at FEE are happy to present the Essential series, five free ebooks collecting the key works of five great freedom philosophers: Leonard Read, Ludwig von Mises, Henry Hazlitt, F.A. Hayek, and Frédéric Bastiat. In each of these compact anthologies, you will find a powerful case for liberty.
But the ideas within are not mere fodder for debate. Like all great sages, these authors offer true wisdom that can inspire you and benefit you personally in your own life. Here is a discussion of just a few of the included works.
Power corrupts and captivity degrades.
Leonard Read (1898-1983), FEE’s founder, dedicated his life to spreading “the freedom philosophy.” In addition to facilitating the contributions of others, Read himself was a prolific author and a font of wisdom. For example, in the included "How Socialism Harms the Individual," Read explains how the forced transfer of wealth degrades and cripples everyone involved. In addition to being directly harmed, the victim of the transfer becomes less provident and charitable. The beneficiary becomes less self-reliant and capable. And the enforcer of the transfer becomes power-addled and contemptible. Power corrupts and captivity degrades. Read cuts through the weeds of public policy debate, and counsels the reader to renounce any role in the redistribution of wealth "for his own mental and spiritual health."
In “I, Pencil,” his most famous work (also included), Read charmingly adopts the voice of a pencil who recounts the tale of its own ancestry. Despite its humble appearance, the pencil is the end result of a mind-boggling, globe-spanning feat of cooperation among millions of strangers. This triumph of coordination is all the more marvelous for having no mastermind. Indeed no central planner, however brilliant and public-minded, could have pulled it off. Such an intricate order can only emerge out of the voluntary interplay of free people. Read imparts to the reader his own sense of wonder at the miracles of the market. After reading Read, you’ll never look at the abundance that surrounds you the same again.
Collectivism severs action from result.
Frédéric Bastiat (1801-1850) also devoted his life to spreading, in his words, “the idea of liberty.” Like Read, he especially sought to convey that idea to the rising generation. And so he began one of his major works with an open letter addressed, “To the Youth of France” (included in this collection). Bastiat describes what happens to individual character under a regime of wealth redistribution (or “legal plunder” as he termed it in his classic, mind-expanding essay “The Law,” which is also included).
Within such an incentive structure, as Bastiat writes, “the individual's sense of responsibility becomes more and more apathetic and ineffectual.” This is because collectivism severs action from result. Acting in error results in suffering, as it always does. But that detriment "strikes innocent parties” instead of falling “upon the one who has erred.” Artificially insulated from the effects of his own folly, the errant person does not learn from experience and has no incentive to adjust his conduct. So, as Bastiat writes, when individual responsibility is nullified by government intervention:
“...evil nonetheless follows upon error, but it falls upon the wrong person. It strikes him whom it should not strike; it no longer serves as a warning or a lesson; it is no longer self-limiting; it is no longer destroyed by its own action; it persists, it grows worse, as would happen in the biological world if the imprudent acts and excesses committed by the inhabitants of one hemisphere took their toll only upon the inhabitants of the other hemisphere.”
Bastiat’s analysis helps us understand the present world, and not just the failures of socialism. Through this lens, we see clearly the connections between reckless bank lending and the “too big to fail” doctrine, between police brutality and the “qualified immunity” doctrine, between the belligerence of foreign allies and the “collective security” doctrine. In all realms, collectivism corrupts.
Every price is the knowledge and values of millions boiled down to a single number.
The distinguished economist F.A. Hayek (1899-1992) also noted the strong association among prosperity, freedom, and personal responsibility. In “The Moral Element in Free Enterprise” (included), he writes:
"Free societies have always been societies in which the belief in individual responsibility has been strong. They have allowed individuals to act on their knowledge and beliefs and have treated the results achieved as due to them. The aim was to make it worthwhile for people to act rationally and reasonably..."
The importance of individuals acting on their knowledge was the theme of Hayek’s groundbreaking article “The Use of Knowledge in Society” (included). Hayek asks, how are the innumerable scarce resources in a global economy to be used to best satisfy human wants? Of all the practically infinite possible ways of combining them, which is to be chosen?
Every tiny detail about the economy is relevant to this question. This includes every single preference of every single soul, and every relevant fact about every material resource. Existing knowledge about those myriad details is dispersed among billions of minds. How can all those bits of knowledge be integrated and utilized to inform the use of society’s resources? A central planning board could not possibly hope to gather and get a handle on so many bits, much less keep up with constant changes in knowledge and values. For a central planner to think otherwise would be “The Pretense of Knowledge” (which is the title of Hayek’s Nobel Prize acceptance speech, also included).
Hayek argues that the market price system is the only way that humanity has discovered to meaningfully cope with “the knowledge problem.” Every resource price is essentially the knowledge and values of millions of minds concerning that resource boiled down to a single number. All individuals can use these simple, yet information-rich prices to guide their economic choices. Describing what he calls the “marvel” of the market price system, Hayek writes:
“In abbreviated form, by a kind of symbol, only the most essential information is passed on and passed on only to those concerned. It is more than a metaphor to describe the price system as a kind of machinery for registering change, or a system of telecommunications which enables individual producers to watch merely the movement of a few pointers, as an engineer might watch the hands of a few dials, in order to adjust their activities to changes of which they may never know more than is reflected in the price movement.”
In the market economy, consumer wishes are the guiding stars of production.
An essential feature of money prices is that they share a common denominator, so they can be subjected to arithmetic. Entrepreneurs can use them for cost accounting, and to determine if their investments resulted in profit or loss. The great economist Ludwig von Mises (1881-1973) identified such “economic calculation” as the key characteristic of the market economy. “Profit and Loss” (which is the name of an included essay) give the entrepreneur a simple metric that communicates how much his or her rearrangement of production has either boosted or impaired consumer welfare.
As Mises brilliantly demonstrates in “Planned Chaos” (also included), there can be no economic calculation under socialism. This is because there would be nothing to calculate in the absence of money prices, which presuppose market exchange and private property. Without profit and loss, socialist planners are economically adrift at sea without a compass.
Also featured is “Liberty and Property,” a speech in which Mises presented the most important features of free market capitalism. In order to earn profits and avoid losses, entrepreneurs must strive to arrange production so as to please consumers. Thus in the market economy, consumer wishes are the guiding stars of production. Mises called this “consumer sovereignty.”
Moreover, the serious money is to be made by serving mass markets. Therefore it is the average, not the elite, consumers who most sway and are served by the market. Capitalism, as Mises argues, means "mass production for the masses” and widespread, ever-rising prosperity for humankind.
Socialism is no substitute for capitalism. And neither is the “middle road” of “interventionism.” Every market intervention by the government harms the general public by countermanding the orders delivered by the sovereign consumers. If the government tries to address the ill effects of intervention with further intervention, the maladies will mount and elicit ever more intervention until every corner of the economy is subjected to government control. Thus, “Middle-of-the-Road Policy Leads to Socialism,” as Mises titled another included essay.
Henry Hazlitt (1894-1993) was another great economics educator. Like Mises, Hazlitt was a perceptive critic of interventionism, which is the theme of his “The Lesson” and “The Lesson Restated” (both excerpted from his classic Economics in One Lesson). Hazlitt’s “Lesson” (which is a modern update of “Seen and Not Seen,” included in The Essential Frédéric Bastiat) is that the art of economics lies in looking beyond the direct, narrow, and intended consequences of intervention. The vision of a true economist encompasses the long-term, indirect, and widespread repercussions of a policy as they ripple throughout society.
In “The Problem of Poverty," Hazlitt eloquently tells of how economic freedom allowed the West to grow amazingly rich after untold millennia of almost universal grinding poverty.
And in “The Early History of FEE,” Hazlitt lovingly tells the origin story of the Foundation for Economic Education, of which he was a founding board member.
These are just some of the highlights of these wonderful collections. Download the FEE Essential series today to be inspired by five of the greatest communicators of the freedom philosophy.
Tables of Contents
The Essential Leonard Read
1. I, Pencil
2. Neither Left nor Right
3. A Break with Prevailing Faith
4. Socialism Is Noncreative
5. How Socialism Harms the Individual
6. How Socialism Harms the Economy
7. The Most Important Discovery in Economics
8. The Greatest Computer on Earth
9. The Service Motive
10. Why Freedom Works Its Wonders
11. Asleep at the Switch
12. In Pursuit of Excellence
The Essential Frédéric Bastiat
1. To the Youth of France
2. What Is Seen and What Is Not Seen
3. A Petition
4. A Negative Railroad
5. The Law
The Essential F.A. Hayek
1. The Case for Freedom
2. The Use of Knowledge in Society
3. The Pretense of Knowledge
4. Intellectuals and Socialism
5. The Moral Element in Free Enterprise
6. Why I Am Not A Conservative
The Essential Ludwig von Mises
1. Liberty and Property
2. Profit and Loss
3. Planned Chaos
4. Middle-of-the Road Policy Leads to Socialism
5. The Place of Economics in Learning
The Essential Henry Hazlitt
1. The Lesson
2. The Early History of FEE
3. Understanding “Austrian” Economics
4. The Problem of Poverty
5. False Remedies for Poverty
6. On Appeasing Envy
7. Planning vs. The Free Market
8. Can We Keep Free Enterprise?
9. The Lesson Restated
Fill your boots up!