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RICHARD W. DUESENBERG, Individualism and Corporations - Ralph Raico, New Individualist Review [1961]

Edition used:

New Individualist Review, editor-in-chief Ralph Raico, introduction by Milton Friedman (Indianapolis: Liberty Fund, 1981).

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


Individualism and Corporations

RICHARD W. DUESENBERG*

A GREAT PARADOX OF AMERICA in the decades at midcentury has been the dual assumption that the inevitable corporateness of a growing and more complex society is evil, and that this evil can only be corrected by actions of the government. Acting as though the government were something other than collective coercion, politicians and public alike have ignored its invasion of our private lives as they have given it the power to clip the wings of some and to nourish the power grabs of others.

The whipping boy of the New Deal was big business. And it still is. A steady stream of “bright young men” from the colleges has been entering government service with the express purpose of doing as much damage as possible to an industrial complex that has provided the American people with the highest standard of living in the history of mankind.

In addition, much popular literature of recent years has devoted itself to deploring the conformity allegedly demanded by modern corporateness. This has been the theme of many best-selling novels and professors, clerics and journalists have taken up the cry—bemoaning the loss of individuality and the depersonalization of modern man. There may indeed be such a trend, but it is not necessarily because corporate activity is not individualistic. In this essay, I propose to analyze the ideas of individualism and corporateness and to make plain what I believe to be the sole preservative of true individualism.

Before denouncing or criticizing the corporate society, a fair-minded person ought to first analyze the nature of concerted action. We hear much these days about John Doe’s being a mere number among many thousands in the Gary Steel mills. Yet, can one argue that the endless lines of flaming stacks and giant furnaces are in themselves an evil? They are inanimate objects, capable of performing only upon human direction; and they are a means of production which a heavily-populated world needs for survival. Insofar as they serve that purpose they are of positive value. Criticism of the corporate society must be more than a nostalgic brief for the pleasures of a former time. However, many and varied were the virtues of the agrarian past, and the task we have before us is that of carrying into the new age the best of the old.

To do this we must first be clear about what it is that we are trying to preserve; that is, we must define “individualism.” This is not easy to do since the idea includes all of human personality. And yet, the very vastness and complexity of individuality is the strongest support for individualism as a political and economic creed. No single mind can know all of history, all of biology, all of the myriads of desires of a single person in any one of a multitude of circumstances, let alone all of these and more combined. Yet, it is the assumption that this is possible, or nearly possible, which underlies much collectivistic thought.

I regret that this vogue of planners and bureaucratic demagogues includes many college and university professors who seem either to miscomprehend freedom’s heritage or to be obsessed with visions of themselves as administrative princes.

The best definition of the term that I know of is to be found in the writing of F. A. Hayek. Individualism, he says quite correctly, is a theory of society, “an attempt to understand the forces which determine the social life of man. . . . Its basic contention . . . is that there is no other way toward an understanding of social phenomena but through our understanding of individual actions directed toward other people and guided by their expected behavior.” It contends further that the “institutions on which human achievements rest have arisen and are functioning without a designing and directing mind.” In substance, Hayek’s definition is that “individualism is freedom lived.”

The primary point of this definition is, of course, the insistence on the genius of undesigned progress. A society of men, free to choose individually, and therefore free to make as many successes or failures as there are choices freely made, is definitely greater than the controlled society, limited to the powers and finite qualities of its collective controlling mind.

This does not mean that individualists are only concerned with the economic wastefulness of error on the part of the planners; they are even more concerned with the tragedies that occur when a brilliant man or a useful idea is left undiscovered by society because the “powers-that-be” were short-sighted or petty men. The defenders of freedom, of course, hold no brief for crackpots, but they permit crackpots to try out their ideas since they know that this is the only way we can insure that viable inventions will be introduced to society.

The amalgamation of the individual into a collective unit manifests itself in many ways and consequences. Organization is, however, a phenomenon consistent with the best traditions of freedom and individualism. It is patently obvious that most of what is considered materially beneficial would be unavailable without concerted effort and concentrated capital. It is important not to confuse organization per se with the depersonalization of the individual, for the individual choice to unite with others for a common achievement is as much a manifestation of individualism as is one’s decision to go anything alone. This is so, at least as long as the joining is freely entered, free, that is, of a conscious coercion by a planning entity’s commands. If the right not to join, or having joined, to withdraw, is reserved and implemented by legal sanctions, the propensity toward depersonalization is minimized. I do not believe it necessary to view a corporate society as necessarily destructive of or conducive to the breakdown of individualism. What is essential is a construction of a legal order which permits the manifestations of free choice, and which denies to any legal personality the absolute power to compel collectivism.

A sine qua non for maximization of individual choice is the formulation of principles upon which a society is to be constructed and the application of them to all units therein. The pragmatism of deciding each issue or case “on its merits” as an ad hoc proposition fails for want of a necessary ingredient of any good law, predictability. The alleged judiciousness of a society which does not feel itself bound to fixed principles is, in fact, not judiciousness, but simply a lack of principle, a drifting toward the point of not more, but less free will.

If we were to ask which characteristics of the Anglo-American legal system were most indispensable to individual freedom, we would have to head our list with the right to freedom of contract and the right to private property.

Many seem to be of the notion that private property and individuality are not necessarily related. Such a notion is preposterous, since neither can endure without the other. Some element of private property has existed in every known society, free and unfree, and the degree of freedom varies in direct proportion to the scope of private property rights. In view of this, it is startling that some theologians and parts of the organized church are among the antagonists, until, it should be noted, the deprivation comes too close to home (urban planning and the zoning off of religious institutions, for instance).

In his Essays in Individualism, Felix Morley has written that: “It would seem that those American theologians whose collectivism induces them to pick from anthropology what they think supports their view on the unrelatedness of private property to human nature, have not only falsified anthropological data but also by implication attack the universality of the family. It is significant that the only truly equalitarian communities in our present world, certain villages in Israel, operate under a system that keeps children from the day of birth until age eighteen in communal nursing homes with the express purpose of extirpating the notion of private property.”

Most of what can be said for private property as a necessary prop of individualism can also be said of freedom of contract. Private property permits one to acquire, to keep, and to dispose. Freedom to contract permits contracting, acquiring the right to insist on the benefit contracted for or claim damages, or not to contract. Each enlarges the security of the individual to do as he will and is able, to acquire and keep what is legally his, a point worth bearing in mind when listening to the current suggestion that the choice of modern man is between freedom and security. Freedom is the best means to security. Sociologists often talk of the absolute security of a prisoner, when attempting a contrast of freedom and security. It is like saying a slave is secure. Secure he is, secured to the whim, caprice, love, hatred, fits and passions of his master, secured to his property, to the unappealable decision of his master to extinguish his life. The same is true of a prisoner, be he behind bars, or a member in a society where the dictatorship of the General Will prevails. To recall a perceptive quote of John Locke’s: “For I have reason to conclude that he who would get me into his power without my consent, would use me as he pleased when he had got me there, and destroy me, too, when he had a fancy to it; for nobody can desire to have me in his absolute power unless it be to compel me by force to that which is against the right of my freedom, i.e., make me a slave.”

The concept of a society, of course, does not rule out limitations on property and contract. The maximization of one’s enjoyment from his property implies a restraint from injury to another’s. Likewise, the right to contract means to contract voluntarily, free from coercion and fraud. An involuntarily entered contract is not, properly speaking, a contract at all. Contracts against public policy, such as not to marry, not to have children, in restraint of trade, to murder or to plot the destruction of another’s rights, have never been recognized or enforced. A contract not to join a union while in a given employment might well be argued to be unenforceable, because it invades the choice of the individual employees. In the converse, a closed shop, the now illegal requirement to be unionized before employed, might be held to be unenforceable under concepts of free contract and property rights. Indeed, the compulsion to join a union after taking employment (the union shop as distinguished from the closed shop) might be illegal for the same reason. The authority given by the state to unions to monopolize the labor market is demonstrably responsible for the exaggerated corruption now infesting American organized labor, and it is as hideous an example of the degeneration of individuality as is conceivable. And why is it not recognized that the poorest excuse for the existence of anything, including a union, is the fact that it can perpetuate itself by the power given it through legislation, rather than the acceptance won by it in the operation of the marketplace? Because it is demonstrable that a religious rearing contributes substantially to the prospects of maturing into a well-disciplined adult, it is just as logical to argue that churches should be given the power to compel membership in them as a condition to receiving a public education.

The greatest threats to individuality, without a doubt, come from the government, either itself acting as agent to extract co-operation from individuals, or acting indirectly by giving to another the power to compel submission. If interventionist policies are looked at from a moral perspective, they are considerably inferior to the free and voluntary actions of society. There is no moral merit to support of social welfare if non-support lands the recalcitrant in jail. Morally, state intervention in social security, federal aid to education, subsidies, etc., however ornamented by glossy phrases of humanitarianism, are reactionary and retrogressive. And the growing galaxy of governmental paternalism poses a real threat to the multitude of privately sponsored organs of our society which have depended in the past on the voluntary charitable support of individuals choosing to further their objectives. It may well be that private education, like other private actions, and consequently the scope of available choices, will in time be starved out of existence because of the tax extortions which paralyze the source of support for concerted private action.

There are some areas of American law where individuality may still prosper almost without restraint. Free speech is staunchly protected by a whole line of Supreme Court cases. One of the paradoxes of the Court in the past several decades has been its singling out of some civil rights for shielding from state intervention, while ignoring or actually permitting others to be eroded away. Actually, such action can be explained by the almost Bohemian-like concept some people, usually collectivists, have of individuality. One such writer recently declared that:

A final ambiguity in the problem of individualism remains to be faced. “Individualism” is used in American discourse, particularly in political argument, to refer to economic endeavor and enterprise. It connotes striving in some self-reliant and relatively unfettered (particularly by government) way for achievement and success, in short, the acquisitive urge. This notion is not identical with what we call “individuality”—the right to “be one’s self,” to develop one’s own individual personality as far as possible according to one’s own values and tastes, to be different, to be a non-conformist, to dissent from orthodoxy if one thinks it necessary, in short, the right to diversity.

Such a definition is blatantly short-sighted, indeed dishonest, if it does not include first and foremost the right to pursue the satisfaction of what the writer called the acquisitive urge. America has been the most individualistic country in history because of this right, and because the practical result of this right has been the widest conceivable assortment of goods with which each could satisfy to the best of his ability the pleasures he craved. I wonder seriously if the author learned his individualism by observing ONLY the incarcerated, the denizens of Greenwich Village, or the inhabitants of a Chinese commune.

Though organization may be inevitable, and may substantially alter the shape of things present from the past, it is not at all incompatible with individual expression. The task of modern man, if he is genuinely concerned with individuality, is to elevate to the status of an immutable moral principle the concept of individual freedom, by which is meant not equality, not happiness, not poverty, not unlimited choice, not security, not necessarily any or all of these, but the opportunity for each man to achieve his own ends, each in his own way.

When libertarians say that individualism should be made a matter of moral principle, they emphatically do not mean that this shall be the objective of society. The value of individualism lies in the fact that it encourages pluralism, thrives on dissent and permits the pursuit of all legitimate objectives while it resolves disputes as collisions of interests arise. It permits the pursuit of particular objectives by everyone, individually or collectively, without the coercion of state intervention.

[* ] Richard W. Duesenberg is Associate Professor of Law at the New York University School of Law and editor of the Annual Survey of American Law and Survey of New York Law.