If America’s wealth were spread around the world it would soon be dissipated, but if her system of free government and free enterprise were spread around the world, nations would soon find them to be perpetual producers of wealth. What foreign nations envy in America is the fruition of 175 years of true liberalism.
APPENDIX C
What is Free Enterprise Capitalism?
Marx made his most damaging mistake while drawing up the blueprints for a Communist society by designing them for a creature which never existed. He misinterpreted the nature of man. Since then, the Communists have expended vast quantities of strategy and energy trying to change the instinctive desires of man, but this has proven impossible.
Marx likewise miscalculated while attempting to analyze free enterprise capitalism. His prophecies concerning its unavoidable collapse failed to materialize. In fact, the very opposite occurred. While nations which toyed with Socialism and Communism progressed slowly, stood still or slid backwards, Capitalism rolled steadily on.
Two things in particular have made modern Capitalism increasingly successful. First, its capacity to satisfy the inherent needs and desires of man, and second, its capacity to function efficiently with very little guidance or supervision. It is sometimes called a natural system of economics because it tends to adjust automatically to human requirements. Nevertheless, being a child of nature, Capitalism contains a certain spirit of the jungle when observed in its wild, uncultivated state where men have used it for selfish, individual survival. However, under domestication and tempered with the ingredient of good will toward men, Capitalism has proven to be man’s most efficient device for the developing of material wealth and for general social advancement; in other words, for community survival.
In order to appreciate the natural qualities of Capitalism which have proven beneficial to mankind, we should first ask ourselves, “What is the nature of man? What are his desires and needs?”
The Nature of Man
Under careful scrutiny, man turns out to be a physical-spiritual being. To ignore either facet of his nature would be as fatal for us at it was for Marx.
On the physical side, we observe that man is an elaborate and complex organism with a capacity to register and react to sensations ranging from excruciating pain to ecstatic pleasure. Bradford B. Smith calls this man’s pain-pleasure scale. A vast array of human needs grow out of man’s desire to avoid pain or discomfort and achieve physical satisfaction and pleasure from life. Some of these would be:
• Satisfying hunger
• Quenching thirst
• Satisfying tastes
• Being warm in cold weather, cool in warm weather
• Avoiding illness
• Being relieved of pain
• Having comfortable and attractive clothes
• Having a comfortable home and surroundings
• Enjoying perfumes and pleasant odors
• Hearing pleasant sounds
• Enjoying relaxation and recreation
• Participating in marital associations
• Enjoying the sensation of movement and travel
• Seeing colorful objects or colorful scenery
Now let us take a moment to consider the other half of man’s nature—the spiritual side. This is sometimes called man’s fear-hope scale. Man, as an intelligent, self-knowing, self-determining being, is capable of having strong feelings ranging all the way from sublime hope to deep fear and despair, Sometimes these are closely related to physical needs and frustrations; sometimes they are purely intellectual. But regardless of their origin, they are very real and result in a wide pattern of intellectual or spiritual needs:
• To be of individual importance so as to count for something as a person.
• To be a party in interest—to be identified with the system.
• To enjoy owning “things.”
• To be appreciated for some unique and important contribution.
• To have a satisfactory degree of economic security.
• To feel the satisfaction of sacrificing or risking something to achieve progress. (This is sometimes erroneously called the “gambling” instinct.)
• To have the opportunity for creativity.
• To feel family solidarity.
• To enjoy the right of privacy.
• To have freedom of expression in matters of opinion.
• To be protected in convictions of religion and conscience.
• To feel significant in determining matters of political importance.
Man’s Mainspring of Action
In studying the nature of man it soon becomes apparent that his “mainspring of action” is the driving necessity to satisfy both physical and spiritual needs. Many economic systems which men have invented tend to smother or ignore these needs. To that same extent these systems are bound to smother man’s greatest source of motivating power—the anxiety to satisfy these deep, throbbing human desires.
Forty years of Communism in the USSR have eloquently confirmed this. The Communist leaders have suppressed the natural desires of their people and have tried to motivate them to action through fear. But this has not worked because fear is primarily a depressant instead of a stimulant. On the long pull it becomes a dull, paralyzing drug affecting both brain and muscle, and leaves a smoldering ash of combustible hostility. “Work through fear” can never compete successfully with the tantalizing opportunity provided by Capitalism to constantly satisfy natural human needs. Satisfying these needs is almost the entire source of power for Capitalism’s productive momentum.
Of course, if human beings made an attempt to rush around in breathless haste trying to satisfy all of these desires to their utmost, they would probably die in their early youth. Therefore Providence has endowed each human being with a built-in reactor against speed which serves to prevent or discourage over-indulgence. It is called “inertia.” As each person feels an inward desire to satisfy some physical need, he simultaneously feels the strong gravitational pull of laziness or inertia. Thereby hangs an important principle of economics: “Man ever tends to satisfy his wants with the least possible exertion.”
Perhaps we should mention in passing that capitalism gives full vent to this principle by encouraging men to continually seek cheaper sources of power and try to develop more efficient machines to do the world’s work instead of using human and animal muscle. Even as late as 1900 over 50 percent of U.S. power was provided by animals and men, but under a half century of capitalistic development they now supply only 2 percent of the power. The rest comes from machines. Other political and economic systems claim to be in favor of mechanization, but no other system is able to promote technological development as rapidly as capitalism because competitive survival becomes so important that it makes it worthwhile to throw away machines as soon as they become obsolete, also to discard outmoded sources of power. Mechanization on American farms came about through economic necessity while mechanization on socialized farms is looked upon as desirable but not particularly necessary.