Soviet Fun

From my book:

Allow me to bring into the discussion the vulgar Soviet hierarchy of social orders. First, there was the (1) Stone Age communal order in which there were no economic distinctions.

Next came the (2) slave-owning society, where the worker was a slave.

Then (3) feudalism, at which point the worker was a serf, a definite improvement.

(4) Capitalism arose next, transforming the worker into a free mercenary. He worked hard for the man, but he played hard, as well.

The current stage, (5) socialism, has elevated the worker into master of productive activities.

The pinnacle of wonder, (6) communism, will abolish work as such; instead of enduring disutility of labor, people will play in pure bliss.

I like hierarchies; there are a few in this book, as well. They give you the big picture. They help ensure that the details cohere.

But great care must be taken when charting the outlines of the universe as whole: pitfalls await at every turn. In this case, the socialist theorizers decided to abolish the real world. There is no higher stage after capitalism, except for each individual as he enters glory in the afterlife. (I, 16)

I want to expand on that a little, regarding war and exploitation. The communal era featured total war. The conquering tribe annihilated its prey. They killed everyone and took everything.

The slave-owning society arose when the victors got the bright idea that they would benefit by sparing some people in the community they pillaged and making them their slaves. People can be useful this way.

Widespread slave-owning was later on replaced by serfdom in the feudal era. It turned out more profitable for the exploiters not to enslave people and thereby reduce their output to that similar to of dumb beasts of burden but to allow them to keep some fruits of their labor and tax the rest. Wealth creation was to that extent given a huge boost.

Capitalism is a much more modern invention. It “reduced the prestige of conquerors and expropriators and demonstrated the social benefits derived from business activity.” (HA, 8) Under laissez-faire, a worker is a free man, obligated to do nothing he contractually did not agree to. Under capitalism, institutional exploitation does not exist.

We see that taxation according to this scheme is a feudal remnant. It may be permissible on the local level for a few well-defined functions of the government. But in a truly free market, taxation would be a tiny percentage of what it is today. There would certainly not be such thing as a tax-supported federal government and even state governments. Taxes would be so trivial as to be almost unnoticed by an average worker.

Our society then is half-capitalist, half-feudal. But capitalism is the most perfect expression on the social level of the individual human nature. It cannot be beat. It is the end of history. There are many people in this world who live in the past, whose mentality belongs to ages come and gone, from feudalism all the way down. We must heal and uplift our own and their natures to usher in a fully capitalist society, rid of the influences of the inferior eras.

Capitalism’s only transcendence is such true love between people and God that all are united into a single vine-and-branches. Even then, as I point out,

Notice how profoundly charity differs from altruism: altruism is defined as “unselfish regard for or devotion to the welfare of others.”

But charity is ultimately perfectly selfish; it is just that it seeks the profit (whether in virtue or narrow happiness) of a united will, ideally, of the entire vine and branches.

Jn 15 and 1 Cor 13:3 illustrate. Love requires no sacrifices from the lover beyond those of ordinary choice. (II, 1)

And that ain’t happening anytime soon, and if it did, it would not abolish capitalism but fulfill it.

Source of Serfdom

Let me answer my own question: Why is tax serfdom a normal state of affairs in America and almost the entire world?

I believe the cause lies in the former popularity of socialism. The social elites — by which I mean the genuine articles, the truly intelligent and good men — saw with horror the socialist mass movements. The common men turned into fanatics and eagerly embraced doctrines that were bound to and in fact would disintegrate social cooperation. Socialist delusions penetrated into legislatures, councils, and all manner of popular assemblies.

As a result, the elites, realizing that global doom was at hand, declared bitterly the masses of common people to be incompetent. The masses could no longer be trusted with self-government, if their efforts were going to destroy society.

While the rest of the world regressed into a slave-owning socialism, in America things did not roll back to quite the same extent but rather merely to feudal serfdom.

The cause was realization by the social elites that the masses could no longer be allowed to govern themselves, lest they actually would create socialism — and end the world as we knew it. The new feudalism came about as a result of a deliberate effort to take power away from the people and vest it into an elite that could at least preserve some vestiges of the market economy. It was a drastic and unjustified decision, but there it is.

Moreover, the elites themselves were far from perfect. The newfound power went into their heads and corrupted them. It is for that reason, I submit, that we had William Buckley favoring “the extensive and productive tax laws that are needed to support a vigorous anti-Communist foreign policy,” and arguing that “we have got to accept Big Government for the duration — for neither an offensive nor a defensive war can be waged… except through the instrumentality of a totalitarian bureaucracy within our shores.”

Totalitarian bureaucracy that has now morphed into an abusive and shocking nanny state.

Natural Law: Property in External Goods

Our next step, now that we have established the natural duties not to murder or assault an individual’s body, is to prove that each man owns his justly acquired property, i.e., via initial appropriation of unowned goods, production, and exchange.

Let’s first consider two abortive attempts to demonstrate this.

First is the observation that when Smith controls an item X, he expects to use it in some way in the future. His has plans for X. If Jones robs Smith, then Smith’s plans are shattered.

Yes, that is an evil that accrues to Smith. But perhaps Jones, too, has an eye on X, hoping to do something with it. We should expect him to ask Smith to sell it at the mutually agreed upon price. But why not do something easier and steal X? This is an apparent good that accrues this time to Jones. The situation is unlike our previous argument in which we have seen that the evil done is accompanied by no good whatsoever to anyone and is for that reason utterly proscribed. This time, moreover, since we cannot compare utilities interpersonally, we cannot say that the evil to Smith outweighs the good to Jones.

Second, we could try to propose that it is man’s nature to produce for his own temporal salvation and enjoyment. But a robber like our Jones rejects his natural impulse and instead is a parasite living off Smith. This is somehow “unnatural.”

But why? Jones surveys his surroundings and locates in them, among other things, Smith. It is just as “natural” for him to pluck apples of an unowned tree as to pluck them of a tree controlled by Smith. We might find a natural duty on the part of Jones not to deprive Smith of so much that Smith starves or freezes, etc. to death (under moderate scarcity). But whence the duty not to plunder him at all?

At this point, we need to know economics. We start by pointing out that even if Jones is all-powerful, nevertheless, Smith for him is some kind of a natural resource. But nature, including its resources, in order to be commanded, must be obeyed. For all his might, Jones is powerless to use Smith other than according to Smith’s inner nature.

So then, if Jones can with relative ease despoil Smith of the goods Smith controls, then Smith enjoys no security of property rights and will simply curtail any and all production beyond that absolutely necessary for him to survive (and we have just seen that Smith has a natural right to at least that). As a result, Jones’ first spasm of expropriation and confiscation will also be his last. The incentives to Smith ensure that Jones himself will in the longer run be poorer than is possible for him to be.

Insofar as Jones loves and so wills good to himself, Jones needs to find out how to use Smith most efficiently. I’ve already discussed the Soviet system of “social orders.” Thus, in order to ensure that Smith produces, Jones can enslave him. But slave labor is terribly unproductive. In the longer run, again, Jones can do far better. How about tax serfdom? This is better but still is remarkably inefficient from Jones’ own point of view.

Jones secures his own interests only under a regime of freedom, private property, and laissez-faire. Jones’ own self-interest, which includes being wealthy and prosperous, impels him to respect Smith’s own control of his property and recognize his “natural” rights to it and to its unfettered enjoyment. Only this way will production hum at the fastest possible speed, thereby benefitting everyone in society in the long run more than any other conceivable system of social cooperation, such as Jones but also, as a remarkable result, Smith the former dead man, slave, or tax serf!

As a result, it is Smith’s nature to be used properly as an organism that produces wealth for the rest of society that causes him to possess his natural rights to lawfully acquired property. Without such rights, everyone is worse off, both Smith and Jones; with such rights, everyone is better off, again including Smith and Jones. Trampling on Smith’s natural rights to property hurts everyone in the long run and most plausibly overall, as well. To that extent, violating one’s natural duties to others is senseless.

Since we must generalize from our tiny society to the world as a whole, we obtain that everyone has natural rights like Smith’s. A law, such as the natural law we are discovering, is by its nature a universal, i.e., something that applies to many, in this case to every human being by virtue of his humanity.

A Typology of Economic Systems

It will be based on an earlier post called Soviet Fun.

Level System
6. Laissez-faire capitalism
5. American capitalism
4 Classical ancient regime, aka feudalism
3. Feudal-style and so superficially somewhat less extreme German type of socialism
2. Slave-owning; socialism of the Russian pattern, 1917-1991
1. Total war; also relations between nations under the national version of socialism

I want to focus on 4 – 6 for a moment and point out that the federal government is essentially the feudal liege lord to whom its many dependent characters owe fealty.

Now these vassals of the Washington’s power elite can be more or less rich, yet all are on call to fight for their lords if not directly in the military than through the electoral process.

The poorer vassals, such as your local welfare bums, are expected to perform their duty if not with bullets than today with ballots.

The richer oligarchs — who owe their wealth to the state or who expect government privileges to protect them from the market process — must finance the politicians’ campaigns, again if not military than election ones.

Progress from 5 to 6 is thereby being checked by all these people’s unwise and destructive efforts.

Complementarity in Straight Marriage but Not Gay

Let’s recall Ginsburg’s argument in favor of gay marriage:

Same-sex unions would not have opted into the pattern of marriage, which was a relationship, a dominant and a subordinate relationship. …

There was a change in the institution of marriage to make it egalitarian when it wasn’t egalitarian. And same-sex unions wouldn’t — wouldn’t fit into what marriage was once.

There are two problems with this reasoning. First, equality of the husband and wife regarding their rights to dispose of property and even regarding custody of children does not entail any other kind of equality. For example, perhaps sexually, the wife ought to be “surrendered.”

Second, there are in general not 2 human relations, hegemonic dominance / subordination and equality, but 3, with the addition of complementarity.

We see this most easily in the market, where people specialize within the system of the division of labor. People’s skills complement each other; they can be more or less sophisticated; they earn their owners different amounts of money. Thus, people are unequal both as producers and as consumers; but neither do they rule or submit to each other.

St. Thomas likens this special relationship to “works done by art; for the roof of a house differs from the foundation, not because it is made of other material; but in order that the house may be made perfect of different parts, the artificer seeks different material; indeed, he would make such material if he could.” (ST, I, 47, 2, reply 3)

Similarly, straight marriage features the relation of both bodily and spiritual yin-yang complementarity which gay marriage does not; a reason why they are relevantly different in order for society to recognize one and spurn the other.

Ethics and Ideology: Were the Bombings of Hiroshima and Nagasaki a War Crime?

Calling the bombings a war crime presupposes the legitimacy of limited war. The state of war is a socially accepted relation between person or group A and group B. It’s just that the moral rules — such as the international law — that specify the proper way of behaving given that relation were not followed, and so A’s atomic bombing B’s citizens was proscribed.

But what if we deny that war itself is legitimate? What if we affirm that the relation between A and B called “war” can no more be recognized than the relation called “slavery”? Again, we don’t have or try to work out the rules for proper treatment of slaves; why should there be rules for proper conduct of war?

Moreover, war is worse than slavery: a slave is at least alive and may have hope of escape. If we condemn slavery, then a fortiori, how much more war!

War is a way of life in (1) Stone Age autarky, (2) slave-owning society, and (3) feudalism, with each improvement of these social orders making war increasingly more limited. It was under feudalism that the law governing war-making came into its own and became best developed. The 20th century saw a reversion into total war, the consequences of which we are still dealing with. (4) Laissez-faire capitalism abolishes war as an institution.

It follows that if we do not consider war to be a legitimate state or relation between any two individuals or organizations, then the atomic bombing of the two cities can in no wise be called a “war crime.” Instead, under the ideology of capitalism, it is simply a crime, a mass murder of innocents of titanic proportions. The alleged war between “US” and “Japan” was nothing of the sort; instead, certain individuals, Smith, Jones, Robinson, etc. slaughtered each other for mysterious reasons and most unjustly.

At the same time, under the ideology of total war, everything is permissible, and there are no such things as crimes including war crimes.

Now slavery already presupposes the concept of property in things other than one’s body. The slaves, like merely material objects, such as weapons, forts, food, land, supply lines, etc., are tools of the slave-owner. Each slave-owner, in waging war against his peers, would want to conquer and plunder the enemy’s property. Moreover, such property, including the slaves, can be legitimately destroyed if doing so helps to secure victory. However, slavery is a step up from total war. A slave-owner would not want to cleanse an enemy slave-owner from the earth entirely. He wants the spoils of war for himself. Those include slaves. The result is that it is likely that rules will be developed to minimize property damage during a war that benefits no one. We thereby enter the realm of limited warfare, insofar as slaves are now somewhat protected from harm by law.

War becomes even more limited when we move up to feudalism in which workers graduate into tax-serfs. At this point, the tax lord’s peasants can no longer be considered solely his tools. True, they pay taxes to him, thereby financing his military campaigns. But they also live for themselves. They are partially free. They can even own property and run a business. The recognition of neutrality of these almost real human beings limits war still further.

Finally, capitalism does away with the legitimacy of war altogether. There are no proper rules for starting or waging war any more than rules for correct serial killing.

Feudalism Is Stable but Unsatisfactory

Our American economy is not capitalist but feudalist with a few capitalist features permitted by the ruling class.

Feudalism is characterized by two features: (1) taxation of everything the government can physically tax; and (2) treating people, adults, as children who need to be protected by the mighty overlords — the “state” — from themselves and from each other in all aspects of life.

Neither Mises nor even Rothbard, consumed as they were with fighting socialism, realized entirely the existence of a non-self-contradictory feudal order. Rothbard came very close, as is evident in this quote:

For agricultural countries, in a preindustrial era, can indeed peg along indefinitely on a subsistence level; despotic kings, nobles and states can tax the peasantry above subsistence level, and live elegantly off the surplus, while the peasants continue to toil for centuries at the bare minimum.

Such a system is profoundly immoral and exploitative, but it ‘works’ in the sense of being able to continue indefinitely…

Even here, Rothbard is not properly distinguishing between slavery and serfdom. Feudalism for the masses is not slavery but serfdom, a mighty improvement. A slave is not taxed at all; he is simply “nationalized,” 100% owned by the slave-master. An income tax may grab 30% of one’s income, but one still has the freedom to decide where to work, how hard, at what remuneration, or whether to work at all, unlike a slave.

Given our neo-feudalism, why did Mises believe that middle-of-the-road policy leads to socialism? If feudalism is a stable system, why should it devolve to a still more primitive order, viz., socialist slavery?

Mises had a particular reason: price controls. Their dynamics is such that, unless fully repealed, they tend to spread and paralyze the economy. But when the government sets prices, it effectively controls if not explicitly owns all capital goods, and society is by that very fact socialized.

There is a second and less clear-cut reason. Many people condemn capitalism on moral grounds. It is, they say, a cruel, exploitative, and unfair system. Their solution is to tax it so that people “pay their fair share” and regulate it in order to restrain capitalism and steer it into pro-social venues. Capitalism, they declare, is always in danger of falling apart because of its inner contradictions and needs constant government intervention (other than direct price controls, from inflation to subsidies to erecting barriers to entry to various industries to sin taxes to import quotas to …) in order to hobble along somehow.

It is this ideology, espoused equally by both the masses and the elites, that’s directly responsible for our present feudalism.

A small minority, however, see further. They, too, condemn capitalism for inequality, insecurity, etc. Capitalism for them is an abomination, just as for the majority of feudalists. But they hold that the massive and all-pervasive interventionism we observe all around us has obviously failed to stabilize, direct, and civilize capitalism. They propose that both capitalism and feudalism fail and recommend socialism instead.

It’s not that feudalism is by its essence self-contradictory but rather that it’s so clearly unsatisfactory that drives some smarter people toward the socialist ideology.

Original Position Through Economic Stages

The stages of economic development are each characterized by its own key social / ideological innovation.

Thus, the first innovation, the state, puts an end to autarkic total war. The isolated families come together to form a tribe. The state (perhaps exemplified by the entire community) is more powerful than any individual or identifiable subgroup within the tribe, and each is deterred through fear of punishment from inflicting unjust harms on fellow men. Tribal wars persist, but the foundation for peace is laid. Everyone is equal before the “law” and alive, though everyone is still equally a loser mired in abject poverty.

With slavery comes division of productive activities. In our primitive tribe there were no business firms of any sort; there were no economic differences between members at all. Now some men offer to their fellows to work for them as slaves, receiving subsistence — but still higher than autarkic — wages, thereby organizing an enterprise to produce something. They also may acquire the ability to capture and guard many unwilling slaves obtained through raids upon neighboring nations. Prisoners of wars between tribes are no longer murdered outright but are enslaved and put to work. Each slave-owner produces different things and trades with other slave-owners. Wealth creation for a few skyrockets.

The problem is that slave labor is deeply unproductive. The third innovation inaugurates the transition to feudalism and serfdom: division of labor. Each serf pays a tax to the tax-lord but is free to specialize and work wherever he pleases and accumulate as much wealth as he can, subject to the taxes. Each worker now has an incentive to be as productive and competent as he can. The great variety of individual talents and natural environments ensures that labor will be minutely divided within firms and factories. The spectacular efficiency of this device brings vastly increased prosperity to many.

(Note that division of productive activities is in between firms; division of labor is within firms. Entrepreneurs do not work but produce by arranging complementary divided factors including workers who do not produce but work.)

Capitalism is marked by the final improvement: freedom of entrepreneurship. With it, all productive and creative forces of society are finally fully unleashed to the enormous benefit of all members who now enjoy fast improvement in their standard of living, whatever (temporary) positions within social cooperation they hold.

This has bearing on Rawls’ theory of justice. Once again I wondered, where do the goods to be distributed equally in the original position come from, such that any deviation from this equality shall then be permitted only if it is in the interest of the worse-off?

Perhaps our stage 2, a tribe with a state qualifies. Let’s say every week the men venture out to hunt a mammoth whose meat is then divided equally among the households. How should this society evolve?

The answer has been suggested: it should implement the foregoing innovations step by step or even all at once. But each innovation greatly increases the speed at which the standard of living grows for some, and the last one, entrepreneurial capitalism, maximizes this speed for everyone, both worse-off, medium-off, and better-off.

Rawls’ fanatical and preposterous interventionism to “correct” capitalism simply is not in the picture according to this interpretation of the choices extant in the original position.

Quadriformities in Relations and Economic Systems

Consider the humble square of opposition in logic:

Square of opposition illustrating four human relations and social systems

Isn’t it interesting that it illustrates or at least has some minimal resemblance to the 4 human relations and the 4 general social systems?

The human relations, in the order of increasing dignity and sophistication, are:

  1. Hostility
  2. Equality
  3. Hierarchy
  4. Complementarity

The social systems in which each of these relations prevails (in the corresponding order) are:

  1. Autarky / total war
  2. Slavery
  3. Feudalism / serfdom
  4. Laissez-faire capitalism

So, AO would seem to indicate hostility: if one is true, then the other must be false (Xor).

AA is obviously equality and is totally boring (Equivalence).

AI is hierarchy: if A is true, then I is true; but not vice versa (Implication).

And in IO (let’s use the subcontraries for this one), the propositions are complementary: at least one I or O is true, and maybe both are (Or). Each does its proper work in conveying truth, but neither interferes with or determines the other.

NB: these groups of 4 are not actually true quadriformities, because a quadriformity is 4 complementary things that together make up a whole.

The relations themselves are not complementary but rather hierarchical, going from the most primitive and savage to the most sublime.

Forget About “Creating Jobs”

The political imperative of creating job is a pathetic remnant of a slave society. When humans first united into tribes, everyone was indeed a slave of the collective tribal state producing on a socialist basis. Loss of a “job” meant either that the entire tribe fell apart or exile from the tribe into the wilderness where one would probably starve or be eaten by wild beasts.

Under capitalism, things are much less dire. So, what, you lost your job? Find a new one! See if there is any unsatisfied human need for which other people have not yet made provisions and be the first to fill it. You’ll be rolling in money in no time.

To the extent that there is persistent unemployment, it is due to (1) government’s own interventions such as minimum wage, and to (2) the business cycle also caused by the state’s perverse monetary and banking regime. But aside from progressing to laissez-faire, the state cannot create any jobs, unless you count bureaucratic positions.

Entrepreneurs create new jobs by in the process destroying existing ones.