Well, no one commented on my earlier post – but I’ve got The Power…I know people have read it (the website tells me how many people viewed it – so, there!). My presumption is that the lack of comments means my argument is unanswerable…or, so unclear that no one can make heads nor tails of it. If that is the case, then allow me to expand on it.
Conservatives love Capitalism and hate Socialism. Our Progressives hate Capitalism and love Socialism. This, of itself, is unremarkable. But I think that we really need to get down a definition of what we mean by the words. For myself, I use both words in a pejorative sense. Both Conservatives and Progressives work on the mistaken notion that Capitalism is the opposite of Socialism when, really, it is just two words for the same thing. And that same thing is that a few people will be in control of the vast majority of Capital. The real argument among Capitalists and Socialists is over who gets to be in charge…and, of late, there really hasn’t been much of an argument because both the Capitalists and the Socialist are continually getting closer to being on the same page, as thinkers well more than 100 years ago figured they eventually would. Bottom line, neither a Capitalist nor a Socialist wants you, dear citizen, to be in control of any substantial amount of Capital – certainly not enough of it for you to be independent of the varied ministrations of the Capitalists and the Socialists.
Capital is, of course, just another word for money – the item we use as a store of the non-tangible wealth we have (tangible wealth is things like land, cars, the shirt on your back, etc). These days the store of our wealth is little slips of paper and coins made out of distinctly non-precious metals. Used to be, the store of our wealth was gold, silver and copper coins and paper notes backed up by same. Money started to be used in ancient times because it was often inconvenient to trade tangible wealth for tangible wealth. If you wanted someone to expend their tangible wealth (ie, their labor) in your vineyards you could pay them in the form of a loaf of bread and a joint of meat (bits of tangible wealth), but it was much easier if you just paid them in some silver coins (a different sort of bit of tangible wealth – but much smaller and easier to carry than a loaf of bread and a joint of meat…less messy, too) and then they could go out and buy whatever they wanted – which might well be a loaf of bread and a joint of meat, but it might also be a new pair of sandals or a jug of wine or what have you. The bottom line was that tangible wealth was exchanged for tangible wealth, but money was just used as a more convenient way of exchanging wealth for wealth. Gold, silver and copper were used at the medium because they were things of intrinsic value – and a small amount of any of them was worth quite a bit and they held their value over time. That is very, very important.
The Roman Aureus was a gold coin of about 8 grams – in today’s price, worth about $406.40. Trying to figure out just what the cost of thing was 2,000 years ago is difficult but if you dropped the amount of gold in an Aureus into the hand of an ancient Roman or dropped it into the hand of a modern American, both would be equally delighted; for both the ancient Roman and the modern American, 8 grams of gold represents something of high value. Gold is valuable – it always has been, and always will be. And it is stable in it’s value. But, you say, why has gold gone up in price so much over the past few years? Good question. The answer is that it hasn’t. The actuality is that the value of the money used to buy gold has gone down. Remember, these days we use slips of paper backed by nothing in order to store our wealth which has not yet been turned into something tangible. Slips of paper are nice, but if you’ve got wealth and governments are printing up lots and lots of slips of paper, then you’d be wise to convert your slips of paper into something which is going to valuable even when the government is done printing. As world wide central banks have printed up buckets of money over the past few years, people have been exchanging the slips of paper for gold and those who have gold are only willing to part with their gold for quite a large number of slips of paper.
Suppose back in 1995 you asked me to rake your yard and the price you offered was $10 and I accepted your offer. Yard raked, you hand over the $10. Given that we live in a modern society, Uncle Sam wants his cut so I wind up in the end with $8 in exchange for my labor (for my expended wealth, you see?). Ok. Everyone’s happy. I go home, put the $8 in a tin box and bury it in my backyard. 20 years later, I go to retrieve that $8…but some how or another, that $8 has now become a mere $5.14! What happened? Where is my $2.86 that I exchanged my labor for? It has been inflated away – the people in charge of printing up our slips of paper have it as their goal that there shall be annual inflation (their target is 2% per year). Why do we do this? Officially, because inflation works to boost economic activity. Actually, it is done because large banks don’t like to go bust.
The Federal Reserve was created in 1913 precisely for this purpose – to provide a place where banks could get money at need when their investments go south. The genesis of it was the Panic of 1907 – for a variety of reasons, the major financial institutions in the United States had got themselves into a jam where they owed more money than they could pay. The temporary solution reached in a rather ad-hoc manner was that the banks, themselves, would print up slips of paper promising their creditors that, eventually, they’d come up with real money (everyone bought into it because they had to – it was that or a lot of very rich people were going to be wiped out financially). The permanent solution was the Federal Reserve – which has the power to print up money in any desired quantity and lend it to banks…and some times central banks like the Federal Reserve de-facto end up paying the banks to borrow the money.
So, why should we care if banks go bust? That is a harder question to answer – but the basic answer provided by the Bankers is that if we allowed banks to go bust, the world will end, or some such horror. I suspect they might be over-selling that point a tad – being as they are the people most directly affected when banks go belly up. The bottom line, though, is that in order to prevent the banks from going bust, it has been ordained that there shall be inflation – the value of our money shall lose 2% a year (or more, if the bankers don’t quite get it right). And that is why the $8 I expended my labor for in 1995 is now worth $5.14. You could say I was a fool to keep in the ground rather than, say, putting it in a bank…but had I deposited it in a savings account it would have been worth $10.27 by 2015 – and it needed to be worth $12.44 to keep it’s original value.
Well, then, you could invest your $8 in some sort of bond or stock fund – you’d make enough to keep ahead of inflation. Generally, yes – but not always, as you can see if you’ve checked your 401k of late (or checked it in early 2009 as opposed to early 2008). I also could have just bought something with it – can you name a thing that I could have bought in 1995 for $8 that would likely still be functional in 2015? Probably not. But suppose I, being perverse, just didn’t want to do any of that – it is my money; I expended my labor to obtain it. I don’t want to put it in a bank. I don’t want to buy stock. I don’t want to buy the latest bit of I-Crap. I just want to hang on to it – for whatever reason. Why is it that if I just decide to hang to to the fruits of my labor that I get some of the value of my labor siphoned off? Is that just? If you had gone into my yard, dug up the money and extracted $2.86 from the cache, you know what that would be called, right? That’s right, boys and girls – it would be called stealing. Why would you, doing that, be looking at a criminal charge of theft but the banking system doing it via inflation is called sound financial management?
It is by this slips-of-paper currency – fiat currency; fake money – that the Capitalist system prevents those who work for a living from building up sufficient sums of capital to be independent. We have to put it into homes – which are taxed as property, so we never truly own them free and clear. We have to put it into cars – which wear out and break down. We have to put it into consumer goods – which are ever more poorly made, thus requiring frequent replacement. We have to put it into stocks and bonds, so that corporations and governments can have a ball with the piles of cash we deposit with them (but, hey, you’re insured up to $100,000.00! Pity if you’ve saved $300,000.00 and things go smash). And if all that doesn’t separate us from our wealth, we’ve got a gigantic, consumerist advertising blitz convincing us to spend so much money that we can never really save that much.
Now, what are our Socialists up to? Well, their part of the game is very interesting. First off, they take a cut of our wealth right at the start – we expend labor in return for money and before we see a cent of it, they take 12.4% of it…to hold on to us for our Social Security and Medicare…if we live long enough to collect it. If we happen to die before we’re eligible then it’s too bad, so sad. The money you paid it sort of disappears. A few driblets of it might come back to minor children or to a surviving spouse – but most of it is just gone. Thanks for playing! If you do live long enough to collect then what you’ll get is not the money you paid in plus the wealth you might have collected using it, but a small, monthly stipend. You just wait each month for that little check to come in…oh, boy! What a nice, little Socialist thing! Little checks every month! Woohoo! Please ignore the fact that if you got all you had paid in back in a lump sum, plus interest, you’d be better off. Don’t think like that – just wait for that little check!
Outside of that, our Socialists are very diligent in raising other taxes on you – all for good causes, of course. In return for you surrendering part of the wealth you earned, you get things like roads and bridges. At least, that is what they’ll tell you. Oddly enough, however, every time they want more from you in taxes they say we need it to rebuild our crumbling infrastructure – and we’re not to be impertinent as to ask what happened to the last boatload of money extracted for rebuilding the crumbling infrastructure. Property taxes; sales taxes; fees; fines – all grand stuff and all of them make it hard for you to accumulate wealth. When all that isn’t enough, they are also right on it creating regulations which makes it ever harder for you to start up or run a business independently. Our Socialists rail against Wal Mart all the live, long day…but ask them to ease the taxes and fees for opening up a small retail outfit and see how far you get.
All you ever wanted to do was work hard, obey the rules and enjoy the fruits of your own labor – but we’ve got a system in both it’s Capitalist and Socialist aspects dead set against that. If we had real money and genuine property rights then if you did work hard and lived frugally, you might become independent…or your children or grand-children might. If you owned your house outright and it was stocked with goods made to last and you bought your food from a local grocer who obtained it from local farms – also run by people who own their property outright – then where in that is the place for a Capitalist to get 10% annual returns? He’s got to get them, don’t you know? Inflation is 2% per year! And you can’t just make enough to stay even – you’ve got to get ahead! Get richer! There’s a billionaire out there with a 250 foot yacht while you’re still stuck with the 145 foot dingy! Where is the place for a Socialist to sucker you into believing that you need the ministrations of a Socialist government to be secure? If you are sitting there all independent then where will the host of bureaucrats who currently dispense welfare go to get a job? Who would pay for their pensions?
It call comes down to money – which is property. Who is in control of it? You? The bureaucrat? The corporate CEO? If it is you, then you’re fine – even if you don’t have much, what you have is yours and no one can take it from you. If it is the bureaucrat or the CEO, then you are a beggar at the table…you’ll have to dance to someone’s tune in order to get what you need to live.
Someone might, at this point, bring up people who are poor. Ok; let’s bring them up. First off, I’d like everyone to notice that Wal Mart accepts EBT – a nice bit of Socialist/Capitalist alliance there, folks. In fact, this is the perfect model for both Capitalists and Socialists – people who are entirely dependent and who get their money in short, small blasts and then immediately spend it. Perfection! Who could ask for more? It is so grand, that we’ve got people into their third generation on it – please just ignore that bit. It is very important that no one notices that people can be on welfare for that long. Please don’t ponder it for a moment and figure out that it might have been better if we had found jobs for these people, taught them to live frugally and then, by having sound money and secure property, eventually got them to the point where they were independent. Think about it – it would be better if we increased welfare by 20% but taught the recipients to save their money, if it was hard money, and we had laws which ensured that at least individually and family owned property was inviolable. Eventually, they would have some fairly large resources – as well as being better educated in living an independent life. But just try to propose something like that – I dare you.
It is, then, how you view money – and property – which makes you either a Conservative or a Progressive. If you like fiat money, debt, government programs, anti-competition regulations and such, you are a Progressive. If you like real money, hard work, saving and inviolable property rights, then you are a Conservative. True, a Conservative economy might not have wild fire growth – I grant that, perhaps, our GDP would be lower than it is if we hadn’t used fake money…but with all this GDP growth, how are things? You like Detroit? How about multi-generation welfare families? Wal Mart? Badly made Chinese consumer goods? Some people with tens of billions while others are waiting for their EBT card to reload? And that leaves aside the fact that the United States had remarkable GDP growth prior to the creation of the Federal Reserve and fake money – and prior to the time when we had a Regulatory State interfering most strenuously in the lives of middle class and poor people instead of those who are well off or well connected to government (very often these days the same people). And, also, maybe there’s something to be said for a society of sober, hard working people who save their money and don’t waste it on frills? I certainly think that such a society is far more Conservative than any alternative.
Many people have taken exception to my Distributist views – I suspect that on the right because this sounds a bit like “Re-Distributist”, while those on the left can’t understand the vital necessity of property rights. What I’d like to point out is that someone having vast sums of property is denying property rights as much as someone who says that all property should be owned by the State. Our whole system – in both it’s Capitalist and Socialist manifestations – is designed to prevent wide-spread ownership of property. It does this by concentrating property in either the hands of a few rich people (Capitalism) or the State (Socialism). Neither the super rich nor the State should have as much as they do. In fact, they should really have not much, at all, in relation to individuals, families and voluntary groupings.
This land of ours – the United State of America – was not built by bankers. It wasn’t built by government bureaucrats. It was built by individuals, families and groups. A bank in London did not send out a set of brave, pioneer bankers to establish a branch in New York City. Nor did the Department of Departmental Affairs send out hard-bitten bureaucrats to plow the land with regulations. It was poor and middle class people who bravely set out and started farms and built towns. The bankers showed up later – so, too, did the government in the sense we know it. It is true that we need government, and banks – but let us set aside any notion that the government and the banks are first priority. First priority belongs to you and me, dear fellow citizen. Banks and government are to serve us, exclusively, or they are entirely destructive.
I don’t mind, really, if a man opens up a bank and by taking in deposits and paying interest on same builds up a pile of capital which he then expands by wise investment. If a man does that and becomes fabulously rich then good for him! But if he messes up and invests badly and his bank goes under, I don’t want my money (my property!) stolen to shore him up. And I certainly don’t want him buying influence in government in order to twist the laws and regulations to suit himself. The laws and regulations, if they are in any sense just, are to protect all of us, not just some. I also don’t mind someone choosing a career in government – we do need someone to administer the laws and regulations and make certain everyone is playing by the rules. But I do mind very much when government employees become, themselves, an interest group set against me and then go about setting up the system to benefit the government (and cronies of same) against the interests of all the people.
The bottom line for me is that a Conservative economy is one based upon hard money and absolute property rights for individuals, families and voluntary cooperatives. Some say we can’t go back to a hard money economy – but as these people are those who benefit from a fiat money economy, I doubt the veracity of their claims. Some say that our property is at the disposal of government and we can only own it as long as the government says it is beneficial to all – but that is just nonsense; an excuse to grab private property and hand it over to someone else better connected to government. The purpose of the individual in life is to serve God and his fellow man – it is most emphatically not to be a conscript cog in either a Socialist or a Capitalist system. If you work, you deserve precisely what you earn by your work – and no one on this Earth has any right to separate you from what you earn. Taxes there must be, but once the tax is paid, it is yours. Period. Do with it as you like – save it or blow it on a weekend in Vegas; your choice. But as soon as someone steps in and decides for you what you get to do with your own, they have done an injustice. Whether they do it by government regulation, financial trickery or a gun pointed at your head is immaterial.