Eighty years ago the nation was faced with a comparable concentration of economic power. Large corporations, by gaining monopoly control over entire industries, had nullified the laws of competition that are conducive to freedom. We responded to that challenge by outlawing monopolies through the Sherman Act and other anti-trust legislation. These laws, however, have never been applied to labor unions. And I am at a loss to understand why. If it is wrong for a single corporation to dictate prices throughout an entire industry, it is also wrong for a single union—or, as is the actual case, a small number of union leaders—to dictate wages and terms of employment throughout an entire industry.
The evil to be eliminated is the power of unions to enforce industry-wide bargaining. Employees have a right, as we have seen, to select a common agent for bargaining with their employer but they do not have a right to select a national agent to bargain with all employers in the industry. If a union has the power to enforce uniform conditions of employment throughout the nation its power is comparable to that of a Socialist government.
Employers are forbidden to act collusively for sound reasons. The same reasons apply to unions. Industry-wide price-fixing causes economic dislocations. So does industry-wide wage-fixing. A wage that is appropriate in one part of the country may not be in another area where economic conditions are very different. Corporate monopolies impair the operation of the free market, and thus injure the consuming public. So do union monopolies. When the United Automobile Workers demand a wage increase from the auto industry, a single monolith is pitted against a number of separate, competing companies. The contest is an unequal one, for the union is able to play off one company against another. The result is that individual companies are unable to resist excessive wage demands and must, in turn, raise their prices. The consumer ultimately suffers for he pays prices that are fixed not by free market competition—the law of supply and demand—but by the arbitrary decision of national union leaders. Far better if the employees of Ford were required to deal with Ford, and those of Chrysler with Chrysler and so on. The collective bargaining process will work for the common good in all industries if it is confined to the employers and employees directly concerned.
Let us henceforth make war on all monopolies—whether corporate or union. The enemy of freedom is unrestrained power, and the champions of freedom will fight against the concentration of power wherever they find it.
CHAPTER SEVEN
Taxes and Spending
We all have heard much throughout our lifetimes, and seen little happen, on the subject of high taxes. Where is the politician who has not promised his constituents a fight to the death for lower taxes—and who has not proceeded to vote for the very spending projects that make tax cuts impossible? There are some the shoe does not fit, but I am afraid not many. Talk of tax reduction has thus come to have a hollow ring. The people listen, but do not believe. And worse: as the public grows more and more cynical, the politician feels less and less compelled to take his promises seriously.
I suspect that this vicious circle of cynicism and failure to perform is primarily the result of the Liberals’ success in reading out of the discussion the moral principles with which the subject of taxation is so intimately connected. We have been led to look upon taxation as merely a problem of public financing: How much money does the government need? We have been led to discount, and often to forget altogether, the bearing of taxation on the problem of individual freedom. We have been persuaded that the government has an unlimited claim on the wealth of the people, and that the only pertinent question is what portion of its claim the government should exercise. The American taxpayer, I think, has lost confidence in his claim to his money. He has been handicapped in resisting high taxes by the feeling that he is, in the nature of things, obliged to accommodate whatever need for his wealth government chooses to assert.
The “nature of things,” I submit, is quite different. Government does not have an unlimited claim on the earnings of individuals. One of the foremost precepts of the natural law is man’s right to the possession and the use of his property. And a man’s earnings are his property as much as his land and the house in which he lives. Indeed, in the industrial age, earnings are probably the most prevalent form of property. It has been the fashion in recent years to disparage “property rights”—to associate them with greed and materialism. This attack on property rights is actually an attack on freedom. It is another instance of the modern failure to take into account the whole man. How can a man be truly free if he is denied the means to exercise freedom? How can he be free if the fruits of his labor are not his to dispose of, but are treated, instead, as part of a common pool of public wealth? Property and freedom are inseparable: to the extent government takes the one in the form of taxes, it intrudes on the other.
Here is an indication of how taxation currently infringes on our freedom. A family man earning $4,500 a year works, on the average, twenty-two days a month. Taxes, visible and invisible, take approximately 32% of his earnings. This means that one-third, or seven whole days, of his monthly labor goes for taxes. The average American is therefore working one-third of the time for government: a third of what he produces is not available for his own use but is confiscated and used by others who have not earned it. Let us note that by this measure the United States is already one-third “socialized.” The late Senator Taft made the point often. “You can socialize,” he said “just as well by a steady increase in the burden of taxation beyond the 30% we have already reached as you can by government seizure. The very imposition of heavy taxes is a limit on a man’s freedom.”
But having said that each man has an inalienable right to his property, it also must be said that every citizen has an obligation to contribute his fair share to the legitimate functions of government. Government, in other words, has some claim on our wealth, and the problem is to define that claim in a way that gives due consideration to the property rights of the individual.