One of the first free market books I read, back in the early 1960s, was William Graham Sumner’s What Social Classes Owe Each Other.

The book originally appeared in 1883. It is often smeared for its “social Darwinism.” According to this interpretation, Sumner thinks that people must struggle with each other in order to live. Humanity will progress if the “fittest,” that is, the strongest, win out, and the weak are left to fall by the wayside. I’ll try to show that this isn’t what he says. To the contrary, he gives a forceful and effective defense of the free market, along lines that will be familiar to readers of Mises and Rothbard.

Sumner’s key point is not that people struggle with each other, but rather that people need to provide for themselves in order to live. To do this they must organize themselves in a society: people would not be able to survive if they tried to live on their own. And there are two basic types of society, ones organized by status and by contract.

In the Middle Ages men were united by custom and prescription into associations, ranks, guilds, and communities of various kinds. These ties endured as long as life lasted. Consequently society was dependent, throughout all its details, on status, and the tie, or bond, was sentimental. In our modern state, and in the United States more than anywhere else, the social structure is based on contract, and status is of the least importance. Contract, however, is rational—even rationalistic. It is also realistic, cold, and matter-of-fact.

Which one of these types is better? Sumner’s answer is that although a status society has its good points, we cannot go back to it; and this is a fortunate thing, because people are far better off in a society based on contract.

That we have lost some grace and elegance is undeniable. That life once held more poetry and romance is true enough. But it seems impossible that any one who has studied the matter should doubt that we have gained immeasurably, and that our farther gains lie in going forward, not in going backward. The feudal ties can never be restored. If they could be restored they would bring back personal caprice, favoritism, sycophancy, and intrigue. A society based on contract is a society of free and independent men, who form ties without favor or obligation, and co-operate without cringing or intrigue. A society based on contract, therefore, gives the utmost room and chance for individual development, and for all the self-reliance and dignity of a free man.

The secret to the success of a contract society, and here the similarity to Mises is unmistakable, is that this permits large accumulations of capital to occur. This is the only way the standard of living of the average worker can in the long run be increased.

So from the first step that man made above the brute the thing which made his civilization possible was capital. Every step of capital won made the next step possible, up to the present hour. Not a step has been or can be made without capital. It is labor accumulated, multiplied into itself—raised to a higher power, as the mathematicians say. The locomotive is only possible today because, from the flint-knife up, one achievement has been multiplied into another through thousands of generations. We cannot now stir a step in our life without capital. We cannot build a school, a hospital, a church, or employ a missionary society, without capital, any more than we could build a palace or a factory without capital. We have ourselves, and we have the earth; the thing which limits what we can do is the third requisite—capital. Capital is force, human energy stored or accumulated, and very few people ever come to appreciate its importance to civilized life. We get so used to it that we do not see its use.

But what about those who are unable to take care of themselves? Doesn’t society have a responsibility to provide for them? It’s from his answer to this question that Sumner’s reputation for social Darwinism arises. He starts his answer with another point that will be familiar to all Misesians and Rothbardians. Society doesn’t exist independently of the individuals in it. To say that “society” must provide for the poor and weak is to say that some people (the “haves”) should be compelled by others to do so. A person included among the haves “is the one who bears the penalty. But he is the Forgotten Man. He passes by and is never noticed, because he has behaved himself, fulfilled his contracts, and asked for nothing.”

He continues the argument by pointing out that the state, which produces nothing, turns people into slaves by taking money from them.

The capital which, as we have seen, is the condition of all welfare on earth, the fortification of existence, and the means of growth, is an object of cupidity. Some want to get it without paying the price of industry and economy. In ancient times they made use of force. They organized bands of robbers. They plundered laborers and merchants. Chief of all, however, they found that means of robbery which consisted in gaining control of the civil organization—the State—and using its poetry and romance as a glamour under cover of which they made robbery lawful….Now, if there are groups of people who have a claim to other people’s labor and self-denial, and if there are other people whose labor and self-denial are liable to be claimed by the first groups, then there certainly are “classes,” and classes of the oldest and most vicious type. For a man who can command another man’s labor and self-denial for the support of his own existence is a privileged person of the highest species conceivable on earth. Princes and paupers meet on this plane, and no other men are on it all. On the other hand, a man whose labor and self-denial may be diverted from his maintenance to that of some other man is not a free man, and approaches more or less toward the position of a slave.

Sumner does not object to helping others. What he emphasizes is that it should be up to each productive individual to decide how much to aid other people.

Furthermore, it ought to be distinctly perceived that any charitable and benevolent effort which any man desires to make voluntarily, to see if he can do any good, lies entirely beyond the field of discussion. It would be as impertinent to prevent his effort as it is to force cooperation in an effort on some one who does not want to participate in it. What I choose to do by way of exercising my own sympathies under my own reason and conscience is one thing; what another man forces me to do of a sympathetic character, because his reason and conscience approve of it, is quite another thing.

Moreover, it is good for people to help each other. “Men, therefore, owe to men, in the chances and perils of this life, aid and sympathy, on account of the common participation in human frailty and folly.”

Sumner does think, though, that people should be careful about whom they help. It is better, in his view, to help those who have good prospects of bettering themselves than to help the incorrigible. This is the grain of truth in the “social Darwinist” caricature, but it is no more than a grain.