From a study done by the Joint Council of Economic Education in 1973, 50 percent of the high school students interviewed could not distinguish between collectivism and a free enterprise society. Fifty percent did not know that the United States economy was based on free enterprise. From another study done by the Opinion Research Corporation, the median estimate of the U.S. public was that corporate profits are 28 percent of the sales dollar. Actually, profits are four to five percent.

These attitudes may be the result of the propaganda of certain textbook writers who hold the idea, in many instances, that a planned economy is the remedy for all of our economic ills and the weaknesses in our American way of life, to which they readily point, without referring to the beneficent fruits of the system.

Before a welfare state can flourish, a welfare state mentality must take root. Are we not today yielding the harvest of seeds sown from the days of the Great Depression to the present? The ethic of today seems calculated to indoctrinate our citizenry toward a dependency on the state. Our Founding Fathers recognized that certain rights were inalienable, that is, God-given; today, the state is being looked to as the guarantor of human rights—life, liberty, and property. Our forebears practiced the biblical ethic that man should earn his bread by the sweat of his own brow; today’s ethic seems to be that it is right to be supported by the sweat of another’s brow.

I ask, Where are the exponents of the free market today? Who is speaking out for the philosophy and system that has brought about America’s greatness and prosperity? You will not find free market exponents among the majority in the halls of Congress, nor in government bureaucracies, nor in labor, the pulpit, or the classroom. Paradoxically, they are not any more heard among the majority of businessmen. Many businessmen kowtow to the power of governmental regulatory agencies; others have their hand out to the federal trough. The platforms of the two great political parties in our land are contradictory to a free man’s political and economic philosophy. The majority party is unabashedly pro-collectivist; the minority party offers a more gradual interventionism as an alternative. My intent, in this chapter, is to plead the case for the free market in a way that, hopefully, the average citizen may understand.

To illustrate my point, let me relate a parable that contrasts two different philosophies.

Two fathers lived side by side as neighbors. Each had two sons. Each had a good job, a roomy house, and material means to provide the best of life’s luxuries. The essential difference between the two fathers was one of philosophy.

Mr. A’s objective with his sons was to instill principles that would bring about self-respect, personal responsibility, and independence. His method merits our scrutiny.

When his boys were young, he taught them how to work at simple tasks by his side. When they became more mature, he developed a work-incentive program. The pay scale was commensurate with the quality of the work performed. An “average job,” for example, paid fifty cents; “above average,” sixty cents; “exceptional,” seventy-five cents. A “one-dollar job” was the impossible task, a goal that he soon observed the boys were striving after. He impressed on them that the only limitations to their earnings were their own personal initiative and desire. He emphasized the necessity of postponing wants so they could save for the future. The lessons were well learned over a period of time.

There was an undergirding moral element to Mr. A’s philosophy, a principle more “caught” than taught. A simple example will suffice. One day the boys, now young men, were working in his plant. Mr. A observed some sloppy work being done on one of the products. He asked to see the product, and removed the label. One of the boys resisted. “Why are you doing that, Dad?” he asked. Mr. A replied, “I’ll not have my name attached to a shoddy product. When my name goes on, my customers must know I’ve given them my best workmanship. Would you want to own this product?” It was an answer that provided a lesson that would last a lifetime. How could the Golden Rule be emphasized more effectively in business!

Mr. B also had a philosophy, albeit one that was reactionary to the early struggles of youth. “I’ll not have my kids go through what I did.” His philosophy was designed to remove the struggle from life. His method also merits our consideration.

Regularly his sons were provided with generous allowances. Little work was expected in their formative years. In later years the boys were encouraged to work, but now they were too comfortable in their security. After all, they had all their material wants satisfied. At this juncture Mr. B made a profound discovery: wants always exceed needs and are never satisfied unless disciplined. To counteract the lack of self-discipline, Mr. B embarked on a routine of imposed restraints. To his chagrin, he found his sons embittered toward him, ungrateful, and frequently disobedient to rules imposed on them.

Need I draw conclusions from this parable? Is it not apparent which philosophy develops a productive, contributive member of society and which philosophy sponsors dependency? Is it not also apparent which philosophy will best prepare one for emotional or economic crises?

I do not apologize for the simplicity of the illustration. One may argue that the characters are exaggerated, but even a child can understand the effects of Mr. B’s caretaker philosophy. Is not his philosophy analogous in many ways to the government official who argues, “In this country welfare is no longer charity, it is a right. More and more Americans feel that their government owes them something”? (U.S. News and World Report, April 21, 1975, p. 49.)

But it is not Mr. B’s philosophy that commands our attention here; it is Mr. A’s. Why is it that the elements in his philosophy are so unfamiliar to so many that they believe their government owes them something? Our task is to make Mr. A’s philosophy both familiar and credible. When it is understood and believed, it will be defended with the same vigor and determination that made our Founding Fathers pledge their lives, their fortunes, and their sacred honor.

Many view the idea of the free-enterprise or free-market system as only an alternative economic system to other systems. This is a serious oversight and causes many to miss the most crucial elements in the free-market system.

First: The free-market system rests on a moral base. Before one can appreciate why this premise is true, two questions must be answered: What is man?, and From what source does man derive his rights?

Our governmental system, like the systems of ancient Israel and biblical Christianity, recognizes man as a special creation of God. He is not, as some theorists reason, a product of chance or merely an educated animal. His paternal origin is from God. Thus, man inherently possesses God-implanted attributes and potential: reason, free agency, judgment, compassion, initiative, and a personal striving for perfection.

Thus we see that the principle of supremacy of the individual over government is rooted in religious precept. This is why the founders of our nation were so influenced by the writings of John Locke, who declared that man was naturally in a state of perfect freedom, that he had a right to preservation and property, and that the source of all this was God. (See John Locke’s treatise, Of Civil Government.)

The Founding Fathers recognized that no people can maintain freedom unless their political institutions are founded on faith in God and belief in the existence of moral law. They realized that to survive, this new nation needed a reliance on the protection of God. In the Declaration of Independence we find their appeal to “the Supreme Judge of the world” and to “the Laws of Nature and of Nature’s God.” The document concludes with their affirmation of “a firm reliance on the Protection of Divine Providence.”

The implications of this moral basis to our political-economic system is that God is the dispenser of man’s rights, not government. The inalienable right of free choice is implanted in the human breast. Man is born to choose for himself. This is why man cannot be driven indefinitely or led by despotic leaders to intellectual, physical, or economic bondage. Once a person awakens to the truth of his divine identity, he demands his rights: the right to property, the right to make his own decisions, the right to plan his own welfare, and the right to improve himself materially, intellectually, and spiritually.

Second: The free market is based on the right to property. The right to property is again based on scriptural precept. It recognizes that the earth belongs to the Lord, that He created it for man’s blessing and benefit. Thus, man’s desire to own property, his own home and goods, his own business, is desirable and good. Utopian and communitarian schemes that eliminate property rights are not only unworkable, they also deny to man his inherent desire to improve his station. They are therefore contrary to the pursuit of happiness.

No property rights! Man’s incentive would be diminished to satisfying only his barest necessities such as food and clothing. How this truth is evident in the communist countries today!

No property rights! No incentive to enter individual enterprise, to risk one’s own capital, because the fruits of one’s labor could not be enjoyed.

No property rights! No contractual relationships to buy and sell since title to possession of goods could not be granted.

No property rights! No recognition of divine law that prohibits man from stealing and coveting others’ possessions. One cannot steal that which belongs to everyone, nor can he covet that which is not another’s!

No property rights! No possibility of the sanctity of one’s own home and the joy that comes from creation, production, and ownership.

A free-market philosophy recognizes property rights as sacred. Because the individual is entitled to ownership of goods and property that he has earned, he is sovereign, so far as human law is concerned, over his own goods. He may retain possession of his goods. He may pass his wealth on to family or to charitable causes.

Charity, that greatest of godly virtues, would never be possible without property rights, for one cannot give what one does not own.

James Madison recognized that property consisted not only of man’s external goods—his land, merchandise, or money—but, most sacredly, he had title also to his thoughts, opinions, and conscience. A civil government’s obligation, then, is to safeguard this right and to frame laws that secure to every man the free exercise of his conscience and the right and control of his property.

No liberty is possible unless a man is protected in his title to his legal holdings and property and can be indemnified, by the law, for its loss or destruction. Remove this right and man is reduced to serfdom. Former United States Supreme Court Justice George Sutherland said it this way: “To give [man] liberty but take from him the property which is the fruit and badge of his liberty, is to still leave him a slave.” (Address to the New York Bar Association, January 21, 1921.)

Third: The free market is based on the right to enjoy private enterprise for profit. As a country we have suffered under half a century of liberal propaganda demeaning economic success. This was done by referring to men who are willing to risk their capital (profit) in tools and equipment as “coupon clippers,” “economic royalists,” “capitalists,” and “profiteers”—as though there were something inherently evil in profit.

Profit is the reward for honest labor. It is the incentive that causes a man to risk his capital to build a business. If he cannot keep or invest that which he has earned, neither may he own, nor will he risk. Profit creates wealth; wealth creates more work opportunity; and more work opportunity creates greater wealth.

There is another benefit to profit. It provides man with moral choices. With profit, man can choose to be greedy and selfish; he can invest and expand, thereby providing others with jobs; and he can be charitable. Charity is not charity unless it is voluntary. It cannot be voluntary if there is nothing to give.

Only saved profit, not government, creates more jobs. The only way government can create jobs is to take the money from productive citizens in the form of taxes and transfer it to government programs. Without someone’s generating profit that can be taxed, government revenue is not possible.

Fourth: The free market is the right to voluntary exchange of goods and services, free from restraints and controls. Nothing is more to be prized, nor more sacred, than man’s free choice. Free choice is the essence of free enterprise. It recognizes that the common man will make choices in his own self-interest. It allows a manufacturer to produce what he wants, how much, and to set his own price. It allows the buyer to decide if he wants a certain product at the price established. It preserves the right to work when and where we choose.

In his first inaugural address, Thomas Jefferson said that the sum of good government shall leave citizens “free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned.”

Why does our system produce more bread, manufacture more shoes, and assemble more TV sets than Russian socialism? It does so precisely because our government does not guarantee these things. If it did, there would be so many accompanying taxes, controls, regulations, and political manipulations that the productive genius that is America’s based on freedom of choice, would soon be reduced to the floundering level of waste and inefficiency now found behind the Iron Curtain.

When government presumes to demand more and more of the fruits of man’s labors through taxation, and reduces more and more his actual income by printing money and furthering debt, the wage earner is left with less and less with which to buy food and to provide housing, medical care, education, and private welfare. Individuals are then left without a choice and must look to the state as the benevolent supporter of these services. When that happens, liberty is gone.

Fifth: A free market survives with competition. Were it not for more competition among goods or services, there could be no standard by which a buyer could discern shoddy merchandise or inept service from excellence. Were it not for competition, the seller could price his goods and services according to his own fancy. It is competition that determines what is good, better, and best. It is competition that determines the price for products or services. If goods are overpriced in comparison with other comparable goods, the buyer will refuse to buy, thus forcing the seller to drop his price.

There is a glaring paradox in our society. On the one hand, legislation has been enacted allegedly to prevent one business or combination of businesses (a monopoly) from disrupting or eliminating competitors in the market. On the other hand, we have yet to awaken fully to the worst form of monopolistic practice currently impeding the free market. I refer to government monopoly, when government either by ownership or regulation prevents the full freedom of action by sellers. This, of course, regulates and controls prices. No better example exists today than the so-called energy crisis.

As a nation, we have artificially regulated the price of natural gas for over twenty years. The Federal Power Commission has set prices and burdened the oil industry with regulations. Consequently, the oil industry has not had the incentive to discover natural gas or drill for oil even though the reserves are there. The environmentalists, with the help of activist lawyers, have combined to make it almost impossible to drill for oil economically. What industry wants to risk its capital fighting through hearings and lawsuits that double and treble its investment costs? So exploration does not take place, or reserves are kept off the market to await the day when government will deregulate. The government is then left with the alternative to go abroad to supply our demand for foreign oil reserves. The most effective energy policy our government could devise would be to step out of the regulatory business. This would provide once again the incentives for industry to make investment and exploration.

Freedom from bureaucratic monopoly is essential to allowing our free market to work effectively. I hope we wake up to this lesson before our freedoms are lost altogether.

We have talked thus far about the vital elements to a free market operation. How does it all work together to bring about needed goods and services? Let me illustrate.

How do our cities and towns each day obtain the quantity of food products they demand? Of all agencies engaged in supplying cities with food, almost none knows how much the city consumes or how much is being produced. Despite this ignorance, the cities receive about the right amount of food needed without great surplus or shortage. How is this accomplished without a central directing body telling each producer what it should produce? The answer, of course, is the operation of the free market—free enterprise in action.

Suppose, for example, that a given city did not receive the amount of food products needed to satisfy its demand. Rather than go without, many people would be willing to pay higher prices. Thus, prices would increase and the volume of production would rise. This would end the shortage. More food would be shipped to that city and less to other places. Or suppose there were an oversupply of food products. To avoid spoilage, the seller must lower his price. This, in turn, would be a signal to the producer to cut back on production. Thus, the oversupply would automatically be regulated. Less food would be shipped to that city and more to other places.

Just as price regulates the distribution of food in a given city, so it also determines the total amount produced in the country. Greater profits provide farmers with incentives to produce given products. If the supply increases at a pace faster than the demand for a product, farmers and ranchers are compelled to lower their prices. As it becomes less profitable to produce, potential producers are deterred from engaging in this occupation, and the unprofitable producers divert to something else or abandon farming altogether.

This is how this remarkable system works in all industries when government and planning control and price fixing are left out, yet few of our citizens seem to understand this. Economic literacy among our people has not been one of the bright spots in our 200-year-old history. Yet it is apparent that when ignorance prevails, the people eventually suffer.

The principles behind our American free market philosophy can be reduced to a rather simple formula. Here it is:

1. Economic security for all is impossible without widespread abundance.
2. Abundance is impossible without industrious and efficient production.
3. Such production is impossible without energetic, willing, and eager labor.
4. Such labor is not possible without incentive.
5. Of all forms of incentive, the freedom to attain a reward for one’s labors is the most sustaining for most people. Sometimes called the profit motive, it is simply the right to plan and to earn and to enjoy the fruits of one’s labor.
6. This profit motive diminishes as government controls, regulations, and taxes increase to deny the fruits of success to those who produce.
7. Therefore, any attempt through government intervention to redistribute the material rewards of labor can only result in the eventual destruction of the productive base of society, without which real abundance and security for more than the ruling elite are quite impossible.

Yes, what worked for Mr. A in producing self-disciplined, responsible, contributive sons will work for a community; what works for a community will work for a state; and what works for the state will work for this nation—if we as American citizens demand that government officials perform only those duties provided by the Constitution and Bill of Rights.

Examples abound in the world of the failure of alternative systems to the free market. What amazes me is that we cannot see from their example the obvious failure of socialism, what it does to a nation’s economy, and how it morally debilitates a people.

Great Britain is a tragic example of this. Here is a nation that has provided the free world with a tradition of freedom and democratic rights, stemming from the Magna Carta and coming down through other important historical documents and statements by famous Englishmen. Yet England today is losing her freedom. She has become a giant welfare state. Today government spending in Great Britain amounts to 60 percent of her national income.

This is socialism. Medical doctors under socialized medicine are leaving Great Britain in record numbers, as are thousands of others.

British Prime Minister James Callaghan said, “We used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you, in all candor, that that option no longer exists, and that insofar as it ever did exist, it only worked by injecting bigger doses of inflation into the economy, followed by higher levels of unemployment as the next step.” (London Times, September 29, 1976, from Labor Party Conference at Blackpool, England, p. 4.)

Such a confession led the renowned economist, the Nobel Laureate, Dr. Milton Friedman, to comment, “That must surely rank as one of the most remarkable and courageous statements ever made by a leader of a democratic government. Read it again. Savor it. It is a confession of the intellectual bankruptcy of the policy that has guided every British Government in the postwar period—not only Labor governments but also Tory governments; of the policy that has guided almost every other Western government—including the U.S. under both Republican and Democratic administrations; of the policy that is now being recommended to Mr. Carter by his advisers.” (Newsweek, December 6, 1976, p. 87.)

Consider another example: our neighbor to the north, Canada. For twenty years (1944-1964), the province of Saskatchewan lived under a socialist government. Here is what the premier, the Honorable W. Ross Thatcher, said about this experience:

In 1944, the Socialists said they would solve the unemployment problems by building government factories. They promised to use the profits to build highways, schools, hospitals, and to finance better social welfare measures generally. Over the years they set up 22 so-called crown corporations. . . . By the time we had taken over the government, . . . 12 of the crown corporations had gone bankrupt or been disposed of. Others were kept operating by repeated and substantial government grants.

During the whole period the Socialists waged war against private business. The making of profits was condemned as an unforgivable sin. What was the result? Investors simply turned their backs on the Socialists. Dozens of oil companies pulled up stakes and moved out. Gas exploration ground to a complete halt. Prospecting in our vast north became almost non-existent.

During the period Canada was experiencing the greatest economic boom in her history, Saskatchewan received only a handful of new factories. After 18 years of Socialism, there were fewer jobs in manufacturing than existed in 1945—this despite the investment of $500 million in crown corporation. . . .

During the period more than 600 completely new taxes were introduced; 650 other taxes were increased. Per capita taxes in Saskatchewan were soon substantially out of line with our sister provinces—one more reason why industry located elsewhere.

. . . the Socialists promised to make Saskatchewan a Mecca for the working man. Instead, we saw the greatest mass exodus of people out of an area since Moses led the Jews out of Egypt. Since the war, 270,000 of our citizens left Saskatchewan to find employment elsewhere.

If there are any Americans who think that Socialism is the answer, I wish they could come to Saskatchewan to study what has happened to our province. (Quoted in Corydon, Indiana, Republican.)

We say, “It can’t happen here.” The lesson of New York City should tell us that this same thing is happening here—to us—now! As Dr. Friedman has pointed out, New York City is no longer governed by its elected officials. It is governed by a committee of overseers appointed by the State of New York. New York City has partially lost its freedom. When will we learn the lesson that fiscal irresponsibility leads to a loss of self-government? When will we learn that when you lose economic independence, you lose political freedom?

We have accepted a frightening degree of socialism in our country. The question is, how much? The amount of freedom depends upon the amount of federal control and spending. A good measurement is to determine the amount, or percentage, of income of the poeple that is taken over and spent by the state. In Russia, the individual works almost wholly for the state, leaving little for his own welfare. Scandinavia takes about 65 to 70 percent of the income of the people, England some 60 percent. The United States is now approximately 44 percent.

There are indications that America is moving away from the philosophy that made her the most prosperous nation in the world. In effect, we are moving toward the philanthropic philosophy of Mr. B and abandoning the work-incentive philosophy of Mr. A. Mr. B’s philosophy has crept in unawares under the guise of a new name—egalitarianism. It is, of course, the socialist doctrine of equality. It strikes a sympathetic chord with many Americans because its initial goal is equality of rights. Today, however, the goal for the proponents of equality is to restructure our entire economic system using the power of the federal government to enforce their grand design. They now advocate throughout our economy that we “redistribute wealth and income,” a good definition for socialism. Our present middle-of-the-road policy is, as Von Mises suggested, socialism by the installment plan.

Americans have always been committed to taking care of the poor, aged, and unemployed. We’ve done this on the basis of Judeo-Christian beliefs and humanitarian principles. It has been fundamental to our way of life that charity must be voluntary if it is to be charity. Compulsory benevolence is not charity. Today’s egalitarians are using the federal government to redistribute wealth in our society, not as a matter of voluntary charity, but as a matter of right.

The chief weapon used by the federal government to achieve this equality is through so-called transfer payments. This is a term that simply means that the federal government collects from one income group and transfers payments to another by the tax system. These payments are made in the form of Social Security benefits, housing subsidies, Medicaid, food stamps, to name a few.

Today, total cost of such programs exceeds $150 billion dollars. That represents about 42 percent of the total of all government federal spending, or about one dollar out of every seven dollars of personal income. (See U.S. News and World Report, August 4, 1975, pp. 32-33.) When will we resolve as Americans that a dollar cannot make the trip to Washington, D.C., and back without a bureaucratic bite being taken out of it?

Medicaid, the government’s regular health program for the poor, cost taxpayers $13 billion in 1975. Medicare, the program for the disabled and elderly, cost $15 billion. Aid to families with dependent children cost over $5 billion, and about $3 billion was spent on food stamps. This is to name only a few of the so-called benefits paid out.

Our present Social Security program has been going in the hole at the rate of $12 billion a year, and yet the party now in power wants to increase the benefits to include a comprehensive national health insurance program. Recognizing that the present program will be insolvent by 1985, President Carter has now recommended that Social Security be funded out of the general tax funds. Charges were made in the last election campaign that the Social Security program was going bankrupt. These charges were denied. Now the truth is out. The President’s recommendation must be regarded as an admission of the failure of the present system and as a calculated policy to take this country into full-scale socialism.

Our major danger is that we are currently—and have been for forty years—transferring responsibility from the individual, local, and state governments to the federal government, precisely the same course that led to the economic collapse in Great Britain and in New York. We cannot long pursue this present trend without its bringing us to national insolvency.

Edmund Burke, the great British political philosopher, warned of the threat of egalitarianism: “A perfect equality will indeed be produced—that is to say, equal wretchedness, equal beggary, and, on the part of the partitioners, a woeful, helpless, and desperate disappointment. Such is the event of all compulsory equalizations. They pull down what is above; they never raise what is below; and they depress high and low together beneath the level of what was originally the lowest.”

All would like to equalize with those who are better off than they themselves. They fail to realize that incomes differ, and will always differ, because people differ in their economic drive and ability. History indicates that governments have been unable to prevent inequality of incomes. Further, equalization efforts stifle initiative and retard progress to the extent that the real incomes of all are lowered.

We must remember that government assistance and control are essentially political provisions, and that experience has demonstrated that, for this reason, they are not sufficiently stable to warrant their utilization as a foundation for sound economic growth under a free enterprise system. The best way—the American way—is still maximum freedom for the individual guaranteed by a wise government that provides for police protection and national defense.

History records that eventually people get the form of government they deserve. Good government, which guarantees the maximum of freedom, liberty, and development to the individual, must be based upon sound principles. We must ever remember that ideas and principles are either sound or unsound in spite of those who hold them. Freedom of achievement has produced and will continue to produce the maximum of benefits in terms of human welfare.

Freedom is an eternal principle. Heaven disapproves of force, coercion, and intimidation. Only a free people can be truly a happy people. Of all sad things in the world, the saddest is to see a people who have once known liberty and freedom and then lost it.

We are a prosperous people today because of a political-economic system founded on spiritual values, not material values alone. It is founded on freedom of choice—free agency—an eternal, God-given principle, and personal virtue.

The Founding Fathers, inspired though they were, did not invent the priceless blessing of individual freedom and respect for the dignity of man. No, that priceless gift to mankind sprang from the God of heaven and not from government. Recognizing this truth, they forged safeguards that would bind men’s lust for power to the Constitution. Each new generation must learn that truth anew.

Yes, America’s foundation is spiritual. Without the moral base to our system, we are no better off than other nations that are now sunk into oblivion. If we are to remain under heaven’s benign protection and care, we must return to those principles which have brought us our peace, liberty, and prosperity. Our problems today are essentially problems of the spirit.

We here in America, as Theodore Roosevelt said over a half century ago, “hold in our hands the hope of the world, the fate of the coming years, and shame and disgrace will be ours if in our eyes the light of high resolve is dimmed, if we trail in the dust the golden hopes of man.”

With God’s help and inspiration, perhaps we may rekindle a flame of liberty that will last as long as time endures.

The focus of this post will be on Georgics. It is not a common word today. Georgic means to be an owner, or ownership.

There was a debate between Thomas Jefferson and Alexander Hamilton regarding what type of nation we should be. They agreed we should be a commercial society, but differed in what type of commercial system to establish.

The Founders believed that America should be organized in a way that allows people the freedom to pursue and obtain the basic necessities of life. The idea of the American Dream is that anyone could become a commercial success. The Founders chose this over being a martial or religious society. Essentially this is what we call a free-market or free-enterprise system.

Hamilton wanted to have a society where everyone is working for big entities and organizations, big industry in which a lot of people are working together to create wealth. As you can see today we’re seeing more and more of this, and less and less of what Jefferson promoted.

Jefferson recognized this would limit the people’s freedom. The model Jefferson proposed is having a bunch of people who are farmers, land owners, shop owners and businessmen and entrepreneurs. Independents. People who are independent, not dependent (Owner vs Employee).

A dependent depends on others. An independent is an owner, someone who is Georgic; someone who owns their own business.

DeMille said that by the year 1900 – 90% of America in general were owners. Now, 100 years later, there are less than 10% who are owners… and the impact on freedom has been proportional.

Often the difference between a person that chooses to be independent rather than dependent is the type of education they received. Those who have a received a “Liber” education generally learn how to think for themselves, whereas others are taught what to think.

I wasn’t brought up in a Liber education. During the past 4 years of my life I have drastically changed my paradigm and way of thinking more in line with a Liber education, through my own studies of the Founding Fathers, the proper role of government and the principles of freedom.  The studies have also lead me to studying the writings of other great minds.  This paradigm shift gave me the desire to pursue my own interests in business as an Entrepreneur rather than working for someone else the rest of my life. I have made the choice to be an independent rather than a dependent.

It’s not necessarily a bad or good thing to be a dependent or an independent, it’s simply a choice. I also recognize that no one is ever going to be completely independent, nor would that be an ideal goal. As a business owner I still depend on other individuals and businesses for many things. As a business owner I enjoy a lot more freedom than I previously did when working for others, though it’s also more challenge and less predictable and stable – but worth it to me.  One point I’d like to promote is that whether you choose to be a business owner or an employee, realize that it is a choice; go with what you feel inspired to do.

Jefferson said you can’t have independence unless you are a nation of independents. If you are a nation of dependents you won’t be free.

I’d love to get your thoughts on Georgics and business ownership vs. employment…

The phrase “survival of the American way of life” carries a somewhat different connotation to various groups even within the United States. Probably to no other group will it bring a more significant meaning in terms of farms of America than to those who operate our farms and ranches. As one who has been reared among them, served them, and been served by them, I declare that our rural people are today the strongest bulwark we have against all that is aimed not only at weakening, but also at the very destruction of our American way of life. It seems that man must get his feet into the soil to keep sane. In any event, no other segment of our population knows so well that “as ye sow, so shall ye reap.” America and the world must learn this eternal truth. Failure to do so can bring only disappointment, suffering, and desperation.

It is not surprising that we should turn our thoughts to a consideration of those factors which will determine in large measure our future success and happiness as a nation through the preservation of the American way of life. What, then, is the American way of life? What are its fruits? Do we really want our free enterprise system to survive?

If you could have spent a recent year with me in war-torn Europe, that which you would have seen would have given the answers. It is heartrending to see people who have lost their freedom of choice—their free agency—and who feel no security; who have no homes they can call their own; who own no property; whose hearts are filled with hatred, distrust, and fear of the future.

The outlook for free enterprise in the world has never seemed so uncertain as now. A world survey by the New York Times shows that nationalization is growing rapidly, especially outside the western hemisphere. Many nations have a mixed economy brought about by an increase in state control and a corresponding weakening of the private enterprise system. Under various forms of socialism and communism, the growth of governmental restrictions and nationalization goes on apace. The seriousness of the situation demands careful reflection by all interested in the preservation and perpetuation of our system of individual free enterprise, predicated, as it is, on a democratic capitalistic economy under a republican form of government.

The New York Times also printed the results of a survey of twenty-two nations, made by correspondents—and of all the countries, Canada appeared to be the only one in which private enterprise “can be said to be functioning today with anything like the freedom from governmental controls that obtains in the United States.”

Millions of people today have become slaves to the state. The dignity and value of the individual, except as a tool of government, have vanished in many parts of the world. We have experienced in years past in many nations, including America, the slavery of person to person. We fought two great wars to settle these issues in our own land. The first was a fight for national freedom; the second was a fight for freedom of person from person. The current question, and one that has brought and is bringing so much sorrow and misery to people in many parts of Europe, is that of slavery of the individual to the state.

Should we as American citizens be concerned? We need not think it cannot happen here.

Fortunately, the founding fathers of this great land, under the benign influence of a kind Providence, established a solid foundation aimed at guaranteeing a maximum of individual freedom, happiness, and well-being. “We hold these truths to be self-evident,” they said in the Declaration of Independence, “that all men are created equal; that they are endowed by their Creator with certain inalienable rights; that among these are life, liberty, and the pursuit of happiness. That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed.” This inspired document proclaims clearly that governments should be established on such principles as “seem most likely to effect” the “safety and happiness” of the people. The Constitution of the United States, which Gladstone has described as “the most wonderful work ever struck off at a given time by the brain and purpose of man,” was aimed to “establish justice, insure domestic tranquillity, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity.”

In these sacred documents are embodied eternal principles that no man, group of men, or nation has the right to withhold from others. Here is our basis for freedom of individual achievement. Our Constitution with its Bill of Rights guarantees to all our people the greatest freedom ever enjoyed by the people of any great nation. This system guarantees freedom of individual enterprise, freedom to own property, freedom to start one’s own business and to operate it according to one’s own judgment so long as the enterprise is honorable.

The individual has power to produce beyond his needs, to provide savings for the future protection of himself and family. He can live where he wishes and pick any job he wants and select any educational opportunity. He is, to a high degree, free through his own hard work and wise management to make a profit, to invest in any enterprise he may choose, and to leave a part of his accumulation to be inherited by others as they may, in large measure, determine. He may enjoy the sacred rights of freedom of speech, freedom of assembly, freedom of the press, and freedom of worship. To this American entrepreneur his home is his castle, and in the event that he is accused of an offense against the laws established by the people, he has the right of trial by a jury made up of his own fellow citizens.

All these and more, embodied in written documents that cannot be changed easily and quickly to suit the whim of some would-be dictator, are our heritage under the American way of life. Here is freedom guaranteed by the limitation of government through a written constitution. Do we recognize and fully appreciate the priceless value of this legacy? Now, while the world is in commotion and turmoil over ideologies and political philosophies, is a good time to reflect upon the past. It is a good time to draw a few comparisons—to take stock.

Under these principles of freedom and enterprise America has become the richest nation under heaven and has grown to be the most powerful and influential nation in the world, using an economy based upon freedom of individual achievement. Here has been established the most highly developed industrial system in the world, together with the technological equipment, human and otherwise, to support it.

Our republic has now been an operating unit for almost two centuries. During that period we have developed a productive plant and a way of life that have given the highest standard of living for the masses known to the civilized world. In the long run, a nation enjoys in the form of goods and services only what it produces. We have established an all-time record of production.

Within the past century we have received a huge increase in net output per man-hour. These vast gains in human welfare have lessened human toil. At the time of the Civil War the average work week was seventy hours. In America the inventive genius provides horse-drawn and tractor-drawn equipment, and one family can cultivate 50, 100, 200, or even 400 acres and more. A man working by hand has the physical force of one-tenth of a horse. A man with a ten-horsepower tractor has ninety times that much power. American ingenuity under freedom of choice has harnessed tremendous amounts of mineral energy to do physical work. Most occupations in the United States today require more horse sense than horsepower. Under our free enterprise system there are good reasons to believe that the technological progress of the past will continue in the future, perhaps at an accelerated rate.

Our free enterprise system also allows for all necessary flexibility. No other economic program responds so readily to changes in wartime and peacetime demands. Witness what happened after the fall of France in 1940, when the President asked Congress for 50,000 planes to strengthen America’s defense in a dangerous world. Other nations and some of our people cried, “Impossible! We haven’t the plants, money, or materials.” What was the answer of America’s free enterprise system? By June 1945, 297,000 war planes had been produced, nearly 100,000 of them bombers.

No fair-minded person contends that the private enterprise system is perfect. It is operated by human beings who are full of imperfections. Many of us deplore the fact that a few of our corporate entities seem to lack that social consciousness proportionate to their power and the privileges granted them by the state. Some businesses apparently still fail to recognize that there are social and spiritual values as well as profits that should be considered in their operations.

Neither do our needs always correspond to our demands under the free enterprise system. For example, the American male still prefers steak and potatoes and apple pie to a better balanced diet. Many American families often prefer housing below a decency level to the “indecency” of getting along without a family car. As a nation we have spent twice as much money for liquor and tobacco as for medical care, about the same for movies as for the support of the churches, and almost as much for beauty parlor services as for private social welfare. Whether wise or unwise, these decisions on the part of individuals as to how they spend their money are the result of free consumer choice, which is a part of the free enterprise system.

With all of its weaknesses, our free enterprise system has accomplished in terms of human welfare that which no other economic or social system has even approached. Our freedom of individual opportunity permits us to draw upon our natural resources and upon the total brain and brawn power of the nation in a most effective manner. This freedom of individual choice inspires competition. Competition inspires shrewd and efficient management, which is conducive to the production of the best product possible at the lowest price.

Are we to discard a system that has produced so much simply because it has not worked perfectly? We all admit there are abuses. One should not condemn an entire system because of the abuses of a handful of those who do not play the game according to established rules. We often refer to the family unit as the very basis of civilized society, and yet all will agree that family life is not perfect—divorces are too frequent, some homes are unhappy—but our objective is not to throw the family overboard, but rather to work for the improvement of family relations. Even the churches of America are not perfect, but no sane American would recommend that the churches be discredited and discarded. We all recognize religion as the basis of true character-building for which the world is starving.

The evidence clearly indicates that our most cherished rights and interests are all a part of the American way of life. Can communism, socialism, fascism, or any other coercive system provide these priceless blessings which flow to us as a part of our American way of life? The common denominator of all these coercive systems is the curtailment of individual liberty. Surely we will all agree that our Constitution provides the basis for the only economic system acceptable to true Americans.

Although we all cherish the material blessings which flow from the American system of individual achievement, it would be folly for us to close our eyes to certain challenging and dangerous trends that are in evidence and that strike at its very foundation. As Americans, far removed from the struggles which won for us our freedom, we are inclined to take the inevitable blessings of freedom for granted. It has been seven generations since the adoption of the American Constitution. Many in America today seem to have forgotten the cost and the value of freedom.

In addition, during the past few years, particularly, loud voices have been calling attention to the weaknesses of private enterprise without pointing out its virtues. We have been teaching our people to depend upon government instead of relying upon their own initiative as did our pioneer forefathers. Our freedom to work out our individual destinies has been abridged. We have been looking upon government as something apart from us and have failed to realize that we, the people, are the government.

We have also been making individual success unpopular. There has been a tendency to refer to men who have cash to invest in tools and equipment for the use of workers as “coupon clippers,” “economic royalists,” “capitalists,” and “profiteers”—as though there were something inherently bad in it. Evidence of this fact is found in the writings and discussions of our high school and college students, the majority of whom, it is reported, believe private enterprise is a failure, although they don’t have a clear understanding of what private enterprise is. With them, as with many adults, there is a vague notion that it is some unfair system which tends to give special advantage to big corporations and wealthy individuals. This attitude is encouraged by certain textbook writers who hold the idea, in many cases, that a government-planned economy is the remedy for all of our economic ills and the weaknesses in our American way of life, to which they readily point without referring to the beneficent fruits of the system.

We are rearing a generation that does not seem to understand the fundamentals of our American way of life, a generation that is no longer dedicated to its preservation. A long-range educational program beginning with the adult level is, of course, the only answer. Our people, both before and after they arrive at the age of the right of the ballot, should understand what it is that has made America great. We can only appreciate freedom if we understand the comparative fruits thereof. It was Jefferson who said: “The price of freedom is eternal vigilance.” It is one thing to win freedom; its preservation is equally important. If reference is made continually to weaknesses of the private enterprise system without any effort to point out its virtues and the comparative fruits of this and other systems, the tendency in this country will be to demand that the government take over more and more of the economic and social responsibilities and make more of the decisions for the people. This can result in but one thing: slavery of the individual to the state. This seems to be the trend in the world today. The issue is whether the individual exists for the state or the state for the individual.

In a democracy the real danger is that we may slowly slide into a condition of slavery of the individual to the state rather than entering this condition by a sudden revolution. The loss of our liberties might easily come about, not through the ballot box, but through the death of incentive to work, to earn, and to save. Such a condition is usually brought about by a series of little steps which, at the time, seem justified by a variety of reasons and which may on the surface appear to be laudable as to intent. It has been pointed out that the more basic reasons offered by would-be planned economy advocates are “the desire to change and control others, the search for security, and the desire of individuals or groups to improve their own economic status or that of others by means of direct governmental intervention.”

Europe today is evidence of the fact that one of the most common routes toward serfdom is followed by those in search of economic security. Never has there been so much apparent interest in security. Many programs so labeled have wide appeal. In order to appraise properly any so-called governmental security plan, however, we must look behind its name. Many so-called progressive programs are attractively labeled, and if we are to preserve our freedom and liberty, we must constantly analyze the nature of issues and programs and ignore labels that have been attached to them.

Equality is also a favorite term. Most people believe themselves to be below the average in income; therefore they feel they stand to gain through equalization via governmental intervention. All would like to equalize with those who are better off than they themselves. They fail to realize that incomes differ, and will always differ, because people differ in their economic drive and ability. The evidence clearly indicates that government has been unable to prevent inequality of incomes and, further, that equalization efforts usually stifle initiative and retard progress to the extent that the real incomes of everyone are lowered.

Many of our problems and dangers center in the issues of so-called fair prices, wages, and profits and the relationship between management and labor. We must realize that it is just as possible for wages to be too high as it is for prices and profits to be excessive. There is a tendency, of course, for almost everyone to feel that his share is unfair, whether it is or not. An effort to adjust apparent inequities often calls for government subsidies. Too often these are authorized without asking, “Who will pay for them?” Much of our program of letting the government pay for it can be described as “an attempt to better yourself by increasing your pay to yourself and then sending yourself the bill.”

The only safe and solid answer is the mechanism of a free market operating in an enterprise and free competition. Here everyone has a chance to cast his vote in the election that will decide what is a fair price, fair wage, and fair profit, and what should be produced and in what quantities. To contradict the justice of that decision is to contradict the whole concept of justice by the democratic process. All will agree that the democratic processes and the free market—both parts of our American way of life—are not perfect, but they are believed to have fewer faults and to do a better job than any other known device. A sure way to take a shortcut to serfdom is to discard the sovereign rights of all the people in either the political or the economic realm.

We must remember that government assistance and control are essentially political provisions, and that experience has demonstrated that, for that reason, they are not sufficiently stable to warrant their utilization as a foundation for sound economic growth under a free enterprise system. The best way—the American way—is still maximum freedom for the individual guaranteed by a wise government that establishes and enforces the rules of the game. History records that eventually people get the form of government they deserve. Good government, which guarantees the maximum of freedom, liberty, and development to the individual, must be based upon sound principles, and we must ever remember that ideas and principles are either sound or unsound in spite of those who hold them. Freedom of achievement has achieved and will continue to produce the maximum of benefits in terms of human welfare.

Our way of life is based upon eternal principles. It rests upon a deep spiritual foundation established by inspired instruments of an all-wise Providence.

Breathes there the man with soul so dead
Who never to himself hath said,
This is my own, my native land!
Whose heart hath ne’er within him burn’d
As home his footsteps he hath turn’d
From wandering on a foreign strand?
If such there breathe, go, mark him well!
(Sir Walter Scott, 1771-1832, Lay of the Last Minstrel. Canto vi. Stanza 1)

…and so on. Sometimes I think of the words of Van Dyke in that great poem, “America for Me”, part of which goes:

‘Tis fine to see the Old World, and travel up and down
Among the famous palaces and cities of renown,
To admire the crumbly castles and the statues of the kings
But now I think I’ve had enough of antiquated things… Oh, it’s home again, and home again, America for me!
I want a ship that’s westward bound to plough the rolling sea,
In the land of youth and freedom beyond the ocean bars,
Where the air is full of sunlight and the flag is full of stars!

And so tonight, I appreciate more than I can say this opportunity to speak to you frankly as an American; one who prizes his citizenship in this blessed land. It seems appropriate that I should say a few words in regards to freedom and liberty. It is by vigilance by business people such as you represent who rely on our great inspired free enterprise system that our liberties will be maintained.

However, far too many today are enjoying a comfortable complacency. As a lead into my message I quote from my friend, Dean Clarence Manion in the Manion forum bulletin of July 3, 1977. He said in these days of pompous highbrowed drivel about the establishment of human rights throughout the world it is most encouraging to find two distinguished university professors publishing jointly the following fact of history. Listen to it. “Humanity has survived in various states of tyranny for thousands of years. One might even say that this is the natural state of affairs for man. Future historians may look back and see the period 1776-1976 as a brief 200 year accident.” I don’t believe it’s an accident in the history of man in which real freedom existed for all. Yes, we are a prosperous nation, our people have high paying jobs, our incomes are high, our standard of living is at an unprecedented level. We do not like to be disturbed as we enjoy our life of ease. We live in the soft present and feel the future is secure. We do not worry about history. We seem oblivious to the causes to the rises and falls of nations. We are blind to the hard fact that nations usually sow the seeds of their own destruction while enjoying unprecedented prosperity. I say to you with all the fervor of my soul, we are sowing the seeds of our own destruction in America and much of the free world today.

It is my sober warning to you today that if the trends of the past forty years and especially the last fifteen years continue we will lose that which is as priceless as life itself: our freedom, our liberty , our right to act as free men. It can happen here, it is happening here. The outlook for free enterprise in the world has never seemed so uncertain as now.

Nationalization is growing rapidly especially outside of the Western Hemisphere. Many nations have a mixed economy brought about by an increase in state control and a corresponding weakening of the private enterprise system. In our own county we unmistakably see a trend toward welfare statism, what one has called pension fund socialism. It seems in vogue for some to raise the question, will capitalism survive? More appropriately the question might be stated; Do we as American citizens have the desire and will for capitalism, and free enterprise to survive?

Today it seems evident that we are rearing a generation of Americans who do not understand the productive base of our society and how we came by such prosperity. Evidence of this fact is found in surveys taken among some of our high school and college students. The majority of whom it is reported believe private enterprise is a failure. Although they don’t have a clear understanding of what private enterprise is. With them as with many adults there is a vague notion that it is some unfair system which stands to give special advantage to big corporations and wealthy individuals. From a study done by the council of economic education, in 1973, 50% of the high school students could not distinguish between collectivism and a free enterprise society. 50% did not know the United States economy was based on free enterprise. From another study done by the Opinion Research Corporation, the median estimate of the U.S. public was that corporation profits are 28% of the sales dollar. Actually profits are 4 or 5%. These attitudes may be the result of the propaganda by certain textbook writers who hold the idea in many instances that a planned economy is the remedy for all of our economic ills and weakness in our American way of life, to which they readily point without referring to the magnificent fruits of the system.

Before a welfare state can flourish, a welfare state mentality must have taken root. Are we not today yielding the harvest of seeds sown from the days of the great depression to the present? The ethic of the day seems calculated to indoctrinate our citizens for a dependency on the state. Our founding fathers recognized that certain rights are inalienable, that is, God given. Today the state is looked to as the guarantor of human rights, life, liberty and property. Our forbearers practiced the biblical ethic that man should earn his bread by the sweat of his own brow. Today’s ethic seems to be that it is right to be supported by the sweat of another’s brow.

Tonight may I state the case for the free market and how it operates? You folks know already pretty well how it operates. I would also emphasize why a free market is essential to regaining political and economic freedoms. The more I become acquainted with the appalling lack of understanding of our free market system, the more I become convinced that we must return to something of a basic primer to explain our economic system. Perhaps this parable will illustrate.

Two fathers lived side by side as neighbors. Each had two sons. Both fathers had good jobs, roomy homes and material means to provide the best of life’s luxuries. The essential difference between the two fathers was one of philosophy. Mr. A’s objective with his two sons was to instill principles that would bring about self respect, personal responsibility and independence. His methods narrowed our scrutiny. When his boys were young he taught them how to work, that of simple tasks by his side. When they became more mature he developed a work incentive program. The pay scale was commensurate to the quality of work performed. An average job for example paid 50 cents, above average 60, and exceptional job, 75. A one dollar job the impossible task a goal that he soon observed his boys were striving after. He impressed on his sons that the only limit on the earning were their personal initiative and desire. He emphasized that necessity to postpone immediate wants so they could save for the future. The lessons were well learned over a period of time. There was an under girding moral element to Mr. A’s philosophy. A principle more caught than taught. A simple example will suffice. One day the boys, now young men were working in Mr. A’s plant. He observed some sloppy work being done on one of the products. He asked to see the products and proceeded to remove the name plate. One of the boys resisted, “Why are you doing that dad?” Mr. A replied, “I’ll not have my name attached to a shoddy product. When my name goes on, my customers must know I’ve given them my best workmanship. Would you want to own this product?” It was an answer which provided a lesson that would last a lifetime. How could the golden rule be emphasized more effectively in business?

Mr. B also had a philosophy, albeit a reactionary one to his early struggles of youth. I’ll not have my kids go through what I did. His philosophy was to remove the struggle from life. His method also merits our consideration. Regularly his sons were provided with generous allowances. Little work in their formative years was expected. In later years the boys were encouraged to work, but were now too comfortable in their security. After all they had all of their material wants satisfied. At this junction Mr. B made a profound discovery: wants always exceed basic needs and are never satisfied unless disciplined. To counteract the lack of self discipline Mr. B. embarked on a routine of imposed restraints. To his chagrin, he found his boys embittered toward him, ungrateful and frequently disobedient to the rules imposed on them. Need I draw the conclusions from this parable? Is it not apparent which philosophy leads to a productive, contributive member of society and which philosophy sponsors dependency? Is it also not apparent which philosophy will best prepare one for an emotional or economic crisis? I do not apologize for the simplicity of the illustration. One may argue the characters are exaggerated. But even a child can understand the effect of Mr. B’s care taker philosophy. Is not this philosophy analogous in many ways to the government official who argues, “in this county welfare is no longer charity, it is a right.” More and more Americans feel that the government owes them something. But it is not Mr. B’s philosophy that commands our attention tonight, it is Mr. A’s. Why is it the elements in his philosophy are so unfamiliar to so many that they believe that their government owes them something? Our task is to make Mr. A’s philosophy both familiar and credible. When it is understood and believed, it will be defended with the same determination and vigor that our founding fathers pledged their lives, their fortunes and their sacred honor. Many of you see the idea of the free enterprise or the free market system as only an alternative economic system to our other systems. This is a serious oversight and causes many to miss the most crucial element to the free market system. May I mention some of these features?
1. The free market system rests on a moral base.

Before one can appreciate why this premise is true, two questions must be answered:

1. First, what is man?
2. The second question, a corollary to the first, is from what source does man derive his rights?

Our governmental system like ancient Israel and biblical Christianity recognized man as a special creature of God, a special creation of God. He is not as some theorists reason, a product of chance or merely an educated animal. His paternal origin comes from God. Thus man inherently possesses God implanted attributes and potential: reason, free agency, judgment, compassion, initiative, and a personal striving for perfection.

From what source does man derive his rights? There can be only two possible origins of man’s rights; rights are either God given as part of the divine plan or they are granted by government as part of the political plan. Reason, necessity, tradition and religious convictions all led the founding fathers of this republic to accept the divine origin of these rights. If we accept the premise that human rights are granted by government, then we must be willing to accept the corollary that they can be denied by government. I for one shall never accept that premise. As the French political economist, Frederick Bastiat phrased it so succinctly. “Life, liberty and property do not exist because men have made laws. On the contrary, it was the fact that life, liberty and property existed beforehand that caused man to make laws in the first place.”

Since God created man with certain inalienable rights and man in turn created government to help secure and safeguard those rights, it follows that man is superior to government and should remain master over it, not the other way around. Even the non-believer can appreciate the logic of this relationship. Thus we see that the principle of supremacy of the individual over government is rooted in religious precept. This is why the founders of our nations were so influenced by the writings of John Locke, which declared that man was naturally in a state of perfect freedom, that he had a right to preservation and property, and that the source of all this was God.

The founding fathers recognized that no people can maintain freedom unless their political institutions are founded on faith in God and belief in the existence of moral law. They realized that to survive, this new nation needed a reliance on the protection of God. In the Declaration of Independence we find their appeal to the supreme judge of the world and to the laws of nature and nature’s God. The document includes their acclamation of a firm reliance on the protection of divine providence. The implication of this moral basis to our political economic system is that God is the dispenser of mans rights not government. The inalienable right of free choice is implanted in the human breast. Man is born to choose for himself. This is why man cannot be driven indefinitely or led by despotic leaders to intellectual, physical or economic bondage. Fear and despotism may rule for a generation, two or three, but in time the human spirit rebels. The spirit of liberty manifests itself and the tyrannical hand of despotism is overthrown. May it ever be so.

Once a person awakens to the truth of his divine identity he demands his rights, the right to property, the right to make his own decisions, the right to plan his own welfare, the right to improve himself materially, intellectually and spiritually.
2. The free market is based on the right to property.

The right to property is again based on a scriptural precept. It recognizes that the earth belongs to the Lord, that He created it for man’s blessing and benefit. Thus man’s desire to own property, his own home and goods, his own business is desirable and good. Utopian and communitarian schemes which eliminate property rights are not only unworkable, they deny to man his inherent desire to improve his station. They are therefore contrary to the pursuit of happiness. With no property rights, man’s incentive would be diminished to satisfying only his barest necessities such as food and clothing. How this truth is evident in the communist countries today! No property rights, no incentive to individual enterprise to risk one’s own capital because the fruits of ones labor could not be enjoyed. No property rights, no contractual relationship to buy and sell because title to possession of goods could not be granted. No property rights, no recognition of divine law which prohibits man from stealing and coveting others’ possessions; one cannot steal that which belongs to everyone, nor can he covet that which is not another’s. No property rights, no possibility of the sanctity of ones own home and the joy which come from creation, production and ownership. A free market society recognizes private property as sacred because the individual is entitled to ownership of goods and property which he has earned; he is sovereign so far as human law is concerned over his own goods. He may retain possession of his goods; he may pass his wealth on to his family or to charitable causes. For one cannot give what one does not own. James Madison recognized that property consisted not only of man’s external goods, his land, merchandise and money, but more sacredly he had title to his thoughts, opinions, and conscience. The civil government’s obligation then is to safeguard this right and to frame laws which secure to every man the free exercise of his conscience and the right and control of his property. No liberty is possible except a man is protected in his title to his legal holdings and property and can be indemnified by the law for its loss or destruction. Remove this right and man is reduced to serfdom. Former United States Supreme Court Justice George Southerland said it this way. “To give man liberty but take from him the property which is the fruit and badge of his liberty is to still leave him a slave.”
3. The free market is based on the right to enjoy private enterprise for profit.

As a country we have suffered under half a century of liberal propaganda demeaning economic success. This was done by referring to men who are willing to risk their capital, their profit in tools and equipment, as coupon clippers, economic royalists, capitalists, and profiteers, as though there were something inherently evil in profit. Profit is the reward for honest labor. It is the incentive that causes a man to risk his capital to build a business. If he cannot keep or invest that which he has earned, neither may he own, nor will he risk. Profit creates wealth. Wealth creates more work opportunities. And more work opportunities creates greater wealth. None of this is possible without incentive. There is another benefit to profit. It provides man with moral choices. With profit man can choose to be greedy and selfish, he can invest and expand thereby providing others with jobs, he can be charitable. Charity is not charity unless it is voluntary. It cannot be voluntary if there is nothing to give. Only safe profit creates more jobs, not government. The only way government can create jobs is to take the money from productive citizens in the form of taxes and transfer it to government programs. Without someone generating profit which can be taxed, government revenue is not possible.
4. The free market is the right to voluntary exchange of goods and services, free from restraints and controls.

Nothing is more to be prized, nor more sacred than man’s free choice. Free choice is the essence of free enterprise. It recognizes that the common man will make choices in his own self interest. It allows the manufacturer to produce what he wants, how much, and to set his own price. It allows the buyer to decide if he wants a certain product at the price established. It preserves the right to work when and where we choose. In his first inaugural address, Thomas Jefferson said that, “the sum of good government shall leave citizens free to regulate their own pursuits of industry and improvement and shall not take from the mouth of labor the bread it has earned.” Why does our system produce more bread, manufacture more shoes and assemble more TV sets than Russian socialism? It does so precisely because our government does not guarantee these things; if it did there would be so many accompanying taxes, controls, regulations and political manipulations that the productive genius based on freedom of choice that is Americas would soon be reduced to the floundering level of waste and inefficiency now found behind the Iron Curtain. When government presumes to demand more and more of the fruits of a man’s labor through taxation and reduces more and more his actual income by printing money and furthering debt, the wage earner is left with less and less to buy food, to provide housing, medical care, education and private welfare. The individuals are left without a choice and must look to the state as its benevolent supporter of these services. When that happens liberty is gone.
5. A free market survives with competition.

Were it not for competition among goods and services, there would be no standard by which a buyer could discern shoddy merchandise or inept service from excellence. Were it not for competition, the seller could price his goods and services according to his own fancy. It is competition that determines what is good, better, and best. It is competition that determines the price for products or services. If goods are overpriced in comparison with other comparable goods, the buyer refuses to buy, thus forcing the seller to drop his price. There is a glaring paradox in our society; in the one hand legislation has been enacted to allegedly prevent one business or combination of businesses, monopolies, from disrupting or eliminating competitors in the market; on the other hand we have yet to fully awaken to the worst form of monopolistic practice currently impeding the free market. I refer to government monopoly. When government, by either ownership or regulation, prevents the full freedom of action by sellers, this of course regulates and controls prices. No better example exists today than the so called energy crisis. As a nation we have artificially regulated the price of natural gas for over 20 years. The Federal Power Commission has set prices and burdened the oil industry with regulations. Consequently the oil industry has not had the incentive to discover natural gas or drill for oil even though the reserves are there. The environmentalists, with the help of activist lawyers, have combined to make it almost impossible to drill for oil economically. What industry wants to risk its capital fighting through the hearings and lawsuits which double and triple its investment costs? So exploration does not take place. Our reserves are kept off the market to await the day when government will deregulate. (There is a skip in the audio here) The most effective energy policy our government could devise would be to step out of the regulatory business. This would provide, once again, the incentives for industry to make investment and make exploration. Freedom from bureaucratic monopoly is essential to allow our free market to work properly. I hope we wake up to this serious lesson before our freedoms our lost altogether.

We have talked so far about the vital elements to a free market operation. How does it all work together to bring about needed goods and services? Let me illustrate. There could be many illustrations. How do our cities and towns each day obtain the quantity of food products they demand? Of all agencies engaged in supplying cities with food almost no one knows how much the city consumes or how much is being produced. Despite this ignorance the cities receive about the amount of food needed without great service or shortage. How is this accomplished without a central directing body telling each producer what it should produce? The answer of course is the operation of the free market, free enterprise in action. Suppose, for example, that a given city did not receive the amount for food products needed to satisfy its demand. Rather than go without, many people would be willing to pay higher prices. Thus prices would increase and the volume of production would rise, or the volume flowing to that city would increase. This would end the shortage. More food would be shipped to this city and less to other places. Or suppose there was an oversupply of food products. To avoid spoilage the seller would lower his price; this in turn is a signal to a producer to cut back on production. Thus the over supply is automatically regulated. Less food is shipped to that city and more to other cities. No bureau in all of Washington could perform this service. It has been tried and failed in many industries. Just as price regulates the distribution of food in a given city, so it also determines the total amount produced in the country. Greater profits provide farmers with the incentive to produce a greater product. If the supply increased at a pace faster than a demand for a product, farmers and ranchers are compelled to lower their prices. As it becomes less profitable to produce potential producers, marginal producers are deterred from engaging in this occupation and the unprofitable producers divert to something else or abandon farming altogether. This is how this remarkable system works. This is how it has built this nation as the strongest nation in the world. Yes, this is how it works in all industries when government controls and planning controls and price fixing are left out. Yet few of our citizens seem to understand this. Economic literacy among our people has not been one of the bright spots in our 200 year old history. Yet it is apparent that when ignorance prevails the people eventually suffer. The principles behind our American free market economy can be reduced to a rather simple formula. Here it is, and I hope if you forget everything else I said, you’ll remember this formula. It is so basic and so simple.
Free Market Economy’s Simple Formula

1. Economic security for all is impossible without widespread abundance.
2. Abundance is impossible without industrious and ambitious production.
3. Such production is impossible without energetic, willing and eager labor.
4. This labor is not possible without incentive.
5. Of all forms of incentive, the freedom to obtain a reward for ones labors is the most sustaining for most people, sometimes called the “profit motive”. It is simply the right to plan and to earn, and to enjoy the fruits of your labor.
6. This profit motive diminishes as government controls, regulations and taxes increase to deny the fruits of success to those who produce.
7. Therefore any attempt through government intervention to redistribute the material rewards of labor can only result in the eventual destruction of the productive base of society, without which real abundance and security for more than the ruling elite is quite impossible.

Yes, what worked for Mr. A. in producing self disciplined, responsible, contributive sons to society works for a community. What works for a community will work for a state and what works for a state will work for this nation if we as American citizens demand that government officials perform only those duties provided by the Constitution and the Bill of Rights. The Constitutions of the United States, an inspired document, is a solemn agreement between the citizens of this nation that every officer of this government is under a sacred duty to obey. The Constitution provides that the great bulk of legitimate activities of government are to be carried out at the state or local level. This is the only way in which the principle of self government can be made effective and safeguarded. The smallest or lowest level that can possibly undertake the task is the one that should do so. The smaller the government unit and the closer it is to the people, the easier it is to guide it, to correct it, to keep it solvent and to keep our freedom. A category of government activity that poses the greatest danger to our continued freedom is the activity not within the proper sphere of government. The Constitution provides the federal government with no authority to grant such powers as welfare programs, schemes for redistributing the wealth and activities that coerce people into acting in accordance with a proscribed code of social planning. There is one simple test to the constitutionality of a principle, do I as an individual have the right to use force upon my neighbor to accomplish this goal? If I do then I may delegate that power to my government to exercise it in my behalf. If I do not have that right, I can not delegate it. If we permit government to manufacture its own authority and to create self proclaimed powers not delegated to it by the people then the creature exceeds the creator and becomes master. Who is to say this far but no farther? What clear principle will stay the hand of government from reaching farther and farther into our daily lives?

Grover Cleveland said, “That though the people support the government, the government should not support the people.” Once government steps over this clear line between the protective or negative role into the aggressive role of redistributing the wealth through taxation and providing so called benefits for some of its citizens it becomes a means for legalized plunder. Examples abound in the world of the failure of alternative systems to the free market. What amazes me is that we cannot see from their example the obvious failure of socialism, what is does to a nation’s economy, and how it morally debilitates a people. Great Britain is a tragic example of this. I was there just a short time ago. Here’s a nation which I love, and here is a nation which has provided the free world with a tradition of freedom and democratic rights stemming from Magna Charta and coming down through other historical documents and statements through famous Englishmen, yet even today is losing her freedom. She has become a giant welfare state. Today government spending in Brittan amounts to 60% of her total national income. This is socialism. Medical doctors under socialized medicine are leaving Great Brittan in record numbers as are thousands of others. British Prime Minister James Callaghan in a speech last September said, “we used to think that you could just spend your way out of a recession and increase employment by cutting taxes and boosting government spending. I tell you in all candor that that option no longer exists and that in so far as it ever did exist, it only worked by injecting bigger doses of inflation into the economy, followed by higher levels of unemployment as the next step. That is the history of the past 20 years.”

Such confession has led the renowned economist, Dr. Milton Friedman, to comment, “That must surely rank as one of the most remarkable and courageous statements ever made by a leader of a democratic government. I’ll read it again. Savor it. “It is a confession of the intellectual bankruptcy, of the policy that has guided every British government in the post-war period, not only labor governments, but also Tory governments, of the policy that has guided almost every other western government, including the United States, under both Republican and Democratic administrations, of the policy that is now being recommended to Mr. Carter by his advisors.”

Consider another example, our neighbor to the north, Canada. For 20 years, 1944 to 1964, Saskatchewan, Canada lived under a socialist government. Here is what their Premiere, the honorable W. Ross Thatcher, said about this experience: “In 1944, the socialists said they would solve the unemployment problems by building government factories. They promised to use the profits to build highways, schools, hospitals, and to finance better social welfare measures generally. Over the years they set up 22 so-called crown or government corporations. By the time we had taken over at the end of the 20 year period, 12 of the crown corporations had gone bankrupt or been disposed of; others were kept operating by repeated and substantial government grants. During the whole period, the socialists waged war against private business. The making of profits was condemned as an unforgivable sin. What was the result? Investors simply turned their back on the socialists. Dozens of oil companies pulled up stakes and moved out. Gas exploration ground to a complete halt. Prospecting in our vast north became almost nonexistent. During the period, Canada was experiencing the greatest economic boom in her history. Saskatchewan received only a handful of new factories. After 18 years of socialism, there were fewer jobs in manufacturing than existed in 1945, this despite the investment of 500 million dollars, in crown corporations. During the period, more than 600 completely new taxes were introduced; 650 other taxes were increased. Per capita taxes in Saskatchewan were soon substantially out of line with our sister provinces; one more reason why industry located elsewhere. The socialists promised to make Saskatchewan a Mecca for the working man. Instead, we saw the greatest mass exodus of people out of an area since Moses lead the Jews out of Egypt, since the lower of 270,000 of our citizens left Saskatchewan to find employment elsewhere. If there are any Americans who think socialism is the answer, I wish they would come to Saskatchewan to study what has happened to our province.”

We say it can’t happen here. The lesson of New York City should tell us this same thing is happening here to us, now. As Dr. Friedman has pointed out, “New York City is no longer governed by its elected officials; it is governed by a committee of overseers appointed by the state of New York. New York City has partially lost its freedom.” When will we learn the lesson that fiscal irresponsibility leads to a loss of self government? When will we learn that when you lose economic independence, you lose political freedom? We have accepted a frightening degree of socialism in our country; the question is how much? The amount of freedom depends upon the amount of federal control in spending. A good measurement is to determine the amount or percentage of income of the people which is taken over and spent by the state. In Russia, the individual works almost wholly for the state leaving little for his own welfare. Scandinavia takes about 65-70% of the increase of the people; England some 60%. The United States is now approximately 44%. America was built on the principle of faith in God, self reliance, the profit motive, individual action and voluntary charity. It was built by those who believed the surest helping hand was at the end of their own sleeves. These forefathers of ours shared one thing in common: an unshakable faith in God and a faith in themselves. There are indications that America is moving away from the philosophy that made her the most prosperous nation in the world.

In effect we are moving toward the philanthropic philosophy of Mr. B and abandoning the work incentive philosophy of Mr. A. Mr. B’s philosophy has crept in unawares under the guise of a new name, egalitarianism. It is of course the socialist doctrine of equality. It struck a sympathetic chord with most Americans because its initial goal was equality of rights. Today, however, the goal for the proponents of equality is to restructure our entire economic system, using the power of the federal government to enforce their grand design. They now advocate throughout our economy that they redistribute wealth and income, a good definition of socialism. Our present middle of the road policy is as Von Mises, whom I class as the greatest economy unit that we have ever known suggested: socialism by the installment plan.

Americans have always been committed to taking care of the poor, aged, and unemployed. We’ve done this on the basis of Judaic Christian beliefs and humanitarian principles. It has been fundamental to our way of life that charity is to be voluntary if it is to be charity. Compulsory benevolence is not charity. Today’s egalitarians are using the federal government to redistribute wealth in our society, not as a matter of voluntary charity, but as a matter of right. The chief weapon used by the federal government to achieve this equality is through so called transfer payments. This is a term which simply means that the federal government collects from one income group and transfers payments to another by their tax system. These payments are made in the forms of social security benefits, housing subsidies, Medicare, food stamps, to name a few. Today, total cost of such programs will exceed one hundred and fifty billion dollars annually. That represents about 44% of the total of all government federal spending, or about one dollar out of every seven of personal income.

When will we resolve as Americans that a dollar cannot make the trip to Washington D.C. and back without a bureaucratic bite being taken out of it? Medicaid, the government’s regular health program for the poor, cost tax payers thirteen billion in ’75. Medicare, the program for the disabled and elderly cost fifteen billion. Aid to families with dependent children cost over five billion. And about three billion is spent on food stamps. This is to name only a few of the so called benefits paid out. Our present social security program has been going in the hole at a rate of twelve billion dollars a year and yet the party now in power wants to increase the benefits to include a comprehensive national health insurance program. Recognizing that the present program will be insolvent by 1985, President Carter has now recommended that social security be funded out of a general income tax fund. Charges are made in the last election campaign that the social security program was going bankrupt. These charges were denied. Now the truth is out. The President’s recommendation must be regarded as an admission of the failure of the present system and as a calculated policy to take this country into full scale socialism.

Our major danger is that we are currently and have been for forty years transferring responsibility from local and state governments to the federal government, precisely the same course which led to the economic collapse of Great Britain and New York. We cannot long pursue this present trend without it bringing us to national insolvency. Edmund Burke, a great British political philosopher warned of the threat of egalitarianism, socialism. He said, “A perfect equality will indeed be produced. That is to say equal wretchedness, equal beggary, and on the part of the petitioners, a woeful, helpless, and desperate disappointment, such is the event of all compulsory equalizations. They pull down what is above, they never raise what is below and they depress high and low together beneath the level of what was originally the lowest.” All would like to be equalized with those who are better off than themselves, I suppose. They fail to realize that income is different and will always differ because people differ in their economic drive and ability. History indicates that governments have been unable to prevent inequality of incomes. Further equalization efforts stifle initiative and retard progress to the extent that the real incomes of everyone are lower. We must remember that government assistance and control are essentially political provisions, and that experience has demonstrated that for that reason, they are not sufficiently stable to warrant their utilization as a foundation for sound economic growth under a free economic system. The best way, the American way, is still maximum freedom for the individual guaranteed by a wise government that provides for the police department and national defense. History records that eventually people get the form of government they deserve. Good government which guarantees the maximum of freedom, liberty, and devolvement of the individual must be based upon sound principles. We must ever remember that ideas and principles are either sound or unsound in spite of those who hold them. Freedom of achievement has produced and will continue to produce the maximum of benefits in terms of human welfare. Freedom is an eternal principle. Heaven disapproves of force, coercion and intimidation. Only a free people can be truly a happy people.

Of all sad things in the world, the saddest in the world is to see the people who have once known liberty and freedom and then lost it. I have seen the unquenchable yearning of the human heart for liberty. On an unforgettable occasion, yes on several occasions, this particular experience is indelibly etched on the memory of my soul. I saw this yearning spirit in the faces of many European people in the aftermath of World War II. It fell my lot, as President under the direction of the church, to be among the first to go without my family into war torn European countries and distribute food, clothing, and bedding to the suffering members of our church and others. I saw during that year long visit first hand entire nation’s prospect, flat on their backs economically. I looked into the face of hunger, the pale within, the many dressed in rags and some are foot. I saw the poor refugees, the poor unwanted souls who were driven from their homes to destinations unknown. They came with all their earthly possessions on their backs. I visited some of their homes, shacks, where as many as twenty two people were living in one room, four complete families. I saw many enslaved by habit barter their scanty ration of food and clothing for a cigarette. I saw some fortunate to get hold of an American magazine and pour over its pages and wonder if what they saw could possibly be true. I saw once happy freedom loving people in bondage under godless leadership. I saw the struggle on every hand to get to America, some legal and others illegal, all in an effort to enjoy freedom and liberty. These were the people, many of them who had once known some freedom, but had lost it.

Yes, we are a prosperous people today because of a political, economic system founded on spiritual values, not material values alone. It is founded on freedom of choice, free agency and eternal God given principles, and personal virtue. The Founding Fathers, though inspired they were, did not invent the priceless blessings of individual freedom and respect for the dignity of man; no, that priceless gift to mankind sprang from the God of heaven and not from government. Recognizing this truth, they forged the safeguards that would bind men’s lust for power to the Constitution. They recognized that freedom must be perpetually preserved to be enjoyed. Each new generation must learn that truth anew. Yes, America’s foundation is spiritual. Without the moral base to our system, we are no better off than any other nations which are now sunk into oblivion. There are some in this land among whom I count myself, whose faith it is that this land is reserved for only a righteous people and we remain here as tenants only as we remain in the favor of the Lord. And he is the landlord as far as this earth is concerned. If we are to remain under heaven’s protection and care, we must return to those principles which have brought us our peace, liberty and prosperity. Our problems today are essentially problems of the spirit. “We here in America,” as Theodore Roosevelt said over a half century ago, “hold in our hands the hope of the world, the fate of the coming years and shame and disgrace will be ours if, in our eyes the light of higher resolve is dimmed, if we trail in the dust of golden hopes of men.” You who gathered here tonight are dedicated to maintain that light of high resolve in the American people. As you do so, may I leave with you this challenge that you help others see that the real issue is not over economic systems, it is the issue of freedom and limited or no freedom, the same issue that brought about this nation’s birth and independence. Yes, with God’s help and inspiration perhaps we may rekindle a flame of liberty that will last us long as time endures. For this I pray and thank you for this opportunity of meeting with you tonight.