Leonard Read knew the problems of socialism and saw what a threat its growth was to Americans’ well-being as well as their liberties. He also saw that the attempt to improve things that cannot work well, as is true of socialistic efforts, could even tempt lovers of liberty into undermining what they believe in. Read made his case in “I Don’t Know,” Chapter 4 in his 1965 The Free Market and Its Enemy. It is worth reconsideration.
Any individual who has become aware of the free market and its miraculous performances must realize that its opposite--socialism--is growing by leaps and bounds. This growth, at the moment, is not so much in formal takeover (nationalization of the modes of production) as in political control and the intellectual acceptance of control; socialism, ideologically, is now American doctrine. This is to say that socialism is not yet as thoroughly embedded in practice as it is in theory--but the acceptance of the theory is the preface to inevitable practice. Performance in the world of practical affairs follows on the heels of prevailing ideas.
Socialistic ideas are becoming so popular that countless “free enterprisers” are either “getting on the band wagon” or “running for cover”…forsaking their role as spokesmen for freedom.
In the absence of skilled spokesmen, freedom disappears.
Making the case for the free market requires a great deal of dedicated homework and learning, among other things, how not to give the case away…[including] tricky and rarely suspected booby traps…[One of them is] Attempting to explain how socialism, once installed, can be made to work better than at present…[It] is impossible of realization…[and] the attempts themselves do the libertarian rationale a distinct disservice.
Leonard Read told a personal story about a FEE seminar that had been invited to Venezuela to illustrate.
A successful businessman (one of our hosts) had once been asked by the government to head this socialized [hotel chain] operation. Thinking that socialism might be made to work were he in charge, he accepted the challenge. When he discovered that these hotels required 150 percent occupancy just to break even, he resigned. Had he known that socialism, by its very nature, can never be made to work, he would have been spared that waste of his energies.
How did Read come to the conclusion that “socialism, by its very nature, can never be made to work?”
Socialism may be defined as the state ownership and control of the means of production and exchange and/or the results of production and exchange; but what, really, is it in simple essence? It is a forcible intervention into exchange processes, a power wedge between the willingness of buyers and the willingness of sellers, a coercive interference with what some persons want that other persons are willing to grant. Socialism, in the final analysis, amounts to the frustration of willing exchange by people who are unaware of how little they know.
[In a voluntary] exchange…nothing [is] involved but a willing swap…The know-it-alls, however, with their police force, insist that a social interest is involved, that the exchange cannot be made without a penalty…To the extent that this transaction is socialized…to that degree is the will of two peaceful parties frustrated.
How can frustration be made to work? How can frustration be manipulated into harmony and increased production? Can any interference with peaceful, willing exchange, regardless of who does the interfering, do other than wreak havoc?
Because socialistic policies frustrate voluntary arrangements, substituting what are, at least in part, involuntary arrangements, such approaches perform poorly. Sometimes, that poor performance leads to thinking that if there were just better managers--say libertarians who “know better” than to trust coercion to advance our liberty or well-being--the problems could be solved. But Read had a good thoughtful response.
Many antisocialists, unhappy with the outcome of socialized activities, feel that these could be improved were they, rather than other know-it-alls, in charge. So they seek election or appointment to the government boards of such activities, under the impression that this is one way to strike a blow for freedom.
They can, when in charge, do more of what they want done with other people’s money than would be the case were other know-it-alls in charge. But this is no libertarian accomplishment; it’s only a substitution of one group’s know-it-all-ness for another’s.
Further, falling for the “better managers” trap undermines the powerful case for liberty over socialism.
When those of a libertarian bent set out to make socialism work better, whether by managing the activity or by their endorsement of legislation which would modify the socialistic details, they tacitly approve the socialistic premise and thereby abandon their own case for the free market. They forswear all fundamental argument against the socialistic premise because by their actions they acknowledge that it could be improved were they themselves framing or administering it. “Socialism, were I it’s manager, wouldn’t be so bad.”
So what was Read’s advice?
The student of liberty, if he is not to get off the track, must hope and work for the restoration of the free market and a government restored to its principled role of keeping the peace. Then let him peacefully keep in character by leaving socialistic activities to those who aren’t yet aware of how little they know…Why should libertarians absolve the socialists by becoming a party to their unworkable measures?
The aspiring libertarian, if he has made the first important step in progress, understands that he does not know how to mastermind the life of a single human being. He concedes that there is an order of creation over and beyond his own mind, that this order works in diverse and wondrous ways through billions of minds and that he should not in any way abort these miracles.
Leonard Read argued that “The accomplished student of liberty acquires a faith that men, when free to try, will perform miracles, a faith extrapolated from experience.” Therefore, trying to improve socialistic government actions, which by their nature undermine individuals’ freedom to discover and implement improvements in voluntary and peaceful ways, was “no libertarian accomplishment,” but instead abetted actions counter to what they believed. In a world of ever-more government tentacles throughout society, that is serious food for thought for anyone who believes in liberty.
