The exploiters

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What does it mean for a firm to have a positive profit? People think of it as some sort of evidence of exploitation for a firm to take $10.00 worth of parts and pay a person $10.00 to assemble them, into a device that a consumer will buy for $40.00 (and boast about his purchase). But of course there is no injustice in this, as long as the person who gathered those parts and sold them for $10.00 voluntarily chose to make that trade, the employee who assembled voluntarily chose to apply for and not quit that job, and the consumer willingly handed over the $40.00 in exchange for the device he wanted more than the money. AND if no alternatives were destroyed, then not a single one of the people in this transaction is worse off than he otherwise would have been.

i anticipate the objection: “Why can’t the consumer get the device for $20.00? Or why can’t the laborer be paid $30.00? Isn’t the rest of the firm just an exploiter, collecting a rent while offering no contribution?” Continue reading

“He helps those who help themselves.”

This title has been used as an explanation, a rationalization, and a taunt. We recognize that somehow, in spite of God’s ultimate power and unstoppable purpose, there is some sort of reason for Man to put forth effort. We have to reconcile the apparent contradiction between the insignificance of human action’s power over the universe (when compared to that of God, or fate, or “historical forces”) with the very practical fact that it matters whether we show up for work, whether we get the crops in before the rains, whether our rifles are ready when the wolves or bandits come.

At least, we have to reconcile it if we believe in God. If it’s all historical inevitability, then it’s not our actions at all producing those outcomes; it’s our inevitable actions playing out as inevitable consequences of forces unrelated to our intentions. In that case, the question is resolved very simply: Human action doesn’t exist, and the grand force determines all things, including our delusion that outcomes somehow “depend” on us. While whether or not we do some deed which forms part of a chain of causation, we are (in this view) in error in thinking there was ever any question of whether we would perform the act. Our distinction between successful and unsuccessful action would be false in this view, since all the parts of the machine only perform according to their own nature, neither exceeding nor falling short of their potential.

This view is not only implicit in the Marxist view of history (etc.) but also has an odd little foothold in Christian thought, Continue reading

The Moral vs. the Practical

“Bite off a little piece.”

There’s a question in the background of modern policy disputes that was perhaps not present in Chesterton’s time, and the fact that what was, for the early Distributists, a fixed and even undisputed matter, is now a divisive doctrine (though not one people bring up) confuses our reading of the earlier works.

To put it shortly, Chesterton never expected that a morally evil act or a directly unjust policy would fail to harm. And, what is equally critical, he NEVER considered revising his tests of moral good and evil or his standards of justice and injustice because some confiscation or intrusion yielded (apparently) good practical results. This of course is directly contrary to the notion of “Social Justice,” which holds that the use of police power is justified by the importance of the social aims, not by some moral standard as such. The crusader for Social Justice does not seek out the evildoer who impoverished the poor man by his unjust actions, he simply identifies a class from whom he can confiscate funds for his noble purpose. The people at whom the law is aimed cannot defend themselves even by proving their own innocence; it is not a matter of restoring what has been stolen, or else there would be some sort of test of responsibility, an examination of actions. Instead, there is only an examination of finances; the man who actually robs the poor with imminent domain is in no way separated from the man who helps them with job offers. The man who is in poverty because he sold everything for drugs is to be treated no differently than the man who has been literally deprived of his livelihood by a licensing board, or thrown out of his home or shop by some agency. The first step toward “Social Justice” is the abandonment of Justice as a test of where police power may be used. And this very step is the one Chesterton never took.

Chesterton did indeed advocate land reform, a direct, legal confiscation of property from the rich and its distribution among the poor. “There, it’s settled. Welfare is consistent with Distributism.” Well, no, it isn’t. In the forgotten system where the weapons of Justice are just that, where the police and the courts, the machinery of confiscation, imprisonment, and coercion, are recognized as weighty and terrible powers, it is clear that to retask these weapons to some purpose other than Justice is a horrible abuse. The Law can only work two things: Justice, or Injustice. No matter how benign or even noble may be some aim, if it is not itself a matter of moral Justice, to use a tool like force to achieve it is a grave evil. To confiscate back what has been stolen may be just; to confiscate what was justly produced can only be to steal.

The reason Chesterton, who believed in Justice, sounds so similar on topics like land reform to modern reformers, who believe instead in “Social Justice” and thus dismiss the above paragraph out of hand, is simply that direct instances of theft of land and deliberate impoverishment of the public by policy were a blatantly visible reality in his time. The enormous travesties of the Enclosures were before his eyes in the way that TARP and Quantitative Easing are before ours (or should be). For the “good of the whole”, the legislatures and authorities of our countries have acted to grant truly shocking privileges of wealth to a select few at the expense of the many. Now, many historians would question the causal relationship between Manchester poverty and the Enclosures (and the Corn Laws, and the Bank of England, etc.) and put the cause down as some other demographic factor. Chesterton never did. In his mind, the Moral evil produced the public misfortune, but it was the Moral fault that gave license to use confiscation. If the same conditions had been produced by blight or earthquake, this would have produced no cause for Land Reform in the coercive sense. This of course is the opposite test applied by the modern reformer, who merely seizes at random, taking from one “class” to help another. Nevermind that the classes involved necessarily include many non-thieves and many non-victims. The goal is not to restore what has been wrongly done, but to build, from scratch and by force, an outcome that is preferable in the mind of the reformer. And so, the reformer says the exact same words that Chesterton said, about taking land from these people and giving it to those people. The reformer forms the same sounds, but he thinks opposite thoughts, for he says of all property what Chesterton said about stolen property. Chesterton said that the lands that the police had seized and handed over to the families then governing England, should be seized right back and given back to those from whose hands they were taken, or their heirs. Because property is so sacred and inviolable, it was a matter of Justice, of law, a matter well warranting swords and firearms to accomplish, to restore the stolen goods to the rightful owners. In contrast, the reformer thinks that property is so trivial, so artificial, such a petty little impediment to the perfection of the race (or whatever his goal is) that any resistance to his seizing and redistributing it any way he likes is a recalcitrant barbarism. And so these two men, who are enemies on the matter of property as Heaven is the enemy of Hell, end up, because of this modern confusion, saying together “We support land reform” when what they mean couldn’t be more different.

Distributism part 2

I missed a thing or two in my last post about Distributism, in order to conclude on a hard hit. I’ll sum the whole issue up in a few words, even though in my experience that’s the least effective way to make yourself clear; I have no idea why, since most of the time I wish long explanations were so condensed. To each his own, I suppose. Here’s the few words: The efficiency advantages of the giant corporations, and thus, their “natural” place in the market, is a false generalization. The reason for this is that the actual production methods that benefit from scale are relatively few, compared to those which only benefit from scale through regulatory and tax advantages. As a consequence, many, many huge organizations are really wasteful superstructure attached to a relatively small core of productive activity.

We are familiar to the comparisons between Distributist production and Capitalist production; the dozens of workshops versus the singular factory, the kitchen of every home versus the commercial kitchen, the five hundred farms of three acres each versus the single farm of fifteen hundred. But what if these aren’t the things we should be comparing? When we compare workshops and factories, we are not, almost by definition, comparing complete enterprises. We are comparing the productive cores of two enterprises, which is a very different thing when you consider the resources which are consumed in the other activities of the firm that owns that factory. Narrowing one’s focus to look exclusively at one of GM’s factories is to look exclusively at the most efficient part of the operation, and to disregard major forms of inefficiency, even those inherent even to the factory itself. Continue reading

Bitter, Free-Market Distributism [RAMBLES]

i used to wonder, when i stood in line at a permitting office (to understand what this is like for a Libertarian, try to imagine being a Puritan, somehow compelled to stand amid the crowd readying the sacrifice to Baal) why any eye of any official in the place remained unblackened. Or at least why such business was not conducted through bulletproof glass, to prevent every contractor or foreman from plucking every officer of interference from behind the counter and beating him senseless. Why was it possible for these officials, who had no more right to choose a wire gauge or outlet spacing for me than i have right to choose a wife for you, to get out three words of their interference or “correction” without having their interfering teeth kicked straight down their interfering throats? Why was i alone (or so nearly alone) in absolute rage?

The answer is startlingly simple. If i may speak for the worst kind of contractor, who has some skill in navigating the regulatory thicket, who knows when to pay fees, knows ahead of time which fees to pay, knows who to give donuts, knows whose boss to call…When he hears the official say, “That will be $387.00 non-refundable to check the plans for this shed.” He does not hear how unnecessarily difficult and costly his work is being made for him, he hears how impossible it is being made for others. $387.00 is a small price to pay for monopoly. His heart may well leap at the very absurdity of a regulatory requirement, as he laughs to himself, “Sure, a crew of illegal immigrants could do this job for half the price, but let’s see them perform an environmental impact study!” The more burdensome are the regulatory requirements, and the more unlike they are to production itself, the more viable competitors become non-viable.

‘”Here, I have some apples, would you like to buy them?” “Yes, thank you.” THAT’S HOW HARD IT SHOULD BE TO START A BUSINESS IN THIS COUNTRY.
-Ron Swanson

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The formula for unhappiness

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. Continue reading

Labor intensity

I was asked to explain something I asserted in How to mow the lawn, regarding the tendency of infinite investment growth to produce either unemployment or overwork or a mixture of the two. Now this is miles away from mainstream thought, and indeed I have not fully explored the speculation myself, but the basic concept is this: In the geometric growth model we have a population that grows at an ever-increasing (compounding) rate, and we attempt to overcome the ever-increasing needs of that populace through ever-increasing production. We take advantage of the compounding nature of economic growth to make sure it follows the same pattern as population, by continually investing a portion of our output in improving our ability to produce. This is really the basis of economic growth at all: Rather than putting 100% of our abilities towards making what we consume today, we dedicate say, 10% to improved machines and methods, which will make tomorrow’s production more abundant than today’s. By partially restraining our appetite for consumption and properly directing what we have saved into real improvement of means, we will enable ourselves to produce more. If we repeat this process each year or each generation, we can expect that next year (since we have increased our productive capacity) the 10% of our output which we invest is a bigger total investment than was this year’s. To take Keynes’s metaphor, we are eating a smaller portion of the pie, in order to make the pie grow larger, and by continuing in this practice, we can expect that the pie eventually becomes so large that the portion which we consume is actually larger than the entire pie with which we started. By investing a roughly fixed percentage of each year’s output in improving next year’s methods, we create an economy of compounding growth.

So once this has been achieved (a fixed practice of continuous, substantial investment) we have on the chart two geometric curves, continually growing ever steeper according to their rate of growth, and as long as our level of investment is sufficiently high, the curve on top will forever be production, while population is always a little shallower, a little lower, and always falling a little behind. In fact, the whole idea is that production must grow faster than does population so that quality of life may continuously improve. If the curves are actually parallel (the rate of growth in production and population are identical) quality of life must actually decline in the sense that the per-capita production is actually declining. This is reflected visually in the fact that the curves always stay the same vertical distance apart, but the that distance becomes more and more insignificant compared the enormity of the totals. What I’m getting at is that the growth of production must be on a trajectory to pull ahead of population, not track it, for the outcome to seem desirable. Per-capita production must increase (obviously) to achieve our goal of appreciable prosperity. If population is to grow on an infinite compounding course, production simply must compound even more aggressively to satisfy this.

[None of the above is inevitable. What I am saying is merely that given the goals of an infinite growth policy, the only apparent or real success of such a policy will consist of production growth accelerating ahead of population growth. This may not be possible, the investments may yield declining returns, production may be misallocated, production growth may hit absolute limits, etc. I merely claim that the infinite growth policy, if it ever succeeds or appears to succeed, will inevitably involve this: The rate of growth in production must exceed the rate of growth in population, because per-capita production must continually increase in order for economic policy to be of visible benefit to the consumer. Each generation must be richer, and not merely larger at the same level of wealth, for the public to view policy as a success.]

Along with the Austrians, I don’t approve of the use of mathematics to attempt to describe human action, but since I’m illustrating a concept of which I don’t approve, I’m going to include some graphs to illustrate what I’m getting at.MalthusHere we have the Malthusian view of the relationship between population and output (production), population being the red line, and projected output being the blue line. Their crossing represents the Malthusian “crisis point,” where population growth overtakes the limits of production, and scarcity and starvation take over. In this vision, the red line would not actually continue up as projected, but instead the population would be limited by the crisis, through famine and other destructive events resulting from the failure of the economy to provide for the vast numbers of people.

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