Book Review: 'Social Economy and the Price System' by Raymond T. Bye, Macmillan, New York, 1950

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Christian Economics Vol. IV, No. 6 [March 11, 1952])

by the Rockefeller Foundation, Professor Bye's Essay in Welfare
Economics, as he styles this work, is neither welfare nor
economics. It is a bland blueprint for a system of "benevolent"
slavery, with the State treating the people like permanently backward
children. The theme runs constantly throughout the book: the consumer – every person – cannot be trusted to run his own life and make
his own decisions. At every turn, he must be guided, harassed,
and commanded by the all-wise State, acting presumably under the
advice of alleged "experts" in the proper procedures
of tyranny.

economist cannot presume to impose his own values on his fellowmen;
if he does, he becomes a dictator instead of a scientist. Bye
begins by denying this principle, leaving himself free to attempt
to rearrange consumers' choices by force. He is critical because
in scientific economics "apparently each individual is
presumed to be competent to judge for himself. This narrow approach
will certainly not do." Of course not, especially if
the economist wishes to transform himself into a dictator.

individuals are not ends in themselves, what goals does Bye set
up for our world? It is "the group," "group cohesion,"
"group solidarity," "effective group organization" – these become the ends into which individual human beings must
be fitted. The fitting, of course, must be accomplished by the
State. As a result, Bye makes the amazing statement that individual
happiness is a fairly good thing, because "unless human
beings are happy in their work, they cannot be good producers
or good co-operators; but above all, happiness is essential to
group solidarity."

in such an auspicious manner, Bye proceeds to ladle out liberal
doses of dictatorial regulations. Should "we"
permit inequality of incomes, and how much? Certainly, asserts
Bye, there should be a great deal of enforced equality, in order
to promote "group cohesion." "We"
should "divide the social income" (which presumably
has been dumped into some sort of convenient heap for Bye and
the State to divide as they see fit) according to the "principles"
of "a guaranteed minimum," "incentive,"
and "common surplus."

first guarantees everyone a "fair standard of living"
to support group strength; the second doles out a little "incentive"
to the wards so they can produce for the group; and the third
commands that the State take society's "surplus"
income and use it to promote projects for group welfare. The principle
of incentive, incidentally, works "by making the right
to receive income conditional upon performing the duty of producing
correspondingly" – the slave must be forced to work
to recompense his master for his board and keep.

is not surprising that Bye considers collectivism superior to
freedom – or "capitalism." Collectivism can put
Bye's principles into efficient operation, thereby eliminating
the "capitalist" problems of monopoly, income
inequality, competitive wastes, depressions, and unemployment.
Furthermore, collectivism will benefit, rather than hamper, the
consumer, "because there will be no acquisitive advertising
to mislead consumers"; instead, the State can "provide
a comprehensive program of consumer education to improve the wisdom
of consumers' choices."

State "because of its long-range view" is far
more able to invest and save than private individuals, and its
statistics enable it to plan the economy far more efficiently.
Bye concludes that "collectivism offers a program for
the systematic reorganization of the whole economic process…such
a system offers the prospect of an economic order in important
respects superior to capitalism."

collectivism with such favor, Bye praises the alleged industrial
and economic achievements of the Soviet Union: "The Soviet
Union found that by forcing the people to curtail their present
consumption…it was possible to arrive in a few years at a stage
of industrialization that might not have been accomplished by
individual saving in less that several generations… Had not World
War II forced the Soviets to turn their industrial power to the
making of munitions, the plants accumulated by the forcible saving
might by now have rewarded the Russian people with a stream of
consumable products that would represent a very marked rise in
their standard of living."

some reason, however, Bye refuses to reward the Nazi and Fascist
states with the honor of being called "collectivist."
"Nazism and fascism were not collectivist systems. They
were manifestations of mass hysteria arising out of economic chaos
under the leadership of mad adventurers." On the other
hand, the tyrannical excesses in Soviet Russia are due to things
"purely Russian," such as absence of industrialism,
no tradition of democracy, and Marxian and other ideological extremes.
Because of political dangers associated with these regimes, Bye
looks more enthusiastically to the slowly evolving collectivism
of Great Britain "with its faculty for wise leadership
and its long tradition of democracy."

he has not doubt of the virtues of the collectivist slave-state.
Yet, in the process of concocting his plans, he has abandoned
economic science and replaced it with a program designed to remake
other people by force in ways which he thinks best. Yet the supreme
irony is that a complete collectivist State could not carry out
its plans because it could not calculate economically. Only free-market
prices permit calculation. Would-be planners are busily foisting
tyranny and poverty on people in pursuit of plans which cannot

~ Jonathon Randolph [Murray N. Rothbard]

N. Rothbard (1926–1995), the founder of modern libertarianism
and the dean of the Austrian School of economics, was the author
of The
Ethics of Liberty
and For
a New Liberty
and many
other books and articles
. He was also academic vice president
of the Ludwig von Mises Institute and the Center for Libertarian
Studies, and the editor – with Lew Rockwell – of The
Rothbard-Rockwell Report

Rothbard Archives


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