Wednesday, October 3, 2012

Freedom = Prosperity

More than half a century ago some people could see that the government was getting too big.  It interferes with our lives in so many ways.  If we had always had the government that we have had during these last 80 years, we never would have risen out of the poverty that still is the life of most people in the world today.

We see it in countries that forgo their large governments in favor of more freedom.  Laissez China, India, Vietnam, South Korea, East Germany...have all gone from government control over their people's lives to a bit less of that.  And they have all become wealthier as a result.

Had we not had freedom in America we would not be wealthy today.  Rather, we would just be another 2nd or 3rd world country whose people live on a few cents per day...just like much of the rest of the world.

It was our, long lost, freedom that created our wealth.  It was freedom, not government rules, that gave us electricity, light bulbs, television...and cars.  Without freedom we would not have arisen from poverty.

We are living in an interesting moment in time.  America was once the freest place in the history of the world.  We are no longer.  We have rules and regulations covering every aspect of our lives.  And many of us wonder when America's pending collapse will happen.

It was not always this way.  There was once a time when freedom ruled, and marvelous things happened on a wild wheel...

I have been posting quotes on this blog from the book: The Wild Wheel.  So much of it is fascinating.  But the whole final chapter should not be broken into a few quotes.

You should read the whole thing:

The last chapter of The Wild Wheel by Garet Garrett (copyright 1952):

IT i s customary in the beginning to say why
one is going to write a book. That was done. If at the
end it is not clear there is very little that can be done
about it. The theme was Laissez Faire, the subject was
Henry Ford, and the idea was to illustrate the theme
by means of the subject, so that one might say,
Man hath the design of his time.

There was the promise in the Foreword that there
should be no moral judgment. Simply, for better or
worse, it was like that. Let the reader do with it what
he will.

It was a world many people grew not to want, or
wanted so little that they were unwilling to defend it.
Only the strong could love it. Anyhow, it is gone. The
number of those who knew it is rapidly dwindling. In a
little while nobody living will be able to remember it at
all. For that reason the book is not round if it omits to
say wherein it differed from the world we now have.
The first condition in it was freedom of the human
will—freedom in all dimensions. What a man would,
that he could—if he could, provided only he did not
cross the right of another to do likewise.

The only law he had to think about was one forbidding
him to restrain trade by conspiracy, and that
was something Ford never had the slightest intention of
doing. He was a complete individualist.

There was no Federal Trade Commission to mind his
way of doing business.

Taxes were nominal. There was no progressive taxation
to penalize growth or bigness. If a man made a
dollar it was all his own.

There was no law to compel him to bargain collectively
with union labor. There was no law requiring him
to recognize unions.

Wages were determined, not by the employer, as the
saying was, but by the law of supply and demand acting
in a free labor market. The employer paid such wages
as were necessary to command a supply of the kind of
labor he wanted. If he wanted better he paid more; if
he paid less he got the leavings and the ineffectives.
There were high-wage shops and low-wage shops; also
high-wage industries and low-wage industries. In good
times wages would rise, as the demand for labor increased;
in bad times they would fall, but seldom if
ever back to where they were before, because, owing to
the mechanization of industry, the productivity of labor
was always rising, and for that reason this was a highwage
country, with a rising standard of living, and
attracted labor from all over the world.

Now wages are determined neither by the employer,
as was once said, nor by the law of supply and demand
acting in a free labor market, but by the industry-wide
bargaining power of an organized and legal labor monopoly.
There was then no intervention by the Federal government
in what now we call labor relations, touching
the hours of labor, the terms of bargaining between
employer and employee, or fixing a minimum wage.
Ford's most celebrated single act was to double the
wage rate, not in a gradual manner but by one dramatic
stroke. Such a thing had never happened before; it
could not happen again. If the law had been then what
it now is, and if labor then had been organized as it is
today, he would have been haled before the National
Labor Relations Board and charged with an unfair
labor practice, on the ground that since he did it as an
act of his own will and without consulting the labor
leaders, his motive could only have been to discredit
unionism. Cases of that curious kind are on the record.
And certainly, if afterward he had increased the tempo
of production in the shop, organized labor would have
shut him up.

In that world that is gone the employer controlled
the speed of the assembly line. Now labor controls it.
In that world the employer could hire whom he liked
and fire whom he disliked, and it was nobody's business.
Now a wage earner cannot be fired but for good reason
and by consent of the union. The employer must prove
his case, and if he fails he will be compelled to rehire the
man he fired and pay him wages for the time he was
idle. The new way is much more humane, especially as
a protection for the weak; the old way is almost forgotten
and anyone who speaks of its grim merits will
be deemed antisocial.

But most important of all, a man then could do what
he would with his profits. Now he has to account for
them to the Federal tax collector and share them with
the government. The more profit he makes the more
of each dollar he must surrender to the government.
The secret of Ford's prodigious achievement lay in
what he did with his profits. He shared them with labor
by paying high wages, and with his customers by continuously
reducing the price of the automobile, and
then, but for a relatively small part declared as dividends
on the stock, all the rest year after year was
returned to the business to buy more and better machines
to make more and more automobiles at less and
less cost.

But now you have to account to the government for
every new machine you buy, and if the tax collector
thinks the inefficient old one you threw away was not
yet worn out you will have to go on paying taxes on
that one besides being taxed on the new one too.
It is easier to imagine other Fords than it is to believe
that another would be able to do in this regulated
world what Henry Ford did in his free world. He would
not be permitted to plow back his profits in that reck-
less manner as capital; he would not be permitted to
parlay his assets out of earnings. He would have to
borrow his capital to begin with, instead of creating it
as he went along, and his profits on that borrowed
capital would be limited—all to the making of a very
different story.

Laissez Faire did not survive Henry Ford. It was
betrayed by its friends, not for thirty pieces of silver
but for debased paper money that would be legal tender
for debt. Then it was stoned to death by the multitude
and buried with hymns of praise for the easier life.
The obsequies were performed by the government,
which assumed at the graveside ultimate responsibility
for the continued success, well-being and growth of the
national economy; by the government's tax collector,
who was to become insatiable, and by organized labor,
whose economic power against that of the employer was
increased by law, deliberately, on grounds of social

You may like it better this way. Many people do. In
any case, it was not to be argued. Only this—that if
Laissez Faire had not begotten the richest world that
ever existed there would have been much less for the
welfare state to distribute.

-page 215-220

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