Time Will Run Back

by Henry Hazlitt

  Peter rejected the contention that advertising was merely an economic “waste.” Like other costs of production, it had the purpose of increasing demand; and it accelerated the process of selecting the better production methods and the better consumption goods. In fact, Peter found it impossible to separate “selling costs” from other production costs. All production costs were in a sense “selling costs,” because a product had to be made attractive enough to buy. And for the same reason all necessary selling costs were necessary “production” costs.

  And it was the process of continually improving production methods and consumption goods that to Peter was the greatest marvel of all. Life in Wonworld had been appallingly drab and stagnant; but Peter had never realized how drab and stagnant it was until the new free market system had wrought this change.

  There was no line in which he did not find one miraculous improvement after another. In food, new vegetables and fruits were constantly being developed; new methods of selling and preparing them, and better ways of cooking them. Peter was particularly fascinated and impressed by the development and rapid progress of frozen foods, which enabled people to eat “fresh” fruits and vegetables all year round.

  In clothing, where previously there had been cotton, wool, silk and linen, a marvelous array of new, cheaper, stronger and more beautiful textiles was constantly being developed. The chemists now seemed to be able to make textiles out of anything—wood or glass, milk or coal. The chemists seemed on the verge of discovering, in fact, that everything could be made out of anything.

  Constant and bewildering improvements were being made in household conveniences, in fluorescent lighting, in radiant heating, in air-conditioning, in vacuum cleaners, in clothswashing machines, in dishwashing machines, in a thousand new structural and decorative materials. Great forward leaps were now taken in radio. There was talk of the development, in the laboratories, of the wireless transmission, not merely of music and voices, but of the living and moving image of objects and people.

  Hundreds of new improvements, individually sometimes slight but cumulatively enormous, were being made in all sorts of transportation—in automobiles and railroads, in ships and airplanes. Inventors even talked of a new device to be called “jet-propulsion,” which would not only eliminate propellers but bring speeds rivaling that of sound itself.

  In medicine, marvelous new anesthetics and new lifesaving drugs were constantly being discovered....

  “In our new economic system, Adams,” said Peter, “we seem to have developed hundreds of thousands of individual centers of initiative which spontaneously co-operate with each other. We have made more material progress in the last four years, more industrial and scientific progress, than Wonworld made in a century.”

  “That is entirely true,” agreed Adams. “But I should like to point out that Wonworld also has benefited by this progress. Bolshekov’s secret agents here see to it that his technicians get hold of all our scientific and trade publications, and of course they systematically steal our so-called military secrets. So in theoretical knowledge, if not in volume of production, my guess is that Wonworld has made almost as much progress as we have.”

  “Whatever progress it has made is purely parasitic,” Peter said. “It would not exist if Bolshekov’s commissars were not constantly appropriating the successful improvements that our free enterprise system has developed.”

  “You’re right, chief. But they get the benefit of them just the same. And after they have adopted or stolen an improvement from us, their propaganda bureau claims that the invention or discovery was really made by some Muscovite.”

  But it was not merely in material progress that Freeworld achieved such amazing triumphs. No less striking were the new dignity and breadth that individual freedom brought about in the whole cultural and spiritual life of the Western Hemisphere.

  The contrast, Peter found, was not quite so striking in certain realms—music, dancing, chess, mathematics. This, he concluded, was because these arts, sciences or pursuits “said nothing”—or at least what they said was so abstract and elusive that it was seldom regarded as being directly dangerous to Moscow’s ruling clique. There had therefore been a tendency, comparatively speaking, to let such pursuits alone. The brains and genius of Won-world, whenever they could, had always tried to get into these lines where they could function with comparative safety and freedom.

  But in nearly all other realms the cultural and spiritual contrast was glaring. It showed itself in novels and plays, in criticism and poetry, in painting, sculpture and architecture, in political and economic thinking, in most sciences, in philosophy and religion.

  And this, Peter decided, was because these pursuits no longer had to cater to the presumed tastes of a particular dictator or of a small group of commissars. The novels, plays and poetry written in Wonworld had been nauseating. They became still more nauseating under Bolshekov. For they were devoted either to the most savage ridicule and denunciation of whatever Bolshekov was not presumed to like, or of the most fawning and abject flattery of Bolshekov and of what he was supposed to have created. Sometimes the authors, playwrights and poets made an ideological mistake, or the party line reversed itself suddenly overnight, and then no matter with what servile and cringing apologies the writers were willing to repudiate or denounce what they had themselves written and to start saying the opposite, no matter how completely they were eager to abase themselves, they and their families were lucky to escape with their lives. Peter saw that this was inevitable under any system in which the livelihood of every author and artist depended on the “planners” at the center, on any one individual or compact ruling group.

  The end of this tyranny had been like the lifting of a great weight.

  Many of the new writers and artists of Freeworld, it is true, now catered to the presumed tastes of a mass public; and the bulk of what was produced was vulgar and cheap. But all this fell quickly into oblivion. It was not the bulk that counted. What counted, as Peter quickly saw, was that each writer and each artist was now liberated from abject subservience to the state, to the political ruling clique. He was now free to select his own public. He did not need to cater to a nebulous “mass demand.” He could, if he wished, write, build, think, compose or paint for a definite cultivated group, or for his fellow specialists, or for a few kindred spirits wherever they could be found. And plays did have a way of finding their own special audience, and periodicals and books of finding their own special readers.

  In contrast with the drabness, monotony and dreariness of Wonworld, the cultural and spiritual life of Freeworld was full of infinite variety, flavor, and adventure.

  Chapter 39

  I am constantly admiring, chief,” said Adams, “the incredible productiveness of your new system, and the wonderful results of the freedom it permits. But I keep constantly having doubts about it too.”

  “So I’ve noticed,” said Peter drily. “What are your doubts this time?”

  “They go very deep. Isn’t this system, even conceding that it is enormously more productive than any collectivist system, selfish and acquisitive?”

  “How?”

  “Well, certainly it rewards selfishness and acquisitiveness.”

  “Of course it does. And so does any other system.”

  “But socialism—”

  “Socialism above all, Adams. And you know that as well as I do. Under any economic or political system conceivable, selfish and unscrupulous people will do the things they think will help them succeed under that system. They will lie, flatter, defraud, deceive, betray, seduce, even rob and murder if they think it will advantage them. If piety is the thing, they will pretend to be more pious than anyone else. If having a ‘social conscience’ is the fashion, they will profess to have a bigger social conscience than anyone else—”

  “Yes, but—”

  “The point is,” continued Peter, “that self-regarding people under any system will do the things that are most rewarded by that
system. The real question is—what are the actions that are most rewarded by a particular system?”

  “All right; put it that way if you want, chief, and my point remains the same. Doesn’t your free market system reward precisely the most selfish and acquisitive actions?”

  “No. It might just as well be regarded as rewarding the most altruistic actions. To begin with, under this system our government has sought to illegalize every action harmful to others that it could reasonably be expected to define and detect. We have illegalized not only theft, assault and murder, but libel and intimidation and coercion of every kind. We have illegalized and penalized fraud, misrepresentation of goods, and the breaking of promises and contracts. And by that means we have made it impossible, so far as it reasonably lies within our power, for any enterpriser to succeed except by one thing—by serving the consumers as well as or better than his competitors do. We have made it possible for him to succeed, not by providing people, I admit, with what they perhaps ought to want, but with what they actually do want.”

  “But shouldn’t a really ethical system supply consumers, chief, not with what they actually happen to want, which may often be harmful to them, but only with what is good for them?”

  “A thousand times, No. What your suggested ethical system implies, Adams, is that someone at the top—or some underling bureaucrat, for that matter—knows better what is good for you than you do yourself. It is an arrogant assumption of superiority on the part of the ruling clique. It is the essence of the. authoritarian attitude. It treats the people like irresponsible wards of the government. It treats the common man with contempt.”

  “But to give consumers only what they ought to want, chief, to give them only what is good for them—” “Those are merely euphemistic phrases, Adams, for compelling them to take only what the bureaucrats permit them to have.”

  “I’m still not entirely persuaded,” persisted Adams. “I concede that your laws prohibit the individual from doing what is harmful to others. But they do not prohibit him from doing what is harmful to himself, such as smoking too many cigarettes”—he looked accusingly at Peter—“or drinking too much or staying up too late; and they do not force him to be positively helpful and benevolent to others.”

  “They certainly do not, Adams. Our laws must seek to give people the fullest liberty possible. And the best way they can do that is to restrain only the liberty of each individual to infringe upon the equal liberty of others. Our specific traffic restrictions are not designed to restrict traffic but to promote and make possible the maximum safe flow of traffic. And our specific restrictions on liberty of all kinds can only be justified insofar as they tend to promote the greatest possible safe enjoyment of liberty for everyone.”

  “But it still remains true, chief, that your laws are essentially negative: they forbid this or that, but they do not enjoin generosity and helpfulness.”

  “If you forbid what is harmful to others, Adams, you have a big enough job for any government to take care of. Moreover, you have definite logical boundaries to that job. But if you begin to demand altruism legally, there are no logical limits—until everybody has been forced to give away all he has earned, or all he has earned above those who have earned least—and then you are back again to the point where no one has any incentive whatever to earn or produce anything.”

  “But how are you ever going to get generosity or benevolence, chief, if you make no legal provision for them?”

  “Any society worth living in,” replied Peter in a tone of conscious patience, “must of course be infused with a spirit of generosity and benevolence. It can’t depend solely on negative virtues—on people’s merely respecting one another’s liberty or their abstaining from deceit or violence. I concede all that to be true. But it isn’t the function of the government to force people into these positive virtues. It couldn’t do it if it tried, and the attempt would merely lead to horrible abuses. These positive virtues must come from within the society itself. And that’s merely another way of saying that they must come from within the individual.

  A society to be worth living in must have a morality. That is, the individuals of which it is made up must adhere to a moral code. But this morality cannot be imposed by officials, by the police, by the state’s apparatus of coercion. It must come spontaneously from individuals, from families, from the precepts of parents. It must be created, enriched and purified by great moral and religious thinkers and teachers, and above all by great moral and religious examples—But we’ve already been over all this ground—”

  “Then you admit,” cut in Adams, “that your new free market system does not in itself encourage a positive morality?”

  “Compared with socialism it certainly does,” Peter replied. “If you make it possible for men to succeed only by competition in serving the consumers—”

  “You are always talking of the blessings of competition,” Adams broke in again. “But isn’t competition precisely the chief evil? Doesn’t your ‘free market’ system promote cutthroat, dog-eat-dog competition, the law of the jungle—?”

  “You are not talking about competition,” Peter retorted, “but only about bad competition. You are talking about a low level of competition. Of course we should strive constantly to raise the level of competition. To do this we must depend first on a high general level of morality, and secondly on perfecting our system of legal restraints. We do not want people to succeed by superior chicanery, by more clever deceit, by greater unscrupulousness, by superior ruthlessness. Therefore our laws must do everything possible to close these avenues to success and to create conditions under which people can succeed only by superior zeal and ability in serving their fellows. And this is precisely what we have sought to do in our new system. It provides them with a system of rewards in proportion to their output—in other words, in proportion to their success in satisfying the consumer. Under this system they must compete for the consumer’s favor.”

  “But competition has always seemed to me a form of warfare, chief. A sound economy should be built on the opposite principle of co-operation.”

  “Competition in serving the consumer can be called a form of ‘warfare/ Adams, only in a metaphorical sense—and it is a false and misleading metaphor. So far from business competition’s being the opposite of co-operation, it is actually a method of social co-operation and one of the most important. Personal competition, in fact, is one of the greatest of all forces in bringing maximum progress. Whether a man is seeking to be the richest man in his community, or the most skillful surgeon, or the fastest swimmer, or the best pianist, or the greatest novelist or philosopher or saint, it is his sense of personal competition that drives him to wring every ounce of ability or perfection out of himself.”

  “Then it all depends, in your opinion, chief, on what actions or aims people decide to compete in?”

  “Precisely,” agreed Peter. “Competition, it seems to me, can be made to perform two main functions. One, as I have just pointed out, is to stimulate everyone to make the most of his innate abilities. The other is to assign each individual to that place in the social system where he can perform the greatest service for his fellows. In a society of status or heredity, everybody is likely to be misplaced—if we judge by the standard of where he could do the most good. We must try to place the greatest industrial leader at the head of the most important firm, and the best conductor at the head of the best orchestra—rather than put the potentially best industrial leader in charge of an orchestra and the potentially best orchestra conductor at the head of a manufacturing firm. And a system which gives free play to personal competition, with judgment by immediate colleagues and peers, is most likely to put men in the places they can occupy most effectively.”

  “I started out on quite another tack,” resumed Adams, “when I was deflected. I started by asking whether your system doesn’t reward selfishness and acquisitiveness. Now it seems to me, a perfect system should reward selfishness.”

  “Wh
y?”

  “Why?” repeated Adams, surprised. “Why, to give an incentive for unselfishness.”

  “That is a contradiction in terms,” replied Peter. “If you do something ‘unselfish’ in the hope of a reward, then you are doing something selfish. If you are doing something ‘unselfish’ and ‘altruistic’ under the spur of a material incentive—or even mainly in the hope of being praised for your action—then what you do is really selfish and acquisitive. It is illogical to ask for a reward for unselfishness. Unselfishness consists precisely in doing the things for which you are not rewarded.”

  “But under your free system, chief, everybody is pursuing his own ends.”

  “That is substantially true, Adams; but it doesn’t follow that the individual’s own ends are necessarily selfish or exclusively self-regarding ends.... Let me put it this way. In what is called a ‘business relationship’ I find that by serving your ends I can best serve my own. I find that by performing a service for you I can get the wherewithal to carry out some project of my own. It is true that I perform this service for you not for your sake but for my own. Or more accurately—for my own ends, whatever they may happen to be. And you give me something in return, not for my sake, but in order to get my service for yourself. So each of us co-operates with the other, each of us promotes the other’s immediate aim, in order to carry out his own remoter aims.”

  “I can see, chief, how that promotes wealth and production, and social co-operation, and mutuality of service. And all that is very fine. But still the ultimate aim of each of us in this business relation is self-regarding. Each of us, to put it bluntly, is trying to make money.”

  “Your argument still misses the point, Adams. Money is merely a means. If we are discussing personal motives, we must go further and ask what each of us is trying to get money for. Money is wanted as a medium of exchange for something else. It is one means—though a highly important one—of achieving our ultimate purposes. What do we intend to do with the money when we get it? This is the main place where the question of motive comes in. A man may earn money to support his family, to send his son to college, to pursue abstract scientific studies, to contribute to some public cause in which he deeply believes, to found a new charity. Now most working people are unselfish in this sense. Most of them support with their earnings not simply themselves, but others—a wife, children, aged parents, a sister or brother, and so on. A man works for his family—not so that he alone, but that they can have more. In brief, he works not merely for himself but for those he loves.”