The Mainspring of Human Progress

Chapter 19

HOPE VERSUS FEAR

No one nation or race of people has a monopoly on creative and inventive talent; but new ideas, like natural resources, don’t amount to much unless and until something is done about them. Many of the things we have today are based on inventions of Old World origin. America’s first century of industrial progress was largely a matter of getting something done with the half-baked ideas that had been around collecting dust for centuries – while the vast majority of people were doing without.

Inventions and discoveries were being made in the Old World long before the White Man came to America. They are still being made, and they will continue to be made by the few unsquelchable geniuses who, in spite of the static surroundings, persist in their independent thinking – without much hope of reward unless the brain child has military possibilities.

But when creative workers find themselves entangled in artificial restrictions and bureaucratic red tape – in addition to the natural, normal, and unavoidable difficulties surrounding their work – much of the potential talent will die on the vine. Even the irrepressible genius can accomplish very little without the help of others.

To extend the benefits of a new invention or discovery requires complex networks of supporting talents, skills, and physical facilities. Thus, progress in the direction of more and better things for more people depends on maintaining conditions that provide opportunities and incentives extending over a wide area. There must be opportunities and incentives to invent and opportunities and incentives to use; and in between, there must be opportunities and incentives to produce and exchange. Here in America, such opportunities and incentives have been more far-reaching and more favorable than anywhere else in the world.

Freedom of Choice

It all comes back to the matter of individual freedom. We’ve been free to invent, free to try out new ideas and new methods, free to back up the other fellow’s business or go in business on our own, free to take a chance on making a profit or going broke. We’ve been free to trade with each other over wide areas, free to buy what we please from whom we please – from Maine to California, and from Key West to Seattle.

That, incidentally, is one of the outstanding contrasts between the Old World and the New World. Try to imagine the problems we’d be up against if our country had been set up like Europe, with each state a separate nation, isolated by customs barriers, different languages, and different monetary systems. Contrast that with conditions as they actually are, and remember that we barely escaped following the European pattern.

Absence of trade barriers has kept us away from the strained artificiality of each area’s trying to be self-sufficient. This has resulted in logical specialization on the basis of natural resources and climate: cotton in the South, flour in Minneapolis, movies in Hollywood, and copper mining in Montana.

We’ve been free to choose our own jobs and free to compete with one another for better jobs, without any overriding authority dictating to us as to where we should work, what we should be paid, and how we should spend it. We’ve been less afflicted by monopolies, cartels, and restrictive labor organizations than any other country.

There may be exceptions, but I’m inclined to the view that objectionable monopolies cannot exist without the acquiescence of the state – either by unwarranted legal protection or by failure to perform its proper police functions in suppressing commercial gangsterism. I am aware that such transgressions usually result from the efforts of private interests or pressure groups to obtain governmental aid to help them “pull their chestnuts out of the fire.” But two wrongs don’t make a right. Double guilt lies at the door of those who propose all-out governmental monopoly as a remedy for the lesser evils of the infrequent private monopoly.

A private monopoly can usually be broken in one of two ways: People can stop patronizing it and find substitutes or do without, or the state can force it to dissolve. But government monopoly is total monopoly; and since there is no higher power to which to appeal, there is no relief short of rebellion and war. The only safeguard against the evils of monopoly lies in maintaining competitive conditions which provide maximum freedom of choice for the consumer.

Please note that I am not using the term free enterprise. This was once a sound term, but the propaganda (both for and against) has given it a pressure-group connotation.

The only sound program for free competitive enterprise – the only program that has a chance to succeed – is one which concerns itself, first, last, and always, with maintaining freedom for the individual citizen – let the chips fall where they may. It’s a matter of keeping the way open so that any business or trade group, large or small, may be continually challenged, kept on its toes, even put out of business, by any runner-up who can demonstrate an ability to serve the customer better.

It may be argued, and it frequently is, that free competition is a ruthless and cruel process. But it is not nearly so ruthless and cruel as the opposite philosophy, which down through the ages has kept the majority of people ill-fed, ill-housed, ill-clothed, embroiled in wars, and dying of famine and pestilence.

Hope versus Fear

There is no escaping the fact that human effort is motivated by hope of reward on the one hand, and by fear of punishment on the other. The ideal combination is rewards that are great and reasonably attainable and punishments that are not too severe.

America’s economic progress is the result of conditions which have provided maximum opportunities for reward, but which have limited the penalties to personal insecurity and business bankruptcy. At the other extreme is the totalitarian state, which promises security at the expense of freedom and which attempts to “encourage” initiative by the threat of the concentration camp or firing squad.

Under free competition based on personal responsibility and voluntary co-operation, our production of useful goods and services has exceeded anything ever before accomplished. True, we are far from perfect, and in some respects we seem to have been drifting backwards.*

The big point is that our progress to date is the result of an entirely new and different form of political structure which made it possible for human energy and individual initiative to work under their own natural control.

But now let’s get away from broad generalities and make a little closer analysis of the effect of political structure on creative thinking and of the benefits growing out of such thinking. For illustrative purposes, we will continue to talk in terms of technical inventions. However, it should be borne in mind that conditions affecting inventive progress in the realm of physics or mechanics have an equal bearing on the development of new ideas and new methods in any field – from statistical techniques to diaper service.

Dynamic versus Static

The inventive mind is an inquiring mind, and the inquiring mind is the mind of a doubter and challenger. Creative thinkers are never satisfied to let well enough alone. They are continually straying off the beaten path and getting out of step with the normal routine. Such people have no place in an authoritarian society. Even though their explorations may be confined to the area of physical things, there’s always the danger of their turning up something that might disturb the planned economy and discredit the superior wisdom of the overlords.

But what’s wrong with a government setting up its own bureaus of carefully chosen scientists and inventors to explore new frontiers of progress, under the supervision of those responsible for the over-all planning? Why won’t that work?

Part of the answer is that nobody is smart enough to select them. What governmental bureau back in the 1890’s would have picked Henry Ford, the powerhouse helper, to pioneer the production of low-priced automobiles? Even his friends and neighbors had him labeled as a scatterbrained tinkerer.*

Who among present-day Washington officials would be able to pick the Edisons and the Ketterings of 25 years hence? Who among the most ardent and self-assured advocates of centralized planning would be so bold as to try to define the next great advance in the realms of scientific development, invention, and production techniques?

Certainly, those assuming the responsibility for mapping out the future would have to consider the disrupting effects of changes due to progress. To ignore the necessity of looking beyond the horizon of things already known would make them self-confessed advocates of a static society.

Stubborn Facts

The difficulty lies in the fact that human energy doesn’t work according to any foreordained plan or pattern. This is especially true in the field of original exploration. In the higher realms of scientific research, you can’t even tell the researcher what to find out – the biggest part of his job is to find out what there is to be found out.

You can’t order a person to have an inspiration. Creative ideas spring from within; they can’t be forced from without. Genius is an unpredictable quality. It doesn’t work according to fixed rules or patterns but turns up in the most unexpected quarters.

Inventive and scientific talent of a high degree can’t be produced by bureaucratic edict. Nor can it be discovered through any formalized procedure – the only way it can be done is through natural selection. In other words, let the creative mind discover itself. That’s the only effective process, and it can only be fully effective in an atmosphere which doesn’t prevent anyone from using his own initiative.

As a result of personal freedom here in the U.S.A., the process of natural selection sifts the embryonic geniuses from 145,000,000 people. That’s how we found Eli Whitney, Charles Goodyear, Thomas Edison, Michael Pupin, Luther Burbank, Ottmar Mergenthaler, Elias Howe, Samuel Morse, and the Wright brothers. Nobody selected them. Given an opportunity in a free land, they selected themselves and forged ahead of their rivals. No governmental bureau can ever compete with this natural process of self-selection on a free and highly competitive basis.

Stimulus

The greater the competition, the better the quality of the persons who reach the top. This is due, not only to the greater number of aspirants, but also to the fact that genius thrives on rivalry. It’s not much fun to be an expert in a field which is completely and entirely beyond the understanding of everyone else; nor is there much incentive to widen the gap by becoming even more expert – why increase the loneliness? Galileo would doubtlessly have risen to greater heights if there had been other astronomers, even lesser ones, to criticize and challenge his work on the basis of factual merit.

There is also a highly important, practical, down-to-earth by-product of personal freedom which can only come through the process of competition and natural selection. The maintenance of our American way of life depends just as much on the runner-up as it does on the outstanding genius. Thousands of men of varying degrees of talent and skill are needed to work out the less spectacular details – details which must be taken care of before even the simplest invention or discovery has any practical value for improving the conditions of mankind on a wide scale. Thus the man who doesn’t quite win the race is a necessary adjunct to the top-flight genius, who has neither the time nor the temperament to handle the follow-through.

Rewards

The progress and contributions of scientists, inventors, and innovators depend on the opportunities for reward for extra effort. The reward may take various forms. It may be the endorsement of others engaged in the same or similar work. It may be the emotional stimulation resulting from intelligent debate, argument, and criticism from rivals. It may be widespread fame and acclaim – this presupposes some degree of intelligent interest on the part of the general public. Underlying all these is the inner satisfaction of doing a good job; but that’s not much of a reward unless it is magnified by recognition from others.

And last, but not least, there is the more tangible form of reward – the pay check or its equivalent. But financial gain is not always the most important incentive. Its importance depends on the individual. Among creative workers, there are those who would find more satisfaction in a complimentary letter from a rival than they would in a salary raise. But the number of Galileos is limited, and even a Galileo can do with some extra cash.

The possibility of fortune, along with fame, insures a bigger crop of geniuses – as well as of runners-up. And in the less dramatic, down-to-earth fields of practical invention and technological progress, the opportunity for financial reward becomes increasingly important as an incentive.

In the final analysis, the size, and hence the effectiveness, of the financial reward – whether it comes through a cash settlement, a royalty payment, a promotion, or a business venture of one’s own – depends on the size and vitality of the market for the product or service. Here in America, this vitality is greater than anywhere else. We have less than 7 per cent of the world’s population – but we also have the dynamic qualities of 145,000,000 free people.

Here in America, the consumers play a role which extends considerably beyond the function of providing a market. As investors, they supply the tools without which large-scale, economical production with high wages would be impossible. In addition, the consumers provide something else which, although less tangible, is of equal or even greater importance. It is the readiness to try new things – a distinctly American trait, which has a deeper significance than appears on the surface.

Just by way of illustration, I’d like to tell the story of an experience which may help to illustrate the point. In fact, it’s two stories, based on two experiences, illustrating several points which started me thinking along these lines.

Some years ago, just before World War II, I read an article on inventions and technical progress. In the early part, it summarized various stories of American inventions and experiments – including the one about Ben Franklin flying his kite during the electric storm, with a brass key attached to the kite string. Considerable emphasis was placed on the fact that many great things had sprung from humble or accidental origin.

That was the general tenor of the first part of the article; but along toward the end, the author began to discuss some theories on over-all social planning. He seemed to forget the unpredictable things that had happened in the past; and in theorizing on the future, he tried to draw some hairsplitting distinctions between useful inventions and nonessential gadgets. He was particularly critical of automobile design and made special mention of the trend toward automatic transmissions as an example of “gadgetry gone wild.”

To make a long story short, it added up about like this: At a time when the world was tottering on the brink of disaster, when so many important things needed to be done, the automobile industry – prostituting its talents and diverting its engineering genius – was devising gadgets to relieve people of the inconsequential task of shifting gears by hand.

It is quite true that the world was tottering on the brink of disaster, and it is also true that some of the automotive engineers had worked out a way to shift gears automatically. I don’t quite agree that it was a useless gadget, but perhaps I am just biased.

The Brink of Disaster

Anyway, my thoughts turned back to Ben Franklin’s going out in that storm to fly his kite, and it occurred to me in passing that the world was tottering on the brink of disaster even back in those days. If things had been under “proper control,” Mr. Franklin might not have been able to get a priority for the brass key used in his experiment.

That was back in the 1750’s, and I’m talking now about the year before Pearl Harbor. The scene shifts to the following year – the summer of 1942, when the world really was tottering on the brink of disaster. We and our allies were taking quite a licking in the air, and one of the most urgent problems of military aviation was to outdo our enemies in altitude flying.

Some engineers felt that a hydraulic clutch, similar to the one used in the new automatic transmissions, might help solve the problem. But the idea had been considered quite impractical. A little promotion seemed in order, and I was asked to help write a booklet on the general subject of airplane engines and altitude flying, with a special chapter on superchargers and hydraulic clutches.

Before the book could be published, it had to be passed by the censors. They approved it all right – from the standpoint of military censorship – but they rather questioned the advisability of mentioning the hydraulic proposition. Since, from our standpoint, that was one of the main reasons for publishing the book, we balked a little and asked, why?

They explained that the Germans had tried to use the hydraulic clutch in their altitude engine but were giving up the idea. In spite of all their technical skill, the Germans had never been able to make them work properly.

A Successful Gadget

I’ll skip the next part of the story, except to say that the booklet was published – and without pulling any punches on the hydraulic clutch proposition. I don’t know that the booklet had anything to do with it, but the prejudice faded away; and shortly thereafter, the experience gained in building hydraulic clutches for automobile transmissions was diverted to the building of high-altitude super-superchargers.

A little later, tanks were equipped with automatic transmissions not basically different from those used in some of the present-day motor cars. This made driving a tank so simple that the operator could be trained in a matter of hours instead of weeks. The job no longer called for a muscular giant – and in a pinch, the driver could help with the fighting. Of even greater importance was the fact that the gears could be shifted without bringing the tank to a stop, thus reducing the danger of getting hit. So, in spite of the trouble experienced by the Germans, hydraulic clutches made in American automobile factories played an important part in winning the war, on land as well as in the air.

Adding it all up, my thoughts began to turn back to the article which tried to distinguish between “essential inventions” and “unnecessary gadgets.”

And then it dawned on me that the responsiveness of 145,000,000 free people provides American industry with a better proving ground than could ever be set up as an adjunct to any factory, in either peace or war. Mass production could never have gotten beyond the experimental stage – in fact, it never could have gotten started – without the support of a public which is alert to progress and which refuses to accept any preconceived boundary between the necessities and the luxuries.

A Contrast

That’s an outstanding difference between a free people and a people whose needs, tastes, and desires are regimented in line with some arbitrary, over-all plan. True, the Germans had a lot of trouble trying to make hydraulic-drive superchargers; but America is not Germany. In this country, we don’t wait for a war to get experience in the quantity production of precision products. Here in America, around a half-million hydraulic clutches for motor cars had been built before we entered the war. And if we could build them for peacetime use, we could – and did – build them for war!

Thus it is that here in this country the experimenters and the innovators are not confined to the research laboratories, the proving grounds, and the factories. Everyone plays a part, and everyone has a chance. It is impossible to draw any hard and fast boundary lines between the top-flight inventors, the runners-up, the amateurs, the everyday users. No such boundary lines have a chance of staying put. They are shifting back and forth even as this is being written.

In America, to a greater degree than in any other country, there has been the opportunity for self-expression, self-development, and advancement on the basis of merit – regardless of race, creed, or class distinction.

The recognition of the fact that the individual is a responsible human being, free and self-controlling and capable of looking after himself, keeps down the overhead of bureaucratic red tape and the cost of policing. This makes low taxes possible, with the result that any enterprising person may reap a good share of the fruits of any extra effort that he is willing to put forth.

Not having to worry about being robbed of his life, his liberty, or his property, the American has been free to concentrate his energies on the production of useful goods and services. Under such conditions, the habit of thrift has been ingrained. Instead of spending all our earnings on goods for personal consumption, there have been strong incentives to save and invest. The capital resulting from such savings made it possible to build up tremendous resources in the form of more efficient tools of production, thus multiplying the effectiveness of human energy to an unbelievable degree.

Through the extra efforts of millions of people who were willing to work a little harder and to spend a little less than they earned, American workers have been provided with more and better tools than have any other workers in the world, with the result that output and wages are higher here than anywhere else. It has been estimated that our superior tools (mechanical power and laborsaving devices) have expanded our natural human energies to the equivalent of a billion extra workers!

The dreams of Sir Dudley North and Eli Whitney could never have become practical realities except under conditions which provided the incentives to save and invest. Not only have superior tools and equipment made possible the production of more things at lower prices, but also many of the more complex products which we have come to take for granted simply couldn’t be made at all, were it not for our highly developed manufacturing facilities.

A Natural Outgrowth

In the last analysis, all of these advantages are the natural, normal outgrowth of a political structure which unleashed the creative energies of millions of men and women by leaving them free to work out their own affairs – not under the lash of coercive authority, but through voluntary co-operation based on enlightened self-interest and moral responsibility.

That’s why plows are now made of steel. That’s why America has led the world in production accomplishments. That’s why we’ve been able to win wars started by nations that make a regular business of fighting. That’s why we are able to feed the victims of pagan aggression.

And last but not least, that’s why the people of the United States, who occupy only 6 per cent of the world’s land area and who represent less than 7 per cent of the world’s population, own:

85 per cent of the world’s automobiles
60 per cent of the life insurance policies
54 per cent of the telephones
48 per cent of the radio sets
46 per cent of the electric power capacity
35 per cent of the world’s railway mileage
30 per cent of the improved highways
92 per cent of the modern bathtubs

Before the war, Americans consumed:

75 per cent of the world’s silk
60 per cent of the world’s rubber
50 per cent of the world’s coffee
40 per cent of the world’s salt.

That last item may sound a bit trivial. I was tempted to leave it out, but some of my economist friends tell me that the amount of salt used is one of the best indications of a nation’s production and general standard of living. If so, that statement leads to the startling conclusion that the people of the United States are exactly nine times better off than the people in the rest of the world.