The Exploitation of the Virtuous
SEPTEMBER 01, 1968 by ROBERT JAMES BIDINOTTO
Mr. Bidinotto is a sophomore, specializing in economics at Grove City College, Pennsylvania.
The hordes of the impoverished who recently dwelled in Washington demanding more welfare assistance, public housing, and a guaranteed income managed to resurrect as their justification the old but familiar cries of "exploitation" and "social injustice" which, they said, had been their fate under the American system. What these terms meant to the demonstrators was apparently at odds with what the dictionaries say they mean, but the "liberal" leaders and propagandists repeated them, too, and with each repetition of each slogan the pickets and marchers felt more victimized by the capitalism they have been taught to hate, and more self-righteous in their crusade for cradle-to-grave welfare. Their support came from both those who should know better, and those who do know better. In the latter category are those who have vested interests in the pressure-group warfare of the welfare state.
It is my contention that there is officially-sanctioned social injustice in our nation. But the system which is its root cause is not capitalism, nor are the principal victims of this injustice those for whom the Leftists mourn.
Let us first discuss the word justice. My dictionary defines the term "just" as "given or awarded rightly, or deserved… rightful, legitimate, deserved, merited…." The clear implication is that justice consists of recognizing and granting those things which are rightfully and deservedly claimed by another man, or, giving men exactly what they deserve. Any more or any less is, by definition, a breach of justice.
Properly defined then, "social justice" would mean the principle of granting and accepting the deserved and rightful in relations between and among groups and individuals in society.
But what is wrong with the concept of justice promoted by the welfare-state advocates? It is simply that what they preach is not justice at all, but out-and-out injustice. What they favor is an abandonment of the concepts of deserved and undeserved, earned and unearned, and right and wrong. Their aim is as old as the one which motivated the world’s first thief: "the fatal tendency," as Bastiat called it, to live at the expense of one’s fellow men.
Freedom and Justice
A truly civilized society exists by means of free, voluntary exchange of values between consenting and willing individuals. It is the function of the government of a free society to promote justice. One of its more specific missions is to assure that exchanges are willing and voluntary, not forced and fraudulent. The initiation of force is outlawed by the government of a just culture. Such a society exists using reason, not plunder, as its means of survival.
The state apparatus exists for the explicit purpose of protecting individual rights.
The only social system based upon the recognition of individual rights is capitalism. Capitalism requires of man his creativity — his ability to produce goods and services — as the price of his survival, for it recognizes the essence of justice: that a man receive what he earns by his own effort and thought, and not what he can plunder from the creative efforts of others. It allows men to trade with one another to mutual advantage in uncoerced exchanges. Capitalism encourages the best men have to offer: thrift, practicality, ambition, hard work, and honesty. Above all, it asks that men use to their fullest extent the productive ingenuity of their minds. Under laissez-faire capitalism a man is judged by his accomplishments, and the means he employs to achieve the values he seeks. Capitalism does not separate ends from means.
This system, based on justice and the respect of individual rights, built the most wealthy, productive, and powerful nation that has ever existed.
Victims of Intervention
But note what happens when government ceases protecting individual rights and actively violates those rights instead. Who suffers and is victimized when our nation accepts the collectivist premise that it is proper to exploit an individual for the sake of society, and that individual rights should be subordinate to "public good"— as determined by democratically-elected politicians?
Our American welfare state, like other statist-oriented systems, is run on the tacit premise of "from each according to his ability — to each according to his need." That is the implied, but seldom-stated, basic principle of which the New Deals, Fair Deals, New Frontiers, and Great Societies are but a manifestation. It is the implied justification of the Guaranteed Income proponents, the advocates of conscription, and the Welfare Statists. What this principle means is illuminating.
It means that the need of one man constitutes a demand on the men of productive ability to fill it… as a matter of right to the "needy" man. The means of enforcing this principle is the coercive power of the state, which confiscates the product of the able and creative to undeservedly benefit those who neither produce nor create.
What determines who shall be looted in this manner? Is mere possession of wealth the basis of the redistributionist creed? The answer is no. Wealth is something that has to be produced before it can be possessed. The allegation that it is the "possession of excess wealth" that is being rectified by this principle is a smokescreen. The degree to which one is plundered is determined by the degree of one’s productivity, or as I pointed out earlier, by the degree of one’s economy, practicality, ambition, initiative, labor, integrity — the productive virtues. The key virtue being man’s rational faculty, his mind, and his creative use of that faculty, it is easy to see what is ultimately being looted and redistributed. It is man’s mind that is being plundered, through confiscation of the fruits of man’s intelligence. It is thus the man of the greatest virtue who is hurt the most by redistribution.
Subsidies for Failure
What determines who shall be the recipient of the plundered wealth? One’s need of that wealth — his inability or unwillingness to produce and create by using his intelligence to its fullest extent. In other words, one’s faults! Who stands to gain and who stands to lose in such a society? Who is exploiting whom?
The producer is chained to produce for those who cannot maintain their own lives. The creator is harnessed to fill the stomachs, clothe the bodies, and build the houses of those who create nothing. The able man becomes a serf of the man who is not able to fill Ms needs, claims, and demands by his own effort. The best are punished and shackled for the sake of the least and the worst. The welfare state, established to correct an imaginary injustice, has perpetrated the worst immorality: exploiting the virtuous for their virtues. In such a society, to improve oneself and show progress means that one gradually strangles himself through his own effort; that the better one gets, the more demands are placed upon him, and the more of a slave to society he becomes. And worse: he is a slave not to somebody else’s superiority, but to his neighbors’ inferiority.
"Might Makes Right"
When a nation proclaims the superiority of the collective whim over an individual right, it embraces a most peculiar standard of morality, based on the simple addition of numbers. The principle invoked is that might makes right, that the size of one’s gang is his sanction to somebody else’s property. One might say, "But it’s perfectly legal to tax one man to benefit another. After all, the laws governing welfare were democratically passed by the majority." This is even worse; it means that (a) the legal system of the nation has been corrupted by the worst of principles, and that (b) "the majority" recognizes itself as being outside the influence of the moral code which the state imposes upon individuals; that any injustice can be committed in the name of the "majority," or "society," or "the common good"; that morality is a numbers game of factions, individuals, minorities, and the omnipotent majority. The alternatives in the game are strictly limited. One either becomes a looter, or one is looted; one is either a parasite living upon others, or one is a victim — a human sacrifice — to that parasitism.
Join a Pressure Group
How does one cash in on the welfare state? One joins a pressure group. The purpose of a pressure group is to pressure the legislature to pressure the producer victim-taxpayer, extorting from him in proportion and to the extent of his virtues. This leads to the scandalous corruption of legislators by lobbyists, whose only aim is to get a special coercive advantage over their neighbors via the power of the government. The presumed beneficiaries of the welfare state are the confirmed parasites; and their victims are those who, under free competition, would be the most successful. And while pressure-group warfare escalates,1 new bureaucracies are created and new bureaucrats employed to legally plunder men’s savings and distribute the loot among those seeking favors. And it is the doer, the thinker, the worker, the producer, who foots all the bills. There is the true "social injustice and exploitation" in America.
The remedy lies in the discovery of individual rights and the only system that can preserve them: capitalism. It is a false idea that the producer of wealth should feel guilty because of his ingenuity, creativity, and riches. Has he not earned the fruits of his effort? Is lie to be apologetic about virtue and success?
It is the task of libertarians to use every opportunity to promote the system under which no one is sacrificed, exploited, or treated unjustly for another’s sake. That system is capitalism, with its respect for individual rights. Its ruling principle is justice for all.
The Interstate Commerce Commission
—a system of laws and rules and an administration of those laws and rules in which the overweening goal is to maintain at as high a level as possible the cost of moving the country’s goods, in the interest of the financial welfare of the movers. The basic goal of regulatory policy is to maximize the earnings of the common carriers, particularly those in financial difficulty.
Much attention is given to the effect of technology upon institutions. Perhaps not as frequently noticed is the ability of institutions to counteract technology. The Interstate Commerce Commission and the regulatory system that it has helped to create have done a truly remarkable job of battling technology head on and, to a considerable extent, winning. The creation and maintenance of large barriers to entry where no significant natural barriers exist (for example, in motor trucking) has been a monumental task, which the ICC has executed successfully in little more than three decades. A motor carrier’s largest single asset is simply its permission to be a motor carrier.
From Indiana Business Review, March/April ¹968
"The Nation—Topsy-Turvy World of Transportation Regulation" by David W. Maxwell, Professor of Business Economics and Public Policy, Indiana University