Author Archives: kenpruitt666
A common misconception about the economy is that we need politicians who have business experience. The thought goes something like this; “These ivy-league politicians are nothing more than failed academics who don’t know anything about business or what creates jobs. We need political leaders who were involved in successful small/big business; they have the experience we need so desperately right now. Because they’ve built and run businesses, they know how to create jobs we need to get our economy back on track. It is all about jobs, jobs, jobs!!”
So, what are the virtues that this experience brings to the table?
“They know not to spend more money than they take in!”
And so does anyone who’s ever successfully managed a household budget.
“They know how to create jobs!”
So they know that a combination of savings and investment creates jobs? That’s not a very big leap that it takes years of experience in the business world to make. If you truly believe that they can create jobs as politicians, I have a story to tell you called, “What is Seen and What is Unseen.” Also, the entire mantra of “Jobs Jobs Jobs!!!” ignores the entire Structure of Production.
“They know how to make the compromises that the country needs!”
So they know how to make shady backroom deals with big finance fat-cats in order to make the statistics look as though things are getting better come election time?
This is what the heavily touted BUSINESS EXPERIENCE amounts to; the politician in question knows how to maneuver his way around Wall-Street and the big banks in order to make shady deals that are paid for by everyone else.
The greatest virtue a politician can have? No experience.
It is a common cry of the protectionist that free-trade hurts businesses that are just starting up. The protectionist says, “If the new industries are not protected, they will be crushed by foreign competition which operates on slave labor and a depreciated currency! Our jobs will be exported overseas and capital will flow out of our country and into theirs, thereby impoverishing us!”
This fallacy, like many fallacies, comes about because the protectionist is not considering both the Seen and Unseen effects. Let’s say a new car manufacturer has just opened shop for the first time, and like any other business, he needs customers as soon as possible to pay the cost of his obligations, but he can’t compete against the foreign car companies such as Toyota. So, he petitions the government with the following plea:
“If you will protect my business from competition by implementing tariffs on imported vehicles, at least until my business is well established, I will be able to hire more workers, pay higher wages, and enrich the country with my product. The result is a higher standard of living for my workers, a better material standard of living for the country, and more tax revenue flowing into the national coffers.”
The government passes this proposal, and thus this “infant” business is now protected. It is commonly believed by protectionists that protection increases National Production. In reality however, protection does not increase production by one cent. To illustrate this, consider a typical consumer; suppose he has some money to play around with ($30,000), so he decides to go out and splurge. He buys some books, a new television, a stereo system to go with the television, and a brand new laptop. To show you the money he’s spent so far, let’s put everything into a list. The following numbers are real prices taken from www.tigerdirect.com and www.amazon.com:
Books: “Stephen King’s IT”, “Stephen King’s The Shining”, and “Stephen King’s The TommyKnockers”. Total price is $21.96.
Television and home theatre system: total price for both is $2,297.98
Laptop: Alienware 14 with a 4th Gen Intel Core i7 processor running at 3.4 GHz, 8 GB DDR3 Ram, 750 GB HDD, Nvidia GeForce GT 750M GPU, 14″ Display, comes with Windows 8, and it’s Silver. This costs $1,199.99.
The total amount of money he’s spent thus far is $3,519.93.
Now, our consumer decides to buy a car. He has a choice of buying from the protected industry, or from Toyota (we’ll just keep his choices there for the sake of the example). He, at first glance, chooses Toyota, and decides to buy a new Toyota Prius for $20,100. He goes into the dealership, and upon reading the contract, he is shocked to discover that his purchase will be subjected to a 35% tax of the amount paid. This means he owes the dealer $20,100, and he owes the government $7,035 to account for the tariff. Outraged, he decides to go with the protected industry who’re selling a car for $24,654. Had our consumer been allowed to buy the Toyota Prius without being subjected to a tariff, he would’ve still had $4,554 to either play around with some more, or invest. Individually, this means that our consumer has suffered a loss of $4,554. This loss also hurts the surrounded businesses who might’ve otherwise acquired his business.
The protectionist policy does not increase production one bit; on the contrary, it diminishes production by hindering voluntary exchange. Ah, but the protectionist is sure to cry out:
“That may be true, but if resources are allowed to just flow out of the country unchecked, we will be left impoverished without a doubt.”
Alright, so we shouldn’t be importing anything. What about exporting finished products?
“Absolutely! That’s what we need! Hurrah for tariffs!!”
The protectionist doesn’t seem to understand that the entire reason we have exports is to pay for imports, and he doesn’t understand that protection does nothing but harm for those not being protected.
Anthony Migchel, author of the blog RealCurrencies, didn’t take too kindly to my attack on him, and referred me to his page where he has, according to him, “gone over these points endlessly.” Well, to say I am not impressed is an understatement. I’ve only read the first paragraph thus far, and literally every single sentence within that paragraph is flat-out wrong. I am now convinced that Mr. Migchel has not read any Austrian literature, for anyone who has would not make mistakes like the ones he’s made.
Quote from Anthony Migchel: “Addresses manipulation of volume as the cause of the boom/bust cycle. But blames the State for this, instead of the Money Power.”
This is what Mr. Migchel opens his “Faux Economics” page with, and just that fast he has made several mistakes. In the first place, the Austrian theory of the business cycle blames the practice of Fractional Reserve Banking for the boom/bust cycle. This can be practiced by a purely private bank, a bank with a state charter, or a central bank. The artificial creation of credit via Fractional Reserve Banking causes entrepreneurs to make ghastly long term investment mistakes, which eventually show themselves as just that; mistakes. What Austrians have said, however, is that it is far easier for a bank with a State Charter or a Central Bank to practice FRB (Fractional Reserve Banking) due to the fact that banks with state charters and central banks have more reach, more resources, and more confidence among the people than the traditional private bank, and thus, the boom/bust cycle is far greater than it otherwise would’ve been.
This is the Austrian theory of the business cycle simplified, but apparently Mr. Migchel couldn’t be bothered to actually research his opponent’s position before denouncing them as “Shills for the MONEY POWER.” He has no clue for instance that two of the best treatises on Austrian economics reflect that very same view. The Theory of Money and Credit by Ludwig von Mises, and Money, Bank Credit, and Economic Cycles by Spanish economist, Jesus Huerta de Soto.
He has no clue for instance that Murray Rothbard, arguably the best Austrian economist to ever live, wrote a book slamming bankers for their influence on world affairs. He also doesn’t know that the same Murray Rothbard pointed out that the practice of FRB is inherently fraudulent because it is in direct violation of the very contract that banks make you sign when you open an account with them.
Quote from Anthony Migchel: “Ignores the wealth transfer from poor to rich through interest and tries to explain it away as a normal free market price for money.”
You know, one of the links in my last post to Mr. Migchel, specifically this link, denied this very line of thought.
Quote from my link: “When posed the question “what is interest?”, one common response is that it is the price of money. This is not true. The price of money, like any other good, is the amount of something else that must be traded for it. To see this, consider the converse: what is the price of a tomato? Well, it is the number of dollars that must be given up in exchange for a tomato. Ok, how about the price of a banana? Again, it is the number of dollars that must be given up in exchange for a banana. Because dollars are money the price of all goods is expressed in dollars, whereas the price of dollars is expressed in other goods.”
So, again I am convinced that Mr. Migchel has not read, and absolutely refuses to read, any text on Austrian economics. Had he simply read the blog post that I specifically linked to him, he would’ve known that Austrians do not say that interest is the free-market price of money.
Quote from Anthony Migchel: “Modern Austrians want a free market for currencies, which is positive. They mistakenly claim Gold will prove to be best in such market.”
No, the Austrian who wants a free market in currencies says that it doesn’t matter which currency comes out the best, because what is money is being decided by the people and not by government/banker bureaucrats.
Quote from Anthony Migchel: “But Gresham’s Law predicts people will hoard gold and pay with paper.”
Again, even after being corrected on this, Mr. Migchel still insists on promoting this completely wrong view of Gresham’s Law. Gresham’s Law only comes into play when the conversion ratio between two commodities is fixed by the state. Period. If the conversion ratio is not fixed, it is not Gresham’s Law. For example, suppose the State decrees that any debts of $20 can be paid in 1 ounce of gold. The problem is that the market values gold at $15. So now, people will buy 1 ounce of gold for $15, and use it to pay off the $20 debt, saving himself $5.
In other words, because the conversion ratio is fixed by law, there is a massive incentive for this kind of behavior. But without this decree from the state, there’s no incentive for this kind of behavior, nor will it send gold flying out of the country. If the market rate is $20 = 1 ounce of gold, then any debt of $20 can be paid either in dollars or gold. It’s up to the debtor. If he pays in dollars, that’s fine. If he pays in gold, that’s fine too, but there is no monetary incentive in this case from him to trade gold for dollars or dollars for gold to pay the debt in question.
As for your hoarding gold claim, this is equally silly. Some producers will only accept gold as payment for goods and services rendered, and as such, gold will still be circulating within the economy. Since there is a free market in currencies, you can also buy and trade in currencies. In other words, you can buy dollars and sell gold, or you can sell dollars and buy gold. Seeing as there are shops that only accept gold as payment, that will be entirely up to the people as to what currencies they hold. If they don’t like gold, they don’t have to shop at the places that only accept gold.
I strongly recommend dropping this Gresham’s Law argument. Aside from it being based on fallacious reasoning, it is also based on a misunderstanding of Gresham’s Law that will get you laughed at by just about any economist who knows their stuff, Austrian or not.
Quote from Anthony Migchel: “Deflation hurts debtors (90% of the population), as the value of debts and the interest payed over them increases in value.”
Deflation does no such thing. Are you seriously worse off because you have to pay less for food, clothing, etc.? And by the way, it’s paid, not payed.
Quote from Anthony Migchel: “Kills economic growth because people hoard cash instead of investing and consuming.”
So, in their compulsive need to hoard cash, people aren’t going to consume anymore? So does this mean these people won’t be buying food, basic clothes, paying rent, etc.? People are going to consume regardless of their expectations, because there are basic necessities that everyone has to have. Even the richest banker in the world has to eat. Just because they aren’t spending as much money, and on what, as YOU want them to gives you no right to denounce them as hoarders.
By the way, saving (hoarding) is investing. Even Keynes said that much, as Paul Krugman points out.
Quote from Anthony Migchel: “Deflation is a result of crashing demand, due to a contracting money supply.”
This is an old mercantilist myth. Deflation is a contracting money supply, not the result of something.
Quote from Anthony Migchel: “The associated declining prices are not a boon, but a symptom of a serious disease.”
If Mr. Migchel really feels that declining prices are a symptom of a serious disease, he could do something about it. The next time he goes to the grocery store, he can mark up the price of all the items he picks out by 50%, and when he pays for his items, pay that amount in cash and tell the cashier to keep the change.
Of course, no sane person would do this, and just as no sane person would intentionally pay more than the price listed for basic needs, no sane person believes that we are worse off due to falling prices.
Mr. Migchel clearly has a lot to learn.
Among the many cries for monetary reform, there is a group of people who want the Federal Reserve to be assimilated into the Treasury Department and for the newly created money (which would be created at a much faster rate) to be lent out interest free. All interest is usury that should be abolished, according to these people. Some of this I have dealt with in a previous post, but Anthony Migchels, writer of the blog RealCurrencies, is convinced that the Austrian case for a free market in currencies is actually a hoax.
Quote from Anthony Migchels: “In the old days of Austrian Economics things were simple: one just derided fiat currency. It is unfair to be raped by interest for paper money created out of nothing, even the Austrians will admit. So, they claim, stop fiat money and replace the paper with Gold. We’ll all feel a lot better when we can slave away for our usurious tributes to the Money Masters if we can pay in Gold coins.”
If he seriously believes that in the old days of “Austrian Economics”, all you did was deride fiat currency, then Mr. Migchels hasn’t done that much research into Austrian Economics. For instance, he hasn’t read “Principles of Economics” by Carl Menger, the book which puts forth, in the clearest possible way, the principle of Subjective Marginal Utility; a principle which has completely revolutionized the science of economics.
Quote from Anthony Migchels: “But later things became a little more complicated. People started to wonder about the Gold Standards of the past. Weren’t these just banker operations? Don’t the bankers own all the gold? Haven’t they controlled Gold throughout modern history? And how about these Government controlled Gold Standards? Can’t Government just change the fixed price and mess up everything that way? And can we really trust them to indeed have the Gold they claim they have?”
First of all, Mr. Migchel’s statement that gold standards have always been banker operations is factually inaccurate. Gold has been money for no less than 6,000 years, and this predates the earliest recorded bank in history by ~2,000 years.
Secondly, Mr. Migchel doesn’t understand how ownership of currency works. Just as bankers didn’t own all of the gold, the bank does not own the money I now have in my pocket. I own that money, and no one else, and the only way the bank can have any sort of legitimate dealing with that money is by my permission. Period. It is here Mr. Migchels has demonstrated not only a severely impaired understanding of ownership, he has also demonstrated a complete lack of understanding as to what money is and where it comes from.
Money doesn’t have to be gold or silver, per se. In fact, historically, many things have been money, ranging from rocks, to gems, to salt, to iron and copper. Money is not some alien commodity that just fell from the sky, or was created by an elite to enslave people (as I’m assuming Mr. Migchel believes), money was created, and can only be created, by the market. It is a medium of exchange, selected by the people’s preferences (i.e., their buying and abstention from buying), by which goods and services are more easily exchanged. It allows for specialization of labor, and thereby increases the overall efficiency of the division of labor.
Money is, first and foremost, a commodity, and just like any commodity, there is a supply of, and a demand for it (which means it DOES exist in the realm of Supply and Demand… you know who you are….)
Mr. Migchel’s main gripe is with the practice of usury, i.e., loaning out money at interest. Here again, Mr. Migchel’s ignorance of the “Old Days” in Austrian Economics shows its ugly head. Had he simply bothered to type “Austrian Economics Interest” into Google, he would’ve found this blog post. Aside from being a fantastic exposition of the Austrian position on interest, the blog is basically a summary of Eugen von Bohm Bawerk’s “Capital and Interest”. Eugen von Bohm Bawerk was a student of the previously mentioned Carl Menger, and was the teacher of the man who would later become the face of the Austrian School, Ludwig von Mises. For yet another response to Mr. Migchel’s position of usury, see the first link above in the first paragraph.
Quote from Anthony Migchel: “Of course, Austrian Economics is well known for its trust in the magical ‘freedom’ of the market. First it has Government declare a ‘free market’, then it has Government enforce the contracts in this ‘free market’ and third it has Government look away if a few monopoly capitalists take this market overnight. Of course Government should not interfere if these capitalists show such wonderful ‘human action’ and gobble up the whole thing. Surely these capitalists would not win, were they not doing something right.”
Quote from Anthony Migchel: “The minute Government creates this ‘free market’, it will be quickly conquered by the Money Power with its vast resources. It will have thousands of independent journalists and professors discuss the wonders of Gold as currency at its media outlets. It will pour in billions to open up thousands of ‘competing’ Gold banks, providing Gold based credit. The one at 4,9%, the next at 5,0%. Many of these outlets will actually believe they are really competing.
The Money Power will bribe politicians to only accept Gold coins in taxes.
Meanwhile, nobody will be investing one cent in Mutual Credit based facilities. Because there is nobody with the necessary resources.”
This is nothing short of a conspiratorial doomsday scenario that is based on truly shoddy historical research (as I pointed out earlier).
Mr. Migchel then proceeds to demonstrate that he is an economic illiterate, addressing the issue of if we did have free competition in currencies. In the process, he sharply contradicts himself.
Quote from Anthony Migchel: Of course, would there be real competition, Gold would be absolutely irrelevant in a free market.
As we explained earlier (here and here), if Ron Paul’s “”Free Competition in Currency Act” (HR 1098)” (which would end legal tender laws and end taxing metals) would ever be enacted, nothing would happen.
Everybody would continue to hoard Gold and pay with Federal Reserve notes.
It’s called Gresham’s law: bad money drives out good money. It’s no use discussing this: just check it out for yourself: would you pay with your Gold coins or with your notes?”
Do you see the contradiction? Saying that nothing would happen if Ron Paul’s policy was enacted, and then to say that we’d be witnessing Gresham’s Law, is a contradiction that can only be made if you have little-to-no understanding as to what Gresham’s Law is.
Gresham’s Law, named after Sir Thomas Gresham, doesn’t come into play without legal tender laws. Period. In one of the links he posted, he addressed this very criticism by saying, “In response to a comment by Memehunter, quoting my article on Gary North, they elaborate on why they think I might be wrong.
They suggest that Gresham’s Law does not apply: “As we pointed out before, this is a misconstruing of Gresham’s Law. Gresham’s Law only applies to tender manipulated via government compulsion: ” ‘When a government compulsorily overvalues one type of money and undervalues another, the undervalued money will leave the country or disappear from circulation into hoards, while the overvalued money will flood into circulation.’ It is commonly stated as: “Bad money drives out good”, but is more accurately stated: “Bad money drives out good if their exchange rate is set by law.”
However, the source for this info is Wikipedia, and I don’t believe the Daily Bell will blame me for not accepting that as Canon Law.
It may be true that this was the situation at Gresham’s time, but it is clear that his observation is true always when different units circulate side by side and one of them is overvalued. Or losing value.”
Now we can begin to understand; it’s not that Mr. Migchel just doesn’t understand Gresham’s Law, it’s that he refuses to understand Gresham’s Law. Not only has Mr. Migchel refused to do any sort of sound research on Austrian Economics, he’s constantly spewing forth these nonsensical conspiracy theories about an elite creating these banks and using interest lending to enslave and exploit, but just a little bit of logic shows us exactly why interest lending isn’t exploitative in the least.
Suppose you have a borrower who his desperate to pay his mortgage; he’s $1,200 short this month. So he goes to his local lender to apply for a loan. After considering the pros and cons of the loan, the lender decided to charge an interest rate of 25%. For those who want to know the numbers, that means the borrower will have to pay back the principle of $1,200, plus $300 in interest, for a total of $1,500. Is this exploitation?
Not at all. Why? Because the borrower preferred the $1,200 he borrowed today to the $1,500 he will have to pay back in the future. If he made a mistake in his valuation, then the mistake is on the borrower, not the lender or the interest lending system.
Quote from Anthony Migchel: “The second issue is, that would there be Mutual Credit Facilities competing with Gold banks, they would be offering credit at 0%, while the Gold banks would want 5% for their mortgages.
Where would you go for your loan?
Is it really any use discussing this further?”
Click here for Mr. Migchel’s explanation of Mutual Credit Facilities, and it is one of the most absurd proposals I’ve ever heard. It will receive its own response in due time.
Quote from Anthony Migchel: “The ‘free market for currencies’ is just a ruse, made possible by Austrian Economics’s standard way of ignoring market power. They only look at Government intervention, but they always ignore the elephants monopolizing the helpless ‘free market’.
Should there be a ‘free market’ for currencies, especially if the Federal Reserve Notes would be phased out, the massively funded and promoted Gold dealers would quickly gobble it up and tightly controlled specie, easily inflated and deflated and taxed with interest, would provide the Money Power with the de facto Gold Standard it wants.”
I can’t tell if it’s typographical errors or what, but Mr. Migchel’s proposal is really hard to understand here. Is he seriously proposing that Gold dealers would control all of the gold, inflating and deflating at will? Does he fault the Electronic dealers for controlling all of the electronics, inflating and deflating at will? The logic is the same in both cases, and it’s completely silly.
In conclusion, I’m afraid Mr. Migchel has a lot to learn about economics.
First, let me apologize for being absent for so long. I have been long overdue for another post, and MarxistMax’s post on Islam gave me the kick in the ass I needed to make one.
“I maintain that the invasion of Afghanistan was and is justified. But the war to topple Saddam Hussein remains a token of destructive idiocy which achieved nothing. We set an entire nation against us, on the basis of self-preservation from WMDs that have still not been found. There have been 461,000 deaths in Iraq since we arrived in 2003, directly attributed to the violence.”
Actually, the War in Iraq accomplished quite a bit, depending on who you talk to. To you and myself, it didn’t accomplish anything, but to Dick Cheney and Halliburton, it was billions in government contracts to repair the damage caused by the war, and millions in oil reserves. The war was, primarily, an effort to keep American markets open in the Middle East. I am sorry to beat a dead horse, Max, but if the doctrines of protectionism rings true, that is, the idea that importation impoverishes a country and exportation enriches a country, then this kind of behavior is entirely justified.
Fortunately, the doctrines of Protectionism are false, and this behavior is some of the most repulsive known to man, despite how accepted it is.
“The 9/11 attacks inspired a culture of fear, paranoia and intolerance. The terrorists attacks that have come since then have painted the Islamic community of Britain as a rotten apple, filled to the brim with murderers, extremists and child traffickers. I have never believed this to be the case. Owing to a multitude of factors, social, economic, historical and cultural, the Islamic community has perhaps found it the hardest of all to assimilate into British culture. Due to differences in wealth between adherent nations of Christianity and Islam, there is more reluctance to deviate from scripture.”
Differences in wealth will not convince a Muslim to deviate from Scripture. Period. No Muslim will deviate from the Qur’an. The Qur’an explicitly condemns this kind of behavior.
“Tommy Robinson and EDL represent a solid core of resentment and ignorance about Muslims, which is spreading through the British working class with dangerous speed. It developed after 9/11, and the twelve years of ‘The War on Terror’ have seen it grow into a cancer. Tommy’s recent decision to jump ship to Quilliam has left many puzzled, not least myself. That man continues to be an enigma to the world.”
Tommy Robinson, not even his real name by the way, got his ass kicked well enough to where nothing he says or does should matter at this point. Here’s the video.
“Tommy Robinson accuses the Qur’an itself of condoning sex-trafficking, FGM and the killing of infidels and homosexuals. But both the Bible and the Qur’an were written for a different age. The question remains one of dogmatism. Most Christians are taught to screen out pieces of scripture which condone awful things, and most Muslim do as well. The only difference between us is that dogmatism is slightly higher within Muslim ranks, that is all. And as I’ve said before, that small difference is owing to the fact that most Muslim countries are less developed than the West.”
Tommy Robinson is full of it. The only time Homosexuals are mentioned in the Qur’an is to condemn the act as a sin, and to recite the story of Sodom. The Qur’an does not condone killing homosexuals, and the Qur’an doesn’t mention FGM (Female Genital Mutualization) at all. In fact, as Mustafa Akyol points out in his brilliant book, FGM is an African Tradition that predates Islam by no less than 1,000 years, and is still practiced today in Ethiopia, which is a Christian majority. Muslims do not screen out the “harsh” parts of the Qur’an, instead they interpret them differently. For example, Surah 9:5 says:
“But when the forbidden months are past, then fight and slay the Pagans wherever ye find them, an seize them, beleaguer them, and lie in wait for them in every stratagem (of war); but if they repent, and establish regular prayers and practise regular charity, then open the way for them: for Allah is Oft-forgiving, Most Merciful.”
While those in the EDL interpret this as an aggressive front against all non-Muslims, the Muslim interprets this as a commandment to be followed during a defensive war, and indeed the Muslim has the correct interpretation.
I was going to do a post on how silly the concept of public ownership is, but I realized that Isabel Patterson did a far better job than I ever could, so I’m just going to pass the torch to her. The following is chapter 27 of Isabel Patterson’s Magnum Opus, “The God of the Machine.” With that, I hand it over to her.
“As language is the faculty which distinguishes man from the lower animals, it is also a ready index to the intellectual level of cultures and persons. The confusion and vagueness of terms always found in collectivist theories is not accidental; it is a reversion to the mental and verbal limitations of the primitive society it advocates, the inability to think in abstract terms. This defect is strikingly evident in the collectivist arguments concerning property. Property is ownership. Things which nobody owns are not property; they are merely objects in nature. Perhaps the most senseless phrase ever coined even by a collectivist is that of Proudhon: “All property is theft.” It is indeed remarkable in its own way, for the variety of errors compressed into such brief utterance; in four words it confuses objects, acts, attributes, moral values, and relations, as if they were interchangeable.
Theft presupposes rightful ownership. An object must be property before it can be stolen. Savages and collectivists are notably ignorant of the severely logical branch of language, which is mathematics. The savage does not go beyond simple addition and subtraction of digits. The collectivist may learn formulas by rote, but cannot grasp the principle of their application to physical phenomena. He will reckon upon processes and results which could be obtained only from a factor he has theoretically excluded from the problem he is proposing to solve. The problem is to define the conditions necessary to a productive society. They must answer to the world of physical reality; nothing may be assumed to exist in physical reality which does not so exist; nor may any aspect of physical phenomena be excluded which will inevitably enter into the conditions in reality. But when the collectivist rejects private property from his theoretic economy, he excludes those aspects of material phenomena which mathematics recognizes by the third dimension. “The three dimensions of a body, or of ordinary space, are length, breadth and thickness; a surface has only two dimensions; a line only one.”
With the third dimension, cubic measure is possible; and the construction becomes capable of solid content. It would never have been possible to conceive of measure abstractly without the previous reality and concept of a unit of measure. The unit of measure of physical energy is established from solids, in terms of time, space, and mass resistance or displacement (gravity). Real physical energy cannot exist except in a three dimensional world, nor without its real existence could it have been conceived abstractly. Two bodies cannot occupy the same space at the same time. This is the reason why private property belongs to man as a creative being (a right both natural and divine). Individual ownership answers exactly to the conditions of physical phenomena. Public ownership is fictitious; its verbal terms do not correspond to reality, to the properties of physical objects and the conditions of time and space. A number of persons may reside in the same house, but only by allotment of objects in space and time to each, either specifically or by precedence.
Nobody could live in a house if the general public were assumed to have the right to go in and out, to sit in the chairs, sleep in the beds, cook in the kitchen. Ten men may be legally equal owners of one field, but none of them can get any good of it unless its occupancy and use is allotted among them by measures of time and space. No agreement can obviate this necessity. If all ten wished to do exactly the same thing at the same time in the same spot, it would be physically impossible, whether they agreed or not. Private group ownership necessarily resolves into management by one person, with division of the product, and ultimate recourse to division of the actual property, in case of irreconcilable disagreement. Theoretically, public property belongs to everybody equally, indivisibly, and simultaneously, which is absurd; if this assumption were applied, the result would be that any person presenting himself to use the property could be asked: “Are you everybody?” and he would be bound to reply: “No”; while he could not assert any claim to use any particular division of the property.
The actual use of public property by the public is therefore limited to approximately two dimensional conditions, in which cubic measure, or solids, need not be taken into account, so that a man is regarded as a point in a line which is divisible into an infinite number of points; and with any number of lines intersecting without interference, on a plane surface. Thus it is practicable—whether or not it is necessary or advisable—to make roads public property, because the use of a road is to traverse it. Though the user does in fact occupy a given space at a given moment, the duration is negligible, so that there is no need to take time and space into account except by negation, a prohibition: the passenger is not allowed to remain as of right indefinitely on any one spot in the road. The same rule applies to parks and public buildings. The arrangement is sufficiently practicable in those conditions to admit the fiction of “public ownership.” To be sure, even in the use of a road, if too many members of the public try to move along it at once, the rule reverts to first come, first served (allotment in time and space), or the authorities may close the road.
The public has not the essential property right of continuous and final occupancy. “Public property” which is used for other purposes than transit is not available to the public at all in any way. Part of the Executive Mansion is open to the public for transit part of the time; but the conditions were pointedly expressed when two children wandered into the building without permission and intruded into the forbidden space. The wife of the Chief Executive deemed it advisable to print a warning that such conduct was unsafe; the children might have been shot by a guard. “Public domain” which is leased for revenue is used by the lessees as private persons; and the rent is not distributed to members of the public; it is used by officials. Whatever “public” property admits of tenure in occupancy, or bears usufruct, officials occupy it or consume the usufruct, while the public pays the upkeep. “Public utilities” are not available to the public as owners. Any citizen who wishes to obtain electricity from a municipal plant must pay out of his private resources for the measured quantity of electricity he gets. He is not the owner; an owner does not have to buy the product of his own property.
At the same time, a citizen who does not use any electricity is nevertheless charged indirectly with a fraction of the upkeep in taxes, though he cannot exercise any property rights whatever in the plant. He can’t even go into the premises of right, which is the first prerogative of an owner. Public property then admits of use by the public only in transit, not for production, exchange, consumption, or for security as standing ground. Where all property is “public,” under Communism, government ownership, the officials appropriate to their personal use whatever they like, with funds for upkeep; while the public exists perpetually in the condition of passengers on a road, having no right to remain in any one spot or to use any object; all the activities of members of the public must be by permission of compulsion. It is impossible to imagine any practical method by which the use or the product of any kind of productive property whatever can be made available to “the public” as such. Though anyone who comes along may use a road (unless it gets jammed), it is not possible to devise any means by which anyone who comes along can help himself to electricity, or for the matter of that to potatoes, as a member of the public, “according to his needs.” The phrase has no application to reality in a productive society.
It is an idea limited to the conditions of wild nature, in which primitive man lives on whatever he can catch or pick up in the way of game, berries, fish, or insects.1 The collectivist is incapable of understanding this because his concept of the “collective” has no dimensions. The society founded on private property is organized for a man of three dimensions, occupying a space of his own in a world of three dimensions, through which energy flows in action and is put to use for production. The collectivist society is “planned” for a world of two dimensions, in which nothing is conceived as occupying space or causing displacement. Man is conceived to be everywhere at once and nowhere in particular, in the collective. The concept is that of a world and a society in which there is no energy, neither kinetic nor static. But since in reality every object must occupy three dimensional space, and moving objects do cause displacement, whenever communists seize the political power to try their alleged experiment, Communism is always said to be still in the future, never in the present. The present is described as “a period of transition.” The commonsense of colloquial speech recognizes the facts, with the advent of collectivism, when people complain that they are being “pushed around.”
Perhaps the collectivist has a dim notion of his logical difficulty with the no-dimensional collective; for all collectivist theories begin with the assumption of a productive machinery and system taken over from the society of private property and personal enterprise. Collectivists must feel, though they do not acknowledge it, that their hypothetical society is nonproductive, for production creates its own means of production. To obscure this difficulty, they lay stress on distribution and consumption as the crux of their schemes. But still they cannot imagine any practical method which approximates to their promise; they can only offer a paper copy of the forms of distribution devised by the society of private property, while eliminating the moral and physical relations which made those forms workable.
That is, they must use quantitative measure for goods, and of time for labor (measures unnecessary to the savage living on the bounty of nature); and a medium of exchange. But they deny the right of the owner and producer to his property and product. In so doing, they necessarily deny the right of a man to his own labor, which is to say, to his own person. All collective societies demand forced labor. With this there can be no true exchange, but only expropriation and doles. Collectivists use the word “right” but never in any context which corresponds with reality, and is capable of specific application. By the Marxist theory, of course they ought not to use the word “right” at all, for Dialectical Materialism is deterministic; therefore it admits no right nor wrong. The use of speech is communication, but Marxists use words with the intent of causing confusion; yet they assume that a productive society, which depends primarily on exact communication, can be organized after they have destroyed that means. In this they revert below savagery, and even below the animal level. They have got down to the premise of mere mechanism.
Cogs in a machine need no language. Thus collectivists talk of civil rights in a collective society, where in fact civil rights cannot exist because there is no place in which they can be exercised and no materials on which they can take effect. How can a man speak freely if there is no spot on which he and his audience have the right to stand? How can he practice his religion if he has no right to own a religious edifice, or to his own person? How is a free press to exist if the materials are not in private ownership? With state ownership, nothing can be done except by command or permission. A slave is under command and permission.
He is not free. Collectivists talk frequently of “the right to work.” What does that connote in terms of physical reality? In a free society, any man has by nature the right to work. No one may force him to work; nor may anyone stop him from working on his own property or in contract with another. But if he has no property, or not enough to yield him a livelihood, he must seek employment from others. It is never within the worker’s power to exact his own terms in full, any more than he can find in nature everything as he would have it; but since the employer must need to hire labor (else he would not be at the trouble), there is a basis for bargaining and agreement. If neither is willing to meet the other’s terms or to compromise, each may look elsewhere, to another possible employer or workman.
But it is said that the workman without property (land) is in more urgent need than the prospective employer; he cannot afford to wait, hold out a length of time for his terms, as the employer can. (It is not conceded in theory that employers go broke, though they certainly do in fact; it is rather assumed that they can sit tight forever if they choose.) Therefore, because land exists in nature and all the raw materials of production are of natural origin, it is said that if a man cannot demand and receive employment at a living wage as of right, his natural right to work has been denied. But is there any imaginable production economy in which the contingency of unemployment will not occur with much harsher terms attached to it? Certainly in a savage nomadic society, the raw resources of nature are directly available to every man (as to the lower animals), “according to his abilities.”
But the moment he begins to utilize those resources in any manner beyond the abilities of the lower animals, by making weapons or tools, private property in such objects is necessarily established. Still, any other man can presumably make similar tools from the resources of nature. Likewise, when land is brought under crude cultivation, marginal to a hunting economy—as some North American Indians grew corn at their summer camps—there need be no exact boundaries; and presumably any person might make his own tools and scratch a fresh plot of ground. But natural causes bring about recurrent famine. The hunter has the right to hunt, but he finds no game. Animals may devour the corn; there is no fence. Buildings are not tight nor durable; there is no way of storing food. Then everybody starves, and that is that. With permanent settlements, permanent landholdings are recognized, in regular cultivation.
The higher the form of production, the more necessary it is to fix ownership, and ownership may take various forms, by persons or local groups or families or other allotments, possibly subject to reapportionment. The two extremes of property title are government ownership and individual private property. The question is, by which system does a man retain his natural rights? With group ownership, a man must be born or formally admitted as a member of the group, else he has no property right. If he has, he may in certain circumstances be bound to the soil. Such was the feudal system. It was a three dimensional concept; a man had a place, a right to work on a specific portion of land.
But he was subject to forced labor so many days a year; he had no right to change his employment; and he had little chance of increasing his production, by improvement of tools. His natural rights were severely restricted; he lost mobility and choice. The presumed compensation was stability, with a local energy circuit of production. But he still suffered recurrent famine, as in a state of nature. The feudal system could not form the long circuit of energy. A runaway from one feudal group could find no place in another; he had to seek the contract society. Many did, a proof of which system they found preferable; others bought their freedom. With individual private property, every man has a natural right to own property. He may inherit it or earn the price and purchase it. Such acquisition is reasonably possible for any able-bodied and competent person, in a natural lifetime, by labor and thrift.
When he has got it, it is his own, with the usufruct. He can try out his own ideas, to improve or increase production, build on it for income, or otherwise please himself. He can accumulate provision for his old age or against vicissitudes of any kind. Further, in the contract society, if he has special abilities in management, or creative ideas, he can obtain capital on credit, with no guarantee on his part except honesty of conduct, and repayment if the project succeeds, the owner of the capital taking the financial risk of failure, while the borrower has a chance of considerable gain, and of knowing that he has earned it fairly by increasing production. These are the advantages peculiar to individual private property.
Then let the case against private property, its possible disadvantages, be stated with the utmost rigor, at its possible worst. Many persons may have inherited no property, nor yet have had time to accumulate any from their earnings before encountering hard times. True that some might have had the chance, and neglected it; but it is never true that all the unemployed had that previous chance. Some are young; others worked productively but met with sickness or loss. And even the imprudent cannot be deemed to have forfeited their natural rights. That opportunity may recur in the future does not soften the immediate pangs of want. Part of the lifetime of such persons will be a period of hardship, which may seem rather worse because others are more fortunate by no effort on their part.
But is it true that the unemployed are in this condition because they are denied access to the land? In Europe, during modern times, practically all the usable land was owned. There was no wild land to which an unemployed man could have “access”; and the owners of land were unlikely to permit the unemployed to use it rent free. But in the United States, there was never a day, in “hard times,” when the unemployed could not have had “access” to wild land, or even to owned land which the owner would have let them use for production. Yet in hard times men did not go into the wilderness. The statement that the land frontier took up the slack of unemployment during industrial depressions is a whole cloth falsehood. On the contrary, the frontier was settled from the capitalist production overflow of good times. During hard times men withdrew from the frontier, even abandoning homesteads, and turned back toward the areas of more advanced development, the towns and industrial regions.
They looked for wage jobs. So it is said that the unemployed are denied “access to the means of production,” which includes the land. But the means of production of an industrial economy are not to be found ready made in nature. The man who wants employment then requires something more than his original natural right. He requires the use of the tools, accumulated capital, and organization of a high productive economy, to apply to the resources of nature. But this definition still does not cover the whole difficulty. The owners of industrial property occasionally run at a loss, to keep up their plant and business connections for the future. In the United States, during times of stress, many employers would certainly be glad if they could run in full employment for the time being at the bare cost of materials, maintenance, and wages of labor and management. Dividends can wait, and often are deferred.
But if an idle plant, including even a stock of raw materials, were handed over to unemployed workers, thus giving them free “access to the means of production,” the workers would be unable to get continued production out of it, to pay for their labor, because that depends on continued exchange at a profit; they could only use up the stock and stop work. Then the unemployed man in a private property economy has not lost his natural rights, and is suffering no greater hazard or privation than he would in a state of nature. He is free to quest for what he needs, but it is scarce for the time being, hard to find. Would he be willing to return to a state of nature as preferable? No. His refusal is rational.
The hazard has in fact been greatly reduced; for the United States, the one great free economy the world has ever developed, has never known famine, although the Indians in the same territory were subject to it. There is no loss, but net gain. The hardship of the unemployed man is not that he has been denied his natural rights, but that for the time being he is not provided with something he did not have in nature. But what he lacks cannot be defined merely as access to the land or to the means of production; it is an immediate connection on the long circuit of energy. The gravamen of the collectivist complaint is that in hard times, there are goods undistributed, productive machinery standing idle, and men in want of work and goods.
Though the goods are in fact rapidly distributed, at a loss to the owners if need be, and productive employment resumed, this is not deemed to constitute an optimum for a working system, allowing for possibilities of improvement in its specific operation to get better results along the same main line. Then the real accusation against private capitalism must be that it does slow down occasionally; breaks and stoppages occur along the line. It does not function with absolute, unvarying, mathematical regularity to supply everybody’s wants continuously and unfailingly and without exception, regardless of the infinite risks of human fallibility, moral and intellectual. The collectivist promises an organization that will never break down even temporarily. He insists that he has the plan of the perfect, “automatic” machine.
On its own terms, this theory is insane. If reduced to specifications, it must be like the wonderful One-Hoss Shay, in which every material, part, and detail was exactly as strong as every other item, so that no part could break down. The imaginary One-Hoss Shay did wear out, but all at once, completely, in utter disintegration. The collectivist absolute government is expected to “wither away” and disappear in the same manner; but although the government is the only specific form the collectivist has in view, he insists that on its dissolution there will be some other kind of organization to take its place automatically, he can’t say exactly what—the proposal trails off into incoherencies and mutterings of revelations to be made later.
There is just one more alleged objection advanced by the collectivist, his final argument, against private property. It is said that after a given stage of capitalistic development there will necessarily and always be more men seeking employment than there will be jobs; therefore the workman will have no real power to bargain and get a fair wage, but must take whatever the employer offers. This is a variant by reversal of the Malthusian theory. Malthus thought there was a “law” by which population tends to increase faster than production, so that workers must be forever “pressing against subsistence” (as animals might in nature)—nothing but immediate limitation of population could remedy the evil. Theoretically, of course, the world could be overpopulated, beyond what its natural resources could support; but Malthus was arguing particularly about the problem of poverty with a going productive system in a world which still had plenty of unoccupied space. Now his supposed law does operate in a collectivist economy, because that economy will not admit improvement in the means of production; hence collectivist societies have legitimized infanticide in the past.
Although Malthus lived during the period when industrial production was getting under way, he seems to have fallen into an arithmetical catch, like the fallacy of Achilles and the tortoise; or else he thought production had already reached or almost reached its highest capacity, and could be so figured. Anyhow, the collectivists were forced to admit that production had refuted Malthus, increasing prodigiously, year by year. Then they had to say that the trouble was “overproduction”; the workingman would work himself out of a job pretty soon! This theory has evoked the phrase “technological unemployment,” which is said to be caused by mechanical improvements in the means of production.
That is, if a machine is invented by which one man can do the work previously done by ten men, it must put nine men permanently out of employment. It sounds plausible, but is it true? Malthus imagined a fixed limit of productive capacity per person, an arbitrary quantity. (He must have had that in view, for there certainly is a limit to the number of children any adult can bring into the world.) The collectivist, with the theory of “technological unemployment,” assumes a fixed number of jobs, another arbitrary quantity. In the feudal system there was such a fixed number of jobs, established by allotments of land in a given area, and ratified by the feudal lord and the community.
This condition did not have to be stated in theory, it was factual and inevitable in the circumstances; but unhappily it has been carried over into theorizing on free enterprise, in which it has no meaning. In feudalism, the specific limitation on the number of jobs might stretch or shrink a little, but it was fairly constant. No such rule can be applied or even imagined as applicable to a private capital free enterprise system, if the facts are examined. In the free economy, there can be no fixed number of jobs, not for one minute. Employment, production, and consumption in a free enterprise society cannot be figured on the same ratios or relations as are assumed by collectivists (which have in fact obtained in collectivist societies).
The ancient collectivist societies assumed that a given number of persons could produce a given quantity of goods; which could then of course be divided pro rata. (What it always came down to in practice was bare subsistence.) Then if all the available land or materials were in production, the maximum number of jobs were filled; somebody would have to be put out of a job before another could be taken on. And if an extra quantity were produced, on total reckoning, for the given quantity of labor, it would diminish to that extent the demand (necessity) for labor. Theoretically, it would put somebody out of employment. This reckoning is really made on a strict subsistence basis, in which “consumption” is just what people eat and wear.
But in a free enterprise economy, increased production increases the number of jobs. It might be said that one job creates another, which is true as far as it goes, but open to misinterpretation; for only productive employment does that. If a man were paid to pick up pebbles on the beach and throw them into the ocean, it would be just the same as if he were in a “government job,” or on the dole; the producers have to supply his subsistence with no return, thus preventing the normal increase of jobs.
Putting the unemployed on the dole does not increase “purchasing power.” The dole divides up whatever is already in production. “Purchasing power,” per se, is exchange. Increasing production does increase “purchasing power,” and therefore creates jobs. Are there fewer men employed in the great steel industry than there were in hand forging? or in rail and motor transport than in wagon and pack transport? or in the building trades with steam shovels, concrete mixers, and so forth, than in handicraft building? No. The real result is not only that people have more tools, larger houses, and travel more, which must tend to maintain employment—they also want and have things they never had before.
Motor cars need tires, roads, gasoline; houses are equipped with new conveniences; when people travel they want hotels, amusements, more clothes—all of which means the creation of more jobs, new jobs. Nothing increases the number of jobs so rapidly as labor-saving machinery, because it releases wants theretofore unknown, by permitting leisure. In a pre-industrial economy, jobs are made by simple division of labor; acquired skill and organization permit some economy of effort; but on the whole people literally have not enough surplus energy to want much. What does any person who is thoroughly fatigued want?
The answer is just nothing. And if he works very long hours, he has no time either, to use what he might conceivably want. By conserving human bodily energy, multiplying the production from a given expenditure of muscular strength, the free economy enables men to want things which are unimaginable in a state of nature. Here is a strange exemption of human organization from the general implications of the Second Law of Thermodynamics. Physical energy manifested through inanimate mechanism—gasoline introduced into a motor car, electricity in a vacuum cleaner—does not cause that mechanism to want, or require, either more or less than a given quantity, known beforehand, which it can accommodate, of which a fixed percentage will be “lost” in transmission, and the rest will go through to perform a measured task.
A man can absorb only a limited quantity of physical energy in food, but at the level of well-being his wants increase progressively and incalculably for other things: and he himself is capable of creating devices to augment his energy and then to put it in use for his novel purposes. His circuit is intrinsically different from any specific circuit composed wholly of inanimate materials. Strictly quantitative mechanical calculations, by ratio or number, cannot be applied beforehand to human free productive organization as a whole. The free enterprise system starts correctly with a concept, corresponding to reality, of a three dimensional man in a three dimensional world, having free will, the moral capacity for contract; therefore it predicates individual private property, by which he may secure his own place, from which point his relations in time and space are left to agreement and self-adjustment.
The economic sphere is reserved from the static political clutch, because it is understood that the quantity of production and changes of position are not calculable in advance. The collectivist theory starts with a no-dimensional man in a no-dimensional collective and a two-dimensional world, excluding private property, yet it assumes three-dimensional production and division of the product. It is impossible to elucidate the innumerable contradictions implicit in this muddle. The collectivist doesn’t even try to work out a practical system of his own, consonant to his theories; he merely goes back to barbarism for distribution by edict, while at the same time he says he will use the productive machinery of free enterprise, which in fact can operate only by the inductive pull of distribution by free exchange. In arguing against free enterprise capitalism, the collectivist always adopts the false assumption of a fixed number of jobs in that system.
Conversely, in arguing for collectivism, he always assumes that there will be as many jobs as there are workers. The government will make the jobs. The one definite and unequivocal stipulation of the collectivist is that all property shall be in government ownership for the collective. In that case, everyone must ask for work from the government; and no one can have any resources which would enable him to make better terms by waiting. Neither is there any other employer to whom the worker might apply. In free enterprise, the jobs are spontaneously created by the productive system. The person who wants to work is hired directly by the person who wants work done, each being free to seek the other; each is interested personally in the benefit. (If it is said that a contractor hires men to do some work someone else wants done, it is still a fact that the contractor also wants the work done, for his own benefit.)
Every want operates directly to stimulate a supply; every supply is a stimulus to discover a want. (Supply creates demand as much as demand brings out supply.) Throughout the longest series of exchanges, every person has a direct interest in getting the goods through, or producing them; so that the general sequence creates the long circuit of energy, by an unbroken transmission. The collectivist’s theory of inevitable “class conflict” in the free economy rests on the economic fallacy of the “wages fund.” It assumes a fixed quantity to be divided between “labor” and “capital,” so that neither can get any more except at the expense of the other; therefore their interests must be diametrically opposed and antagonistic. Certainly individuals must always have their separate interests; but in the free economy, there is nothing to divide until “capital and labor” have come to an agreement, hence their separate interests draw them together.
And increased production can increase both shares, not one at the expense of the other. Where the government is the sole employer, someone may certainly want to work, or want work done, or want a certain product; but he is never in direct exchange with any other person who has a like interest in the transaction. The man who wants work must ask the government for some kind of a job and for a portion of the alleged “general” production. Thus between what he offers and what he wants an agency intervenes which has no interest in the transaction. The immediate incentive is really the other way; officials won’t want to be bothered by taking on more people for whom “jobs” must be “made.”
Then the government distributes the product. It is of no interest to the persons employed in distribution whether the quality is good or not, nor whether the stuff is handled for the convenience of either the producer or the consumer; because neither the producer nor the consumer has the power to decide which distributor he will patronize, or how much he will pay for an article. He must go to whatever depot his ticket indicates, and take whatever there is, on the fixed terms; or do without; while the persons employed in distribution will wish to handle less rather than greater quantities. The officials will get theirs first and best. Yet all these persons must ask the government for employment all their lives. It is idle to demand it as a right, for they have not the least power to enforce such a demand.
They cannot accumulate materials and land by which to make themselves independent; and certainly they cannot pick up any tools offhand and go to work upon the first material or plot of land they come upon. They must ask for everything, day by day, hour by hour. If it is true that with private property some persons, having no property at a given time, have no “access” to the land or to the means of production, and are thus at a disadvantage in seeking employment, then under collectivism everybody is in that condition. Every workman has lost all his natural rights, and gained absolutely nothing in return. He is still subject to famine, and gets at best bare subsistence; but he can neither stay in one place of right, nor move about of right. Long trains of prisoners transported in cattle cars to a place where they do not wish to go are in the logical condition of members of the collective. It is specifically against the interest of officials in a collective to increase production above bare subsistence level, for “the people.”
It would only give them more bother; and it would (if consumed) tend to increase the energy of the miserable population, and make “the people” unruly.2 Even when the interest of the officials does call for increased production of war materials (the officials being desirous of saving their own necks), the need has to be met by importing machinery and goods at the cost of a reduced margin of subsistence, or on credit, a debt which will never be paid. What power, in what circumstances, can the individual have against government? In a free economy, there is a government of limited powers. Individual citizens own the productive property.
Whether or not it is expressed in a formal charter, the limitation of the power of government is kept in effect by the fact that the government must get its supplies from the citizens by taxation, and the taxation can be kept within limits by a proper division of the political agencies (checks and balances) and a proper representative system, the representatives being obliged to seek re-election. Nobody is presumed to have the right to demand employment from the government, because it is well understood that government “jobs” are non-productive.
However, if he has a vote, the citizen without property has a means of bribing the government to make a job for him, by expropriating the property of another citizen. Such bribery depends entirely upon the ownership of private property by other citizens. If the process is carried on until all property has been expropriated or made subject to expropriation, no citizen, no voter, has any power left against the government, or any bribe to offer to the government. In the collective, where there is no private property, the government owning everything and the individual nothing, the power of the government is absolute; and it is immaterial what claim the worker may make, he has no means of obtaining it.
The government certainly can “make jobs,” but there is no connection of supply and demand, no induction on the flow of energy. The only effective demand is that of officials for what they personally want; but as they are under no necessity of producing in return, there is no exchange; it is simply a net charge on forced labor. The circuit of energy is cut with every transaction. Further, if the no-dimensional concept of the collective did approximate to reality—which is impossible—the “right to work” would be utterly meaningless. No part of the collective could act without the whole acting in accord. If a person is supposed to be only a component of the collective, and one person wants to do even one thing, he must theoretically get the consent of every other person, be it a thousand, a million, a hundred million, or two billions. It is ridiculous.
Of course, what the person really has to do is to get the consent of certain officials. Now in the free society any person wishing to undertake an enterprise in which capital and various persons will be employed, must obtain the consent of the owners of the capital and of the persons who will do the work. That is not always easy, but he can apply directly, and those concerned can make their own decision according to their view of their own interest. Very few original ideas return production immediately; innumerable ideas fail expensively; but those concerned have the right to take a chance and the loss.
How can any official even be granted explicit authority to take a similar chance? He cannot. The matter requires personal judgment on every single proposal. Can every official of the collective have authority to dispose of all available materials? No. Can each official have authority to dispose of a given portion of available materials for—what? For a proposal of an experimental innovation, made by anybody, while nobody knows what the result will be? Of course not. What is the official to do? He may deal out a favor, but it must be at a risk to himself with no particular inducement in the prospective returns. And what inducement is there to the innovator, the man of creative ideas? None. Hence the collective society is static. Whatever productive machinery it contains must be inherited or borrowed from a primary field of freedom elsewhere, a free economy. With such borrowings, nobody in the collective need be responsible for the decision and expenditure involved in the period of original invention.
The machinery can be taken over at a fixed cost. It can even be copied at a fixed estimate; but it can’t be invented. The history of small nominal collectives within a free economy leads to extremely misleading conclusions because the relation to that free economy is not recognized. Many fail forthwith, but few such group experiments have “succeeded” in a remarkable way. Where the founder of such a collective prescribed a rule which cut the group off from social relations with the free society—as by celibacy among the Shakers or the “community marriage” of the Oneida community—a strict internal limitation on consumption and a discipline of regular labor could also be prescribed. In these “successful” experiments, the communities not only got a living; they actually got rich.
Why, then, it may be asked, is not collectivism at least a practicable system by which people can be secure and rich at the expense of their liberty, if they are willing to surrender their liberty? The answer is, because there would be no surrounding free economy from which they could get rich. These enclave groups sold their products to the free economy and converted the gain into real property, land and buildings, static forms. But the individuals concerned never surrendered their liberty; it was impossible to do so, while the free economy existed. Any member of the collective could walk out any minute he chose.
No member of the collective could really be subjected to personal punishment, imprisonment, or even the prescribed discipline of labor, as by deprivation of subsistence, by the collective, while the free economy existed. Only those who voluntarily submitted to it were in the collective, and only for such time as they chose. Nothing in their economic procedure was peculiar to the collectivist system. Anyone in the free economy could get rich by the same labor, thrift, and accumulation as the collectivists practiced. Everything in these groups which is pointed to as the fruit of collectivism was owing to the free economy: the means of production; the market whereby production was converted into static wealth; the laws by which life and tenure were secure; and even the habit of self-discipline by which the rules were observed and labor performed.
Above all, there was no power whatever of actual compulsion, of the brutalities, torture, starvation, exile, execution, which collectivism inflicts when it has the power. Altogether, private property is the only basis of a productive society, the only means by which anyone can ever have free “access to the means of production,” not of permission but by natural right. In any society, or if there were but one man on a desert island, work must be done; that is a law of nature. But only in a society of individual private property can a man have a say as to the conditions in which he will work, or acquire property on which he can work just as he pleases, or accumulate property by which he may ensure subsequent leisure, or improve his skill or the means of production for his own benefit. The incidental hazard of a free society, which is that of nature, that some individuals may be temporarily unable to command a livelihood, is the permanent condition of every man in a collective society. In giving up freedom, the individual gets nothing in return, and gives up every chance or hope of ever getting anything.
Private individual property is not only the most favorable condition for a high production economy. It is the only transmission line by which high production is possible at all. What does any collective society promise even in its most extravagant propaganda? Simply that it will copy the production of the free societies—which in fact it cannot do. In the nineteenth century some Socialists promised a return to handicrafts, although handicrafts developed with private property, not government ownership. Workingmen were not attracted. The Communists then promised machinery.
During the past twenty-five years, collectivism has been imposed on one European nation after another. During that period considerable improvements in machinery have been made in the United States. Has any collectivist nation made any improvement in machinery? None. The Nazi collective promised workingmen in Germany cheap cars, which American workingmen have had in increasing numbers for twenty-five years. Has even one cheap car been produced for or obtained by a workingman in Germany? Or in Russia? Or in Japan? Not one. Has the standard of living risen in either country?
No, it has fallen far below the nineteenth century level. As a reasonable test of the respective claims and performances of the collective society and the free society, when they exist simultaneously, which will individuals join if they have the choice? Millions of persons came to the United States and remained gladly, as long as they could gain entry; they stand in line now for admittance under immigration quotas.
How many persons have sought admission for citizenship and permanent residence in Russia, Germany, Italy, or Japan under collectivism? Have professed collectivists from Germany sought admission to Russia? No, they seek the United States none the less, if they can contrive to get here. The borders of the collectivist nations are closed—to prevent their own people escaping, as from a jail. And the happy collectivists crawl through barbed wire to get out.”
This issue comes up a lot when you back a Christian into a corner (of course he’ll deny being backed into a corner). If shown the folly of the Bible, he will reply that you’re simply using human reasoning to rationalize away the message of the Almighty, and with this he simply appeals to authority, and his zealotry inflates in response to such… uninformed criticism.
This of course assumes (quite wrongly) that humans are actually capable of understanding God’s reasoning. A species that doesn’t even amount to a speck of dust in the universe is capable of understanding the mind of a being who’s presumably older than time itself and created all there is in the universe. Yeah… no, that isn’t happening any time soon. The reason is fairly simple; we weren’t meant to, at least for the time being. Any reasoning that God makes must, for humans to comprehend it in our current state of perception and consciousness, MUST be transmuted into human reasoning.
This, and for no other reason (assuming Christianity is completely true), is the reason that Christianity, contrary to the opinions of the Christians themselves, is the reason that Christianity, as well as the other religions of Judaism and Islam, is Human Reasoning. Humans, in their current state, are utterly incapable of understanding the nature of a being that is both omnipotent and omnipresent, is all wise and all knowing, etc., etc.. The reasoning of this Deity is thus utterly meaningless to us, all that matters is that a being far more powerful than us is telling us to do X, Y, and Z. This is of course assuming that the Bible, as the Christians would have us believe, is the pure, infallible word of God.
It can be assumed, safely, that a being such as this is not going to make mistakes, but unfortunately for God, if it is assumed that the Bible is the pure word of God, the Bible is loaded to the hilt with mistakes. Nevermind the purely scientific errors the Bible makes, of which others within the respective fields have pointed out, the errors I’m going to lay waste to are economic and philosophical.
The Bible tells us, in Romans 13 1-7:
“Let everyone be subject to the governing authorities, for there is no authority except that which God has established. The authorities that exist have been established by God.
2 Consequently, whoever rebels against the authority is rebelling against what God has instituted, and those who do so will bring judgment on themselves.
3 For rulers hold no terror for those who do right, but for those who do wrong. Do you want to be free from fear of the one in authority? Then do what is right and you will be commended.
4 For the one in authority is God’s servant for your good. But if you do wrong, be afraid, for rulers do not bear the sword for no reason. They are God’s servants, agents of wrath to bring punishment on the wrongdoer.
5 Therefore, it is necessary to submit to the authorities, not only because of possible punishment but also as a matter of conscience.
6 This is also why you pay taxes, for the authorities are God’s servants, who give their full time to governing.
7 Give to everyone what you owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor.”
And just like that, the claim of infallibility goes up in smoke. An unbiased look at history shows us, undeniably, that government authority figures are anything but bastions of the public good. Barbaric tribes throughout history who rape, pillage, and murder the surrounding territories for their personal enjoyment and gain have not, and could not have caused 1/6th of the horror that government authorities have implemented on people, especially their own, and it is not this way without reason.
The taxes it collects, which is justified supposedly by the Social Contract, are a guaranteed source of revenue. The money that the government collects through taxation is used to hire soldiers, who are then used to extract more money. The Social Contract, which he will insist is the justification for taxation, is illegitimate by its very nature. No court of law would ever accept as evidence for a claim of suit a contract that has not been signed by anyone. On the contrary, the Social Contract is nothing more than a decree of superiority of one group over another:
“We WILL provide you with whatever service we so desire to provide, whether you want it or not, you WILL pay us taxes for these services, whether you want to you or not, or you WILL be arrested, your property forcibly seized, or if it has to be done, we WILL kill you and those who resist with you.”
This is the Social Contract, and if you’re sane enough to reject such an arrangement, then you’re told to move to an island and away from society. Society is nothing more than a code-word for that network of interrelations by which people exchange their services voluntarily with one another. Since no one has ever signed an open, formal contract saying that they will pay taxes for services X, Y, and Z, taxation is theft. To forcibly confiscate a person’s money and then to infer or assume his content because he then proceeds to use those goods and services is an insufficient proof of consent. On the contrary, it is no proof of consent at all.
Is God so evil as to impose a system like this upon us? I don’t think so. No, the above verses were written by some court historian who sought favor with the prevailing government of the time, or it was written by some poor fool who’s foundation in logic and reason has been all but washed away by systematic indoctrination.
Zak Smith, one of my followers, made the case in response to my last post that hardly anyone would watch the video I placed as a challenge to the people of the Liberty Movement who believe in the Constitution. I take his point, so in order to encourage people to watch it, I’ve selected a few of Lysander Spooner’s best quotes from the video. The video is at the bottom.
“The number who actually consented to the Constitution of the United States, at the first, was very small. Considered as the act of the whole people, the adoption of the Constitution was the merest farce and imposture, binding upon nobody.
Read more at http://www.brainyquote.com/quotes/quotes/l/lysandersp537773.html#ks43XLKoXUc6mHM5.99”
“When a man says he is building a house for himself and his posterity, he does not mean to be understood as saying that he has any thought of binding them, nor is it to be inferred that he is so foolish as to imagine that he has any right or power to bind them, to live in it.
Read more at http://www.brainyquote.com/quotes/quotes/l/lysandersp537744.html#xslxvvBgz0SVdmhL.99”
“Any number of scoundrels, having money enough to start with, can establish themselves as a ‘government’; because, with money, they can hire soldiers, and with soldiers extort more money; and also compel general obedience to their will.
Read more at http://www.brainyquote.com/quotes/quotes/l/lysandersp537746.html#pERvjd6R0ixyMGfW.99”
“The secret ballot makes a secret government; and a secret government is a secret band of robbers and murderers.
Read more at http://www.brainyquote.com/quotes/quotes/l/lysandersp537748.html#z5JH0bG4J4VwTfRf.99”
“If any man’s money can be taken by a so-called government, without his own personal consent, all his other rights are taken with it; for with his money the government can, and will, hire soldiers to stand over him, compel him to submit to its arbitrary will, and kill him if he resists.
Read more at http://www.brainyquote.com/quotes/quotes/l/lysandersp537756.html#2hQKJUVK7sos6tzY.99”
“But this theory of our government is wholly different from the practical fact. The fact is that the government, like a highwayman, says to a man: ‘Your money, or your life.’ And many, if not most, taxes are paid under the compulsion of that threat. The government does not, indeed, waylay a man in a lonely place, spring upon him from the roadside, and, holding a pistol to his head, proceed to rifle his pockets. But the robbery is none the less a robbery on that account; and it is far more dastardly and shameful. The highwayman takes solely upon himself the responsibility, danger, and crime of his own act. He does not pretend that he has any rightful claim to your money, or that he intends to use it for your own benefit. He does not pretend to be anything but a robber. He has not acquired impudence enough to profess to be merely a ‘protector,’ and that he takes men’s money against their will, merely to enable him to ‘protect’ those infatuated travellers, who feel perfectly able to protect themselves, or do not appreciate his peculiar system of protection. He is too sensible a man to make such professions as these. Furthermore, having taken your money, he leaves you, as you wish him to do. He does not persist in following you on the road, against your will; assuming to be your rightful ‘sovereign,’ on account of the ‘protection’ he affords you. He does not keep ‘protecting’ you, by commanding you to bow down and serve him; by requiring you to do this, and forbidding you to do that; by robbing you of more money as often as he finds it for his interest or pleasure to do so; and by branding you as a rebel, a traitor, and an enemy to your country, and shooting you down without mercy, if you dispute his authority, or resist his demands. He is too much of a gentleman to be guilty of such impostures, and insults, and villanies as these. In short, he does not, in addition to robbing you, attempt to make you either his dupe or his slave.”
“The ostensible supporters of the Constitution, like the ostensible supporters of most other governments, are made up of three classes, viz.: 1. Knaves, a numerous and active class, who see in the government an instrument which they can use for their own aggrandizement or wealth. 2. Dupes—a large class, no doubt—each of whom, because he is allowed one voice out of millions in deciding what he may do with his own person and his own property, and because he is permitted to have the same voice in robbing, enslaving, and murdering others, that others have in robbing, enslaving, and murdering himself, is stupid enough to imagine that he is a “free man,” a “sovereign”; that this is “a free government”; “a government of equal rights,” “the best government on earth,” and such like absurdities. 3. A class who have some appreciation of the evils of government, but either do not see how to get rid of them, or do not choose to so far sacrifice their private interests as to give themselves seriously and earnestly to the work of making a change.”
“In truth, in the case of individuals, their actual voting is not to be taken as proof of consent, even for the time being. On the contrary, it is to be considered that, without his consent having ever been asked, a man finds himself environed by a government that he cannot resist; a government that forces him to pay money, render service, and forego the exercise of many of his natural rights, under peril of weighty punishments. He sees, too, that other men practice this tyranny over him by the use of the ballot. He sees further that, if he will but use the ballot himself, he has some chance of relieving himself from this tyranny of others, by subjecting them to his own. In short, he finds himself, without his consent, so situated that, if he use the ballot, he may become a master; if he does not use it, he must become a slave. And he has no other alternative than these two. In self-defense, he attempts the former. His case is analogous to that of a man who has been forced into battle, where he must either kill others, or be killed himself. Because, to save his own life in battle, a man attempts to take the lives of his opponents, it is not to be inferred that the battle is one of his own choosing. Neither in contests with the ballot — which is a mere substitute for a bullet — because, as his only chance of self-preservation, a man uses a ballot, is it to be inferred that the contest is one into which he voluntarily entered; that he voluntarily set up all his own natural rights, as a stake against those of others, to be lost or won by the mere power of numbers. On the contrary, it is to be considered that, in an exigency, into which he had been forced by others, and in which no other means of self-defense offered, he, as a matter of necessity, used the only one that was left to him.”
The so-called Liberty Movement is getting more and more attention from the Mainstream Media, but unfortunately for the Liberty Movement and those involved, there is far too much garbage associated with it. For instance, one section of the Liberty Movement believes that the Federal Reserve is a privately owned corporation, another section believes that today’s banking system was created by a Jewish Conspiracy, etc., etc..
One very big problem with the Liberty Movement is it’s absolute refusal to denounce, or separate itself from, the racists who’ve thrown their hats into the ring. They usually respond with some nonsense like, “Well, Liberty appeals to many people.” Does it really? Are the people who say this really so stupid as to believe that racists want liberty? Take this for example if you don’t believe me. Read this and tell me with a straight fact that racists want Liberty.
The latest example (to come to my knowledge) is a movement called, “Truckers to Shut Down America.” This is a group will will be going on a three day strike (Oct. 11-13, 2013) in order to send a message to Washington. Well, here’s just part of what they want.
“It does not matter if a million or 50 roll through DC in this effort. Congress will listen to We the People. Which is remove Obama from office for crimes of treason and misdemeanors. We want Congressional hearing on Benghazi and Seal Team 6. Louis Learner [sic] put in jail. No amnesty, remove all Muslims in our government that do not uphold the Constitution. Remove Eric Holder from office for crimes against the people and the Constitution. Last but not least is Fuel prices.”
I’ve underlined the important part in this poorly worded nonsense. Why he mentioned MUSLIM government employees who don’t uphold the Constitution instead of saying, “Remove all government employees that do not uphold the Constitution.” is beyond me. It would seem to me that their purposes would be better served with the latter quotation, because the group of government employees that you would be targeting would be far larger.
This brings me to the single biggest problem with the entire Liberty Movement, and that is their insistence on “Restoring the Constitution.” These people treat the Constitution as if it were a document sent down from God encased in The Holy Grail. I have a direct challenge to these people who believe that the answer to our problems is the Constitution. Listen to the entire video below, and tell me that what we need is the Constitution. While you say the Constitution is a document of freedom and liberty, I say that the Constitution is a document condemning everyone in America to servitude and should be abolished as quickly as possible.
The government never grows tired of making people’s lives harder than they otherwise need to be, and if the every day struggles of paying the bills and putting food on the table weren’t hard enough, the government, through the wisdom of our enlightened bureaucrats decides that life must be harder on all of us. You would think people would get tired of this, eventually. You would think that workers would eventually rise up in revolution against these malicious attacks, but they cheer it on.
What is this latest assault on workers that I speak of? I’m speaking of course with regards to the government’s recent crackdown on companies hiring illegal immigrants. According to the Wall Street Journal (9/13/13) under the heading, “New Hunt for Illegal Workers”:
“The U.S. government has launched a fresh crackdown on employers suspected of hiring illegal immigrants by notifying about 1,000 business across the country in recent weeks they must submit documents for audits. The so-called “silent raids” are the largest since July 2009, according to immigration attorneys, and weren’t publically disclosed by Immigration and Customs Enforcement, the agency that conducts such inspections.”
In other words, the government is going to force no less than 1,000 different businesses across the country, businesses that are working peaceably and are producing goods/services of value, to go through the pain (and expense) of preparing special documents for audits, in order to target a given group of workers who are doing absolutely nothing wrong.
Those who are more emotional are quick to scream in response, “THEY’RE ILLEGAL!!”, illegal by what standard? “They didn’t go through the immigration process!!” Good for them. The immigration process is, in fact, nothing more than useless paperwork. It proves nothing, it contributes to nothing. It is nothing more than an added cost that the public must pay for, and the cost comes in more than just the cost of paying bureaucrats to process all the paperwork. As Ludwig von Mises keenly pointed out, “There cannot be the slightest doubt that migration barriers diminish the productivity of human labor.”
The reason this is so is obvious; migration barriers hamper the division of labor by diminishing the capacity for labor to go from one area to another.
Thanks to our campaign of Nationalism, so-called “illegal” immigrants are denounced as lazy asshats with a bloated sense of self-entitlement, who pollute our communities with drugs, and rob/kill the otherwise natural citizens. This characterization of undocumented workers is entirely unjustified, and has no factual basis for it in the least, but that won’t stop the die-hard Nationalists from believing in it. Many people denounce this as racist, but this isn’t racist in the least; denouncing all Mexicans as the above would be racist, but you can plainly see that isn’t what’s happening here.
To make matters worse, the die-hard Nationalists consistently try to use economics to justify this nonsense. They try to saw for instance that “illegal” immigrants are taking our jobs. A quick glance at the immigration and job situation thoroughly discredits this idea.
They try to say that “illegal” immigrants are expensive to the tax payer because the tax payer has to bear the costs of healthcare, education, and other benefits that I… just don’t feel like listing. This statement on its own is fair enough, but in reality they are no more expensive that the other people being covered. If the government wasn’t offering these free services in the first place, would the undocumented still be expensive to the tax payer? Of course not, because then the individual would then be paying for his own healthcare, education, etc.. If anything, the undocumented are really doing you a favor; they are highlighting the absurdity of offering these free programs in the first place.
They try to say that “illegals” are bringing in diseases that we had previously wiped out or just weren’t here to begin with. They say that this is so because “illegal” immigrants don’t go through the health screening that “legal” immigrants go through. To thoroughly discredit this idea, you need only ask yourself, “How do you collect evidence for this claim when “illegals” rarely go to hospitals and are rarely caught by the government?” For more information on this, click here to be taken to a page hopelessly destroying the Nationalist (or Nativist if you prefer) myths on immigration.
I just can’t help but wonder when the people at large are going to get sick and tired of the constant lying, the slandering, the pandering to emotions, etc., etc.. For what immigration is supposed to look like, I refer you to some of the finer work that Milton Friedman has done.