Time Will Run Back (43 page)

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Authors: Henry Hazlitt

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“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.”

“Why?”

“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.”

“But socialism, chief, argues that he ought to love
everybody,
and ought to work for everybody.”

“But the simple fact is, Adams, that he
doesn’t
love everybody, and you can’t
force
him to love everybody. And if you try to force him to love and support everybody, you merely kill his incentives and impoverish everybody. Of course under a regime of freedom you can persuade or exhort a man to widen voluntarily the circle of his love or at least his good will. And if a man here or there under our free market system
does
love everybody, and
does
want to produce for everybody and give to everybody, there is nothing to prevent him from doing so to the limit of his capacity.”

“Then your point,” said Adams, “is that while we may regret that more people are not more charitable than they are, the fault is not that of the free market or of the private enterprise system, but of human nature?”

“Precisely,” said Peter. “My point is that the nature of human beings primarily determines the nature and working of the economic and social system under which they live—and not, as Karl Marx supposed, the other way round.”

“But wouldn’t your argument apply also to communism, chief? Aren’t its faults also primarily the faults of the people who adopted and operate it?”

“The people first embraced communism, Adams, under a delusion; but then were held to it by bayonets. I am talking about systems that people are still free to change peaceably. Communism is infinitely worse than the potential human nature of the majority of people who live under it, because no one is free to make his will known, no one is free to act, without risk of torture or murder. Let me put it this way. An economic or political system is always as good as the people who live under it—as long as they are free to change it.”

Chapter 40

IT was June 21, just five years from the day when Peter’s air force had landed in America. The date was now Independence Day, the biggest holiday in Freeworld. Peter had broadcast a radio talk on a hemispheric hookup at noon.

Now he and Adams were completely alone in the White House.

“I gave everybody here the day off,” said Peter. “In fact, I insisted that they take it off. There are only two guards outside, with strict orders not to let anybody in—even Cabinet officers—on any excuse. There are no telephone girls at the switchboard, and my own telephone line is dead. It all gives me a wonderful feeling of peace. At last we can have one policy talk without a thousand interruptions. Sometimes during the last few years I’ve felt the way a philosopher would feel if he were information clerk at the Union Station and had to develop his system between questions.”

A hundred miles east of Nantucket Island, the crew of a Coast Guard ship watched a huge flight of long-range bombers pass above them, headed for the American shore. When the captain trained his binoculars on them, he was reassured to see that they carried the Freeworld markings.

“What do you think?” he asked the first mate.

“I suppose it’s got something to do with today’s celebrations.”

“Hear anything about it in advance?”

“Nope.”

“Think we ought to wireless a report of it?”

“We oughtn’t to make ourselves look foolish.”

“Just wireless, as a routine report:
More than one hundred big bombers, our markings, passed over
—then give our position—
heading west by south!’

“Very good, sir.”

“I have heard you call your new system, chief,” said Adams, “by many different names, which you seem to use interchangeably. Sometimes you call it free enterprise, sometimes competitive private enterprise, sometimes the private ownership system, sometimes the private property system, sometimes the profit-and-loss system, or the profit-seeking system, sometimes the price system, sometimes merely the market economy, or the free market economy. Isn’t it about time you settled on some definite single name for it?”

“Does it matter?” asked Peter.

“Well, you know what Bolshekov is calling it in his propaganda!”

“What
is
he calling it?”

“He says it’s nothing but a brazen revival of capitalism!” Peter hit the ceiling. “The dirty son of a Trotsky!” He had slipped into the old profanity without thinking of its literal meaning.

“Quite true,” said Adams; “but we must have an answer for him.”

“Well,” said Peter, quieting down, “suppose for the sake of argument that Bolshekov’s charge were true? Suppose, in our persistent gropings toward a better system than communism, we had done nothing better at last but stumble into and rediscover the very same old ‘capitalism’ that we had been reviling for two centuries as the depth of human iniquity and misery? Suppose that were true? How would Bolshekov know it, any more than we do? When we destroyed all the old literature, when our forefathers carefully expurgated even from Marx everything but the mere abuse and left as few hints as they could of how the system actually worked, how can Bolshekov know any better than we what the old capitalism was like?”

“He doesn’t,” said Adams; “but he’s got hold of a powerful propaganda weapon, and we’ve got to find an answer.”

“Well, it’s perfectly silly,” said Peter, “to call our new system ‘capitalism.’ We can rightly call it any of the names you just cited, but not
that!
How does the name apply?”

“Well, the system certainly makes use of capital, chief, of capital goods, or machinery and tools—”

“Of course it does. But so does socialism, communism, or any other conceivable economic system. Otherwise mankind couldn’t survive!”

“Well then,” Adams asked, “how do you suppose the old ‘capitalism’ ever got its name? Why did our filthy bourgeois forefathers ever call it ‘capitalism’?”

Peter thought for a moment. “Maybe they didn’t. Maybe this was just a term of abuse that its socialist enemies applied to it. Maybe it was merely Karl Marx himself who invented the term, or made it stick.”

“But why was it considered appropriate even as a term of abuse?”

“That would be a little hard to guess,” said Peter. “Let’s see.... Let’s assume that the term ‘capital’ already existed, and that it meant money and the tools of production. And let’s say that this capital happened to be privately owned by individuals. Then these private owners might get the name ‘capitalists.’ Now let’s say these capitalists used their capital to establish enterprises and hire workers. If people who disliked this system started to call it ‘capitalism,’ the name itself would adroitly imply that the system existed primarily for the enrichment of the capitalists—and hence for the exploitation or robbery of the hired workers.”

“So if the defenders of the system were foolish enough themselves to use Marx’s epithet for it,” suggested Adams, “they would begin under a heavy semantic handicap?”

“Precisely,” said Peter—“or perhaps not. Perhaps they could have proudly embraced this intended smear and turned it to their own advantage. They could have said: ‘You do well to call our system “capitalism.” For it is precisely this system that leads to the maximum accumulation and the most efficient allocation of capital. It is only this system, in short, that makes the fullest use of capital, of the tools of production, and so takes burdens off the back of labor, constantly and enormously increases the worker’s productivity and wages and wellbeing.’,.. Yes, I think we could work out a good propaganda answer to Bolshekov.”

“Then let me ask—” Adams began.

“But I might add,” Peter continued, “that Bolshekov is entirely wrong in applying the term ‘capitalism’ to our new system if he means by it that it is necessarily the capitalists who hire the workers. On the contrary, as we see every day, it is enterprisers, often without much or even any capital of their own, who hire both capital and labor at market rates of interest and market rates of wages. They could be just as plausibly accused of exploiting the capitalists as of exploiting the workers, because, of course, each enterpriser is trying to hire both capital and labor as cheaply as he can.”

“But isn’t it competition among themselves,” said Adams, “that forces the enterprisers to pay as high rates for both capital and labor as they actually do?”

“Precisely “

The bomber flight appeared over Nantucket. Two reconnaissance planes were sent up to have a closer look at it. They were fired upon. The colonel in charge of the Nantucket airfield telephoned the Department of Defense at Washington...

The bomber flight passed over New York, releasing a few bombs. It passed over Philadelphia, and dropped another load. Interception planes were now rising to meet it....

The telephone operator at the Department of Defense reported back to the Under-Secretary. “The White House doesn’t answer!” “Ridiculous! Keep ringing....”

“Have you any other objections?” Peter asked.

“When I bring up objections to your new system,” answered Adams, “I bring them up as much to clarify my own mind as for any other purpose. I need not tell you that in spite of all these objections I am, on net balance, lost in admiration of your great discovery.”

“You are tremendously generous. But I must repeat that it isn’t exactly my dis—”

“I am beginning to think, chief, that it is, in fact, the greatest discovery ever given to mankind. For one thing, it has made possible most of the other discoveries that promise constantly to lift at least the material welfare of mankind—”

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