A Sure-Fire Remedy

After 35 years of probing, I have finally hit upon a sure-fire remedy for socialism— the disease suffered by those who call for state inter­vention in order to do good or give help to their fellow men. The cure can be effective, however, only if the patient can be per­suaded to take his medicine. A very large if!

But, first, let us understand the malady and its symptoms.1

There is nothing unusual about an early symptom of the disease: a perfectly normal compassion for those who, for whatever reasons, fail to emerge from the poverty level. The first real sign of break­down comes if the compassion sours, curdling into a deep-seated resentment and indignation when­ever conscientious effort or labor is rewarded less than no effort or labor at all. For instance, one man receives only a dollar a day for ditch digging while someone else is given a $10,000 check for sim­ply posing momentarily while his picture is snapped. The patient’s sensibilities are offended: Rank injustice! Miserable economic in­equities! Although these are the danger symptoms, the case is not necessarily hopeless. Many of us are similarly infected.

The malady does not reach the malignant or virulent stage until the indignant individual turns to socialism, that is, until he advo­cates coercion as a means of cor­recting what he regards as eco­nomic disparities and inequities. Diagnosis is now easy: the patient will turn to minimum wage laws, rent and other price controls, Fed­eral urban renewal along with government housing and the like, subsidies to farmers for not farm­ing and to others for services never rendered, strikes as a pricing mech­anism for labor, restrictions on across-the-border travel, trade, and investment, and so on. When these symptoms appear, beware, for the disease is contagious!

What can be done for these vic­tims? Scolding, name-calling, im­patience, intolerance is false ther­apy and should be scrupulously avoided. No sound diagnostician fools around with surface mani­festations; he approaches the problem systemically, as the phy­sicians put it.

A Mistaken Sense of Values

What delusion lies at the root of the malady? It is a notion as old as mankind and so ingrained in our tradition and thinking that, like a vestigial organ, it stays with us not only as utterly use­less but as positively harmful. The traditional notion: the value of any good or service bears a direct relationship to the amount of ef­fort or energy exerted. It is the cost-of-production idea of value; economists call it the labor theory of value.

Were this theory of value car­ried to its logical and absurd conclusion, the ditch digger would receive far more than the actor who only had his picture snapped. The patient, however, is less con­cerned with these exaggerated disparities than with the com­monplace ones. For instance, he sees the highly educated college professor as "underpaid." He pities the poor farmer, on whose produce all of us depend, who la­bors from early morn until after dark; the wage earner who doesn’t have a "decent standard of living"; on and on. But note that the sym­pathies engendered have their roots in the patient’s theory of value — he measures a man’s worth in terms of the effort or energy exerted. "That just isn’t fair," he exclaims, and he takes coercive steps "to put things right."

This is the advanced stage of the disease, the germs of which lie in the traditional mode of thinking and action.

Until 1870, there was no basis for prescribing a remedy. Then came an important discovery: the value of any good or service is what will be willingly exchanged for it. Value, in short, depends not so much on the objective cost of production as on the subjective judgment of the customer. This was discovered nearly a century ago; yet only a few in the popula­tion have any apprehension of this unassailable economic fact.

The important fact is that the market value of my labor is not the value I put on it, nor does it matter what anyone else says my fair wage ought to be. The value of my production is determined by what you and others will freely exchange for it. There is a world of difference between our inher­ited, vestigial notion and this re­cently apprehended economic truth.

Our patient, it turns out, is in­fected by the vestigial notion and the contradiction it forces upon him. He allows his emotions to be governed by what he thinks an-other’s wage or reward should be; whereas, what he thinks is irrele­vant, unless he’s the buyer. He then contradicts his own theory every time he shops around for bargains — the latter a perfectly normal and correct behavior. The error of his theory is exposed by his own actions, for when he shops for bargains he is trying to buy other people’s labor as cheaply as possible. Living such a contradic­tion is bound to have psychological effects, the ill effect in this case being the resort to coercion. So­cialism, in other words, is a psy­chological illness.

To Each According to Need

Now, what is the curative medi­cine so distasteful to socialists that few will try it? The first step is for the patient to abstain from coercion and rely entirely on per­sonal demonstration and persua­sion to help those whose plight he deplores.

The next step is for the patient to abstain from using price and quality as criteria for purchases. Shopping for bargains is taboo. Instead, he shall find those per­sons who are the objects of his compassion, those further down the economic ladder than their efforts seem to him to warrant. He shall then purchase their goods or services — labor — at a price which he thinks befits their efforts and needs. The patient’s tailor, for instance, shall be chosen not for his competence or the desirability of his suits but for how strenu­ously he works at his trade. And the patient will then reimburse the tailor at a rate to assure him a "decent standard of living." Fur­ther, the patient shall follow this rule in all transactions for all goods and services. Henceforth, he shall look no longer to his own requirements but only to what he sees as the requirements of others. Preposterous? Yes, this remedy is the counsel of error. But it is absolutely consistent with the la­bor theory of value, the vestigial notion that lies at the root of the patient’s illness. Will the patient try it? If he did, he soon would tire of it. He won’t take advice from others; but if he will only test his theory against his own actions, he is cured. This is a do-it-yourself remedy; the dosage: read the prescription each morn­ing on arising.

A Fair Field; No Favors to Anyone

How, now, is economic justice to be served? Justice is served when the door of opportunity is as open to one individual as to any other. Whether or not a person serves himself well or ill or caters to the satisfactions of others efficiently or inefficiently is in a realm other than justice. A fair field and no favor is our stand if we would en­shrine justice. It is none of our business how a person makes out when justice prevails; that’s en­tirely his own affair.

Are we then to let the unfor­tunate go unattended? Is there to be no thought of them? Of course, that will not be the case! The record as well as sound theory demonstrate that the coercive way of life leads to general impoverish­ment; the record and theory at­test to the fact that the willing exchange method of cooperation affords prosperity on a scale here­tofore unknown to mankind.

And for the relatively few who remain unfortunately situated, let each of us give of his own, not someone else’s goods as a means of alleviation. This is the highly commendable Judeo-Christian practice of charity, heartening to benefactor and benefited alike. While charity is in a realm beyond economics, it is evident that with­out sound economic practices char­ity is impossible.

In the final analysis, it is those who produce, not bleed, for hu­manity who are the benefactors of mankind. No one need prescribe any remedy for them for they are in good health.

—FOOTNOTES—       

1 Socialism is a double-phased malady: the planned economy and the welfare state. While the two seem always to go hand-in-hand — as perhaps they must — my remedy is aimed specifically at the welfare state phase.

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Reciprocity

Tsekung asked, "Is there one single word that can serve as a principle of conduct for life?" Confucius replied, "Perhaps the word ‘reciprocity’ will do. Do not do unto others what you do not want others to do unto you."

LIN YUTANG, The Wisdom of Confucius