MAY 01, 1969 by DEAN RUSSELL
Dr. Russell was for many years a member of the staff of the Foundation for Economic Education and currently heads the Department of Economics at Hillsdale College in Michigan.
Russian commissars and American businessmen have two compelling objectives in common. They desire the well-being of their families and success in earning their livings. Those are universal incentives, deeply ingrained in the basic nature of human beings everywhere.
No lasting society can be developed on a principle that prevents, or even seriously hampers, a person from favoring his family (or clan or tribe) over all others, or looking first to his career ahead of yours.
That’s why communist theory applied as a complete economic and political system can never work in practice. It is based on a concept of morality that is not in harmony with human nature. The communist slogan of selfless equality, "From each according to ability; to each according to need," is simply not how human beings in general feel about other human beings. Man worries first about his parents and his children and his job, in Russia as elsewhere.
We continually repeat the cliché that "man is imperfect." But we don’t really believe it. For we still follow the utopian schemers whose "perfect" plans depend upon perfect people. Actually, since man really is imperfect, no planner can even define perfection. He can only express personal preferences. In the real world, man must first be interested in himself; otherwise, he wouldn’t even be alive. Success in his own job, whether he is a clerk in a store or a cleric in a church, comes first. But that universal characteristic of human nature is good, not bad. For if ministers and priests and rabbis were not first sincerely interested in succeeding in their chosen careers, they couldn’t be of any real help to you and me. Unless they recognized a primary obligation to their own families, we would be foolish indeed to trust them with ours.
This interest in self and family (in most, countries, "extended family") has been the basis of whatever civilization we have been able to develop and maintain. And this human desire to "get ahead" and to help our children do well is still the mainspring of human progress. It isn’t that we emotional human beings don’t love other children and want to help them — indeed we do! — it is just that our own children come first. We simply do not operate on the instinctive ant level of "one for all and all for one."
Attuned to Reality
The people who base their political and economic systems on these fundamental motivations of man — self, family, and the accumulation of material possessions to sustain and advance them — are acting in harmony with reality. Thus, they are the people most likely to develop a government and economy (a society) wherein every child has the greatest possibility of developing whatever peaceful ambition he may have.
So, let us not deny man; but let us acknowledge him and his nature — and use his own selfish ambitions as the mechanism to advance society in general. How can that be done? Well, the economist and philosopher, Adam Smith, explained the procedure in his famous book that was published in 1776, The Wealth of Nations.
Smith observed that merchants and manufacturers try to organize production in such a manner as to create services and products which will give them high profits. "[The producer] intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which is no part of his intentions…. By pursuing his own interest he frequently promotes that of society more effectually than when he really intends to promote it." Smith was referring primarily to jobs and to mass-produced goods and services at low prices.
It is self-interest — the human desire to secure goods and services for himself and his family — that causes the producer to go into business in the first place. If peaceful competition is preserved, and fraud is forbidden, there is only one way that producers can get the products and services (money) they want from us. They must compete with each other to supply products and services we consumers want. And, obviously, they must offer them at prices we can pay. In a voluntary exchange, the producer and consumer each would rather have what he is getting than what he is giving up. Thus, the position of each is automatically improved by the exchange. That procedure is firmly based on human nature, and thus it offers the most direct path to desired material progress — the building of hospitals, churches, and schools, as well as the providing of good jobs and sound medical and retirement programs.
A Century of Progress: Family Plan
Recently, I encountered still another example of the reality of this benefit that comes to society because man is interested first in his own career and family. I was in Wilmington, Delaware, for the annual meeting of the Curran Foundation. A fellow-trustee, Willard A. Speakman, Jr., Chairmanof the Board of the Speakman Company, told me that his firm is celebrating its centennial.
I expressed interest in the story of 100 years of progress by a small family-owned company that competes with several large companies in the field of plumbing fixtures and safety equipment. Naturally, I was then invited for a quick tour of the plant!
During our tour, Bill Speakman explained that the enterprise began in 1869 when his grandfather, Allen Speakman, saw the need for skilled gasfitters and steamfitters. In due course, Allen’s son, Willard Allen Speakman, became head of the company. Next, his son (my host) became president. And now the fourth generation, Willard A. Speakman, III, holds that position.
The traditional American dream of "going into business for oneself" has been tried by literally millions of free Americans. Most of them failed, quickly and completely. But whether any new business fails or succeeds is of no particular importance to you and me. The vital issue for us is that everyone shall be free to try; there must be no law or tradition that prevents you and me from starting a business that just might be carried forward by our children and grandchildren for a century and more.
Those were the thoughts that filled my mind while my host was explaining to me the hydraulic principle behind the Speakman shower head. I’m not an interested student of hydraulics. I was interested, however, in Bill’s explanation of how his company manages to survive among its large competitors.
He claims that a primary reason for the continued existence and growth of the Speakman Company is that its customers know that the firm is family-owned and that the family will go to great lengths to protect its reputation. "Some of our products are, of course, superior to those of our competitors," he said. "But our customers can still choose from several good manufacturers. That’s why we stress integrity and service as much as we stress the quality of the product we sell."
The most important information I got from my tour and conversation is that the company employs 500 persons at competitive wages and without reference to creed or color or politics.
I asked Bill why he had hired those persons. He concluded his lengthy answer by saying, "Actually, when all is said and done, we hired them because we needed them."
I know. As Adam Smith explained it long ago, the producer "intends only his own gain," but the result is that he promotes the interest of society "more effectually than when he really intends to promote it."
The Speakman Company molds brass into plumbing fixtures for a profit; it doesn’t interfere in the lives of its employees. The would-be dictator deplores such "selfish" materialism; he wishes to mold human beings into a better society for the benefit of all.
Happy centennial, Bill, and I hope that the Speakman Company is still going strong when the fifth generation is ready to take over.
The increase in per capita consumption in America as compared with conditions a quarter of a century ago is not an achievement of laws and executive orders. It is an accomplishment of businessmen who enlarged the size of their factories or built new ones.
LUDWIG VON MISES, Planned Chaos