United States there are 201,277 physicians, 87,000 dentists and 1,439,030 hospital beds. The life expectancy in the United States is 65.9 years for males and 71.5 years for females. In Russia the last life expectancy tables show the average to be 41.9 years for males and 46.8 years for females.{230}
Certain foreign propaganda agents have tried to depict U.S. wealth as a fortuitous gift of nature. Economists have pointed out that many foreign nations have equal access to resources and could duplicate the wealth of the United States if they were willing to accept the principles of government and economics which make the development of such wealth possible. Propaganda agents have insisted that since the United States has become remarkably wealthy it should divide that wealth with the rest of the poverty-stricken world. Economists have answered this by pointing out that what America has to share with the world is not so much her wealth as her time-tested system of government and economics.
If America’s wealth were spread around the world it would soon be dissipated, but if her system of free government and free enterprise were spread around the world, nations would soon find them to be perpetual producers of wealth. What foreign nations envy in America is the fruition of 175 years of true liberalism.
APPENDIX C
What is Free Enterprise Capitalism?
Marx made his most damaging mistake while drawing up the blueprints for a Communist society by designing them for a creature which never existed. He misinterpreted the nature of man. Since then, the Communists have expended vast quantities of strategy and energy trying to change the instinctive desires of man, but this has proven impossible.
Marx likewise miscalculated while attempting to analyze free enterprise capitalism. His prophecies concerning its unavoidable collapse failed to materialize. In fact, the very opposite occurred. While nations which toyed with Socialism and Communism progressed slowly, stood still or slid backwards, Capitalism rolled steadily on.
Two things in particular have made modern Capitalism increasingly successful. First, its capacity to satisfy the inherent needs and desires of man, and second, its capacity to function efficiently with very little guidance or supervision. It is sometimes called a natural system of economics because it tends to adjust automatically to human requirements. Nevertheless, being a child of nature, Capitalism contains a certain spirit of the jungle when observed in its wild, uncultivated state where men have used it for selfish, individual survival. However, under domestication and tempered with the ingredient of good will toward men, Capitalism has proven to be man’s most efficient device for the developing of material wealth and for general social advancement; in other words, for community survival.
In order to appreciate the natural qualities of Capitalism which have proven beneficial to mankind, we should first ask ourselves, “What is the nature of man? What are his desires and needs?”
The Nature of Man
Under careful scrutiny, man turns out to be a physical-spiritual being. To ignore either facet of his nature would be as fatal for us at it was for Marx.
On the physical side, we observe that man is an elaborate and complex organism with a capacity to register and react to sensations ranging from excruciating pain to ecstatic pleasure. Bradford B. Smith calls this man’s pain-pleasure scale. A vast array of human needs grow out of man’s desire to avoid pain or discomfort and achieve physical satisfaction and pleasure from life. Some of these would be:
• Satisfying hunger
• Quenching thirst
• Satisfying tastes
• Being warm in cold weather, cool in warm weather
• Avoiding illness
• Being relieved of pain
• Having comfortable and attractive clothes
• Having a comfortable home and surroundings
• Enjoying perfumes and pleasant odors
• Hearing pleasant sounds
• Enjoying relaxation and recreation
• Participating in marital associations
• Enjoying the sensation of movement and travel
• Seeing colorful objects or colorful scenery
Now let us take a moment to consider the other half of man’s nature—the spiritual side. This is sometimes called man’s fear-hope scale. Man, as an intelligent, self-knowing, self-determining being, is capable of having strong feelings ranging all the way from sublime hope to deep fear and despair, Sometimes these are closely related to physical needs and frustrations; sometimes they are purely intellectual. But regardless of their origin, they are very real and result in a wide pattern of intellectual or spiritual needs:
• To be of individual importance so as to count for something as a person.
• To be a party in interest—to be identified with the system.
• To enjoy owning “things.”
• To be appreciated for some unique and important contribution.
• To have a satisfactory degree of economic security.
• To feel the satisfaction of sacrificing or risking something to achieve progress. (This is sometimes erroneously called the “gambling” instinct.)
• To have the opportunity for creativity.
• To feel family solidarity.
• To enjoy the right of privacy.
• To have freedom of expression in matters of opinion.
• To be protected in convictions of religion and conscience.
• To feel significant in determining matters of political importance.
Man’s Mainspring of Action
In studying the nature of man it soon becomes apparent that his “mainspring of action” is the driving necessity to satisfy both physical and spiritual needs. Many economic systems which men have invented tend to smother or ignore these needs. To that same extent these systems are bound to smother man’s greatest source of motivating power—the anxiety to satisfy these deep, throbbing human desires.
Forty years of Communism in the USSR have eloquently confirmed this. The Communist leaders have suppressed the natural desires of their people and have tried to motivate them to action through fear. But this has not worked because fear is primarily a depressant instead of a stimulant. On the long pull it becomes a dull, paralyzing drug affecting both brain and muscle, and leaves a smoldering ash of combustible hostility. “Work through fear” can never compete successfully with the tantalizing opportunity provided by Capitalism to constantly satisfy natural human needs. Satisfying these needs is almost the entire source of power for Capitalism’s productive momentum.
Of course, if human beings made an attempt to rush around in breathless haste trying to satisfy all of these desires to their utmost, they would probably die in their early youth. Therefore Providence has endowed each human being with a built-in reactor against speed which serves to prevent or discourage over-indulgence. It is called “inertia.” As each person feels an inward desire to satisfy some physical need, he simultaneously feels the strong gravitational pull of laziness or inertia. Thereby hangs an important principle of economics: “Man ever tends to satisfy his wants with the least possible exertion.”
Perhaps we should mention in passing that capitalism gives full vent to this principle by encouraging men to continually seek cheaper sources of power and try to develop more efficient machines to do the world’s work instead of using human and animal muscle. Even as late as 1900 over 50 percent of U.S. power was provided by animals and men, but under a half century of capitalistic development they now supply only 2 percent of the power. The rest comes from machines. Other political and economic systems claim to be in favor of mechanization, but no other system is able to promote technological development as rapidly as capitalism because competitive survival becomes so important that it makes it worthwhile to throw away machines as soon as they become obsolete, also to discard outmoded sources of power. Mechanization on American farms came about through economic necessity while mechanization on socialized farms is looked upon as desirable but not particularly necessary.
The Law of Variation
The genius of Capitalism is not merely that it satisfies the desires and needs of mankind generally, but it responds to the factor of variation as between individuals. It allows each man to do anything he wishes so long as he can survive at it. Therefore each man continually surveys the field of economic opportunity and gradually tries to push him into that phase of work which best satisfies him.
This is one of the greatest blessings of free enterprise Capitalism. To a remarkable extent it allows a man to do just about whatever he wants to do. Laborers are not conscripted nor told they cannot strike; nor are they ordered to remain in certain occupations as tends to be the case in socialized and communized countries.
Under Capitalism Everyone Can Gain
A study of human nature reveals that “value” is psychological rather than real. Whether a thing is “worth” a certain amount depends entirely on the mental value attached to it. Capitalism has proven to be a dynamic economy in which everyone participating in a transaction can increase the value of what he has, or, in other words, make a profit. This can be true of both the buyer and the seller. For example, take a man who wants to buy a used car. He has a certain amount of money or credit. When he offers this money to the dealer it means that he would rather have the car than that amount of money—the “value” of the car is greater to him than the “value” of the money. If the dealer agrees it means that the dealer would rather have the money than the car. In fact, he won’t sell the car unless the price he gets is of greater value to him than the value of the car. As the car is driven away, both men have made a profit. Both men feel they have improved their position as a result of the transaction.
This is a strong contributing factor to the success of Capitalistic free enterprise. It allows everyone to win, either by making a profit or by improving his position as the result of an honest transaction.
The Meaning of a Free Economy
Capitalism thrives best in a free economy but freedom is a much misunderstood subject. For example, there is no such thing as total, unrestricted freedom. Freedom means simply the chance to choose. Therefore freedom can only relate itself to specific choices such as the freedom to speak or not to speak, the freedom to believe or not believe, the freedom to buy or not to buy, and so forth. Furthermore, freedom can move in only one direction at a time. If a man has ten dollars and chooses to spend it on a night of celebration he has thereby lost the freedom to spend that same ten dollars on some new clothes. Once the choice is made, a person is not free to avoid the consequences of that choice. That is why we say there is no such thing as unrestricted freedom, or freedom in general. Freedom is always restricted to some specific choice and freedom is always restricted to choosing one direction at a time.
It is for this reason that a free economy requires a continuous education of its people so that they will exercise their “freedom to choose” in such a way that it will sustain sound moral principles and build a dynamic economy with a strong social structure to preserve it. In making such choices, the people must sense what is best for both the individual and the community. They must be well informed. They must know enough about each problem so they can anticipate what the result will be when they have made their choice.
There are many notable examples in both modern and ancient history to illustrate what happens when people are only casually concerned with their right to make a choice or exercise their freedom. Free peoples require alert, aggressive leadership and a socially and politically conscious citizenry. This is not easily maintained, but it is the price of freedom. Sometimes the streak of natural laziness in people makes them wish that a commission, a dictator or a king would make all the decisions and force the people to do what is good for them. But this is the road to ruin for a free economy. The people must retain the sovereign right to choose, for that is
all freedom is.
Now we come to the four great freedoms which must always exist in a truly free economy.
First—Freedom to Try
One of the most essential ingredients in a healthy economy is the freedom to try. This is really the freedom to achieve and it is based on the principle that “the genius of one or a few men cannot begin to compare in the aggregate to the genius of all the people.”
Therefore, in a free country a man can develop a new kind of shorthand, a different kind of screwdriver, a new breed of cattle, or an improved type of mousetrap. When he is through, no one may wish to buy the new product or service, but at least he is free to invent it and try to sell it if he can. This is an in indispensable characteristic of Capitalism—the freedom to try.
One of the reasons atomic energy was shared with the people for peacetime development was because Americans have been educated to believe that this is the best way to harness atomic power for a vast multitude of domestic services. With many thousands of scientists working on ways and means to exploit atomic power—instead of using just a few hundred—the results should be correspondingly greater. This is particularly true where each of the scientists is free to try anything his inventive genius may dictate.
This was precisely the way we developed radio, television, the prevention of polio, the wonders of the modern automobile and the sound-barrier-breaking speed of the propeller-less jets. By way of contrast, it is interesting to note that the providing of an adequate road system was reserved to the State and Federal Governments. Notice that this monopolized program has never come up to the public needs at any time in our history. It is interesting to consider what might have happened if highways had been left in the open market where businessmen could compete for the opportunity of serving the public with adequate systems of highway facilities. In fact, during recent years there have been several places where toll roads have been built by private capital with the permission of state legislatures because the people were so dissatisfied with the inefficiency of government supervised thoroughfares.
The Naked Communist Page 33