A statist is a man who believes that some men have the right to force, coerce, enslave, rob, and murder others. To be put into practice, this belief has to be implemented by the political doctrine that the government—the state—has the right to initiate the use of physical force against its citizens. How often force is to be used, against whom, to what extent, for what purpose and for whose benefit, are irrelevant questions. The basic principle and the ultimate results of all statist doctrines are the same: dictatorship and destruction. The rest is only a matter of time.
Now let us consider the question of economic power.
What is economic power? It is the power to produce and to trade what one has produced. In a free economy, where no man or group of men can use physical coercion against anyone, economic power can be achieved only by voluntary means: by the voluntary choice and agreement of all those who participate in the process of production and trade. In a free market, all prices, wages, and profits are determined— not by the arbitrary whim of the rich or of the poor, not by anyone’s “greed” or by anyone’s need—but by the law of supply and demand. The mechanism of a free market reflects and sums up all the economic choices and decisions made by all the participants. Men trade their goods or services by mutual consent to mutual advantage, according to their own independent, uncoerced judgment. A man can grow rich only if he is able to offer better values—better products or services, at a lower price—than others are able to offer.
Wealth, in a free market, is achieved by a free, general, “democratic” vote—by the sales and the purchases of every individual who takes part in the economic life of the country. Whenever you buy one product rather than another, you are voting for the success of some manufacturer. And, in this type of voting, every man votes only on those matters which he is qualified to judge: on his own preferences, interests, and
needs. No one has the power to decide for others or to substitute his judgment for theirs; no one has the power to appoint himself “the voice of the public” and to leave the public voiceless and disfranchised.
Now let me define the difference between economic power and political power: economic power is exercised by means of a positive, by offering men a reward, an incentive, a payment, a value; political power is exercised by means of a negative, by the threat of punishment, injury, imprisonment, destruction. The businessman’s tool is values; the bureaucrat’s tool is fear.
America’s industrial progress, in the short span of a century and a half, has acquired the character of a legend: it has never been equaled anywhere on earth, in any period of history. The American businessmen, as a class, have demon* strated the greatest productive genius and the most spectacular achievements ever recorded in the economic history of mankind. What reward did they receive from our culture and its intellectuals? The position of a hated, persecuted minority. The position of a scapegoat for the evils of the bureaucrats.
A system of pure, unregulated laissez-faire capitalism has never yet existed anywhere. What did exist were only so-called mixed economies, which means: a mixture, in varying degrees, of freedom and controls, of voluntary choice and government coercion, of capitalism and statism. America was the freest country on earth, but elements of statism were present in her economy from the start. These elements kept growing, under the influence of her intellectuals who were predominantly committed to the philosophy of statism. The intellectuals—the ideologists, the interpreters, the assessors of public events—were tempted by the opportunity to seize political power, relinquished by all other social groups, and to establish their own versions of a “good” society at the point of a gun, i.e., by means of legalized physical coercion. They denounced the free businessmen as exponents of “selfish greed” and glorified the bureaucrats as “public servants.” In evaluating social problems, they kept damning “economic power” and exonerating political power, thus switching the burden of guilt from the politicians to the businessmen.
All the evils, abuses, and iniquities, popularly ascribed to businessmen and to capitalism, were not caused by an unregulated economy or by a free market, but by government intervention into the economy. The giants of American industry—such as James Jerome Hill or Commodore Vanderbilt or Andrew Carnegie or J. P. Morgan—were self-made men
who earned their fortunes by personal ability, by free trade on a free market. But there existed another kind of businessmen, the products of a mixed economy, the men with political pull, who made fortunes by means of special privileges granted to them by the government, such men as the Big Four of the Central Pacific Railroad. It was the political power behind their activities—the power of forced, unearned, economically unjustified privileges—that caused dislocations in the country’s economy, hardships, depressions, and mounting public protests. But it was the free market and the free businessmen that took the blame. Every calamitous consequence of government controls was used as a justification for the extension of the controls and of the government’s power over the economy.
If I were asked to choose the date which marks the turning point on the road to the ultimate destruction of American industry, and the most infamous piece of legislation in American history, I would choose the year 1890 and the Sherman Act—which began that grotesque, irrational, malignant growth of unenforceable, uncompliable, unjudica-ble contradictions known as the antitrust laws.
Under the antitrust laws, a man becomes a criminal from the moment he goes into business, no matter what he does. If he complies with one of these laws, he faces criminal prosecution under several others. For instance, if he charges prices which some bureaucrats judge as too high, he can be prosecuted for monopoly, or, rather, for a successful “intent to monopolize”; if he charges prices lower than those of his competitors, he can be prosecuted for “unfair competition” or “restraint of trade”; and if he charges the same prices as his competitors, he can be prosecuted for “collusion” or “conspiracy.”
I recommend to your attention an excellent book entitled The Antitrust Laws of the U.S.A. by A. D. Neale.1 It is a scholarly, dispassionate, objective study; the author, a British civil servant, is not a champion of free enterprise; as far as one can tell, he may probably be classified as a “liberal.” But he does not confuse facts with interpretations, he keeps them severely apart; and the facts he presents are a horror story.
Mr. Neale points out that the prohibition of “restraint of trade” is the essence of antitrust—and that no exact definition of what constitutes “restraint of trade” can be given.
1 A. D. Neale, The Antitrust Laws of the United States of America: A Study of Competition Enforced by taw, Cambridge, England: Cambridge University Press, 1960.
Thus no one can tell what the law forbids or permits one to do; the interpretation of these laws is left entirely up to the courts. A businessman or his lawyer has to study the whole body of the so-called case law—the whole record of court cases, precedents, and decisions—in order to get even a generalized idea of the current meaning of these laws; except that the precedents may be upset and the decisions reversed tomorrow or next week or next year. “The courts in the United States have been engaged ever since 1890 in deciding case by case exactly what the law proscribes. No broad definition can really unlock the meaning of the statute . . .”2
This means that a businessman has no way of knowing in advance whether the action he takes is legal or illegal, whether he is guilty or innocent It means that a businessman has to live under the threat of a sudden, unpredictable disaster, taking the risk of losing everything he owns or being sentenced to jail, with his career, his reputation, his property, his fortune, the achievement of his whole lifetime left at the mercy of any ambitious young bureaucrat who, for any reason, public or private, may choose to start proceedings against him.
Retroactive (or ex post facto) law—i.e., a law that punishes a man for an action which was not legally defined as a crime at the time he committed it—is rejected by and contrary to the entire tradition of Anglo-Saxon jurisprudence. It is a form of persecution practiced only in dictatorships and forbidden by every civilized code of law. It is specifically forbidden by the United States Constitution. It is not supposed to exist in the United States and it is not applied to anyone—except to businessmen. A case in which a man cannot know until he is convicted whether the action he took in the past was legal or illegal, is certainly a case of retroactive law.
I recommend to you a brilliant little book entitled Ten Thousand Commandments by Harold Fleming.8 It is written for the layman and presents—in clear, simple, logical terms, with a wealth of detailed, documented evidence—such a picture of the antitrust laws mat “nightmare” is too feeble a word to describe it.