Leonard Read's "Anything That's Peaceful"

Leonard Read may have been one of the most important, yet largely unknown, figures in modern libertarian history.  After failing in business in Michigan, he moved to California and became involved with the local Chamber of Commerce.  He moved up the ranks of the US Chamber of Commerce, and was eventually promoted to director of the Los Angeles Chamber of Commerce.  He was a vocal opponent of FDR's New Deal.  In order to combat what he saw as a lack of understanding of economic principles among the public, which he saw as the cause of the growing move towards socialism, he founded the Foundation for Economic Education, or FEE.

Through FEE, Leonard Read became instrumental in connecting great libertarian, or classical liberal, thinkers and also instrumental in connecting common folks who were interested in these sorts of ideas with the material of these great thinkers.  And if that weren't enough, Leonard Read also wrote nearly 30 books in defense of free enterprise and limited government.  Probably his most famous was his essay "I, Pencil" in which he illustrates how the free market price system promotes cooperation, and how without it even the manufacture of such a trivial $0.10 pencil would be extraordinarily difficult if not impossible.  Milton Friedman famously borrowed the concept of this essay for his 1980 TV series "Free to Choose."

After reading this famous essay, and watching a very inspiring youtube video on how to best advance liberty (more on that in a future blog), I decided the next book I read should be one by Leonard Read.  I chose "Anything That's Peaceful," which he authored in 1964, because it happens to be the only one in print by the Mises Institute at the moment (although they have the pdf's of many more). 

Read begins this book by briefly deriving and expressing what he supposes to be the purpose of life:  To continue evolving one's knowledge and consciousness in order to become more like the "infinite consciousness" (God).  I don't often read books in search of the meaning of life, and I certainly didn't expect to find it expressed in a book about political philosophy, but I'm glad Read included it.  I think it says a lot about Read, as well as the libertarian movement.  Supporters of the free market are often derided as "greedy" and "materialistic" by proponents of the various socialist ideologies.  But I think the reality is much different.  It is the Marxists and socialists who look only at what is material and measurable.  Supporters of the free market, from Adam Smith to Charles Murray, try to understand and treat the "whole man" (as Barry Goldwater called it in his book "Conscience of a Conservative"), including not just his material circumstances and his animal instincts, but also his creative and spiritual aspects as well.

Moving on from his ambitious premise, Read moves uses the next few chapters to explain the folly of socialism.  He first explains that, behind the curtain of rational and scientific planners and benevolent overlords, it is only violence that holds up the socialist state.  It is men with guns commanding others, without guns, to do as they are told upon pain of death.  He demonstrates how even the most trivial law, backed up nominally by the most trivial fine, will ultimately lead to a man with a gun coming to your house to shoot you if you absolutely refuse to recognize the law.  He gives a couple of humorous, but tragic, real world examples to back up his demonstration.  And Read goes on to further demonstrate that socialism does not allow for creative solutions to human wants, harms the individual by removing his sense of self-responsibility (what Read argues is "the very essence of his being"), and does not produce products and labor which are the most valuable to the consumer because transactions take place only under duress.

The thesis of this book is that any peaceful activity should be allowed to take place, and only violent or fraudulent activity should be punished by government.  It is a total rejection of the "mixed economy" we have today (and really have had, in some form or another, back even to our founding).  In order to prove his thesis, Read spends the final five chapters of the book taking on two of the largest socialist enterprises in our mixed economy:  the post office and public education.

I really enjoy reading books by libertarians from this period of history.  I'm not sure what it is about them.  It might be the style and voice (they had a slightly different vocabulary, and a common literary reference point that, thankfully or unfortunately, we don't really have today).  It might also be the fact that they were being ideologically besieged from all sides; the fact that they were losing their grasp on liberty with alarming speed, and they were losing the arguments in the mind of the public.  The New Deal and the Great Society were the great socialist enterprises which came into being in the US around this time, but overseas as well you saw the rise of National Socialism and Communism. Even in largely capitalist countries you had governments moving in to nationalize this industry or that industry, to forcibly unionize people, and so on.  That had to have had an effect on the writers from this era. 

Today, fortunately, it is very rare to find someone who actually thinks that a state-run society can produce more or better products than a competitive capitalist market.  We still have to deal with those who wish to do good with other people's forcibly taken money, but only a few nuts suggest that the oil industry, for example, should be nationalized.  Or the car industry. Or most other industries.  The thought today is largely that there are a few exceptional industries (such as education, transportation, first class mail delivery, and a few others such as healthcare) that may be better run by the government, and many more that need to be "regulated," but wholesale socialism is largely rejected.

As a Christian and a minarchist, Leonard Read comes at libertarianism from a very similar place as I do.  I've downloaded a few more of his books, and I look forward to reading them.

Energy Independence Is Economic Suicide

Every single American politician seems to promise energy independence.  When they don't deliver (as they inevitably won't), they get knocked for not following through on their promise.  I, for one, am very glad that they don't proceed down that path.  It's certainly possible to free ourselves from foreign oil, but it would be extremely expensive, not free. It wouldn't even be intelligent.  In fact, given current market conditions, it would be economic suicide. It would be Smoot-Hawley times 100.

What am I talking about?  Let's have a little thought experiment.

Imagine that we had a machine that could, with very little energy, transform 14 bushels of corn grown in Iowa into 1 barrel of oil. Since America is very good at producing corn but not currently all that good at producing oil, we would regard this as a fantastic invention! Well what if I told you we already have this invention, but it isn't a technological one, it's an economic one. One that the great economist Milton Friedman talked about frequently:  free trade.

We send Saudi Arabia, Venezuela, and Canada our corn and they send us back barrels of oil.

Do we really want to break this marvelous invention, which transforms things we don't need but are very good at producing into things we do need and are very bad at producing, just so that we can claim to be "self-sufficient?" We could certainly survive, but our standard of living would go down dramatically because many of our workers, and much of our capital, would have to be diverted from efficiently producing corn (and other things we are good at making) into inefficiently producing energy.

Take this whole problem down a few levels, down to the family level.  Nearly every family in the United States relies on trade with other families in order to meet their basic needs.  In the old days this may not have been quite as true.  My Grandmother, for instance, lived in a sod hovel in Montana for part of her life.  Her family built that hovel.  Her family grew most of the food they ate, they drew their own water out of a well, and they made most of the clothes that they wore.

They were very self-sufficient, and many would consider that a good thing.  But in reality that family was very good at doing some things and very bad at doing others.  Perhaps the father of that family was very good at farming but only an OK carpenter.  Perhaps the mother of that family was very good at washing clothes but only a passable seamstress.  Judging by the fact that they lived in a sod hovel, it is unlikely anyone in that family was a very good home builder.  The reality is that even that family would be better off if they could produce lots of what they were good at producing, in this case probably crops, and trade for things that they were not so good at producing.  And, indeed, they must have traded for some things because it would be impossible for my great-grandfather to, for example, construct all of his own tools:  to mine the ore out of the ground, refine it, and hammer it into shovels, plows, and hoes all by himself.

A family is better off spending most of their time doing the things it does well, and trading for the things that it does not do well.  Today most families take that to an extreme.  Some might have a member who is a very good secretary but no one who is very good at making shoes, so they trade their time as a secretary for shoes.  Some may have a member who is a very good plumber but no one who is a very good dentist, so they trade their time plumbing for the dentist’s time fixing teeth.  Nearly all of us trade some specialized skill for even the basic necessities of life.  Our food.  Our house.  Our utilities.  This strategy, what economists call “specialization,” has lead to an enormous increase in living standards as each person shifts into his or her most productive activity.

The same principle applies to a nation.  We cannot be good at everything, and even if we were we would want to spend our time doing only the things we do best and trading for the other things we want.  At one point we were the best country in the world at producing oil.  But over the years we have exhausted the oil which was very easy to get in Texas and West Virginia.  Today most of the easiest oil to collect is in other countries.   We should do what we’re best at and allow those other countries to do what they're best at.  This would bring prosperity to every country as each is allowed to shift into their most productive activities.

It is often said that we need to become energy independent so that we won't have to fight all of these wars for oil.  I don't accept that argument in the slightest.  If we're fighting these wars over oil, we're shooting ourselves in the foot.  It would be far more ethical, by all moral traditions of the world that I am aware of, to spend an extra trillion dollars on oil in a decade than to spend an extra trillion dollars occupying a country for a decade.  But I don't even think I have to rely on moral arguments to make this case, because these wars have not driven the cost of oil down, they've driven it up.  Wars, it has been famously said, do only two things:  Kill people, and break things.  In this case we've broken the oil infrastructure of Iraq making their oil more expensive.  Additionally, we've crippled the finance sector of Iran,  one of the worlds most oil rich countries, with all of our sanctions and made it much more expensive for them to upgrade their oil infrastructure and bring oil prices down.

Ultimately, these oil-rich countries will charge as much as the market will bear for their oil, and we'll charge as much as the market will bear for our products.  There's nothing wrong with that.  It's just the free market in action.  You can protest, and whine about the OPEC cartel, but OPEC has been just about as effective as any other cartel which hasn't been enforced by the threat of violence (which is to say, not very effective).

In my opinion we would all be better served if our government brought the troops home, stopped meddling in the internal politics of the Arab states, and cultivated a strong trading relationship with whatever government those people end up with. I suppose you could write me off as an “isolationist” but it seems to me that those who would advocate shutting off our country to trade in certain products or advocate large taxes, tariffs, or subsidies in the name of “self-sufficiency” or “energy independence” are the ones who are truly “isolationist.”