Freedom's Future

What are the prospects for liberty in the years to come? REASON reports from Britain, Scandinavia, West Germany, and the United States.

In preparing this special 15th anniversary issue, we contacted several of REASON's long-time contributors, at home and abroad. We asked each of them to reflect on the gains and losses for personal and economic freedom in their part of the world over the 15 years since REASON was founded and, in that context, to speculate on the prospects for liberty over the next 15 years. Here is a selection of the results.

Britain: Instinct for Freedom

Eben Wilson

If I wrote that "there is a fundamental liberty about life in Britain which is not easily found elsewhere," I might be accused of typical British arrogance. These words, however, are those of a German—Ralf Dahrendorf, director of the London School of Economics.

It is true to say that in Britain there is a traditional gut feeling that liberty is something one has, whereas in the United States, liberty is more of an intellectual ideal for which one strives. Unfortunately, complacency born of gut feelings like the Britons' is probably our greatest enemy. And the danger is magnified, now that contemporary Britain is in a state of fundamental change. Within our political and social institutions, old class rivalries are being replaced by a fierce ideological battle within the middle class.

Collectivist and egalitarian dogma forms the basic beliefs of a new college-educated "hard left" that has infiltrated the traditionally class-based Labour Party. The intolerance of compromise among these new ideologues is matched only by their relentless determination to infiltrate the moribund democracy of the Labour Party's grass roots.

On the other hand, the intellectual vigor of the free market's proponents has never been greater. The Institute of Economic Affairs, the Centre for Policy Studies, and the Adam Smith Institute, among others, catalyzed by Margaret Thatcher's tenancy of 10 Downing Street, are clearly gaining audience in both the bureaucracy and the House of Commons.

The first approximation to the truth, then, is that a polarized parliament will be the forum that defines the boundaries of our freedom over the next decade. Greater polarization of politics will at least give vent to the arguments for and against collectivist public policy. One has to remember that Britain starts from the edge of no return with fully half of our economic "freedom" firmly in the hands of government. At this level of realpolitik, I am optimistic. There have been signs: The Conservative cabinet recently had a genuine debate about what Britain should do with its welfare state. And, more recently, the abolition of one entire tier of local government has been proposed. Such perspectives were unthinkable four years ago.

Economically, however, I am pessimistic. Our "entitlement" programs—national health, social security, index-linked pensions—have a momentum of their own, one that you in America know only too well. It has taken four years, at the cost of enormous political outcry from the vested interests, for Mrs. Thatcher's government to halt the growth in government spending, let alone cut it. And shortly beyond the decade ahead, the demographic proportion of old people to working taxpayers becomes frightening. If that problem hits us before a solution has been agreed upon, the prospects for our economic liberties are grim.

The second approximation to the truth requires me to don the traditional mantle of complacency and arrogance. The British people do have an instinct for their freedoms. We do not, for example, have identification cards like our continental partners. We do not even need to drive our cars with a license in our pockets. We are not submerged in petty ordinances. Most of our institutions are self-regulating without government fiat and rules to constrain them. And it is still possible, in the provinces, to cash a check without a card guaranteeing your credit. I have a feeling that our locking plate in any slip away from liberty still remains our underlying moral sense that men should be free to choose their own way in life, however much the welfare state may be whittling away at this rather yeoman sentiment.

I was home in Scotland at the New Year. A British people live there of a more practical sentiment than the English Britons, and I overheard two men in an exchange about the Falkland Islands. The first, a man of reason, declared that the principle of freedom of self-determination was upheld there. The second—also, I think, a man of reason, replied tautologically, "C'mon, man, let's face it—they got thumped. People should'na tell others how they should run their lives."

I see more hope than despair for Britain in the next decade.

Eben Wilson is REASON's foreign correspondent in Great Britain. He is a journalist and writes and produces documentaries and dramas.

Scandinavia: Quiet Revolution

Ole-Jacob Hoff

My assignment here is a tough one: "to assess the trends for and against personal and economic freedom in Scandinavia over the next decade or so." Tough not only because these trends run both ways but because freedom is not a fixed Utopia to be achieved by a doctrinaire program—it is only the elusive condition of absence of coercion. We who love liberty dream of a world in which free men, acting in a free market, will put a premium on rational behavior, mutual decency, and innovative action, thus making progress possible and civilization flourish.

This dream has never been fulfilled, but the paradox is that it is an indestructible reality; it reaches the incandescence of dissidence and revolt under conditions of tyranny, when liberty is suppressed. The trouble in Scandinavia, as in many other areas, is that most of us have lived in a limbo between tyranny and freedom, in the mixed economy and the welfare state, subject to numerous restraints and gentle coercion—and, for many people, the dream was blurred. Freedom was no longer a priority. It became but one of many attractions served on the platter of collectivist programs, almost every one of which called for the government to take a larger hand in economic decisions and expand collective power at the expense of individual freedom.

The planners didn't put it that way, of course. They just promised Cornucopia in return for "a little authority" to make us fit into their mathematical "models" of the economy. But now the models do not work as they should; even in the much-touted welfare economies of Scandinavia there is something rotten. And that's the good news: corresponding to this decay is a breakdown of illusions about statism and socialism.

Not that the planners openly admit their glaring inability to create economic growth. Instead, they plead for "crisis understanding" in Norway and "crisis consciousness" in Sweden. In both countries they demand wage restraint. Rising prices are eroding welfare benefits, and in Sweden and Denmark, politicians dare no longer "guarantee" that old-age pensions will be inflation-proof. In Norway, the proportionately huge income from North Sea oil still permits politicians to indulge in subsidization and welfare spending with a spirit of après nous le déluge. But their fate is tied to the price of oil, and they're sunk if it falls below $20 a barrel.

To people at large, all of this is both frightening and infuriating. They see it as a breach of the simple promise of security implicit in the very meaning of welfare state for which they have let themselves be taxed and taxed and taxed. But as taxpayers, they now hear that they may not get back their money's worth.

Hard as it may be to assess the political effect of this fear and fury, it is fair to say that it is serious and will be a lasting one. The state is no longer accepted as a benign Big Brother but more and more regarded as "that fictitious entity by which everyone seeks to live at the expense of everyone else," as Frédéric Bastiat put it.

The change of climate is patent: tax evasion is on the increase, the underground economy is expanding, and restrictions are being snubbed ever more openly. "Increasing lawlessness" the government calls it; but it isn't—it's just a quiet revolution signaling a departure from the simple trust that the law-abiding Scandinavian citizens traditionally have put in their governments.

In the wake of this departure, politicians feel very unsure. Understandably so. Their promise of free lunches was their trump card, but they have lost it—the game in the political arena is now a different one. They feel the way the emperor must have felt when he was revealed to be without clothes.

Indeed, the Scandinavians are losing their innocence. And for the next decade or two, I see no return to the naive faith, which has prevailed since World War II, in the benevolence of the state. The lesson is valuable, no less so for being learned the hard way. In cynicism there is hope.

So far, so good the news. But even if coercion is seen to fail, freedom is not necessarily seen to work. That's the bad news. Scandinavians still cringe at the thought of a consistent market economy, and they still seek solutions through public paternalism or state corporatism. The dirigistes still dominate, even on the political right, by raising a formidable smokescreen of excuses. They are solidly supported by the vested interests that have grown up around the welfare state and are ferociously battling to retain their privileges.

In these quarters, it is solemnly maintained that the recession is evidence of the failure of capitalism—that rising unemployment is caused by monetarism, inflation by US interest rates, and economic stagnation by the inefficiency of private enterprise. Dubious arguments, to be sure, but they can fool quite a few people for quite some time.

Furthermore, the thesis is being advanced that the welfare state can increase employment and income by expanding the public sector, because then, at last, resources will be used for a real "egalitarian liberation," not for "repressive" private profit. This king of Orwellian Newspeak will not pass the test of the economic market, but its defeat in the political market at which it is aimed is not a foregone conclusion. In fact, Herr Olof Palme won the elections in Sweden with it and is using the predatory means of the state to realize his rhetoric. And he is less likely than Monsieur Francois Mitterrand to back down before he loses power.

Which trend will prevail? The collectivist one heading for increasing coercion or the individualist one heading for greater freedom? Neither one, probably—at least not unequivocally. But the fact is, the relentless march into socialism has been stopped, and it cannot be resumed as if nothing has happened. Meanwhile, time marches on; the market economy—impure as it is—still functions and will provide the economic and technological innovation that will shape our future and open new areas of freedom.

That, I suspect, is what always has happened: freedom is chased by suppression; individual enterprise is hunted by collectivist coercion. Freedom may never be rewarded a decisive victory, but—being the mother of progress—how can it in the long run fail?

Ole-Jacob Hoff is REASON's foreign correspondent in Norway. He is a former editor of Farmand and is now a free-lance writer.

West Germany: "Never Again"

H. Joachim Maitre

Germans have a low threshold of public anxiety. Few nations are so given to worrying about themselves, their image in the world, their future, the economy, and the big issues such as war and peace, security and stability, and—last but not least—freedom and democracy.

Are we Germans a nation of pessimists and hand-wringers? A renowned commentator recently asked several foreign correspondents in Bonn this question. The answer was a tactfully qualified yes.

Things that older democracies take almost in stride—inflation, unemployment, and terrorism, for example—ring alarm bells much earlier in Germany, even though the Germans' record of coping well with all these is quite good. The reason, of course, is the shadow of history that hangs so heavily over the public consciousness. Germans ask serious questions about whether Bonn could become another Weimar.

Fifty years ago, Adolf Hitler took the reins of Germany. The lethal results are still there for the whole world to see: a divided Germany; a Europe split right down the middle, with the Communist East challenging the West and the entire free world, both ideologically and militarily.

Having triggered the National Socialist catastrophe in 1933, Germans today seem willing to come to terms with their past. On the occasion of the 50th anniversary of Hitler's coming to power, there abound solemn pledges that it will not happen again.

Of course it will not happen again, for history does not repeat itself. But the pledges of "never again"—so freely issued throughout the whole of Germany, in Frankfurt-am-Main as well as in Frankfurt-an-der-Oder—conveniently ignore that roughly 17 million Germans were simply thrown from one dictatorship into another in 1945.

To these Germans—the citizens of the German Democratic Republic—freedom is but a dream. They have grounds to feel betrayed by the Federal Republic's Ostpolitik, which has brought them no increase in personal freedom and little relief from socialism's ever-present economic gloom. But now the vast majority of East Germans, virtually all of them within reach of West German radio and television, are encouraged by the new government in Bonn. While not renouncing Ostpolitik, Helmut Kohl's administration is poised to end the period of one-sided deals with East Germany, pressing instead for a relaxation of internal suppression in exchange for the trade privileges so vital to the East's socialist economy.

Chancellor Kohl has reintroduced into the political vocabulary two words that have not been heard in West Germany for some time: Westpolitik and Vaterland. The first shows the Christian Democratic Union and Christian Socialist Union's complete commitment to the Western alliance; the second, their open patriotism, their belief in antique qualities, their refusal to accept the division of Germany.

After more than 10 years of Ostpolitik—resulting in renewed Soviet resolve and increasing doubts in Western Europe about NATO's effectiveness—the new German government will make a conscious effort to improve relations with Washington. Without the protection provided by the United States during the past 30 years, West Germany would not be what it is today, Helmut Kohl admits, adding that Germans want friendship and partnership—but not dependence. There will be no slavish following of US policy, the new government vows, although common values will be stressed.

The economy will prove to be West Germany's prime test case for freedom. Given the slump created by the Social Democrats' interventionist policies, the ideals and realities of the free market will have to be revived. The country's economic miracle in the '50s, after all, would have been unthinkable without the Adenauer administration's bold moves to lift postwar controls on the market economy. The country's economic decline during 13 years of Social Democratic rule is likewise attributable to Chancellor Brandt's open hostility toward free enterprise. And in his final year in the chancellor's seat, Helmut Schmidt—chronically prone to lecturing leaders of other Western nations on the virtues of a mixed economy—felt forced to abandon what was left in him of Adam Smith, blaming West Germany's recession on a global trend.

To rescue the economy from the doldrums, Bonn will have to set conditions aimed at freeing private enterprise from the usual assortment of semisocialist manacles—such as punitive taxes and compulsory collective bargaining with unions, which have been spoiled rotten in the recent past. An early economic recovery will provide the key to the Germans' political future—throughout postwar history, West Germany's political stability has been based on its strong economy.

"Produce the politicians capable of guaranteeing the political integrity and stability vital for democracy." That was exactly the charge brought against German politicians in the late '20s, when Hitler appeared on the horizon. The charge may be as unjust today as it was then, but the question won't disappear: Is Bonn, after all, another Weimar? Only time can tell.

H. Joachim Maître is REASON's foreign correspondent in West Germany. He is a vice-president of Axel Springer Publications.

United States: Narrow Slot

John Hospers

When Albert Jay Nock wrote his splendid libertarian books in the 1930s and '40s, you could almost count the full-fledged champions of liberty in America on one hand. But he lived a generation before his time. His eloquence was largely wasted on an audience not yet ready to receive his message. The prospects for liberty then, in the heyday of the New Deal, must have seemed enormously discouraging.

Then came Ayn Rand, who more than anyone else wrought a change in the thinking of thousands, if not millions, of the reading public. Atlas Shrugged, more than any other work, roused countless readers from their liberal-statist dogmatic slumbers and turned the thinking of readers in the 1960s completely around. Capitalism had been a dirty word for a generation, and now it became permissible, even fashionable, to use it again in tones other than of condemnation. Speakers and writers proudly proclaimed it, shouted it from the housetops, even wrote books defending it, in the name of both Rand's Objectivism and the Austrian school of economics. The works of Ludwig von Mises, after years of undeserved eclipse, began to be studied, though mostly outside colleges and universities. Academia to this day has ignored both Rand and von Mises, but in spite of this a systematic philosophy of liberty has made inroads in the thinking of many thousands of people.

By the time I wrote Libertarianism in 1971, there was already a considerable audience for these views. Only among academic colleagues was there scorn and contempt—"He's really gone off his rocker." By the time the Libertarian Party was formed in 1971, and later, when I became the party's first presidential candidate in 1972, there was still widespread ignorance of the libertarian position and the usual quota of contemptuous remarks. But audiences and interviewers sensed a totally fresh approach to social-political problems, and they were mostly willing and eager to listen to it.

Aside from the usual and predictable run of foolish questions—to which an answer was demanded in 30 seconds (such as, "What are you going to do with the poor—let them starve?")—there was also a growing attitude of receptivity, even probing inquiry and sometimes enthusiasm. It was an exhilarating experience to be part of this pioneer work.

In the ensuing years the tide grew. In 1972 the total audience, excluding radio and television, numbered thousands. By the time Ed Clark became the Libertarian Party's presidential candidate in 1980, it had become millions. Most of them didn't follow the libertarian philosophy in every detail. Usually, they didn't understand all of it—a systematic body of doctrine is seldom totally understood by the majority—and some tried to reduce it all to a few cheap slogans incessantly repeated as a substitute for genuine thought. But by 1980 almost everyone had heard of libertarianism and knew that there was a new intellectual force abroad in the land that, like it or not, had to be reckoned with.

Since then, dozens of books have appeared defending laissez faire and the free market, and a smaller number on the philosophical underpinnings of the libertarian world view. If libertarianism fails to grow, it will not be for lack of books and magazines defending and explaining the free society. Partly as a result of libertarian inroads into popular thought, big government is treated with a new and widespread skepticism—even by those who want its benefits. And the "liberal" view—that you can solve any social problem by throwing government money at it—is already almost dead. As a philosophy, though not, unfortunately, as a practice, the New Deal itself is dead.

This is not to say that all is well, or even that the prospects for liberty are not somewhat disheartening. The academic profession is still controlled by New Dealers and a large variety of statists, teaching Marx and Keynes to their students as if these views had never been challenged and rigorously excluding from their ranks any new candidates who dare to hold non-statist views. And the marketplace itself has been increasingly corrupted: business owners who used to make it on their own, launching an enterprise with their own money in the hope of success but also in fear of failure, have largely been replaced by business owners who find it easier and more secure—and, unfortunately, politically possible—to live off other people's money via government favors and subsidies. The business owners have been joined by union leaders and lobbyists and other pressure groups anxious to feed at the public trough, and in obedience to their whims, the members of Congress vote greater and greater appropriations in return for reelection. Meanwhile, to pay for all these giveaways, inflation grows and government deficits mount astronomically. In comparison with this horde of millions, the champions of economic liberty, even though they have grown a hundredfold in the last decade, still seem like voices crying in the wilderness.

During the presidential primary of 1976, I was visiting Guatemala to speak at the Universidad Francisco Marroquin, the only university in the world dedicated to the work of Ludwig von Mises. "It's a pity that Ford got the nomination," one of my hosts commented. "He got it because they thought that Ford, the incumbent, would be more likely to win in November. But probably they were wrong, and Reagan would be more likely to win. Now, if Reagan should become president in 1980, it will probably be too late for the American economy." I have thought many times during the intervening years that my Guatemalan hosts were probably right.

When Reagan entered the White House in 1981, the mess he inherited was almost past redemption: an inflation rate of 20 percent, a national debt of nearly one trillion dollars (and doubling every decade), and constantly rising deficits—to be paid for either by inflating the currency directly or by borrowing from the marketplace, thus driving interest rates up so abruptly as to stifle business loans and precipitate a nationwide depression. Reagan's $35-billion budget decrease (or, rather, cut in Carter's scheduled increase) was so small compared with the real need as to be almost cosmetic. Yet, in order to get even that small cut through Congress, Reagan had to make deals with senators—"I'll uphold your sugar subsidy if you vote for my bill"—that set the free market back even further. The effect of the cut was about as noticeable as a band-aid on a broken water main. The costs of government kept rising, and the restoration of a free market receded still further.

The principles of liberty may have become more familiar in the marketplace of ideas, and certainly the president is not unacquainted with them, but they have scarcely penetrated the halls of Congress, where budget decisions are made. And Reagan, no matter how strongly he is convinced of something, will not propose any measure unless he believes it has a considerable chance of success. If he had advocated in the first year the $300-billion tax cut that some libertarians chided him for not putting forth, he would not only have been ruinously defeated; he would have been flayed alive by press and public, perhaps even impeached or assassinated. The danger now is that the public, never long on patience, will demand a quick fix. Once that is not forthcoming, they will swing in the opposite direction and elect in 1984 someone who is long on spending and short on elementary economics.

The voting public, meanwhile, is abysmally ignorant of elementary economics. Reagan, moreover, failed to inform them how deep-seated the problem was, how far down the road to national ruin the country had traveled, and why it would take both time and a discomfiting period of readjustment for the situation to right itself and for the market and prosperity to be restored. He spoke to the public as if a few quick touches of his golden hand would turn inflation around and return the nation to solvency. The public was only too glad to believe him. But when it didn't happen, the murmurs against him grew into a clamor.

To make matters worse, Reagan delivered himself of much free-market rhetoric without deeds to match the words. The public then turned against the words, presumably concluding that if this—that is, high unemployment and high interest rates—is the free market, we want no more of it. In a recent national poll, the majority of voters wanted (1) lower taxes, (2) no inflation, and (3) more public benefits. There is no way in the world Reagan or anyone else could square this circle. No libertarian could do it either—what could a libertarian president do, given the present complexion of Congress, in the present dismal situation? When you have painted yourself into a corner, you can't sprout wings and fly.

If Reagan had cut the budget to the bone, including welfare and entitlement programs (which would have been impossible anyway, thanks to Congress), there would have been much suffering, but prosperity could have returned within a year. As F.A. Hayek has said, such reversals have to be made quickly and decisively—if you try to do them slowly, the opposition gathers its forces and negates them again. Apparently Reagan never seriously considered such drastic moves. By picking away at the budget here and there, he succeeded only in alienating each special-interest group whose ox he gored.

The media, totally unsympathetic to Reagan's aims, never asked questions like, "But if we put people back to work with government spending programs, won't this involve the massive creation of new money, and more inflation, which in the end would hurt everyone?" or, "You speak of people who are hurt when government programs are cut. But government programs are paid by taxpayers, and won't they be helped by every saving that's passed along to them? If a father can't make his car payments, for example, because he—rather than the government—has to pay for his son's college tuition, what of the taxpayers who have no cars at all because they have to help pay for that tuition?" Such questions might have set public thinking on the road to economic sanity. But such thoughts were never raised by the self-appointed guardians and molders of American opinion. The average citizen, reading little if anything, hearing news chiefly from television, continued to wallow in ignorance. And the nation sped on toward economic catastrophe.

The end result is that there are no good options left. If the government tries to solve the unemployment problem with more federal programs, inflation will shoot up and everyone's purchases will cost more. On the other hand, if it bites the bullet too hard, sitting absolutely tight on the money supply with no real decline in public spending, interest rates will rise, unemployment will increase, and the economy will continue to stagnate.

There is, I think, only a very narrow slot between these two courses that would enable us to avoid either runaway inflation or deflationary depression. Whether Reagan, or Paul Volcker at the Federal Reserve, is up to this job of fine tuning is dubious. As Reagan himself said in a recent but little-noticed speech in Los Angeles, "Massive deficits are now built into the budget. It would be counter-productive to raise taxes, and we can't touch the entitlement programs. The only hope of balancing the budget is to stimulate business recovery."

If this were done, productivity would rise and more jobs would be created, but at the moment this alternative is politically impossible: Reagan is already known as the president of the rich. Corporations' annual profits are falsely but popularly believed to exceed 30 percent of revenues. All the current agitation is for "giving more to the poor," but whatever the merits of welfare benefits, you don't get industrial expansion or new jobs or plentiful consumer goods by increasing them.

There is only one area, it would appear, in which genuine progress is being made. The best man in the cabinet, Secretary of the Interior James Watt, is opening up large tracts of government lands and allowing enterprising people to lease these lands for the mining of gold and other precious metals. The metals are there—we don't need to be dependent for, say, chrome on Russia or Zimbabwe.

And Watt wants to do more: sell government lands, which the government is unproductively maintaining—or failing to maintain—at taxpayers' expense, to private individuals or corporations who would develop them—or not develop them—productively and profitably. But all this has to be done very quietly. At the slightest sign that a single acre of federal lands, however useless, may be sold off (one quick and clear way to ease the national debt), environmentalists and commentators rise up crying for Watt's dismissal and Reagan's impeachment as a traitor to his country.

What, then, are the prospects for liberty? The forces of big government, which continue on the whole to prevail in Washington, are pitted against the small but growing forces of liberty and the free market. Most of the nations of Western Europe, as well as Canada under Trudeau, have probably passed the point of no return. But there is still hope for the United States. Almost all the younger men in advisory positions in the administration—underlings thus far—are advocates of the free market. Some of them favor a return to gold as money, and some (almost unbelievable but true) favor the abolition of the Federal Reserve. But the older men, those long in the Establishment, continue to steer the ship of state toward the fatal reefs of doubt and insolvency. At this point no one can predict with any accuracy which side will win.

It would be consoling to say, "Liberty is on the march, and nothing can stop it." But the forces of statism are on the march too, and thus far they have not been stopped. Both sides are equally determined. The course of liberty is the only long-term solution, but the opposing course of statism is deeply entrenched. It is now a race against time.

Contributing Editor John Hospers is a professor of philosophy at the University of Southern California. He was the Libertarian Party presidential candidate in 1972 and is the author of Libertarianism, as well as several philosophy textbooks.