Let Freedom Reign

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A ROLE FOR RATIONALITY1

The characteristic that most significantly distinguishes man from other organisms is his ability rationally to will his own actions. Admittedly, this is only a budding ability, a rarer achievement than generally believed. But, nonetheless, the rational will is a potentiality, and its progressive realization would seem to be the mark of man fulfilling his destiny, namely, coming more and more to share in Creation.

The observation that those who do not learn from history are condemned to repeat it generally refers to the rise and fall of nations and civilizations. My contention is that history does have certain lessons to teach:

1. The rise of civilized societies is the result of freedom, and freedom is a state of affairs stumbled upon and, in no instance, a premeditated, rational design.

2. The explanations for societies in ascendancy have generally been false—the ascent has been attributed to organizational gadgetry rather than to freedom.

3. The decline and fall of civilized societies has usually been attributed to some organizational error rather than to overorganization. Rarely has a lack of freedom been assigned as the cause.

4. To avert a decline and fall requires rational analysis and an understanding of what it is about freedom that accounts not only for ascendancy but for the maintenance of the ascendant position. Be rational in this respect or look for the cycles of history to repeat themselves!

Professor F. A. Hayek, who has a scholarly sense of what is historically significant in human behavior, observes:

Modern man prides himself that he has built his civilization as if in doing so he had carried out a plan which he had before formed in his mind. The fact is, of course, that if at any point of the past man had mapped out his future on the basis of the then-existing knowledge and then followed this plan, we would not be where we are. We would not only be much poorer, we would not only be less wise, but we would also be less gentle, less moral; in fact we would still have brutally to fight each other for our very lives. We owe the fact that not only our knowledge has grown, but also our morals have improved . . . not to anybody planning for such a development, but to the fact that in an essentially free society certain trends have prevailed because they made for a peaceful, orderly, and progressive society. (Italics added.)

It is my belief that each praiseworthy society—Sumer, Athens, Carthage, Rome, Venice, Florence, Kiev, England, America—has not flowered from a rationally designed scheme for social felicity but, rather, has bloomed from a state of freedom come upon unwittingly, inadvertently, accidentally. Merely observe that there has been little understanding of the reason for the remarkable release of creative energy—even after freedom has existed. If there is no understanding of the wonders wrought by freedom after the fact, how, possibly, could there have been any anticipation of its wonders before the fact?

The American Miracle

History’s greatest creative outburst took place in the United States of America where freedom—private ownership, freedom in transactions, willing exchange, government limited to keeping the peace—was more nearly approximated than elsewhere or at any time. The correlation between freedom and creativity appears to be unassailable.

Was the American miracle premeditated, a rationally designed structure of society? Far from it! The people who came to this land were fleeing from old-world tyranny. They had little else in mind than to get away from their shackles. Europeans who migrated to America observed that the more a government ruled the actions of men the worse off they became. Their conclusion: That government is best which governs least. Hardly a refined theory!

What did these settlers do? They limited government more severely than governments had theretofore been limited. An examination of the Constitution and the Bill of Rights reveals 46 instances of “no” and “not” directed against governmental action; in short, hands off! And there they stood, freer than man had ever been before.

This American action did not occur as a rational prognosis of better things to come, for these forebears of ours hadn’t the slightest idea of what lay in store for them except that each could be his own man. They chose freedom for freedom’s sake alone; hang the economic or other consequences.

If we could gather all the facts, I believe that every instance of freedom has come about as a last resort. Authoritarians had tried everything in the way of controlling the creative actions of men; everything had failed and their bag of tricks was exhausted. What to do when such a dead end is reached? Indeed, what could be done in ruling creative actions? Nothing! And there stood the citizens free to act creatively as they pleased.

Freedom in every historical instance has been brought on by desperation; there simply wasn’t anything else to try. And then followed the miracle which was attributed far more to organization than to freedom.

Facts concerning the U.S.A. are more abundant than in previous instances. Beginning roughly 150 years ago, people the world over observed in America something most unusual. For the first time in history, every individual, regardless of station or status, was his own man.2 Each could employ himself as he saw fit, each retain the fruits of his own labor, each decide his form of worship; in a word, freedom of choice in all aspects of life was as open to one as to another. Foreigners heard of an explosive creativity and an unprecedented prosperity—a new world in which the lowliest laborer might rise to an affluence greater than that of lords and dukes!3

The upshot? There began the greatest migration to a single country ever known. And something more: curious individuals, such as Alexis de Tocqueville, as well as governmental commissions from many nations, came here to discover the magic that had been loosed. If they could find it, they themselves could experience the miracle. Or, so they thought.

Imitations Unsuccessful

What was the message most of them took back to their countries? What was the magic word? It was organization. They focused their eyes on the Constitution and the Bill of Rights featuring limitations of governmental authority, separation of powers as between the legislative, judicial, and executive branches, and so on. Simple enough; merely duplicate these forms of political organization and then any society can experience the social and economic progress evident in America!

And many nations did just that, patterning their new Constitutions after our own. Indeed, it may be that Argentina’s Constitution was an improvement over ours. But take a look at any Latin American nation today, especially Argentina during the past three decades. Perón! Military juntas! Outrageous inflation! Meatless days in what was the greatest meat-producing country on earth! Ten to twelve million pesos for one of our good autos, well-equipped. Export and import at a virtual standstill! Another veritable Garden of Eden in a state of social and economic chaos! And bear in mind that the Argentinean Constitution is still there—a scrap of paper, no more!

For further proof that “organization” is not the magic word, we need only consider our own situation, the current state of affairs in the nation that provided the organizational model. I think it is not necessary to document here the nature or extent of our social collapse. That we have not fallen as low as Argentina is only because we began our decline from a higher perch. We need only bear in mind that good organization, by itself, did not insure the ascendant position.

The American Constitution was no more than a written record of what the preponderant leadership at that time believed. It was a recording of the thoughts, sentiments, and principles that made up their code and that they were capable of practicing. This document merely put their ideals in writing. The Constitution did not produce their high qualities; it was the other way round: their qualities produced the Constitution. And that’s all a Constitution can ever be; it’s an effect, not a cause. Instead of paying obeisance to our Constitution, we ought to be probing and admiring the thoughts of those who wrote it.

Seen in this light, it becomes clear why other nations gained nothing by copying our Constitution. Copying is useless unless the thinking be up to such a standard. And when our thinking falls below that of our Founding Fathers, our Constitution, like copies of it in other lands, becomes but a scrap of paper. To expect anything more is like expecting a rogue to change his ways by pinning on him a “good conduct” medal.

The Creative Plus

I am arguing that something much more than organizational gadgetry accounts for the good society. Social remedies are not to be found in writing a new Constitution, by amending the present one, or by adding laws upon laws. We must keep in mind that a good society and good organization are not two different sets of data to be correlated; they are simply two different aspects of the same set of facts.

Of all the foreign investigators who sought an explanation of the American miracle, Alexis de Tocqueville came closer to the right answer than anyone else known to me. At least, he knew that the miracle could not be attributed to organizational gadgetry:

I sought for the greatness and genius of America in fertile fields and boundless forests; it was not there. I sought for it in her free schools and her institutions of learning; it was not there. I sought for it in her matchless Constitution and democratic congress; it was not there. Not until I went to the churches of America and found them aflame with righteousness did I understand the greatness and genius of America. America is great because America is good. When America ceases to be good, America will cease to be great.4

Aflame with righteousness! Of one thing I am certain: there can never be a good society except it be comprised of persons distinguished by righteousness. But I doubt that this alone is the magic word.

I return to Professor Hayek for the key ingredient: “. . . in an essentially free society certain trends have prevailed because they made for a peaceful, orderly, and progressive society.” For it is only in an essentially free society that certain trends have the possibility of prevailing: self-responsibility, improved morals, a passionate striving for intellectual excellence, a will to overcome obstacles, an energetic enthusiasm turned inward to self-improvement, an abounding entrepreneurial spirit, competition, and free pricing.

One point ought to be crystal clear: No manner of organizational gadgetry can make a great society out of unworthy people. Further, a nation of great people can suffer considerable imperfection in organization and still experience an outburst of creativity.

Observe the Florentines at the height of their creativity. We look askance at their organization, the opposite of our ideal: an all-powerful Duke of Florence, a person of dictatorial power in the driver’s seat. But the limitation of power was more or less self-imposed by several Dukes, attaining its apogee in Lorenzo the Magnificent. In effect, he limited his great political power to keeping the peace; Florentines acted creatively as they pleased; an essentially free society prevailed which accounted for one of the greatest outbursts of creativity up to that time. The decline began with the reign of Lorenzo’s son, Piero, whom the unlimited power corrupted.5

Creativity and Freedom

I wish only to stress that creative outbursts have a direct correlation with freedom; that freedom exists in the absence of coercive control of creative activity and that the limitation of power, whenever it has occurred, must be attributed to happenstance rather than to organizational design. And, finally, there never has been nor can there now be any avoidance of a decline in our Western societies short of a rational analysis of why societal ascendancy depends on freedom. These points, I believe, are what history has to teach; and the failure to apprehend them is not only an invitation for history to repeat itself but an assurance that it will.

The reason that creativity and social felicity can flourish only in an essentially free society is an enormous wisdom or knowledge that cannot otherwise be tapped. My own term for this is Creative Wisdom. This, I am insisting, is not only the most important but, also, the most overlooked point in political economy.6

As a starter, reflect on freedom’s opposite, an essentially authoritarian society where the dictator or a committee of commissars—bureaucrats—plan and dictate what shall be done: what produced in what quantities and qualities, what exchanged and by whom, where citizens shall work and at what hours and wages, how educated, what thoughts may be openly expressed, and so on. On what knowledge does such a society operate? According to the authoritarian design, only on that of a discrete individual, the dictator, and his conforming henchmen—infinitesimal knowledge! Were the authoritarian design carried out to the letter—no more knowledge in operation than he and his bureaucracy possess—all would perish. And just as surely would any population perish were there no knowledge but yours or mine!

Actually, what happens in all statist arrangements is a leakage of free human energy. Independent knowledge persists in showing itself, because no bureaucracy has ever been able to bring under control all creative actions. Even in Russia, every citizen makes some choices. As in the case of lightning, the knowledge implicit in choosing zigs and zags its way along the lines of least resistance, leaks through the porosity of the authoritarian embrace. It is this leakage of knowledge which alone accounts for any and all accomplishments generally credited to statist arrangements. For it is self-evident that it is only a free, volitional action that can possibly be creative. But bear in mind that the knowledge which does show forth in these statist organizations of society is an inhibited, stifled, restrained knowledge, bureaucratically unwanted, politically illegal, and, thus, a frustrated and minimal knowledge. All knowledge in society stems from freedom trying to operate, and only when this fact is overlooked do people come to believe that an authoritarian society has possibilities worth exploring. It is the knowledge that leaks out despite the Plan that accounts for all the accomplishment, but people see only the Plan and mistakenly attribute the accomplishment to it.

Now, reflect on the knowledge that emanates from an essentially free society. It is a luminosity so brilliant that, by and large, we are blinded not only to its genesis but even to its part in our lives. The blessings it confers are taken for granted as is the gift of sunshine—automatically our daily due.

The Role for Rationality

Here we have a role for rationality. We will either discover how to give this luminosity—Creative Wisdom—a rational analysis; or we will lose it—that is, history will repeat itself.

The enormous knowledge that emanates from an essentially free society develops by reason of the fact that in such a society no person imposes his will by force upon any other person. Were such imposition possible, that society would not be free. When no one can restrain anyone else in his creative actions, then knowledge, ideas, insights are free to emerge from many millions of potential sources. Creativity, in this event, has no external inhibition!

Potential sources! This is one of the key points in any rational analysis. No one can even remotely guess where bits of knowledge will originate. Example: Some decades ago, in the state of Michigan, an angry brakeman picked up a young railroad newsboy by the ears and threw him into the baggage car. For all anybody knew, he was an ordinary waif named Tom. Who could then have guessed the potentiality in the lad who later became known to the world as Thomas Alva Edison!

Every normal person on this earth has a bit of unpredictable Edison in him. From whom an idea will burst forth can no more be foreseen than one can know today what tomorrow may bring. Freedom taps this richest of all the world’s resources and assures us that society will have the use of all the knowledge there is or ever will be!

The knowledge freedom makes available to all of us is unimaginably greater than the knowledge that can issue from those who would rule others, for they suffer the greatest ignorance of all: an unawareness of how little they know.

Who in our field, for instance, is more knowledgeable than Professor Ludwig von Mises? He once was asked, “Were you the dictator of these United States, what steps would you take to remedy our current ills?” Mises replied, “I would abdicate.” His response evokes a hearty chuckle, because it’s so startlingly at odds with the popular mode. Most people, unaware of how little they know, would respond with suggestions for ruling. Mises—wiser—knows he lacks the wisdom to rule, an understanding as rare as it is profound.

Those of us without such deep understanding are unaware of any impressive alternative to your or my rule. To ever so many people, it’s only a question of who shall rule: you, someone else, or I? Generally, I am more impressed with my knowledge than yours, and vice versa. Overlooked is the fact that your knowledge or mine is infinitesimal, that not enough knowledge exists in any discrete individual to rule a single person, let alone a society. Also overlooked—and this is my point—is the almost unknown alternative, strikingly impressive, once it is apprehended. That alternative is the aggregate of all the knowledge issuing in literally trillions of tiny bits from all who live, which I refer to as Creative Wisdom.

Two Steps

Two steps are required to grasp the alternative to the minuscule knowledge that can issue from authoritarian arrangements. The first is to recognize that there is actually such a phenomenal force as Creative Wisdom. The second is not so much to understand precisely how tiny bits of knowledge form into a magnificent whole—a brilliant luminosity—but to know for certain that these bits will automatically form in an essentially free society. Rationally, how may these steps be taken?

The first is easy. Take any manufactured thing—an automobile will suffice. What is this thing? It’s a product resulting from the application of human knowledge—inventions, discoveries, ideas—to the resources of Creation.

Reflect on the knowledge that accounts for the automobile. The automobile is inconceivable apart from the fact that someone, eons ago, harnessed fire, and later invented zero, and learned how to refine ore. It is no exaggeration to claim that bits of knowledge by the trillions prefaced today’s motor vehicle. Note that this knowledge spans the period of human consciousness and that much of it was experienced before there was even the idea of an auto.

To complete this exercise, merely reflect on how little of this knowledge you contributed. A tiny bit, if any, regardless of whether you are a coal miner or the President of General Motors! No single person has the knowledge to make a thing as simple as a pencil, let alone an automobile.7 Yet, pencils are made by the billions and autos by the millions, annually. The explanation lies in that phenomenal, over-all knowledge, that brilliant luminosity: Creative Wisdom.

Nor should we ever limit these observations to things. You and I are less competent to structure another human being than to build an automobile. And still less competent to structure society. All progress stems from Creative Wisdom, none from human masterminding.

The second step—seeing how Creative Wisdom is formed—may be beyond our comprehension. Trillions of knowledge-bits, from moments to eons apart and originating in persons rarely known to each other, form into a phenomenal, effectively working whole. How can their coalescence be explained?

It seems to me that society is blessed with a performance observed in nature: molecules coalescing to form in one instance a tree, in other instances a blade of grass, a rock, a lily of the valley, on and on in an infinite display. Merely note that the coalescence is automatic as long as the molecules are free to form. I cannot make a tree, but I can interfere with its development.

It is inconceivable that any human mind, regardless of how brilliant and wise, could coalesce these trillions of disparate bits of knowledge. What is it, then, that brings them together for their remarkable and countless performances? There has to be an ingathering or beckoning force and we should have some idea as to what it is or how it functions.

This beckoning force, I believe, operates through self-interest—the profit motive, material and psychic,8 plus competition and free pricing—these being found only in an essentially free society.

Price is the monetary message of self-interest, the voice of subjective judgments. Its call penetrates not only our own society, but societies the world over. For instance, if one wants more tomatoes for his canning business, he only has to announce an attractive price; it’s that simple. Further, no more market wisdom is required on the part of potential suppliers than the ability to read a price; anyone can do it. In a word, tomatoes go where price beckons. But this is my point: Price coordinates or brings together the countless fractions of expertise involved in tomato production and distribution: soil culture, planting and harvesting machinery, trucking and railroading, indeed, bits of know-how too numerous to calculate.

Let me repeat: While I have used things for the purpose of illustration. Creative Wisdom applies no less to social, moral, and related problems. I can no more ingather the knowledge to run society or other people’s lives than I can make an automobile or a jet.

In any event, rationality does not require that I comprehend everything about life in order to affirm my certainty that life exists. And by the same token, rationality does not require that I comprehend precisely how trillions of tiny bits of knowledge form into Creative Wisdom in order to affirm my certainty that this is a phenomenon essential to life.

Finally, Creative Wisdom functions only in freedom. To avoid another disastrous decline and fall, we must not only know that freedom is essential but must try to know why it is essential. This is the lesson that history teaches.

Here, indeed, is a role for rationality.

• 1The Royal Bank of Canada Monthly Letter, February, 1969.
• 2Even prohibiting pollution in highly polluted areas may be no solution. Pollution is becoming a problem of the whole troposphere, that is, the troposphere assuredly has containment limitations. If this view be accepted, then pollution released atop Mt. Everest could eventually wreak its havoc on Americans.
• 3But to what avail are gas masks for human beings if plant and animal life succumb to pollution?
• 4This is not to overlook or minimize the polluting effect of a thousand and one other well-known governmental interventions.
• 5Whose interpretation of historical events is one to trust? Which historian deduces from the facts available the real causes of what shows on the surface? My impressions of Florence, at odds with what the encyclopedias report, are from The Medici by G. F. Young (New York: Modern Library).
• 6Professor Hayek apprehends this exceptionally elusive fact better than anyone else known to me; indeed, I am unaware of who the others are. See his “The Uses of Knowledge in Society,” The Freeman, May, 1961.
• 7See the chapter, “Only God Can Make a Tree—Or a Pencil” in Anything That’s Peaceful (Irvington-on-Hudson, N.Y.: The Foundation for Economic Education, Inc., 1964).
• 8For my comments on material and psychic profit, see the chapter “What Shall It Profit A Man?” in Deeper Than You Think (Irvington-on-Hudson, N.Y., The Foundation for Economic Education, Inc., 1967).