Freedom in One Lesson

52.

Complexity and Consumer Interest

Two of the most common errors in economic policy are the beliefs that the interests of some should supplant those of others and that an increasingly complex society requires expanding government control.

The first belief is a clear contradiction of the idea that government should serve its citizens. It is an excuse to mistreat consumers to benefit favored groups. The second belief is an excuse to ignore the experience and wisdom we can glean from the past. History’s countless government failures are treated as irrelevant while “new and improved” promises enable further government expansion.

Leonard Read deals with both beliefs in “A Consumer Looks at Freedom,” from his 1971 book Then Truth Will Out (Read 1971a).

Consumer interest is the premise from which all economic reasoning should proceed! . . .

Bearing in mind that we live in a highly specialized economy and, thus, are thoroughly interdependent, my consumer interest is progressively served by an increase of goods and services obtainable in willing exchange for my offerings. That’s all there is to it. . . .

. . . In the final analysis, the issue is between coercion and freedom. . . .

Every increment of economic progress any people enjoy has its origin in the release of creative energy—a product of freedom. . . .

During America’s early days, when our simple and largely agrarian economy featured some measure of self-subsistence, consumer interest was easily discerned by nearly everyone; people saw the fraud, the futility, of coercively taking the fruits of one’s husbandry . . . and handing them over to others. The injustice of such tactics was readily apparent; the coercionist had no ideological leg to stand on; his arguments, however clever, were seen to be against consumer interest.

But let the economy become increasingly specialized and complex—a concomitant of the free market way of life—and no one can grasp its intricacies. . . . People thus acting freely in the market evolve patterns of interactions so complex that they defy comprehension. . . .

This quite natural, pervasive blindness is precisely the situation best suited to the modern soothsayers, witch doctors, seekers after power, coercionists, who prey on any and all observed dissatisfactions in society; or, if none are observed, they invent and whip up the clamor on which they thrive. A problem? You name it! They have an answer. And millions of people, having no answers of their own, are taken in. . . .

Complexity of relationships in no way alters the propriety of moral, spiritual, social, or economic principles. . . . The dictum that thievery is evil holds as true for the theft of a dime as for the theft of a thousand dollars. The moral principle that l owe respect to your life, livelihood, liberty applies no less to all others than to you alone.

. . . When [the authoritarian] premise is accepted, namely, that it is appropriate for them to lord it over us— implying that our rights derive from them—then they have no choice but to discard the natural law and to concoct “laws” of their own. And these “laws” must be of a kind that they think befits their premise. Their premise being faulty, it follows that their “laws” cannot rise above mere aberrations. . . .

Relevant to this thesis is a celebrated cliché: . . . “The more complex the society, the more government control we need.” What this says, in effect, is that the more diversified our specializations and the more numerous our exchanges—manifestations of free, creative energy at work—the more must we submit to authoritarian regulation. In short, the more freedom works its wonders, the more coercion we need! Talk about conjuring up contradictions! But such is the nature of the soothsayers’ “laws.”

Choose the most brilliant person of your acquaintance and ask yourself how competent is he to run your life, that is, to decide where you shall work, how many hours, at what wage, what and with whom you shall exchange. . . . “Utter nonsense!” is your answer. Now increase the complexity by multiplying you by a dozen, or a million, or 200 million. Obviously, the more complex the society, the greater is our need to be free—the less can we tolerate government control! . . .

“Government, in its last analysis,” wrote Professor Woodrow Wilson, “is organized force.” . . . [But] coercive tactics can never lead to anyone’s real advantage—any more than a wrong can beget a right. . . .

. . . Once the gates of something-for-nothing are opened, more and more people from every walk of life rush to the trough. . . . They let others foot their bills! . . .

. . . In all of these coercive schemes, such income and capital as you and I possess are syphoned off, and with not an iota of goods and services in exchange.

Do away with coercion; limit force to defense against fraud, violence, predation, misrepresentation—that is, against all destructive actions. What then? What remains? The free market, private ownership, limited government way of life—the greatest discovery in human history for working one’s way out of poverty!

If we will judge each practice and policy—private as well as public—in terms of how well it serves consumer interest, we will be on the right track. In the way of life thus deduced, everyone will make only those exchanges which he believes to be to his own advantage—all gain and no loss. Quite a switch from the coercive way!

As a consumer, I choose freedom. But even if the coercive way had economic advantages, I would still choose freedom. There is much to be said for being one’s own rather than somebody else’s man.

All sorts of rhetorical tricks can be used to shift attention away from the interests people share in common as consumers. But since consumers benefit from secure property rights and economic freedom, such misdirection can enable government abuse. We should be cautious about references to “increased complexity” as a justification for violating rights. We tend to recognize such abuses as immoral and unacceptable when committed by individuals, yet many defend them as beneficial when government is the perpetrator.

Leonard Read diagnoses sleight-of-hand tricks for what they really are and urges people not to be taken in by the political equivalent of three-card monte. Americans have ignored or forgotten his wisdom, much to their own harm. Recovering it is the path to both moral and economic improvement.