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non serviam #9
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Contents: Editor's Word
Ken Knudson: A Critique of Communism and
The Individualist Alternative (serial: 9)
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Editor's Word
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The saga continues ... The chapter Ken Knudson's article today,
"Capitalism: Freedom Perverted" is probably the most challenging
chapter to the readers of Non Serviam, and I have no doubt that many
will wish to comment. Such comments do, unless they are themselves
articles, belong on the list, nonserv. As Ken Knudson is presently
on vacation, it might take some time beforehe replies.
Happy reading, and I look forward to a good discussion.
Svein Olav
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Ken Knudson:
A Critique of Communism
and
The Individualist Alternative
(continued)
CAPITALISM: FREEDOM PERVERTED
"Permit me to issue and control the money of a
nation and I care not who makes its laws."
- Meyer A. Rothchild
Roosevelt, in blaming the depression of the 'thirties
on "heedless self-interest," played a cheap political trick
for which the world has been suffering ever since. The great
crash of 1929, far from being created by "free enterprise,"
was created by government interference in the free market.
The Federal Reserve Board had been artificially controlling
interest rates since 1913. The tax structure of the country
was set up in such a way as to encourage ridiculously risky
speculation in the stock market. "Protective tariffs"
destroyed anything that vaguely resembled a free market.
Immigration barriers prevented the free flow of the labour
market. Anti-trust laws threatened prosecution for charging
less than the competition ("intent to monopolise") and for
charging the same as the competition ("price fixing"), but
graciously permitted charging more than the competition
(commonly called "going out of business.") With all these
legislative restraints and controls, Roosevelt still had the
gall to blame the depression on the "free" market economy.
But what was his answer to the "ruthlessness" of freedom?
This is what he had to say on taking office in 1933:
"If we are to go forward, we must move as a trained and
loyal army willing to sacrifice to the good of a common
discipline, because without such discipline no progress is
made, no leadership becomes effective. We are, I know, ready
and willing to submit our lives and property to such
discipline because it makes possible a leadership which aims
at a larger good." [82]
We've been on that Keynesian road ever since. The
"larger good" has become larger and larger until today the
only cure the politicians come up with for the economy's
ills is more of the same poison which made it sick in the
first place. The rationale for such a policy was expressed
by G. D. H. Cole in 1933:
"If once a departure is made from the classical method of
letting all the factors [of the economy] alone - and we have
seen enough of that method [have we?] to be thoroughly
dissatisfied with it - it becomes necessary to control ALL
the factors...for interference with one, while the others
are left unregulated, is certain to result in a fatal lack
of balance in the working of the economic system.." [83] (My
emphasis)
- 40 -
Many people, on hearing the individualist critique of
governmental control of the economy, jump to the erroneous
conclusion that we believe in capitalism. I'm sorry to say
that some anarchists - who should know better - share this
common fallacy. In a letter to "Freedom" a few months ago I
tried to clear up this myth. Replying to an article by one
of its editors, I had this to say:
"First let me look at the term `anarcho-capitalist.' This,
it seems to me, is just an attempt to slander the
individualist-anarchists by using a supercharged word like
`capitalist' in much the same way as the word `anarchy' is
popularly used to mean chaos and disorder. No one to my
knowledge accepts the anarcho-capitalist label*, just as no
one up to the time of Proudhon's memoir on property in 1840
accepted the anarchist label. But, unlike Proudhon who could
call himself an anarchist by stripping the word of its
derogatory connotation and looking at its real MEANING, no
one can logically call himself an anarcho-capitalist for the
simple reason that it's a contradiction in terms: anarchists
seek the abolition of the state while capitalism is
inherently dependent upon the state. Without the state,
capitalism would inevitably fall, for capitalism rests on
the pillars of government privilege. Because of government a
privileged minority can monopolise land, limit credit,
restrict exchange, give idle capital the power to increase,
and, through interest, rent, profit, and taxes, rob
industrious labour of its products." [84]
Now most anarchists when they attack capitalism strike
it where it is strongest: in its advocacy of freedom. And
how paradoxical that is. Here we have the anarchists,
champions of freedom PAR EXCELLENCE, complaining about
freedom! How ridiculous, it seems to me, to find anarchists
attacking Mr. Heath for withdrawing government subsidies
from museums and children's milk programmes. When anarchists
start screaming for free museums, free milk, free subways,
free medical care, free education, etc., etc., they only
show their ignorance of what freedom really is. All these
"free" goodies which governments so graciously shower upon
--------------------
* I have since been informed that "the term `anarcho-
capitalist' is now in use in the USA - particularly amongst
those who contribute to the Los Angeles publication
`Libertarian Connection'." It seems to me that people
accepting such a label must do so primarily for its shock
value. Very few people like capitalists these days, and
those who do certainly don't like anarchists. What better
term could you find to offend everyone?
- 41 -
their subjects ultimately come from the recipients
themselves - in the form of taxes. Governments are very
clever at concealing just how large this sum actually is.
They speak of a billion pounds here and a few hundred
million dollars there. But what does a figure like
$229,232,000,000.00 (Nixon's proposed budget) actually mean
to the taxpayer? Virtually nothing. It's just a long string
of numbers preceded by a dollar sign. People have no
conception of numbers that size. But let me try to shed some
light on this figure by breaking it down into a number the
individual taxpayer can't help but understand: the average
annual cost per family. This is a number governments NEVER
talk about - for if they did, there would be a revolt which
would make the storming of the Bastille look like a Sunday
school picnic. Here's how to calculate it: you take the
government's annual budget and divide it by the population
of the country; then you multiply the result by the average
size of family (4.5 seems a reasonable number). Doing this
for the American case cited, we come to $4,800 (i.e. 2000
pounds per family per year!*). And that is just the FEDERAL
tax bite. State and local taxes (which primarily pay for
America's "free" education and "free" public highways) have
yet to be considered. I leave it as an exercise to the
British reader to see why their "welfare state" also prefers
to mask budgetary figures by using astronomical numbers.
One thing should be clear from this example: nothing is
for nothing. But the Santa Claus myth dies hard, even - or
should I say especially? - among anarchists. The only
encouraging sign to the contrary I have found in the
anarchist press of late was when Ian Sutherland complained
in the columns of "Freedom": "I object, strongly, to having
a large section of my `product', my contribution to society,
forcibly removed from me by a paternalistic state to
dispense to a fool with 10 kids." [85] Unfortunately, I
suspect that Mr Sutherland would only replace the
"paternalistic state" by the "paternalistic commune" - and
in so doing would still end up supporting those 10 kids. My
suspicions were nourished by what he said in the very next
paragraph about "laissez faire" anarchists: "perhaps they
--------------------
* I am usually quite conservative in my use of
exclamation marks. When I used this example in a recent
letter to "Freedom", the editors saw fit to insert one where
I had not. In keeping with their precedent, I will do
likewise.
- 42 -
should join the Powellites." Perhaps Mr Sutherland should
learn what laissez faire means.
Laissez faire is a term coined by the French
physiocrats during the eighteenth century. John Stuart Mill
brought it into popular English usage with the publication
in 1848 of his "Principles of Political Economy," where he
examined the arguments for and against government
intervention in the economy. The "con" side of the argument
he called laissez faire. "The principle of `laissez faire'
in economics calls for perfect freedom in production;
distribution of the returns (or profit) to the factors of
production according to the productivity of each; and
finally, markets in which prices are determined by the free
interplay of forces that satisfy buyers and sellers." [86] I
find it difficult to see how any advocate of freedom could
possibly object to a doctrine like this one. Unfortunately,
what happened in the 19th century was that a handful of
capitalists, who were anything but believers if freedom,
picked up this nice sounding catch phrase and decided to
"improve" upon it. These "improvements" left them with the
freedom to exploit labour but took away labour's freedom to
exploit capital. These capitalists, in perverting the
original meaning of laissez faire, struck a blow against
freedom from which it still suffers to this day. The
capitalist who advocates laissez faire is a hypocrite. If he
really believed in freedom, he could not possibly condone
the greatest invader of freedom known to man: government.
The capitalist necessarily relies on government to protect
his privileged RIGHTS. Let us look at the foremost advocate
of capitalism today, Ayn Rand. Her book "Capitalism: The
Unknown Ideal" has two appendices. The first is on "Man's
Rights" where she say, "INDIVIDUAL RIGHTS ARE THE MEANS OF
SUBORDINATING SOCIETY TO MORAL LAW." [87] (Her emphasis)
Once again we are back to "rights" and "morals" which
Stirner so strongly warned us about. And where does this
lead us? Directly to Appendix Two, "The Nature of
Government," where she says that government is "necessary"
because "men need an institution charged with the task of
protecting [you guessed it] their rights." [88] Let's see
what some of these precious rights are:
I. Chapter 11 of Miss Rand's book is devoted to a
defence of patent and copyright laws. In it she calls upon
government to "certify the origination of an idea and
protect its owner's exclusive right to use and disposal."
[89] Realising the absurdity of PERPETUAL property in ideas
("consider what would happen if, in producing an automobile,
we had to pay royalties to the descendants of all the
inventors involved, starting with the inventor of the wheel
- 43 -
and on up." [90]), she goes into considerable mental
acrobatics to justify intellectual property for a LIMITED
time. But by so doing, she only succeeds in arousing our
suspicion of her motives, for it seems strange that a mere
lapse of time should negate something so precious as a man's
"right" to his property. Admitting that "a patented
invention often tends to hamper or restrict further research
and development in a given area of science [91], our
champion of the unhampered economy nevertheless manages to
justify governmental "protection" to secure the inventor's
"rights." As for copyrights, our millionaire author thinks
"the most rational" length of time for this governmental
protection would be "for the lifetime of the author and
fifty years thereafter." [92] How does she justify all this?
The way she justifies most of her inane arguments - by
quoting herself: "Why should Rearden be the only one
permitted to manufacture Rearden Metal?" [93] Why indeed?
II. Capitalists are fond of proclaiming the "rights" of
private property. One of their favourite property rights is
the right to own land without actually occupying it. The
only way this can possibly be done is, once again, by
government protection of legal pieces of paper called
"titles" and "deeds." Without these scraps of paper, vast
stretches of vacant land would be open to those who could
use them and exorbitant rent could no longer be extracted
from the non-owning user as tribute to the non-using owner.
There is much talk these days of a "population
explosion." It is claimed that land is becoming more and
more scarce and that by the year such and such there will be
38.2 people per square inch of land. But just how scarce is
land? If all the world's land were divided up equally, every
individual would have more than ten acres apiece. Even
"crowded" islands like Britain and Japan have more than an
acre per person on average. [94] When you consider how few
people actually own any of this land, these figures seem
incredible. It's no wonder then that the absentee landlord
is a strong believer in property rights. Without them his
vulnerable land might actually be used to the advantage of
the user.
III. Capitalists have always been great believers in
the sovereign "rights" of nations. Ayn Rand, for example,
thinks it perfectly consistent with her brand of freedom
that the United States government should tax the people
within its borders to support an army which costs tens of
billions of dollars each year. It is true that Miss Rand
opposes the war in Vietnam. But why? Because "IT DOES NOT
SERVE ANY NATIONAL INTEREST OF THE UNITED STATES." [95] (Her
emphasis) So we see that our advocate of "limited
- 44 -
government" wouldn't go so far as to limit its strongest
arm: the military. Eighty billion dollars a year for
national "defence" doesn't seem to phase her in the least -
in fact, she would like to add on a few billion more to make
"an army career comparable to the standards of the civilian
labour market." [96]
As every anarchist knows, a frontier is nothing more
than an imaginary line drawn by a group of men with vested
interests on their side of the line. That "nations" should
exist is an absurdity. That a highwayman (in the uniform of
a customs official) should rob people as they cross these
imaginary lines and turn back others who haven't the proper
pieces of paper is an obscenity too indecent to relate here
- there may be children reading. But if there are children
reading, perhaps they can enlighten their elders about the
obvious - as they did when the emperor went out in his "new"
clothes. The nationalists of the world are strutting about
without a stitch of reason on. Can only a child see this?
IV. The cruelest "right" - and the one least understood
today - is the exclusive right of governments to issue
money. There was a time about a hundred years ago when
nearly everyone was aware of the currency question. For
several decades in the United States it was THE political
issue. Whole political parties formed around it (e.g. the
Greenback and Populist parties). William Jennings Bryan, the
three-time Democratic candidate for the presidency, rose to
fame with his "easy money" speeches; next to Lincoln's
Gettysburg address, his "cross of gold" speech is probably
the best-known public oration of 19th century America. Yet
today virtually everyone accepts the currency question as
settled. Governments issue the money people use and they
never give it a second thought - it's just there, like the
sun and the moon.
The capitalist is vitally interested in the
government's exclusive right to issue money. The capitalist
is, by definition, the holder of capital; and the
government, by making only a certain type of capital (namely
gold) the legal basis of all money, gives to the capitalist
a monopoly power to compel all holders of property other
than the kind thus privileged, as well as all non-
proprietors, to pay tribute to the capitalist for the use of
a circulating medium and instrument of credit which is
absolutely necessary to carry out commerce and reap the
benefits of the division of labour. A crude example of how
this system works is given by the Angolan "native tax." The
Portuguese whites in Angola found it difficult to get black
labour for their coffee plantations, so they struck upon a
rather ingenious scheme: tax the natives and the natives,
- 45 -
having to pay their tax in MONEY, would be forced to sell
their labour to the only people who could give it to them -
the whiteman. [97]
The same thing goes on today on a more sophisticated
level in our more "civilised" societies. The worker needs
money to carry out the business of everyday life. He needs
food, he needs housing, he needs clothing. To get these
things he needs MONEY. And to get money he has to sell the
only thing he's got: his labour. Since he MUST sell his
labour, he is put into a very bad bargaining position with
the buyers of labour: the capitalists. This is how the
capitalist grows rich. He buys labour in a cheap market and
sells his products back to the worker in a dear one. This is
what Marx called the "surplus value theory" of labour. His
analysis (at least here) was right; his solution to the
problem was wrong.
The way Marx saw out of this trap was to abolish money.
The worker would then get the equivalent of his labour by
pooling his products with other workers and taking out what
he needed. I've already exposed the weak points of this
theory. What is the individualist alternative?
-----
REFERENCES
82. Quoted from Charles A. Reich's article in "The New
Yorker" magazine, "The Greening of American," September 26,
1970.
83. G. D. H. Cole, "What Everybody Wants To Know About
Money" (London: Victor Gollancz Ltd., 1933), pp. 526-7.
84. Ken Knudson, "Letters", "Freedom," November 14, 1970.
85. Ian S. Sutherland, "Doomsday & After," "Freedom,"
February 27, 1971.
86. "Laissez Faire," "Encyclopaedia Britannica," 1965, vol.
XIII, p. 606.
87. Ayn Rand, "Capitalism: The Unknown Ideal" (New York:
Signet Books, 1967), p 320.
88. Ibid., p. 331.
89. Ibid., p. 131.
90. Ibid., pp. 131-2.
91. Ibid., pp. 132-3.
92. Ibid., p, 132.
93. Ibid., p. 134.
94. "Geographical Summaries: Area and Population,"
Encyclopaedia Britannica Atlas," 1965, p. 199.
95. Rand, op. cit., p. 224.
96. Ibid., p. 229.
97. Douglas Marchant, "Angola," "Anarchy 112," June, 1970,
p. 184.
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- POSITIVISM, n: A philosophy that denies our knowledge of the Real *
- and affirms our ignorance of the Apparent. Its *
- longest exponent is Comte, its broadest Mill and *
- its thickest Spencer. *
- *
- "The Devil's Dictionary", Ambrose Bierce *
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