On Freedom and Order

Leonard ReadBY LEONARD E. READ, THE FREEMAN

Originally published by The Freeman: Ideas On Liberty, January 1965

My purpose in this essay is to throw some light on an important but obscure argument concerning the orderly nature of the free mar­ket economy. Unless the point is understood, the free economy stands in danger of extinction. But if the point is to be clarified, it must first be isolated from the general confusion that attends the fear of chaos and the desire for order.

Most of us claim an affinity for freedom; but if given a choice be­tween a freedom suspected of chaos and a regimentation assured of order, we would choose the regi­mentation. We instinctively fear and detest the opposite of order which is chaos, and for a good and compelling reason: man cannot exist unless nearly everything in his life situation is orderly, that is, unless a vast majority of ex­pectations can be taken for grant­ed and counted on to materialize.

Man’s existence requires a fairly dependable level of order.

For example, man could not exist if he could not count on oxy­gen in the next volume of air he inhales or if he could not confi­dently expect Old Sol to rise on the morrow. Were there any doubt about the continual rhythm of these events, the doubt alone would do him in. Or let only minor mishaps intrude themselves into the autonomic nervous system—which, beyond conscious effort, controls heartbeats, breathing, glandular and countless other bod­ily activities—and man’s earthly days are over. Man is a nervous animal and one of the conditions of survival is a dependable, order­ly sequence of things to come.

Nor need we limit our observa­tions to the necessity for orderli­ness in nature or in man’s person; also required is an orderly social environment so that man can know what to expect, within lim­its, from his fellow men. Suppose, for instance, that no one could be counted on to keep his word, that promises were meaningless, that capriciousness in everything were the rule: buy a can of beans only to find it filled with mud; hire workers who refuse to work; con­tract one price and get charged a higher price; earn a livelihood that is subject to confiscation at anyone else’s pleasure; act peace­fully but with no security of body and limb; and so on and on. Man can endure but little of this; he can’t cope with life at sixes and sevens, with many things in the realm of uncertainty. And because of this he will pay almost any price—even his freedom—for cer­tainty, for order. Indeed, when confronted with but a modicum of chaos, he will accept with alacrity numerous variations of the goose step, those constraints which mini­mize uncertainties and thus give him the semblance of order.

But most of these “goose steps” which give a semblance of order such as controls of prices, wages, rents, hours of labor, or “planned” production and exchange—eco­nomic freezes, one might say—are not, in fact, order. On the con­trary, these rigidities are exam­ples of chaos and of interference with men’s choices and expecta­tions.

“Where We Want to Be”

The truth is that order and chaos in the economic realm are the reverse of what is generally supposed to be the case. It is doubtful if anyone could more strikingly phrase this common con­fusion than was done by one of our country’s most powerful labor officials. He wrote:

Only a moron would believe that the millions of private economic de­cisions being made independently of each other will somehow harmonize in the end and bring us out where we want to be.’

If “where we want to be” is un­der a dictatorship, this statement about the market might make sense. Otherwise, this evidences an utter confusion as to the nature of man and the nature of the market. Analogous to the labor leader’s “millions of private economic de­cisions” are the “millions” of cre­ative decisions within each human being, such as: 1,000,000,000,000,­000,000,000,000,000 atoms of nu­merous configurations; some 30,­000,000,000,000 cells; bone mar­row producing 1,000,000,000 new red blood cells every 60 seconds; each kidney having some 5,000,000 complex glomeruli; a diencepha­lon, a portion of the brainstem that acts independently of consciousness; a cranium filled with nerve tissues having a seemingly unlimited supply of neuroblasts—unfinished nerve cells—which can, with conscious effort and other dis­ciplines, be transformed into func­tioning neurons. Such enormous, utterly staggering phenomena of man’s composition—”fearfully and wonderfully made,” unfathomable to our finite minds—appears as chaos. These trillions upon tril­lions of data, about which we have but the dimmest notions, can eas­ily tempt one to conclude: “Only a moron would believe that these will somehow harmonize in the end and bring us out where we want to be.”

These phenomena are not cha­otic as they appear to be but, in­stead, are an order of creation we cannot comprehend. For they do harmonize and bring us out where we want to be: a human being, the most amazing example of order within our awareness.

Of Markets and Men

Order, I suspect, is never the product of chaos; it would seem that only order can beget order. And I firmly believe that this rule applies as much to the market as it does to man. True, we do not seriously question the point as it relates to man; we are so dumb­founded by the mystery of life that we readily concede that only God can make a tree—or a man. But there is all too little faith and humility as it concerns the market. Here, when we witness millions of economic decisions made independently of each other, we will, if not perceptive, call them chaos; whereas, in fact, we are viewing an order the complex­ity of which cannot be brought within our limited grasp. What we lightly pass off as chaos is but a reflection of our failure to com­prehend.

Take only a casual look at our economic world. Visit Russia, Red China, Cuba, East Germany. Like our labor official and many of our educators and business “leaders,” these unfortunate people do not understand how millions of de­cisions made independently of each other could possibly har­monize in the end and bring about efficacious results; that is, their minds, deficient in awareness, sensing only chaos in the complex data of the free and unfettered market, proceed to bring “order” out of it. How? A Mr. Big takes over and substitutes his one-source decisions for the millions of decisions that would otherwise be made independently of each other. But observe that one man’s orders bring about everyone’s cha­os, as deadening in the end as if he himself were to take over the forces that make him a human being. He can no more mastermind market data than he can the data of his own being, that is, without disaster.

A Housewife’s Nightmare

Unfortunately, the chaos brought on by one-source decisions—dic­tatorship—is seldom thought of as chaos once the subjects have endured it for a short time. Like wild animals placed in zoos—as soon as the shock of contrast is over—the subjects come to think of their fetters as more a part of ordered than chaotic life. But let an American housewife, for in­stance, accustomed as she is to an economy in which decisions are made more or less independently of each other—where the free market is approximated—awaken suddenly to a Russian, one-source decision situation: the larder bare, no telephone, no car, no taxi avail­able, standing in line hours on end only to find a scrap of this or that for her family; freedom of ex­pression, of writing, of religion denied; a suppression of desires, aspirations, ambitions. What a shock such a sudden contrast would evoke! Mrs. America would, indeed, be conscious of an unbe­lievable chaos; she would correctly conclude that a great deal of order had been removed from her life situation.

The more a country’s economy is politically ordered or “planned,” the more chaotic is production and exchange. Conversely, the freer the market—that is, the greater the extent that economic decisions are made independently of each other—the more order there is in production and exchange. Try making purchases in Havana and then try in Chicago or Keokuk. You will have little doubt as to where the order is. Or if it be argued that Cuba hasn’t had time to “make socialism work,” then compare experiences in Moscow with Hong Kong. Russia has been at it for nearly half a century! Also bear in mind that the chaos which is manifest in the Moscow market place must have its origin in chaos: a one-source-decision ap­paratus; that the order which is manifest in the Hong Kong mar­ket place must have its origin in order: millions of economic deci­sions made independently of each other.

The Nature of Things

Order is not necessarily charac­terized by things in a static, mo­tionless relationship, as is so often thought. Take, for instance, heav­enly bodies: motion in relation to one another is of their nature; they manifest order only when orbiting. Were they to behave con­trary to their nature, that is, were their swift flight through the void to halt, cosmic chaos would result.

Now, reflect on neat rows of cemetery headstones. As distin­guished from heavenly bodies, a static, motionless relationship of each to the others is of their na­ture.Were these headstones to go into motion or orbit, a behavior contrary to their nature, we would observe the contrary of order: chaos!

These observations are meant to suggest that it is the frustration of the nature of a thing that spells chaos—order consisting of what is in harmony with a thing’s na­ture. What is order in one instance might be chaos in another. The nature of the thing prescribes the characteristics of the order and the chaos peculiar to it.

The Nature of Man

Consider the nature of man. The Greek philosopher, Heraclitus, amusingly oversimplified it when he suggested that man is on earth as in an egg; that he cannot go on forever being a good egg; that he has to hatch or rot. Man’s nature, as distinguished from that of other animals, is to evolve, to emerge; it is to grow in conscious­ness, awareness, perception; it is to make strides as a rational ani­mal and, eventually, to make choices with intelligent discrimi­nation and, to some extent, to will his own actions. Men—potentially, at least—must be included in cre­ative phenomena and any thwart­ing or frustration of this, his sensitive and spiritual nature, must induce chaos. The man-im­posed goose step in its social, po­litical, and economic versions—the headstone kind of static, mo­tionless order—is the antithesis of any order that has to do with expanding consciousness.

Man, in the light of his destiny, is not a static organism. This is unthinkable. Furthermore, the free and unfettered market is but the unfrustrated economic mani­festation of man’s creative, emerg­ing, spiritual dynamism. Man en­joys freedom only if he be free to act. This is self-evident; it needs no proof. Thus, it follows that man can be free only if his peaceful, creative actions are not aborted. This is to say that man can be free to emerge in the direction of his destiny only if his market—eco­nomic expressions of men—be free. The free market, founded on economic decisions made inde­pendently of each other and rest­ing, as it does, on common con­sent, is consonant and in harmony with freely acting man. Dyna­mism, in this context—moving, flowing, creative, kinetic energy—is as much a characteristic of the free market as it is of the in­dividual human being, man and his market being but two parts of a whole: this dynamism is of the nature of each. Order in either case—man or his market—exists only as this dynamism, showing forth peacefully and creatively, finds unfrustrated expression. Any man-imposed goose step must breed chaos just as surely as if some human dictator were to stop the heavenly bodies in their orbits.

In the above I have tried to suggest that we must look to the nature of a thing to determine what is order and what is chaos. Whenever we impose the headstone variety of static, motionless order to man and his market, that is, whenever we substitute one-source decisions for millions of decisions made independently of each other, we get chaos for our unintelligent pains. And it is axiomatic that freedom must disappear as we practice the error!

The Miracle of the Market

To illustrate the mysterious or­der of the free market, think of any one of a million goods or serv­ices: corn flakes, atomizers, hats, automobiles, radios, TV sets, tele­phones, machine tools, computers, illumination, and so on, things that are left more or less to countless decisions made inde­pendently of each other. Millions upon millions of tiny think-of-­thats, little creativities, individual acceptances and rejections, whims, likes and dislikes—forces too nu­merous ever to recount and which appear as chaos but are, instead, complex order—miraculously com­bine to form the fantastic order of these artifacts by which we live. Observe that the order of these is so perfect, their production and exchange and their demand and supply so nicely balanced, that we take them as much for granted as we do the air we breathe. Never a second thought! No argument! And, further, the very fact that an automobile, for instance, is an or­derly mechanism is testimony in itself that it originated out of or­der, not out of chaos.

Now, reflect on those goods and services no longer entrusted to the millions of economic decisions made independently of each other in a free market but delegated in­stead to one-source governmental decision as a way of bringing “or­der” out of “chaos.” To cite a few: an ever-enlarging part of employ­ment, many wages, prices, ex­changes; a good deal of housing; wheat, tobacco, corn, cotton; more and more power and light; roads, education, money value, and others. Observe the imbalances and note that these are the only goods and services we ever argue about. By this method, we do not bring order out of chaos but, rather, chaos out of order! The very fact that these are in a chaotic state is testimony in itself that they have their origin in chaos.

One consequence of confusing order and chaos is a static market and its aftermath, a frustration of man’s nature, the free market be­ing but the extension or manifes­tation of the free man. Damage cannot be done to the free market without an equal damage to man’s nature. When men are compelled to look to a one-source decision in­stead of to the individual deci­sions of men, man is robbed of his wholeness. Self-responsibility, the corollary of self-decision and the wellspring of man’s growth, gives way to cheap politics, mass plun­der, pressure grouping, protection­ism. Any time a society is organ­ized in such a manner that a pre­mium is put on the obeisance paid to political planners and when lit­tle, if any, reward attends integ­rity and self-reliance, the mem­bers of that society will tend more to rot than to hatch!

If human beings were meant to be ordered in such fashion as are the moving atoms in a molecule of motionless mineral, is it conceiv­able that any one man or organ­ized group of men would be capa­ble of planning and directing the lives and activities of all others? It is precisely because we differ from one another, because—as even the communists admit—each has his needs, that human beings require freedom to express those needs and to satisfy them, individ­ual by individual. The free market affords a mechanism for the ex­pression of these countless differ­ences, in the bidding and asking prices, the voluntary buying and selling of scarce resources, where­by each may pursue his own prop­er interests without infringing up­on or denying the nature and the interests of any other peaceful person. When alternatives have been sought to the open market, the result always has been some variation of the master-slave ar­rangement, with one man’s order bringing chaos into the lives of others.

Why the Confusion?

We are led to speculate on why this confusion about order and chaos. While there are few who put the case for the headstone va­riety of order as boldly and as honestly as the labor official, all who argue for and introduce rigid­ities into the market are up to the same mischief. Sadly, not a cate­gory of the population is exempt: teachers share heavily in the guilt as do preachers, business and civic leaders; indeed, were it said, “Let him who is without sin cast the first stone,” few rocks would fly.

When the error is as general as this one, the cause must lie very deep, indeed. Inspect this suspi­cion of mine and see if it makes sense. Man—most men—suffers a fearful contradiction. There is on the one hand his God-given na­ture: to be born on this earth, to grow and to emerge in conscious­ness; to age and, eventually, to de­part this earth. This cosmic, evo­lutionary tug is a powerful force but not as a rule, a force about which man is sharply conscious. Then, on the other hand, there is man’s slight, budding ability to reason and choose—an ability still linked to an abysmal ignorance. Being but dimly aware of his nat­ural destiny or how ignorant he is, man tends to ascribe to his reason an omniscience out of all propor­tion to what the facts warrant. Thus, man—most men—is con­fronted with two powerful com­mandments that are in conflict, one might say, at war with each other.

Man’s nature calls for a flexing, an improving use and a continuing growth of the faculties, regardless of how uncomfortable or painful this perpetual stretching may be. Then, in opposition, is his defec­tive ability to reason which com­mands him to remove himself from the struggle, to get out of rather than into life, in a word, to seek ease.

That man’s “reasoning” is often a more powerful push than is the tug of his natural destiny is evi­denced by his fear of earthly de­parture. Viewed rationally, it would seem that departing this earth is as congenial to man’s na­ture as being born. Both arrival and departure are but two parts of life’s equation; whatever has a beginning has a conclusion. Yet, note how general the fear is.

Afraid to Die—or Live

But now to my point: Not only is man—most men—fearful of that aspect of his nature which is his earthly demise, but he is equally fearful of that aspect of his nature which is life’s living! Observe the tendency to run away from problems, obstacles; the pas­sion for wealth as a means of re­lief from employment; the yearn­ing for security; the ambition to retire; and, specifically to my point, the dread of competition and the craving for protection. Man—most men—as a conse­quence of this “reasoning,” seeks a static, motionless kind of order—the headstone variety—while his nature calls for an order of the dynamic variety which man, un­less perceptive, looks upon as chaos.

Competition—our attitude to­ward it—gets to the heart of the problem. It is the great antistatic force, the enemy of status; com­petition is the activating agent, the gyrator, so to speak, in man’s life and in his market; it keeps things whipped up, moving, chang­ing, improving, always uncomfort­able, sometimes painful, but, none­theless, dynamic. A noncompeti­tive society is a monopolistic soci­ety. Competition is the ally of man’s natural destiny and, thus, it is the preservative of his free­dom; without competition man’s market and man himself would fall into a state of lethargy; the static kind of order would prevail, in which freedom is impossible.

Be it noted that human beings, as if in response to their natural and evolutionary destiny, favor competition for everyone—except one person: self! As for self, “reason” takes command and seeks protection against the uneasiness competition imposes.

When everyone favors competi­tion for me—except me—it would seem that the competitors have it, that protection for me would be impossible. But when we let gov­ernment—organized police force—intervene in the market place, that is, in creative human actions, thus permitting government a power sway over and beyond keeping the peace, we provide a fatal flaw in the armor of freedom. It is called logrolling: “I’ll vote for your pro­tection if you’ll vote for mine.” And, as protection spreads, com­petition correspondingly decreases, monopoly increases, and freedom diminishes. We achieve the head­stone kind of order which, for man, is chaos.

We may never be able to mend the aforementioned flaw until we acquire a more rational view of competition—human dynamics—than we now have; not a more ra­tional view of competition for others—this we possess—but for self. If I concede that competition is desirable for all others, how, rationally, can I make an excep­tion of myself? It doesn’t make sense.

Keeping in mind man’s natural, evolutionary destiny, competition is as good for me as for anyone else. Admittedly, experience helps in being rational: About forty years ago my competitors ran me out of the wholesale produce busi­ness. I had to sell my home, furni­ture, car, everything to pay the creditors. Broke! A painful ex­perience, indeed! But had it not been for competition, I would, no doubt, be in that business today. Not that there is anything wrong with being a wholesale produce merchant; it is that I did not be­long in that role. Others were bet­ter fitted for it. And, important to me, I was led—not happily at first—to discover that there were other employments that better suited my aptitudes. Competition made ft possible for me to discover how best to allocate those few resources peculiar to my own person. Com­petition is at once the economizer and activator; it helps to keep us on the creative move and to find the niche appropriate to the dis­tinctive abilities of each.

If the above reflections are at all valid, it is certain that individual freedom cannot exist among peo­ple whose main emphasis is on se­curity, status, protection. Building fences (protectionism) ) against freedom in transactions (the free market) is of the same ill-suited order as rejecting those evolution­ary forces which conspire to make improving human beings out of mankind. The fixations and rigidi­ties implicit in status are of an order in which freedom is impos­sible.

Freedom exists only as her im­perative is observed: all peaceful and creative actions unrestrained. True, this calls for an order so complex that it gives the appear­ance of chaos but, instead, it is only incomprehensible order; it is the order of a living tree, of emerging man, of creation going on before our eyes.

Freedom is a condition of all creation, including man’s share in it.


Footnotes

See The New York Times, June 30, 1962.


Leonard E. Read (1898-1983) was the founder of Foundation Economic Education, and the author of 29 works, including the classic parable “I, Pencil.”


Used with the permission of the Foundation for Economic Education.