This bears repeating: there is no respect in which any two persons are identical—physiologically, psychologically, philosophically, ideologically. Nature decrees variation in everything—no exceptions. In the animal world it seems that the more advanced the species, the greater the differences. As to man, this rule also holds true: the more advanced the individuals, the more distinctive are their dissimilarities.
Yet, regardless of this fact, we do generalize about our fellow humans; we attempt to categorize each other, to lump men and women under neat little labels: brilliant, muddled, idealistic, cussed, black, white, religious, inventive, and so on. All generalizations are oversimplifications; nonetheless, we couldn’t get along without them. Communicating one with the other would be out of the question were minute particularization a requirement. Categories are tools of thought and are essential to communicable writing, talking, even to thinking for ourselves.
We cannot dispense with classifications without doing away with communication; we couldn’t even think without them. But we can aid and abet our own thinking as well as our powers to communicate by dropping loose, sloppy classifications in favor of more refined ones. In short, we can try to say more precisely what it is we really mean.
For instance, in the politico-economic area, we carry oversimplification to an absurd extreme by putting all of humanity into two categories: (1) those we roughly think of as on “our side,” and (2) those we regard as ideological adversaries. Such, of course, is the ultimate in erroneous classification. And to continue the error is to promote suspicion, misunderstanding, dissension, hate—yes, even wars. We should, insofar as possible, be done with this nonsense!
The sloppy labels employed depend on which of the two imaginary sides is doing the classifying. Those on one side will call the others collectivists, leftists, statists, communists, interventionists, state planners, welfare staters, Fabians, traitors, nazis—each term used derisively. There is another label—the favorable one these “collectivists” call themselves: “liberals.”
But those who call themselves “liberals” will, with no less self-righteousness, refer to their so-called adversaries as extremists, reactionaries, rightists, profiteers, enemies of the poor, and even fascists. One also hears muttered epithets such as dog-eat-dog, law of the jungle, and the like. These are some of the ways the “lefties” label the “rightists.”
Observe, now, how the “rightists” label themselves: conservatives, patriots, libertarians, individualists, constitutionalists; some will say they stand for capitalism, many for private enterprise. There are other favored labels—terms to indicate where they stand: the rule of law, free enterprise, free competitive enterprise, the market economy, the exchange economy, voluntarism, the profit and loss system, the incentive system, limited government.
What a babel of nondefinitive classifications from both imaginary camps! And who among us is exempt from this looseness? Most—not all—of these labels are meaningless and utterly confusing unless one is aware of the author’s thinking, motivations, prejudices, predilections; they’re no aid to clarity.
Reflect, for instance, on “capitalism” as used by Karl Marx, a term of opprobrium, and then by Ludwig von Mises, a term of approbation. We do, of course, derive some idea of what is meant when “capitalism” is employed by such well-known authors, but most people who use the term are total strangers and, thus, we haven’t the slightest idea as to what is implied. “Capitalism,” on its own, is nondefinitive. We are at the mercy of the definers, few of whom agree.
Or, to further illustrate, take “private enterprise.” To some minds this conjures up privately owned businesses honestly competing for consumer favor, an economic ideal. To others, everything from embezzlement to piracy is suggested, both of these enterprises being quite private.
All politico-economic classifications in current usage have their faults. Nor is it possible to construct a term that is precisely definitive. However, there is one that seems to be an improvement over the others: willing exchange. I have used this term for some years as a means of identifying my own position, and, while little if any adoption by others has been noted, it is significant that no one has taken issue with me for using it. Perhaps if the implications of “willing exchange” were high-lighted, it might be more widely employed. If clarity can be served, it’s worth trying to make the case for its inclusion in our vocabulary.
The first step is to recognize how deeply exchange extends into human affairs. It goes to the very roots of and is fundamental to earthly existence. This is more or less apparent, as related to goods and services, in a division-of-labor society. As stated earlier, specialists exchange—or perish! But more: man, individualistic as he is, remains a social being. Even were an individual in comparative isolation, he can exist only by reason of his heritage—an exchange process in knowledge and ideas extending back to the harnessing of fire, even to the dawn of human consciousness.
So far, so good—no argument. In a word, we can declare ourselves in favor of exchange and arouse no more controversy than announcing a favoritism for life. And for good reason: exchange, without any modifiers, isn’t meaningfully definitive.
It’s at the next step—when modifiers are introduced—that controversy has its genesis. Shall it be willing or unwilling exchange?
I wish to suggest that standing for willing exchange, on the one hand, or for unwilling exchange, on the other, more nearly accents our ideological differences than does the employment of the terms in common usage. It is when using these terms to distinguish ourselves that we can openly, honestly, logically part company, and with considerable clarity. Willing or unwilling exchange makes subterfuge not impossible but difficult; to side with one or the other is to declare one’s meaningful position more or less unequivocally and unmasked; there is a minimum of verbal façade to hide behind.
Willing exchange, uncommon and thus not in the trite or cliché category, immediately provokes reflection, a big mark in its favor. The term has not yet been saddled with emotional connotations, such as those built around free trade, for instance. Further, its antithesis, unwilling exchange, comes to mind, and no one, not even a protagonist, proudly acknowledges he favors that; it does offense to his idealism. Unwilling exchange, at the very least, is a semantic jolter; it suggests to any sensitive sponsor that he take another look at his position.1
The Many Facets of the Market
While I use willing exchange and the free market synonymously, the word market, to most people, conjures up no more than a swapping place for produce or the little understood and much maligned stock market; they see in market only crass materialism, no spiritual or cultural qualities, none whatsoever.2 Frederic Bastiat used the term, liberté des transactions, a good-image phrase but, to my way of thinking, not quite as thought-provoking as willing exchange.
The full antithesis of willing exchange encompasses more than forced or coercive exchange which unwilling so clearly implies. No exchange at all—the absolute prohibition of exchanges—must also be included as the antithesis of willing exchange. One of many examples: the prohibition of exchanging dollars for gold.
If we cut through all the verbiage used to report and analyze political and economic controversy over the centuries, we find that much of it boils down to a denial of willing and the insistence upon unwilling exchange. What were the Crusades but an attempt forcibly to substitute the “true faith” for the beliefs of the “infidels”! Napoleon attempted to substitute his authoritarianism for someone else’s rule, armies and guns being his method of persuasion. The looting of neighboring nations was only a coercive exchange of some people’s property for the invaders’ satisfactions. Robbery, an exchange device, was the first labor-saving scheme. Feudalism was a coercive exchange of the serfs’ labor for the serfs’ and lord of the manor’s protection. Mercantilism forcibly controlled and/or prohibited exchange.
However, it is not necessary to draw on ancient history for examples of unwilling exchange. Today, the fruits of one’s labor are forcibly exchanged to put men on the moon, to pay farmers not to grow numerous crops, to rebuild deserted downtowns. The list of coercive activities that go beyond the principled scope of government runs into the thousands.3 Nor does one have to be much of a political economist to see that minimum wage laws, labor union compulsions, social security, medicare, free lunches, foreign aid, and a host of other governmental activities are the antithesis of willing exchange.
Unwilling exchange has its genesis in an objective theory of value, that is, in the forcible imposition on the individual of a value standard not of his choice but of someone else’s making. It’s Napoleon’s, or a labor union’s, or a bureaucracy’s value judgment—not the individual’s value judgment—that determines how the individual shall employ himself, what his hours and wages shall be, what and with whom he shall exchange, and what shall be the disposition of his income. Throughout the ages, right up to the present moment, unwilling exchange has been conspicuous, and for a simple reason: most people haven’t known any better!
It was less than 2 seconds ago on our collapsed calendar, not long enough to be widely apprehended, that Austria’s Menger, England’s Jevons, and Switzerland’s Walras, almost simultaneously, made the greatest discovery in economic science: the subjective theory of value, sometimes called the “marginal utility theory of value.” Until this time, no one had ever formulated a valid theory of value. Then these economists, by merely observing how ordinary people exchange when unrestrained, discovered that the value of anything was what others would give for it in willing exchange. The value of a painting, for instance, is whatever others will forego in order to obtain it. That’s marginal utility, pure and simple, which can be only subjectively determined. In short, no one else but you can determine the relative or marginal utility of anything to you.
Here, for the first time in history, the concept of willing exchange unseats Napoleonic behavior—all forms of authoritarianism—and enthrones the individual. The consumer becomes king. Individual freedom of choice rules economic affairs. Whether I plow the fields or pilot a plane, or whether I exchange the fruits of my labor for some corporation’s stock or for a bungalow by the seashore is for me, and a willing seller, to decide; it is no one else’s business! In good theory this is true; in practice it faces opposition.
Liberty Is for Others, Too
Most individuals favor subjective evaluations as applied to self but will, at the same time, insist on objective evaluations as applied to the millions who “don’t know what’s good for them.” In a word, very few will accord that liberty to others which they personally cherish so much. These inconsistent people are the victims of an historical momentum—the darkened millennia of mankind’s past—and thus have not apprehended the newest politico-economic fact on the face of the earth: individual liberty. This slowness to apprehend may, in turn, derive from our poor choice of descriptive terms.
Admittedly, making the case for the use of willing exchange as a means of identifying one’s position, is going to raise the question, “Well, if I am not to single out as descriptive of myself such terms as conservative, patriot, capitalistic, libertarian, free enterpriser, or some other loosely definitive label, what then? Are you suggesting that I call myself a willing exchanger?” Indeed not!
The best answer to “What are you?” is your own name. If one be a Marx or a Mises, whose reputations precede them, the name alone suffices. If one be neither infamous nor famous, and another is interested in the details, let him inquire and listen. A personal experience will help with my point:
I was invited to lecture at a clergymen’s seminar in Texas. Just before the affair got under way, a gentleman proffered his hand, announcing, “I am Charles Hemphill from Cisco.”
My response, “I am Leonard Read.”
“Where are you from, Mr. Read?”
“The Foundation for Economic Education at Irvington-on-Hudson.”
“Oh! You’re Leonard Read!”
My ideological position was unknown until identified with FEE. Immediately, Mr. Hemphill knew of my beliefs, and in considerable detail.
Now, suppose my answer to the question, “Where are you from?” had been, “Right here in Mineral Wells.” That would have given him no tip-off as to my position. This new friend, an inquiring spirit, would have wanted to know how to classify me. My capsule answer, today, would go something like this:
No man can contrive or blueprint a good society any more than any individual can make such a simple thing as a wooden lead pencil.4 The pencil, or any other artifact, for that matter, is a manifestation of infinitesimal and varied creativities flowing through the minds of men in complex interchange since well before the harnessing of fire. Once the pencil comes into existence, we can, to some extent, observe and write about what took place, the most significant deduction being the unobstructed flow of creativities, that is, creativities in free and willing exchange.
Similarly, the good society is a manifestation, not of a predesigned blueprint—not of a mass blindly following some person’s scheme of organization—but, rather, the natural out-cropping of the efforts of a goodly number of people in pursuit of Truth. In a word, a good society, like a pencil, is a configuration of the tiny wisdoms men come upon when seeking, above all else, what is right and righteous.
Whenever a good society shows forth, we can, to some extent, observe and write about what took place, the most significant deduction being the unobstructed flow of millions of individually acquired wisdoms, that is, flashes of enlightenment in free and willing exchange.
No man set about inventing willing exchange. Instead, some men were in pursuit of Truth. Their numerous findings and insights combined to make of them the kind of men who understood the advantages of willing or free exchange. But whenever the pursuit of Truth has not been uppermost among the aims of a considerable number of people, the understanding recedes to the point where unwilling exchange is believed in and practiced.
No man preconceived and set about designing and writing the Declaration of Independence, the Constitution, and the Bill of Rights as a means of erecting a good society. These political documents were really a configuration of beliefs that achieved dominance through a pursuit of Truth quite extraordinary in its intensity. The seeking of Truth was the seed; a good society, perhaps the best that has existed, was the bloom; these documents were but a recording of the beliefs. To confirm this, merely note that when the beliefs changed, the documents became commensurately meaningless.
When we entertain the idea that political documents and laws cause a good society, we are wont, in adversity, to repair and revise the documents and laws. This is not only useless but seriously diverting. For nothing counts but Truth, and Truth comes to us only when we are seeking what is right and righteous. This, to my way of thinking, is the most important and practical of all political facts.
Special Privileges for None
Reflecting on what the pursuit of Truth has divulged, I believe that no person, or any combination of persons, regardless of numbers, or any agency they may contrive—be it a labor union, trade association, or government—has any right of control over any other person that does not exist or inhere as a moral right in each individual. The only moral right of control by one individual over another or others is a defensive right, that is, the right to fend off aggressive or destructive actions. Governments, therefore, should go no further in controlling people than the individuals who organize it have a moral right to go. For, if government does not obtain its power of control from those who establish it, from where then does its power derive? In short, limit governmental power to codifying the do-nots consonant with the defense of life and livelihood, to the protection of all citizens equally. No special privilege for anyone!
This is to say that, ideally, government should be limited to inhibiting and penalizing all violence, fraud, predation, misrepresentation—that is, to keeping the peace. Insist that it tolerate no unwilling exchange and that it never indulge in what it is organized to prohibit. Let government do only this; leave all else, including welfare and prosperity, to willing exchange.
I believe we are fully agreed as to the quality of liberty we cherish for ourselves. The question is, are we agreed to allow this same quality of liberty to all others? If so, the spirit of liberty may be on the move again.
Practicing unwilling exchange is clearly a thing not to do. Understanding what not to do, in this instance, makes clear what to do: willingly exchange.
Since the division of labor, or specialization by human beings, is so intimately involved as both cause and consequence of the exchange process, let us look deeper into the nature and meaning of automation. . . .