Freedom in One Lesson

24.

The Good within Our Reach

It is often asserted that we should cooperate rather than compete in society. For instance, FDR said, “Competition has been shown to be useful up to a certain point, but cooperation, which is the thing we must strive for today, begins where competition leaves off ” (Roosevelt 1912). Bertrand Russell expresses it even more sharply: “The only thing that will redeem mankind is cooperation” (Russell 1954).

But such views, now as well as then, tend to falsely understand competition and cooperation as either-or choices. Many supposedly cooperative ventures actually reduce social cooperation. Market competition, however, provides a peaceful process that expands it.

Leonard Read is fully aware of our mutual dependence on cooperation—our interdependence. He addresses the theme in “The Good within Our Reach,” from his 1981 book How Do We Know? (Read 1981a).

Suppose there were no coming together, each individual dependent solely on his or her own thoughts and productivity. . . . All would starve! . . . Merely ask yourself, whoever you may be, how well you would prosper were you dependent on only that which you know how to do. . . .

Why is coming together a beginning? Because it results in a pooling of our specializations. . . . We have become interdependent; each of us is dependent on the unique specializations of others and freedom to exchange. . . .

There is no question that working together leads to success.

Read understands market competition as an essential means to expand and improve cooperation rather than threaten or hinder it. Market competition is a discovery process that reveals what would otherwise be unknowable: who will cooperate best with one another and how they will cooperate across uncountable individual choices and interactions. Those who cooperate more effectively with others earn greater rewards. And the stronger the competition for consumer patronage and employees, the more such cooperation develops.

The problem is to maintain the freedom to cooperate and to compete. . . .

. . . A noted professor . . . at a leading college condemned the market economy on the ground that cooperation was good, competition bad. What a fallacy! Example: When bakers of bread compete, the one who provides the best—highest quality at the lowest price—is the one with whom we cooperate. Competition and cooperation are twin virtues and when strictly observed they form what might well be called “The thank you society.” When buying a loaf of bread . . . I say “Thank you” because I want the bread more than the money. The grocer says “Thank you” because he wants the money more than the bread. This is the free market at the bread-and-butter level!

He contrasts his understanding of competition as a means to improved cooperation with a failed government attempt at forced cooperation that he had lived through.

The present situation is remindful of the ideological slump during the early days of the New Deal: the National Industrial Recovery Act—the NRA or the Blue Eagle—became law. Top business leaders and their national organizations endorsed this fantastic set of strangling controls over the economy. . . . Why this anti-free market position? . . . One [reason] was the hope of being rid of dreaded competition.

The NRA was a bust. Growing opposition culminated in the Supreme Court ruling that it was unconstitutional, but that process was impeded by arguments for phasing out its restrictions to avoid harming the economy (of course, some of those arguments came from those who gained from the restrictions). In contrast, Read argued for the opposite: ending the abuses of liberty would rapidly restore the ability to voluntarily expand cooperation.

However, after a year of this politico-economic nonsense, business leaders and their organizations reversed their position, but some dragged their feet. Abbreviated, their reasoning ran like this: “ We must be rid of this political monstrosity, but let us eliminate it gradually. To get rid of it suddenly would wreck the economy.”

Getting rid of what’s wrong gradually is a nonsensical tactic. . . . Restore what’s right right now! And that is what happened to NRA in May, 1935, with the Supreme Court’s famous “Chicken Case” decision. As of that moment every phase of NRA was abolished, not an iota of it remained. The wrong abolished suddenly! Did the economy go smash? To the contrary, citizens went suddenly to work. . . . The opportunity of working together was increased.

Ending the NRA restrictions immediately restarted voluntary cooperation in the market. And restoring the freedom to offer superior goods, services, and organizational approaches in peaceful, voluntary arrangements led to far better results. But many learned nothing from that object lesson. “Only a few learned the lesson and came to an understanding of how the free and unfettered market works its wonders for one and all!”

Leonard Read reinforces his lesson with the example of the NRA, which shows how rhetoric about “working together for mutual benefit” is often a cover for damage to competition, the undermining of cooperation, and the loss of liberty. He sees that what Friedrich Hayek calls the “extended order” of competition in the marketplace improves outcomes. Requiring the consent of all whose rights are involved (a constraint absent in political determination) forces competition into beneficial channels and offers better possibilities for everyone.

Market competition improves cooperation because everyone is free to offer their cooperation under whatever terms they find acceptable. The process rewards those most able to satisfy consumer desire, however weak their political power (a weakness that is often exploited), which improves results for themselves and for those dealing with them.

Contrary to those who assert that cooperation is superior to competition, only relationships based on the voluntary exchange of private property (i.e., capitalism) exclude coercion and allow true voluntary cooperation. The goal of this cooperation is not to eliminate competition but to channel it into forms that have been mutually agreed on. Rather than condemning the market as the antithesis of cooperation, Read recognizes, along with Ludwig von Mises (who joined FEE at its very beginning, urged to do so by Henry Hazlitt), that competitive markets comprise “a system of mutual cooperation,” where “the function of competition is to assign to every member of the social system that position in which he can best serve the whole of society and all of its members” (Mises 1998).

We are once again in a time when self-proclaimed political saviors are shilling for government and imposing “cooperation” at the expense of Americans’ rights and liberties (e.g., the Biden administration has pushed for almost every special advantage for labor unions ever dreamed up). Such “cooperation” undermines real, voluntary cooperation that evolves through market competition. Revisiting Read’s thoughts on advancing “the good within our reach” can help us to defend our rights, liberties, and well-being.