Let us address the problem of the real misery of vast numbers of men in the modern world. I’m talking about the prevalence of despair among citizens of modern societies, particularly male, but both wealthy and poor, successful, religious, nihilist, blue-collar, white-collar, healthy, unhealthy, really of all stripes. Unhappiness is a net drawing in all kinds, remarkably, all kinds who are secure against the miseries that attended the lives of their grandfathers. Why do suicide and alcoholism prevail to such a great extent in lands where starvation and exposure are all but eradicated? How is it that men have been saved from destruction, and ushered into a paradise of luxury and ease (relative to the hardships taken for granted a few generations ago) only to be cut down instead by an epidemic of self-destruction? How is it that every misfortune that afflicted our forefathers may be avoided, and a thousand satisfactions unavailable to them may be put before us, yet it is our generation’s lives that must be escaped in hard drink or shotgun blasts?
One idea would be that ease and luxury are unmanageable for men; that hardship is our natural environment, and we are lost without it, like salmon trying to fight their way upstream but finding no resisting current. This is to some extent true, in the sense that the satisfaction of contention is unique and essential to our life, but it is not unique to the struggles of our grandfathers, nor to the kind of hardships that are forced upon us by outside circumstance. Rather, in an individual life, we often see that escaping from a struggle with starvation actually opens the way for greater and more satisfying struggles, as of creative work or some personal, well-chosen mission. Depriving men of insecurity in their food supply or their shelter has not taken away from them the satisfaction of contending against obstacles, instead, it has set before them a choice of obstacles, whose overthrow will grant generally still greater satisfaction than the bare subsistence obtained through more basic labors in the face of a harsher world. By putting the struggles of Earth under men’s feet, we only place in their hands the struggles of the stars, if struggle is the desire of their hearts.
Another argument is roughly that modern man’s misery is not exceptional except in that it finds an outlet in such destructive escapism as drugs or video games or crime or what have you. This would be the Prohibitionist programme, hoping to take away those substitutes for happiness that a man may yet pursue, in the hopes that in their absence he will turn his hands toward more wholesome activities. I don’t think I need to emphasize the historical link between the original Prohibitionist movement and perhaps the darkest hour of Western industrial misery. It is tempting to mock the ladies who would take away a young man’s Xbox, on the grounds that it provides an artificial fix of adrenaline and such neurological satisfaction, apparently to the neglect of those activities he should be engaged in to naturally receive the same fix. It would be tempting to mock them even if they weren’t echoing the cry of their predecessors, who hoped that by taking away the beer of some workman ground to nothing in the gears of some Manchester factory, they would restore him to wholesome citizenship and productivity (and as a secondary consideration, to happiness). The factory grinds the man, the drug ungrinds his heart. Something stifles the youth’s impulse for accomplishment, the video game gives this impulse some inadequate vent. When we see a great mass of the images of God engaged in forgetting what they are, busily consuming a sad substitute for their natural joys, we should wonder what happened to those joys, and not how we may snatch away the substitute. In fact, we can learn a lot about why young men play video games by studying the reasons they “shouldn’t”, just as we could learn a lot about the rampant indulgences of the factory slums by looking at the case for their prohibition. In briefest form; the drunk workman was a public problem, and therefore his private behavior had to be placed under legal controls. The gamer is insufficiently adjusted and involved in modern life to satisfy the expectations of the reformer ladies, and therefore there should be censorship and limitation on the publication of this insidious art. In both cases, the man is to be regulated for failing to fit himself well into the collective. The monopoly on satisfaction must be maintained; the factory worker may not be allowed to forget for a night that his bare existence depends on conformity, and so the means of forgetfulness must be destroyed, lest he begin to despise his legitimate owner. The boy must not forget his duty to fit himself into a clique, to engage in rites of passage and obtain the approval of his social class, and so the alternative satisfaction must be destroyed, lest he think himself good enough when he has not made vice president.
In any case there is some root dissatisfaction that drives the use of drugs and substitutes in unhealthy directions, as has been demonstrated strongly by the Marxist objectors to our system. While utterly lost about solutions, they make a fine point about the presence of drugs in ancient (pre-Marxist and pre-regulation, I might add) societies, where even powerful narcotics existed and were prevalent, even entirely unconstrained by law, without those societies suffering anything like the epidemics of addiction and overdose we today endure. This is a rather blunt historical fact, that peyote did not afflict the Native Americans the way alcohol afflicted industrial England and America. And indeed one could hardly say alcohol afflicted the Native Americans until one could say they had already been severely afflicted by worse things, from the same source. First comes misery, then comes escapism, then comes the reformer, misplacing the blame.
One might put down modern misery to spiritual error or Sin or human nature or weakness or failure, or to any of one’s pet concerns; I know that the chiropractors will have immediately leaped up and shouted “Subluxation!” for what is wrong with modern man, and the Scientologists, “Thetins!” or some such drivel. Neither of these, nor any of the more realistic concerns about the fundamentally flawed nature of humanity can explain the error of this age; if our misery were a symptom of Sin itself, then the thirteenth century should have been full of both hunger and despair, for it certainly had its share of the deceitful heart of man. And were Subluxation or Thetins real things, as afflictions of all but an enlightened few, they would still fail to show what sets apart the modern man from the ancient who would envy him. In short, why is it only the man with the longest life expectancy who wonders why his life must be so long?
I will put forward three social attitudes in which I know men are trained, and of which I know any is sufficient to produce mass misery in the face of the best of circumstances. The first is the isolation of “labor” as the singular salable commodity produced by the average man. The second is the preference for immediate rewards over long-term ones, as previously understood. The third is the attachment of self-worth to one’s place in a hierarchy of men.
The three are (in our time) entangled in each other, so the treatment of these problems will perhaps not be so distinct as the problems themselves initially appear.
As to the first formula for misery, it is perhaps the most accepted, even forgotten principle of practical economic policy that labor and capital are not merely different types of inputs consumed in productive activity, but that these two names also represent two separate social groups. Capital and labor are treated simultaneously as things like flour and yeast, that is, as fundamentally different elements in the productive process, and as entities like Byzantium and Rome, that is, as the flags or labels of two definitively distinct collections of human beings. This is rather like artificially dividing people into “Flour Holders” and “Yeast Holders,” even under conditions which in no natural way prevent a man from having both some flour and some yeast, or one or the other, or neither, in his pantry. It is self-evident that there is no economic law preventing anyone from selling both labor and access to capital, nor from ownership of both or either, or of combining the two under his own control in order to sell the product of both. A man may own a workshop and yet work in it, an employee may own stock in the company he works for, an entrepreneur may rent his machinery to one enterprise and sell his expertise as labor to another, a teacher may draw a paycheck from one entity and collect dividends from another in which she owns stock. And similarly, a man may derive his entire livelihood from the sale of his unskilled labor, and society may so applaud this singular practice of income earning as to extinguish in its members the impulse to ever collect any capital income or profit, in spite of the myriad opportunities which naturally exist to do so. It may be that social conditions are such that the obvious upshot of the development of capital-intensive production is ignored, that is, that instead of every farm and workshop increasing its level of capitalization to take advantage of new technology, rather many many farmers and business operators abandon the practice of combining their labor with capital and instead sell their labor on the labor market to enterprises which have pursued capitalization. It may be, and it is, that the practice of ownership of tools and machines as well as labor may become a practice of an esoteric minority. Such a thing in the economic sphere is as laughable as if by some propaganda and persuasion the general public left off brushing their own teeth, and instead relied upon specialists for every facet of their dental health.
Yet the general public is to be excused in some degree for their abandonment of the practice of acquiring tools and capital of all kinds, for it has been the policy of government to favor labor and to punish ownership of capital in innumerable ways. The fundamental method by which capitalization of a small, long-term operation occurs, that of saving, has been perhaps the most ruthlessly discouraged and punished activity of the masses since John Maynard Keynes succeeded in capturing the imagination of the rulers of the world. Not only has the interest rate (that is, the price paid by borrowers to those who have restrained their spending sufficiently to save and ultimately to bank and lend their earnings) been openly driven to levels of absolute absurdity in their lowness, but the means by which this has been accomplished (the “open market transactions” of central banks) has produced innumerable copies of what savers have sacrificed to save. The savers have withheld their consumption of luxuries and improved necessities in order to accumulate savings accounts full of dollars. The central banks have not only acted to prevent these savings accounts from accruing any return, they have done so by simply printing the same “dollars” which the savers have saved. They have made sure that savings accounts, which are made full only by working and then not buying as many things as we can afford, have returns around one percent of one percent, and if that alone were not enough, the method by which they have done so is to fire up the printing presses and produce by fiat what we could only produce by hard work and restraint. Our savings, which we could only accumulate through a combination of sacrifice with further sacrifice, of providing labor, goods, and services to others while not allowing ourselves to enjoy the benefits of these same things, have been supplanted by the authority of the central bank to produce the same thing through mere action of the printing press. I must fix any number of electrical systems to obtain a thousand dollars. The Federal Reserve obtains the same thing by the wave of its hand. And it waves its hand freely, even wildly, in a time of crisis. The value of my work has been stolen from me, because i was fool enough to value my work in the same units of measure as those which the Federal Reserve has the authority to print at its own idiotic discretion.
And yet the practice of saving for the future, of planning, shepherding, restraining consumption, building up and preparing, in short, of thinking long-term, was for centuries the method by which a man or a family or an enterprise managed to achieve wealth. In the face of a government incapable of or unwilling to provide favoritism to your economic benefit, the only means by which you may manage to overcome the fundamental hardness of making a living is to invest the output of your labor in improving the means of (that is, the tools and resources used in) earning your livelihood. And the only means by which you could make such an investment is by withholding your hand from fully consuming the full value of your productive activity. You must produce, yes, but you must actually avoid consuming in order to accumulate. You must not spend your money on that new couch if you are to spend it on that new punch press, because once you have a better punch press, you will be able to buy a dozen couches. This is obvious to the rustic, to the farmer, to the businessman, to the entrepreneur, to the CEO, and to the Distributist. It is not obvious to the Keynesian economist, and where his influence prevails, it is not obvious to the worker, specifically because through Keynesian policies, this ancient practice of saving is robbed of its reward. Because the family which makes it a practice to save and shepherd their resources does not, after any number of generations, find itself in a better economic position than one which has spent wildly, the lesson of life is not learned. And the reason it is not learned is because of the lesson’s deliberate defeat by the central banks. If the fundamental mechanism by which saving rewards the saver is the interest rate, and the interest rate is radically lowered by the premeditated action of the Federal Reserve and the European Central Bank and the rest of them, then what these institutions have done is to put before the populace an altered version of the fable of the grasshopper and the ant, wherein some godlike power intervenes in favor of the grasshopper and makes sure that his fortunes are no worse than that of the ant. And that, given the nature of the human mind, is a lesson that will be learned. If the ant is better off than the grasshopper, man is tempted to argue that the ant in some way cheated, that she inherited her wealth, or lobbied for it, or what have you. But the second the grasshopper is seen enjoying both the rewards of his immediate and unrestrained consumption, and the rewards which we expected to attend the ant’s saving behavior, that alternative lesson is almost automatically entirely embraced. Men will very enthusiastically applaud anyone telling them that they should spend wildly, because that is the way to prosperity, just as any Leftist will happily tell you that “many leading economists” support their policy of increased spending. They would not be “leading” economists if they did not. They would not be the Nobel prize-winning, popularly-applauded, influencers of public policy they are if they were not the incomprehensible cheerleaders of whatever the politicians find politically expedient. When an activist finds that Ben Bernake or Paul Krugman is entirely in support of their wish for a billion dollars, they should not naively take that as an endorsement from scientific and disinterested economic authorities; they should regard it as it is: These economists applaud and defend those policies which have succeeded in earning votes, whether they benefit the public, impose costs on the public, or violate the fundamental rights of the public. It is enough for Ben Bernake that an establishment candidate wins the election. It is nothing to him if twenty million stoic savers have their lives’ work wiped out with the stroke of his pen. It is even more irrelevant to him if this action is perceived by a hundred million welfare-winners, and in a very concrete way, visible in the form of cell phones and plasma TV’s, translated into an incentive not to produce, but to get on welfare and to vote for more pro-welfare candidates. The science of economics is for hire, it seems, and the highest bidder (what a surprise) is the man in control of the mint. To paraphrase Henry Hazlitt: Economics is more afflicted by error than any other science, because it is the only science which can enrich the powerful more with error than with truth.
This deliberate destruction of the rewards of saving has been but an element (though it would likely be decisive, even in isolation) in the cultural convention of considering “labor” and “capital” not as two elements of production which any man may own and use to his advantage, but as the identifying marks of two permanent and separate social groups, as if for some men, it was impossible to lift a shovel, and for others, impossible to possess one. Indeed, this convention extends so far as to actually alter the definition of “capital” itself, to the disregard of the class of equipment typically owned by men working in skilled trades, and to the disregard of the technical knowledge (in theoretical work considered strictly as “capital” as distinct from the actual pushing, shoving, cutting, bending, etc. that this knowledge directs) possessed by any worker of any skill. Instead of regarding the electrician as an owner of both labor and capital, we combine the two elements of his economic power under the name “skilled labor” that we may more conveniently place him in one of Marx’s categories of men. This of course seems merely semantic, and it may be, but consider this: When a union campaigns for a minimum wage or a minimum of working conditions for anyone to be permitted to engage in the production of those goods produced by its members, what is immediately excluded is “unskilled labor.” It is immediately made impossible to replace one man’s well-equipped, skilled, swift, hands with a crowd of the unemployed, who make up for skill with numbers, and compete on price. If it takes three high-school dropouts to accomplish in a day what one experienced master can do in the same time, those three are only in a competitive position if they may bid less than one third the price (each) asked by the master craftsman. But then, high-school dropouts may well do such a thing, and may well need to do such a thing, especially where the master is asking $90.00/hour. Where he asks $27.00/hour, he is still in danger of being undersold, unless the minimum wage is enforced at or above $9.00/hour. In that case, no matter how badly those high-school dropouts need the work, it is impossible for them to undersell the “skilled worker”, and it is impossible for the consumer to reduce his cost. Is the minimum wage a pro-labor, or pro-capital and anti-labor policy in this case? Under our current popular headings of “labor” and “capital” the best we can say of the minimum wage is that is pro-one kind of labor, and anti-another kind of labor. If we consider labor and capital to be social groups, and divide them based on wealth itself (as people habitually do) then we have a struggle wherein skilled worker enjoys a position of privilege against the competition of the unskilled worker, who must necessarily accept a lower price to compete.
But if we analyze the contest based on the academic definitions of labor and capital, it becomes plain that the minimum wage (and workplace regulation in general, along with the activities of the major successful unions) is not to the advantage of “labor” at all, because it is exactly those who have no economic weapon except labor itself (those we have called “unskilled labor”) who are unemployed and hurt by these things. The skilled workers, the framers, carpenters, electricians, tilesetters, etc. among the specialty trades, those who benefit from such regulation (in the sense that unskilled competition is restrained) are distinguishable from unskilled labor specifically by the possession of those things which would classically be called “capital”: Their tools, equipment, and expertise. “Skilled labor” is merely a euphamism for owners of capital. It is merely a to disguise a mixed thing as a singular thing, to the disregard of its defining element. And it is no coincidence that these, among all the groups rather arbitrarily grouped under the heading of “labor”, have been most successful in gaining economic success. The “skilled laborer” has been successful in union negotiation, but he is also successful in direct negotiation. The IBEW is successful in demanding that an employer furnish restrooms and high wages for the same reason that a productive electrician is successful in telling a demanding supervisor to piss off or find a new electrician. The electrician brings with him far more than x units of labor, that homogeneous product which can be drawn from any able body among the unemployed, that is, a portion of the heterogeneous capital structure of the production process. He may be replaceable, but he is only replaceable by a part of the same kind, a part which cannot be replaced by any number of the general unemployed. And so the seller of this “skilled labor” (whether individual or union) is demanding a price not primarily for labor at all, but for access to capital: Specifically, the knowledge needed to direct the hands and tools correctly in the production process. And this knowledge we had always called a type of capital, except in politics.
Thus, even as the social group popularly identified as “labor” has grown to include the whole of what are called the lower and middle classes, its greatest successes (the victories of the great unions and the haphazard wealth of the skilled tradesmen) have been entirely the result of the economic power of capital to enrich. They have been the economic victories of the owners of capital, made possible by those exact advantages which that capital conferred. Those others, whom the defenders of “labor” still fervently hope to save (even as their policies actively destroy their chances, as in the minimum wage example above), those whose continuing misfortune perplexes the reformers, those identified under the sub-heading “unskilled”, are the only true examples of the economic condition of those whose whole economic power consists of “labor”. If one can only contribute the brute power of pushing, lifting, bending, greeting, scanning, counting, breaking, stocking, pressing, turning, and cranking, to the making of the things people wish to consume, that is, if one only has labor, specifically, identical to that of the millions upon millions of unemployed, and unmodified by equipment or expertise, then one is truly in a quandry which those attempting to help “labor” have not even begun to solve. The irony is that you are in that quandry because you are exactly the man you are trying to save; they have set out to save the seller of labor, they have only succeeded in further assisting the owner of capital, whom they mistook. The pure laborer is beyond the reach of their efforts.
Now i must clear up a misunderstanding which must very likely arise from my two last claims: First, that modern banking has actively assaulted and to a great extent destroyed the impulse to accumulate capital among the masses, and secondly, that the familiar realities of the plumber’s wealth or the union wage are victories of the capital whose destruction i had just finished lamenting. Is capital ownership among the masses destroyed, or not? The answer is, of course, “not entirely.” Where we do see the economic victory of those we conventionally consider among the working classes, it is indeed a result of the ownership of capital, this i admit freely. My answer is that we do not see such victory nearly as often as we should without the influence of modern banking and modern regulation. Where unions prevail, the destructive influence of regulation is often offset or even reversed (though, as i have mentioned, often to the detriment of consumers and alternative workers). This is an entirely inferior result to all trades, and all industries, not merely the unionized ones, being free from the arbitrary oppression of regulation (even when imperfectly reversed by the arbitrary privileges of union power). Indeed, those economic activities where “skilled labor” or small capital even exists are few in the extreme, when compared to the breadth of activity which goes on in an economy. Within the construction industry, there are specialties where the capital involved is spread among the innumerable experts at the front line. How many industries have anywhere within their ranks such an arrangement? How many instead bring products all the way from the mine to the consumer entirely without the touch of an expert hand? The electrician is an exception, and a positive exception. But his economic position is the one we should desire for everyone now considered in the class of “labor.” If we desire that everyone should be prosperous, we should desire that everyone should own his own capital. If we desire that nobody should be poor, we should desire that nobody should have nothing to offer but labor itself, nothing but the homogeneous output of ignorant, unequipped humanity. If we desire that a man should have more power over his fate than has an animal over its, our very first impulse should be to allow him to equip himself with those human things which first allowed humanity to overcome want: Productive property and knowledge, that is, with capital.