Solving Problems in a Free Society

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I wrote
about the Age of Tranquility
(the period before there were drug
laws in America), I received the following email:

A frightening thought – if the clock were to be turned back,
free access to drugs once again.

In earlier
times these things simply evolved, no fuss or feathers.
As you say, they were there, people used them as such (a bit like
glue used to be in my own childhood, something used to stick fingers
to balsa wood; it never occurred to us to sniff it). Today the
mentality is different.

Now there
is too much mystique – take the lid off and the box would
explode? If these drugs are as addictive as claimed, and they
suddenly became freely available … brrrrrrrr.

I understand
the concept of freedom, to destroy oneself if one chooses; I also
believe that the majority of people are decent and have common
sense. A country with a small population might be able to absorb
such an experiment, but your country with its unique mindset ("Bomb
everybody to make the world safe") couldn’t handle it.

I can see why it would be easy to believe this. Much the same fears
were expressed when the repeal of Alcohol Prohibition was being
considered in the early 1930s – even though Prohibition had
been in force only a little over a decade. There was talk that America
would become a nation of drunks – that the people who had been
teetotalers before Prohibition would now be tempted to give it a
try, and that the old customs that restrained people voluntarily
would no longer be respected.

Of course, when Prohibition ended, people celebrated happily for
a few weeks – and then life returned to pre-Prohibition normality.
The gang wars were over, no one had to risk his life drinking bathtub
gin anymore, and police corruption diminished rapidly. The celebrations
were about more than just the availability of legal booze; they
cheered the return of peace and freedom.

Planned Economy
or Freedom?

A similar situation occurred at the end of World War II.

As the war was winding down in 1945, there was a great deal of hand-wringing
over the problem of 10 million GIs coming home from war and looking
for jobs. How could the economy handle such a huge, sudden influx
of labor? The Common Wisdom predicted another Great Depression.
(Actually, the first one had never ended, since very few people
saw their standard of living increase during the war.)

When the war ended, Congress set to work to create a giant plan
to control the transition to a peacetime economy, work the returning
soldiers into the labor force without disruption, and generally
save us from chaos and destitution.

But, instead, one of those miracles happened that don’t come around
very often: Congress argued so long over the plan that it was never
implemented. So the U.S. economy had to fend for itself – and
fend it did. The ex-servicemen found jobs, the economy took off
upward, and the Great Depression was finally over after 16 years.

The Congressmen and pundits, never having studied economics seriously,
were unaware of Say’s Law. Stated simply it is: Any new supply
is accompanied by an equivalent new demand. In other words,
any new entrant into the labor force also brings with himself a
demand for products and services at least equal to the employment
he seeks. So when 10 million more workers were available and seeking
jobs, there was now new demand that was equal to 10 million people,
requiring 10 million more people to produce the products and services
necessary to meet that demand. In short, a new job for each new

The only problem involved was the matching of new workers to the
new jobs that were created by the new demand of people who hadn’t
been in the market for new refrigerators when they were sitting
in foxholes in places like Italy and Wake Island. How was the matching-up
going to be handled?

Well – guess what – people who knew how to handle such
things suddenly appeared out of nowhere, made their services available
for a profit, and the entire transition was over within a year after
the end of the war. The economy really boomed for the first time
since 1929.

The Principle

The principle here is: Whatever the problem in a free market,
it will be a profitable opportunity for someone who knows how to
fix it.

Whatever difficulty you think might occur in a free market –
people afraid to buy products for fear they’re unsafe, no way to
raise the money for some huge project, people insecure for some
reason – it represents an opportunity for someone to solve
the problem and make a profit for himself. The bigger the problem,
the bigger the payoff for solving it, and the more people who will
turn their attention to solving it – including a lot of very
smart people who previously had not had an interest in the subject,
especially not before there was a free market to reward them for
taking an interest.

The transition to a society of legalized drugs is a different problem
from the economic transition after World War II. But the solution
is always the same: more liberty and less government. Free
people will sort things out because they have to in order to get
what they want; politicians know only how to play political games.

We don’t have to know how everything will be handled in a free society.
All we have to know is that free people have much more incentive
to solve problems than do politicians whose own livelihood and life
savings are never on the line.

10, 2005

Harry Browne [send
him mail
], the author of Why
Government Doesn’t Work

and many other books, was the Libertarian presidential candidate
in 1996 and 2000. See his website.

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