This essay is about libertarian thought. As background I will provide a brief summary of the conclusions of the first essay in this “Invisible Hand” series which examined the physical object nature of our money and some of the unfortunate consequences of that nature. I will be concise so this review won’t take long.
All money in history (and pre-history) has been considered to be or to represent physical objects such as a basket of grain, a cow, a coin, or a paper bill. Today most money is in computer accounts and though it zips around the world from account to account at almost the speed of light, it still is treated as if it were a physical object of some sort. Because we treat money as if it were a physical object, anything which is true of physical objects in general will also be true of money. This obvious point is ignored by economists and others who talk and write about money even though it is the most important truth about money. The importance of the physical object nature of money cannot be overstated. What follows are some of the consequences of that physical object nature.
First, money is like other physical objects in that it can be taken from its owner against that owner’s will; by force, fraud, or stealth and it can also be lost or destroyed. This means that you need to suspect almost everyone of trying to get your money by fair means or foul.
Second, money must be amoral because all inanimate physical objects are amoral. Even animals are amoral, in that they have neither an ethical sense nor morality, especially when they are used as commodity money. You can use your physical object money for anything, good or bad.
Third, the money supply is independent of the supply of goods and services for sale because the supply of one physical object is independent of the supply of other objects.
Fourth, money falsely simulates a zero-sum game in monetary transactions because the money gained by one party must be lost by some other party or parties. Money makes us think that other people can gain money at our expense and that we can only gain money at their expense. It makes us treat others as if they were competitors, rivals, opponents, or even enemies.
Fifth, money is almost impossible for a society or nation to control. In every nation that attempts to limit, regulate, or tax trade a black market comes to exist; and organized crime flourishes in all nations.
Sixth, money transactions are two-party interactions. Two-party interaction is inherently unstable because if one party gets an advantage in power such as having more money, the stronger party can use that power to gain still more advantages. This is particularly true of money. The old saying “them as has, gets” is true. Possession of money does make getting more money quite a lot easier. Naturally, the weaker party in such two-party interaction will eventually want to end the interaction. Thus the relationship is unstable.
Keeping that review in mind, let’s consider several issues in libertarian thought.
Wikipedia tells us that two of the many kinds of libertarian positions are consequentialist libertarianism and deontological libertarianism. The former supports a free market and private property rights only on the grounds that they bring about favorable consequences in prosperity and efficiency. The latter, also known as natural-rights libertarianism, considers the initiation of force and fraud to be inherently immoral regardless of the consequences.
Now I don’t see these two as being inherently in conflict on all points and issues. After all, morality and good consequences seem to me to go hand in hand. It seems to me that, in general, if people behave morally, the outcome will tend to be prosperity and efficiency. That should have these two kinds of libertarians in strong agreement on almost all occasions. But such an outcome is not usually possible in an economy using physical object money which we will refer to as POM
With a POM economy, wherein people can take money from others by force and fraud, and wherein one must have money to survive, one may logically be presented with a situation in which one must either use force and/or fraud… or starve. This is clearly a version of the lifeboat situation, so let’s drop it as unreasonable in that such circumstances should rarely occur.
Let’s consider the POM consequence of the false zero-sum game simulation in which people end up seeing each other as rivals, competitors, or even enemies. The phrase “all’s fair in love and war” seems to justify the use of force and fraud when one is “at war” with rivals. People will be acting against the best interests of others due to this simulation. What one considers to be initiation of force or fraud is an almost inevitable outcome of such a relationship. In other words, force and fraud will be ubiquitous. You will hardly be able to do anything in the economy without the threat of force and/or fraud. Consider the major U.S. banks’ enormous mortgage fraud that sent the world into a recession from which we still have not fully recovered. The fraud swindled people for trillions of dollars and generated bailouts for the banks in the hundreds of billions. Yet the policy makers in the banks have not suffered for their fraud and few if any of those involved have gone to jail, even at the lower levels. Fraud is business as usual. Then there’s organized crime to provide physical force. On TV we see groups of heavily armed citizens attempting, through the threat of force, to coerce people into accepting lack of limits on gun use. Whether their case is a good one or not they are using force. So who initiates force and fraud in such a situation? How far back in time do we have to go before we find the first force or fraud in trade? I contend that the force and fraud in trade started thousands of years ago with the development of commodity money, the first kinds of POM. Use of force in barter is outright robbery, not trade. And it’s really hard to use fraud in barter when the person you are trading with knows as much about the items being traded as you do. So in a POM economy one could quite reasonably contend that any instance of force or fraud was in reaction to previous force or fraud. My bank cheated me so it’s just self-defense if I cheat the bank. It’s all right for me to cheat on my taxes because the government is taking my money by force. You see, POM forces, tricks, entices, and lures us into committing force and fraud just to get along. How can you take care of your children if you don’t go along with the force and fraud of the business you were hired to work in? How can your business compete with other businesses which do use force and fraud if your business does not? What about businesses that influence the government to benefit themselves through government contracts and favorable legislation even above and beyond subsidies? How does an honest small business survive facing that? Sure, one would like a system which did not use either force or fraud but achieving such a system is impossible with a POM economy.
POM is also amoral so it can be used for the immoral initiation of force and fraud. POM is uncontrollable so it is able to be used to initiate force and fraud.
If we consider the only real alternative, a system using a non-POM, we have a system which cannot be used for force or fraud, because it is moral and is easily controllable, and which does everything humanly possible to generate prosperity and efficiency. The non-POM system is a rewards-only system. Non-POM being denied causes no suffering any more than being denied dessert causing suffering. So even denial of non-POM is not force or fraud. Non-POM rewards go only to those who increase the prosperity of others. So the entire distinction between consequentialist libertarianism and deontological libertarianism goes away with a non-POM economy. One gets both a moral system which does not involve force or fraud and a prosperous, efficient economy.
Next we compare and contrast libertarian anarchism with libertarian socialism. Wikipedia says and I QUOTE “Libertarian anarchism is a political philosophy which advocates the elimination of the state in favor of individual sovereignty, private property, and open markets. Anarcho-capitalists believe that in the absence of statute (law by decree or legislation), society would improve itself through the discipline of the free market (or what its proponents describe as a “voluntary society”). In an anarcho-capitalist society, law enforcement, courts, and all other security services would be operated by privately funded competitors rather than centrally through compulsory taxation.” UNQUOTE
Wikipedia’s definition of libertarian socialism is, and I QUOTE “a group of political philosophies that promote a non-hierarchical, non-bureaucratic society without private property in the means of production. Libertarian socialists believe in converting present-day private productive property into common, while retaining respect for personal property, based on occupancy and use. Libertarian socialism is opposed to coercive forms of social organization. It promotes free association in place of government and opposes the social relations of capitalism, such as wage labor.” UNQUOTE
It appears that the state is seen as the main source of force (and probably fraud as well) by the anarcho-capitalists. The libertarian socialists view the main source of force as being in private ownership of the means of production, and the authoritarian hierarchies which result from private ownership. Is there any reason why they cannot both be right? It seems to me that government, the state is certainly an authoritarian hierarchy which uses force. It also seems to me that force is in use by many private citizens. We all recognize that the state is not the only source of force in an economy and that authoritarian hierarchies which employ force exist in the economy. Both points of view are correct in identifying a part of the problem regarding the initiation of force and fraud. It’s just that they are focusing on different parts of the problem. From the point of view of the victim of initiation of force or fraud, does it really matter whether the perpetrator of the villainy was part of a corporation or a state employee? In both cases, the powerful party has injured the victim – or threatened to injure him physically or financially). In the vast majority of such cases, the law and the power of the state even support the perpetrator.
POM is heavily involved in both the establishment and maintenance of the state and of the large hierarchical organizations. POM is amoral and uncontrollable so it can be used by the state or any other large organization to initiate force or fraud. POM transactions are also two-party interactions. Therefore, the more powerful party can increase its relative power over the weaker party; thus we get large businesses (mega corporations) and powerful governments. These institutions, within their bureaucracies, also experience a concentration of power in the hands of a few such that the powerful gain more power over the state or the business. And the exercise of that power, because POM simulates a zero-sum game relationship, is coercive and authoritarian – because everyone else is seen as an enemy, rival, or competitor for the available rewards. Obey or suffer is the option presented to those who are weak. Also, those who are unwilling to use force and fraud to “get ahead” in business bureaucracy or the state bureaucracy do not rise to the top. The top is for those who have luck, talent; and a willingness to do anything, no matter how immoral or harmful to others. A history of any state or large, successful business organization will show this clearly. It’s the consequence of human nature in the context of a POM.
So both the libertarian anarchist and the libertarian socialist are correct regarding the nature of the problem: Let’s see how their proposed solutions fare.
The Anarcho-capitalist would use privately funded competitors to provide law enforcement, the courts, and all other security services. The problem with this is, once again, POM. Remember that consequence of the two-party interactions? That will always result in the number of competitors becoming very few: Actually just one, or a monopoly. That way they can coercively take money from the public. There’s no reason to think that human beings in an anarcho-capitalist economy would behave any differently than do human beings in all the other POM economies. When society falls apart as during the decline of Rome when the legions left, there is no government to provide those services. So a number of private groups step in to provide them. It was called the Dark Ages for a reason. Those groups fought among themselves until there was only one group for each area. They continued to squabble but then it was called war. Those groups became the state, the government, the prime initiator of force. POM will always make that happen because POM can be taken from its owner against the will of that owner. The reward is there for anyone with enough force or a slick enough fraud to do the trick; thus the temptation is overwhelming for enough people to make it inevitable that some people will yield to that temptation.
The libertarian socialist would abolish authoritarian institutions. Good luck with that. Since those institutions have considerable force at their disposal and no compunctions about using it, just how would one bring about their abolishment? Remember the problems with abolishing slavery? Well, abolishing government power and powerful corporations would make that look like a walk in the park. Just as in the case of the anarcho-capitalist’s elimination of the state, it would result in the state popping up again like a game of whack-a-mole; and they’d pop up for exactly the same reasons.
But just for the sake of this argument I’m having with myself, let’s say that those authoritarian institutions were abolished and did not pop up again. Think about running any large organization without a bureaucracy and without centralization. How can an orchestra coordinate its activity without a conductor? How can a football team succeed if each player gets to pick what play he will run at the snap of the ball? How can surgery be conducted successfully if no one is in charge? Try running an army or a major construction site without organization; it just doesn’t work. Now I’m not saying that the needed coordination of behavior requires coercion and the use of force. What I am saying is that someone needs to make decisions and others need to accept those directions if large projects or beautiful music are to be produced. The thing is that with POM, one expects resistance which leads to coercion. The idea is that cooperation will only occur if one has some means to punish those who do not obey. This is a POM relationship which comes from that zero-sum game simulation. So if that libertarian socialist economy came to exist in a POM economy, it would soon be using force to gain cooperation.
Now what about that common ownership of productive property or capital? Who makes decisions? Who is responsible for commonly owned capital goods? Where is responsibility placed? Whoever makes the decisions is in charge and has power. If the group votes for all decisions, that’s no responsibility; it is also rule by the ignorant. Then there’s the problem of timely decisions. If everyone owns the same capital goods or even if it’s just a sizable group, it’s going to be hard to make quick decisions. If you’ve sat in on a meeting that was supposed to decide some things, you may have noticed that it takes forever unless someone is “ram rodding” a decision down the throats of everyone else; but that would be the authoritarian relationship the libertarian socialists hate, so there would be great difficulty in making timely decisions. Next we come to consistency of decisions: Just as individuals change their minds, so does group sentiment. Consider your local legislature. They don’t have to be consistent… There’s no reason why they should even try to be consistent since the responsibility is diffused over so many people. If you’ve ever tried to participate in a project overseen by a committee you have had a taste of this inconsistency. In my experience with computer programming projects the committee keeps changing its collective mind, whatever that is, and adding or subtracting features. Common ownership of capital goods just doesn’t work. Of course one could call it ownership but give actual control of capital goods to some central authority to make the decisions. But that subverts and undercuts the whole point in common ownership. It’s like that stock I own in a large corporation. I am a part owner but I have no control anyone could detect in what that corporation does with its capital.
Once again we see that the bad features of our current systems are correctly identified by those two seemingly opposite points of view, and neither has a true solution.
Finally I would like to take up the non-aggression principle or NAP. Wikipedia defines this as QUOTE “a moral stance which asserts that aggression is inherently illegitimate. …Aggression, for the purposes of NAP, is defined as the initiation or threatening of violence against a person or legitimately owned property of another. Specifically, any unsolicited actions of others that physically affect an individual’s property or person, no matter if the result of those actions is damaging, beneficial, or neutral to the owner, are considered violent or aggressive when they are against the owner’s free will and interfere with his right to self-determination and the principle of self-ownership.” UNQUOTE
It seems to me that this is at the heart of almost all libertarian schools and philosophies. It may not be strongly emphasized by all libertarians but it appears to me that it would be difficult for any libertarian to argue against that principle. On that basis I would like next to present the relationship of POM and non-POM to that principle. I would like to demonstrate to everyone’s satisfaction that POM is inherently in conflict with the non-aggression principle and that non-POM brings about interaction and social structures which support, uphold, and encourage people to follow that principle.
But first I would like to emphasize that non-aggression is a principle, not an ethical system. It is a principle which could philosophically undergird an ethical system and which could be supported or operationalized by an ethical system. But being only a principle, we cannot expect it to bring about any improvement or change in human behaviors. That is the province of ethical systems. Ethical systems have a variety of means of bringing about particular behaviors. Some are formal and overt as in the legal system with its laws, police, courts, and prisons or a religion such as Christianity with its commandments and the offer of heaven or threat of hell; whereas some other systems are almost unnoticed, having no explicit rules or formal enforcement mechanism. Also, most formal systems emphasize punishments and coercion such as slavery or the Uniform Code of Military Justice, the informal systems more often use rewards and contexts to encourage certain behaviors.
With that as background I now take up POM. It turns out that POM is an ethical system. It does have a variety of means of bringing about particular behaviors. As I implied above, this POM ethical system is in direct conflict with the principle of non-aggression. That person who is most a victim of aggression is the slave. Not only is a slave subject to violent attacks for any reason or no reason at all, but the slave has no property rights. If you have read the earlier essay in this series about slavery, you will know and understand how and why POM brings about slavery in agricultural economies. I believe that the existence of slavery provides all the proof needed to make my case but I am not trying to debate here, rather, I am trying to increase understanding.
The first consequence of POM is that it can be taken from one against one’s will. Since money is generally a desirable thing to possess whether one owns it or not, that serves as a motive to take the POM of others whether they like it or not. The second consequence of POM is that it is amoral. Therefore, it can be used to commit immoral acts such as taking POM from its owner against that owner’s will. The fifth consequence is that the use of POM is uncontrollable and thus no ethical system can prevent its use to take POM from its owners against their will. So POM provides both motive and means for aggression. If enough people are tempted, some will yield to that temptation, and use force and/or fraud to gain POM.
The fourth consequence of POM is that it falsely simulates a zero-sum game interaction. This divides the members of an economy against one another. This means that with every POM transaction, one can reasonably expect that the other parties are trying to work against you as competitors, rivals, or even as enemies. So even when one is giving up some of one’s POM voluntarily, one finds oneself in a context in which one is dealing with opposition. Therefore, the behavior one evidences is defensive, cautious; expecting or fearing some deception. If you travel to a big city and go into certain neighborhoods at night you’ll rationally fear being robbed. The context provides the expectation of risk, of danger.
Finally, the sixth consequence of POM is that of two-party interactions. This inherent instability means that power becomes concentrated in the hands of a few. The use of power to compel the behavior of others is very tempting, especially considering that they are seen as opponents or enemies due to POM. Why else would labor and management be in conflict? Therefore those with power frequently exploit, coerce, compel, and otherwise use force and fraud to get their way.
It is rather obvious that POM is an (un)ethical system which encourages immoral behavior, behavior which violates the non-aggression principle. Almost all of law and the criminal justice system are focused on behaviors with respect to POM, attempting to control and limit the behavior of people using POM. But because POM’s influence is so much stronger than the law, organized crime flourishes, massive frauds are the rule, and violence is common – even though such things are supposedly against the law. The state uses coercion to get its way. Those who do the coercing are paid using POM. Those who order the coercion are doing so in order to affect POM. Taxation is made possible and motivated by POM. Invasions of personal privacy by the state are mostly motivated by POM.
In short, POM provides a context and a huge set of rewards and punishments which encourage aggression. Its means of bringing about aggressive behavior are obvious and subtle, overt and covert, moral and immoral. I submit that no libertarian “ideal society” is possible if that economy uses a POM. No ideal libertarian society can even be remotely approached if the economy uses a POM. Any efforts to further any libertarian progress will be opposed, obstructed, and thwarted by POM. Changes in the law advocated by libertarians will fall short of their objectives in reducing aggression. Elimination of the state will not end government; it will only change the set of people doing the governing. Elimination of one kind of taxes will merely find that some other form of legal extortion will extract money from the citizens. Big money interests will continue to rule; whether through government, or corporations, or contracts. POM is to blame and is responsible for the centuries of failure of libertarian efforts to end aggression.
That’s the dark side. The bright side is that non-POM is possible. Non-physical object money is also the foundation of a truly ethical system. It also affects human behavior in thousands of ways by means overt and covert, formal and informal, obvious and subtle. Let’s compare.
Non-POM cannot be taken from you against your will. That eliminates a source of fear and vulnerability. Non-POM is moral so it cannot be used for immoral ends. Non-POM is easily controlled, so it is not available to be used to commit aggression. That’s a major improvement via elimination of negative influence; but what about positive aspects?
Non-POM emphasizes the mutual interdependence of human beings. Therefore it encourages people to see one another as being friends, companions, cooperative, and helpful. Therefore, non-POM creates a set of contexts and conditions which discourage aggression. If one can win only if others win, one will not want to act aggressively toward them.
Non-POM transactions involve three parties, which makes them stable. Power to coerce never becomes concentrated in the hands of a few. Individuals may possess great power but that power is the power of cooperation, not the power of coercion. People in a non-POM economy cooperate and allow others to coordinate their behavior in order to make life better for others since that is how one earns non-POM.
The non-POM is based on true free markets, which emphasize private property. But property does not become concentrated in the hands of a few with non-POM. (See the essay on property for details.) With no concentration of the power to coerce, participants in the economy share decision making even as the libertarian socialists would like, while maintaining complete individual ownership and responsibility for capital goods.
The differences between the libertarian anarchists and the libertarian socialists would appear to be a product of the use of a POM in the world’s economies. With a non-POM the two schools have nothing to argue about. The libertarian anarchists get their individual sovereignty, private property, and open markets while the libertarian socialists get their non-hierarchical, non-bureaucratic society with no coercive forms of social organization. With non-POM the consequentialist libertarians get their productivity and efficiency while the deontological libertarians get the elimination of force and fraud.
In my examination of the various libertarian schools of thought I have yet to find any objective or goal advocated by any of those schools which the non-POM economic and ethical system does not provide. Non-POM is completely compatible with libertarian thought.