October 6, 2000
This is a plain version.
This series of essays explores economic and financial issues from a Promethean perspective. In part, they expand on the brief economic discussions found within The Promethean Trilogy. They also explore the free economy of a Promethean society in a more complete way. Additionally, these essays examine a number of debates surrounding economics: debates about capitalism (according to different meanings of the word), freedom of exchange and free markets, making money, control of economic activity, economic exploitation, ownership, and more. Taken as a group, these essays will give the reader a more complete understanding of what economic system is pursued by the Promethean movement, and why... Promethean capitalism, concisely described as true free-market capitalism, fully-consensual free enterprise and exchange for every individual.
This is not a collection of essays written foremost for the purpose of supporting 'capitalism' by any meaning, or any economic system. Rather, these are essays composed to contribute to Prometheanism, the philosophy of the Promethean movement, which places the integrated personal strength and advancement of individual human life first. As the economic component of that approach, these essays happen to endorse a certain sense of the word capitalism, because Promethean capitalism is necessary and beneficial to that purpose. No system should be the basic goal and the measure in the economic realm, or any other; impact on human life of each person and especially one's own life (always our window to lives of others) must be considered. Always attention must be given to the fulfillment, and advantages, and progress to the fullest potential of our lives. The system of capitalist economics as I will discuss it is favored in part because it is not a system which is planned and controlled, except at an individual level; it is as organically decentralized as natural life itself.
Promethean capitalism does not bear resemblance to anything in common practice today. It is however built upon the uncommon work of many people, and the logical conclusion to the tradition of economic freedom. Although those who have contributed to this tradition over the centuries are too numerous to acknowledge here, I wish to begin this series by crediting them, especially those thinkers whose work implies the radical freedom which is endorsed and sought here in the name of Prometheanism.
1. A Reintroduction to Capitalism
Before we can address the kind of capitalism which is desirable, and before we can address the debates surrounding capitalism, its successes and its failures, we must first ask: what is capitalism?
There have been very many different traditions of capitalism. There is the concept of free enterprise. There is free trade and exchange. There is the principle of private ownership. There is liberalism in the traditional sense. Classical liberalism attempts to reconcile its tenets of predominant 'individual rights,' especially the right of property, with limited constitutional government which exists to guarantee those rights, claiming that this arrangement is a free market. The tradition of laissez-faire capitalism is a loose idea based on the principle laissez faire, to let [things] alone. There are various schools of economics with their own developments on the theme of capitalism, such as the Chicago school economists, or the Austrian school economists. Recently, there has also been the idea of capitalism as a moral system according to Objectivism and its derivative movements. And then there is capitalism simply as making money, and a capitalist simply as one who makes money.
And how is the word capitalism generally understood today?
A dictionary will define the word this way, or similarly:
1. An economic system, marked by a free market and open competition, in which goods are produced for profit, labor is performed for wages, and the means of production and distribution are privately owned.
2. A political or social system regarded as being based on capitalism.
(source: American Heritage)
Most of the first definition above is extraneous, or misleading. The system commonly regarded as capitalism today does not have a free market (unhindered, voluntary exchange) or open competition. Some labor is not performed for wages (for example, an approximate average of one-third of labor is the U.S. is 'owed' to the state), and a large proportion of the means of production and distribution are not privately owned, they are state-owned.
And, if capitalism is just "an economic system" among other possible systems, why choose it over others? If it is characterized by producing goods for profit and performing labor for wages, why not experiment with other possibilities such as labor performed without wages, or goods produced without profit? Why not tinker with a market; why not experiment with partially-free markets or less-than-open competition? And why not have all or some of "the means of production and distribution" outside of private hands?
This has all been done and continues to be done, and it has all failed in terms of beneficial impact on human lives. This experimentation has led to the condition of so-called 'capitalism' today. There has been a failure to understand the essence of the issue; there has been a failure to understand capitalism. There has been a failure to understand what is at stake, and there has been a failure to understand what is really of value.
The second definition more accurately describes what is called capitalism by most people today, and gets at the heart of a problem: what most people call capitalism as a sociopolitical system is merely something regarded as such, rather than a sociopolitical circumstance which follows from the economics of what capitalism really is, at its root — or what it should be.
The dictionary definitions I quoted above, as well as most economic, social, and political discourse on capitalism, is removed, theoretical, cold, impersonal, even antiseptic — everything but realistic and human and immediate. But the real point of it all is immediate, and it is human, and it is personal.
What distinguishes capitalism is first of all simply an absence of something, and the consequences which follow. That something is compulsion in matters of economics — matters of trade and ownership. Capitalism is founded on choice for each person over themselves and their own affairs, as well as their interactions with others, rather than considering domination and interference to be acceptable.
Capitalism as a tradition is essentially individual economic freedom, a tradition with ancient roots around the world. That this has been diluted, and at times discarded, does not change that capitalism represents the economic aspect of a wider regard for individual freedom, which has also found many other expressions. 'Capitalism' today is not capitalism as a fulfillment of this theory.
I identify certain elements as essential to the tradition of capitalism, all connected and inseparable dimensions of what we might call economic individualism:
1. Individual private ownership of person, and whatever material possessions can be recognized to belong, rather than the rights of other people (or group rights) to individual person and property.
2. Voluntary labor and effort by each person, i.e. the absence of compulsory labor (also known as slavery).
3. Voluntary exchange, whether through barter or the use of an agreeable medium of exchange.
4. Free trade across artificial lines which divide individuals into groups. The advantages of free exchange between people imply the unimportance of division, and the erosion of official borders as well as collective divisions which exist only in belief, such as religion, race, ethnicity, etc.
Capitalism as a tradition of freedom emphasizes the individual over the collective group, prefers free and voluntary interaction to compulsory, and is tolerant of diversity among individuals and in practical terms, favors and rewards it (especially specialization, but also the ability to adapt and draw upon multiple capacities).
The logical fulfillment of this would be the most radical of all possible elimination of restriction on individual economic freedom. It would imply the most radically individual understanding of economic identity. It would also foster the greatest possible individual diversity.
Given the essence of capitalism: the logical destination of the tradition of capitalism is real free-market capitalism, a stateless free market based on individual rather than group identity, on individuality, and on individual freedom.
Thus in Promethean Capitalism I have chosen the phrase "Promethean capitalism" to describe a radical, true free market of individuals, which I believe is the economic circumstance most conducive to individual accomplishment and improvement.
Some will still wonder: why use the word 'capitalism' if capitalism is now considered to be something other than Promethean capitalism — why use the phrase "Promethean Capitalism?" Why not abandon 'capitalism' to what is today a perversion of individual freedom, even if I am right about the unfulfilled 'soul' of capitalism as it should be?
In every great tradition, every tradition founded on something essential, important, and beneficial, there will evolve the complexity of distortion and obfuscation as that tradition evolves (more so if the potential of such a tradition has never been fully pursued and realized). But that does not condemn the essence of such a tradition, or prevent us from defending that essence from its corruption and ultimately returning it to its worthiest meaning. We should preserve and continue what has been great and beneficial, and object to what has not. We should continue the tradition of what has been contributed toward personal freedom in the name of capitalism — not abandon the name of capitalism to what really belongs to authoritarianism, or to exploitation, or to the impersonal, or to the half-realized life. Capitalism belongs to us.
2. Value, Capital, and Currency
Many people who do not care about money as a main goal believe that economics of any sort has little to do with them. Or, they feel that economics does not describe what they care about at all. Some rarely think about economic concerns in the first place; money occurs to them as an issue only when it becomes an obvious concern, or in some other way passes right in front of their face. Exceedingly prevalent, and dangerous, is the idea that they should not care about economic freedom and do not need to, since they have no obsession with making lots of money. As 'little people' in economic terms, many expect advantages from redistribution of wealth taxed from those who make the most money, or have the most money.
And most economists, who naturally care about money very much, are generally not able to identify with these other perspectives enough to effectively dissuade people from those beliefs, even free-market economists.
One mistake has been to limit the discussion of free enterprise to the financial and the physical. Capitalism would seem to be about financial capital — the physical manifestations of it, currency and resources and possessions which convert to currency, and the exchange of this capital. This is only the roughest and most closed understanding of capitalism. Unfortunately it is a popular one, especially among rulers, and one prevalent among critics of free markets.
There is much more, or can be much more, to capitalism than money. To understand how and why, it is necessary to reintroduce ourselves to money.
Money or currency is a medium of exchange which is supposed to represent value. Governments now manufacture money by printing or coining official currency. Of course, to get us to care about official currency in the first place, governments bridged from precious metal. Computerized credit now represents paper money and coinage. Paper money originally represented gold when there was a gold standard and coins were precious metal. Long before this, gold, and originally silver became standards because they were rare and durable, malleable into coins, and had useful value on their own as commodities. Far from being an original product of central government, money was a commodity adopted for exchange. The most marketable commodity tends to become the standard known as money in a given context or culture. In various places and times, people have used cowry shells, beads, barley, lead, copper, or clay tokens, sometimes different clay tokens for different commodities. And originally, there was no symbolic money — there was only the inefficiency of direct bartering.
For streamlining transactions, representations of money may be used which are worthless in themselves without solid reference to the commodity which has been accepted as money, until that representation is accepted as a commodity of exchange in itself. The electronic credit which represents cash today is worthless without that connection. However, paper money no longer requires a direct link to gold, because there is a belief in its validity as a standard. The evolution of that belief has had much to do with the intrusion of government into money and exchange.
Besides making trade and exchange easier, the invention of money also made taxation easier. As soon as a standard naturally evolved as a more efficient means of exchange than barter, the taxation also became more efficient. Instead of a percentage of the harvest or the herd, rulers could appropriate money. For some centuries, decentralized and unofficial money actually existed side-by-side with government, and official taxation.
Then, although money had begun as an evolving standard to represent value (whatever worked well), rulers discovered that by centralizing money, issuing official, enforced, and regulated currency, they gained an unprecedented level of control over exchanges within society. Through this monopoly over value when it is exchanged, governments acquired the means to interfere in the exchange of value, to appropriate value, and to simulate the original creation of value by creating for itself more of the means of exchange. Even more far-reaching was the interference of this 'objective value' in the definition of value itself. Official money has become official value.
Control of money has become control of value, thereby culturally fostering a falsely objective value. Public policy-makers always care about centrally-minted legal money (printing it does fuel governments, after all). We often get the feeling that we are all supposed to care about it, even if we are not disposed to a great interest in trading or business, even if money would serve us best as a means, and not a standard of value. In the hands of a central authority, money has become a prime influence of social control, in addition to being a useful tool.
Governments now manufacture money by printing or coining it. But governments produce what stands for value; they do not produce value in itself. Governments try to set objective monetary values and manipulate them, but all conceptions of value are subjective, as the products of different individual minds. The idea of objective value is artificial. It depends on external control of what we believe and what we use. That is why in a Promethean society, a free society, there must be no official currency. Decentralization of currency is the foundation of a truly free economy, in a truly free society. Any standard which can be agreed upon as a means of exchange for any given transaction, is a valid one. Who can say what shared standard or standards will be found when there is no interference with choices? Perhaps more than one kind of currency will work better than just one. Perhaps gold will again be standard, except with multiple independent standards for its verification. We do not know, because force has been used for thousands of years now to control a monopoly on currency.
A decentralized, individual understanding of capital is just as important. Anything which can be exchanged, or converted to a form which can be exchanged, can be considered capital. But so can anything which has value for one individual, yet others would not accept in any exchange, at least in its current form. Plenty of experiences, knowledge, beliefs, and other thoughts have value only to the person who possesses them. In intangible ways, perhaps these contribute to capital others would care about — or perhaps not. However, to the individual who does care, they do have value. Now, externally or 'objectively' that is not monetary value. But that is not necessarily important to a person, nor should it be, if their idea of profit is something else in a given context. An individual understanding and assignation of value allows for this. This is a major reason why an individually free economy may be said to be most essential to those whose chief interests are not financial; only when the identity of value and capital are freely determined individually, and this freedom is recognized, are other personal interests besides the financial definitely allowed to be a factor to the extent that they matter to a person, such as artistic creativity, family, privacy, abstract thinking, recreation, etc.
The point of Promethean capitalism is the freedom to define one's goals subjectively, as one desires, and the freedom to pursue them.
Capitalism is for everyone.
3. Exchange and Markets
An economy is the financial dimension of a culture, indivisible from all the complexities of a culture, and inseparable from the origin of culture in the interactions and exchanges between individuals. Although the words economy and market typically relate to exchanges which relate to money and finance in an apparent way, these are subsets of a larger complex web of all human cultural exchange.
An economy begins in its essential form with the exchange of one thing for another between two individuals. What is exchanged might be an object, a service, an action, loyalty, an idea, knowledge, information, words, or even nothing appreciable. Anything can be exchanged which can be assigned subjective value (even if that value is understood to be nil), a value which may be conceived differently by the two individuals. Typically, what is exchanged is something desired by an individual who receives it.
In practice, the economy of a society (a society being nothing other than a group of interacting individuals) is composed of many, many such exchanges in a complex web so vast and interconnected it can be described only with difficulty, and often predicted with much less certainty than the weather; both of these are complex systems in mathematical terms. A market in economic terms is the totality of this web of exchange, which invariably gains its larger character from the qualities of individual exchanges, and the subjective conceptions of value in each case, since it is composed of nothing else. Some of these exchanges will involve groups of individuals; in this case the dynamics between these individuals as well as their individual conceptions (which of course may themselves be of infinite variety) must be considered. This general categorization could describe every possible exchange, economy, and market.
Marveling at the sheer complexity of any large market, we begin to see why 'market planning,' actually an attempt to control markets centrally, does not fare well. Not only are there trillions upon trillions of individual exchanges (or even many more) contributing to larger 'market forces,' some of these are not even measurable, many of them do not use money at all, and all of them (despite the present existence of official currency as a standard of value) are based on individual subjectivity at some level. A market can only be planned if the scope of organic human interaction can be planned — obviously quite impossible. To regulate and plan such a thing is beyond any human beings comprehension; it is somewhat like planning a universe. Chaos mathematicians have a term for this, a complex system — something so complicated and intricate that any estimation of order can only fail as a model — a system that cannot be systematized. Most known complex systems are built from simple basics to be complex upon the multiplied interaction of the basics. But markets are complex upon complex, because the most basic exchange results from the inherent complexities of at least two human minds. The complexity of a stock exchange itself is considerable, yet the immediacies of this little corner of a market are a tiny subset of all the factors involved. The internet includes incomprehensible complexity, yet all electronic exchanges of ideas and information are merely a minor part of all cultural and financial exchange in the worldwide market.
Although exchanges which do not involve a recognized form of currency are rarely allowed to be centrally controlled and regulated to the extent that financial exchanges are, control over financial exchanges are accepted, even where people do realize that other exchanges should not be regulated and controlled. Few people would accept central control over the exchange of words, thoughts, or favors — but taxation and regulation are accepted as soon as a medium of exchange is introduced. This is foolish, because one kind of control very often leads to another.
When an exchange is voluntary — which occurs when the two things exchanged are (subjectively) agreed by both parties to be of equal value, or when inequality is recognized by one or both parties, yet judged as an acceptable condition of the exchange by both — then that exchange is a free exchange, the basic element of a free economy. Note that gift-giving from presents to charity is included in this definition as an acceptable unequal exchange of something for nothing, perhaps derived from a sense of obligation, or a desire to inspire one. Or, gift-giving can be an exchange for nothing immediately substantive, but providing a sense of well-being for the giver which is worth something too — maybe much more than the gift itself.
As long as every exchange within a market which is not voluntary is aberrant (as in the case of theft), and every group acting as a party of exchange is based on entirely voluntary association, that market is a free market. Notice that provision is made here for the case of theft and other acts of violation and exploitation as aberrations, since otherwise no free market could exist on a large scale. But notice something else:
1) Government acting as a representative of a people is not a voluntary association, yet it represents a party of exchange.
2) Taxation, seizure, duty, and other 'exchanges' involving government are not considered to be equal by both parties, and certainly they are usually not agreeable.
3) These non-voluntary exchanges are not aberrant, but widespread, comprising a significant proportion of all exchanges within societies incorporating government — which is to say virtually every territorial society in existence.
For an economy to be a free market, it cannot be composed of exchanges which are not voluntary, so it cannot involve government. Even a laissez-faire, minimized state still would not possess a free market. No society founded on the principles of collectivism and compulsive central authority has a free market, or a free culture, for that matter. Unhindered by government and founded on individualism, a Promethean society can have a real free market and a free culture; a Promethean society can benefit from Promethean capitalism.
What are the advantages of this Promethean capitalism? Aside from the innate appeal of personal freedom, the most obvious potential advantage from a given voluntary exchange is this: since value based on need or desire is subjective to each individual, advantage may be derived by each party to an exchange without exploitation. Because individuals have different capital to trade and different desires, exchanges can reward both sides. Both can be self-interested, both can win. (Of course both do not always win — not if a choice is foolishly or ignorantly made, or if deceit is involved. But these are not problems which concern only voluntary exchanges.) Both individuals who trade can profit according to their own definition of success, however this is defined. This most immediate advantage is also the most important, for each person. But on the large scale of a market, there are additional advantages which accumulate for many individuals.
One point to stress is that capitalism depends on private, personal capital, but not necessarily only private profit; any number of people may benefit incidentally or indirectly from an exchange. And they commonly do, even when there are limitations and restrictions placed on free exchange, in a market which is not free. Imagine how much more is possible in Promethean capitalism.
The achievements of any individual can be exchanged as capital. Much of that capital is mental capital, which can circulate and become useful to many people. Ideas, knowledge, and methodology propagate expansively as a side effect of individual exchanges and individual profits. The subjective profits from each exchange spread from one exchange to another. Improved methods of production coupled with competition lower the prices of goods, even for those who have not invented those methods — yet reward the inventors. Scientific advances pass to those who have no knowledge of science — yet reward the scientists. Through the web of market exchange, wages for physical labor become intellectual education or medical care, rewarding the physical laborer, the teacher, and the doctor along the way, with very little waste due to friction, thanks to choice and competition. Improvements spread, relative prices go down, and relative wages go up. As millions or billions of people conduct trillions upon trillions of interconnected exchanges over time, productivity, capital, wealth, achievement, and individual benefit which is possible and realized can build upon itself at a fantastic rate. At the same time as there is enormous progress and advancement, everywhere, time and effort can be saved and devoted toward what matters to each person. Quite simply, whatever is valuable to you is more likely to become possible through both your own efforts, and through the pursuits of other people seeking their own kind of advantage, in their own way.
4. Property and Arbitration
Even before exchange is possible, there must be an understanding of property, a sense in which what will be exchanged belongs to the person who will exchange it. Otherwise, one would simply take things rather than offering an exchange of mutual benefit. For a functional market and a functional society, it is easy to see that understandings of personal, or shared property, had to evolve.
The idea of the private ownership of valuable capital is a great contribution to economic life. It is a natural extension of the idea of belonging — what a person does, creates, or is associated with most directly, belongs to them. This is ownership, or property, by creation. Naturally, in this sense capital inherently belongs to someone. This meaning of ownership is not transferable; whether a painter still has a painting or has given it away, it remains his by the deed of creation. And in the same sense, this writing will always remain mine most directly. Almost certainly, this property-by-creation would have been the first understanding of belonging and ownership, the association of the deed with the one who has accomplished it.
But, in order to exchange the physical property which is created or maintained by people, more is required. There needs to be an understanding of property which can be transferred from one owner to another, used or exchanged again according to the desire of the owner. This sort of property is beneficial and useful so long as it is an understanding resulting from voluntary exchanges, or from the original effort invested in its creation (with goods, for example) or development (in the case of land) before it has been exchanged. An understanding of exchangeable private property, connected to accomplishment and use, is essential for mutual benefit within a market.
However, over history the concurrent development of an understanding of private property with the development of law has not produced a consistently desirable result. The law as the codification of official, governmental opinion asserts a monopoly over the definition of belonging, a monopoly which is ultimately supported by force.
The assigned role of defining and guaranteeing property, coupled with the monopoly on force which can take it away, has ensured a conflict of interest within the government. For example, the U.S. government has come to own almost one-third of U.S. land through eminent domain, environmental decrees, and asset forfeiture, much of it without compensation. This is the eventual result of mastery over private property, characterized as early as 1795 by the attitude of the U.S. Supreme Court: "the despotic power, as it has been aptly called by some writers, of taking private property, when state necessity requires it, exists in every government... government could not subsist without it."
An extreme example of this conflict of interest occurred in the western United States in the 19th century, after the Civil War. During this time a coalition of government-subsidized railroads, and politicians, many of whom were bribed or had financial interests in the railroads, willfully displaced, starved out, and murdered Native American settlers of western lands so that the railroads might expand through the country. Vast tracts of land were provided to these corporations through official land grants, in contradiction to the established ownership of the same land by native Americans, who were not considered official citizens with legal property rights. The army was employed to support the planned, legal theft of this land through organized genocide, which General Sherman would approvingly label as "the final solution to the Indian problem" in 1867. Clearly the land belonged to the Indians, and clearly they were people — but they were not full people officially, and therefore had no official rights to land, or any property. Neither property nor profit were to blame for what followed from the exploitation of law and governmental force, and the system which made it so easy.
In the past, when the most significant private property was physical, the protection of property under law served people well for the most part. Property such as land is relatively easy to record officially. The intervention of law to protect it generally benefits people, provided of course that recognized property has not been obtained involuntarily, through influence with government as the guarantor and arbitrator of property, as in the example of the railroads. But even when property law works without corruption, there also comes an unyielding artificial definition of property. If the law recognizes property, it is owned. If not, law as the recognized social confirmation of property in the eyes of others, discounts ownership. At best, law only follows the custom of property as it is already recognized, as with the American Homestead Act of 1862, which granted legal title to 'squatters' who had already been farming land for at least five years. Where it fails to recognize this easily enough, squatters remain squatters rather than owners, and businesses remain black-market, unable to acquire the legitimacy necessary to succeed in a society with law. The failure of official property to follow custom is an enormous barrier to prosperity in developing countries.
And law is a labyrinthine accumulation of tradition, legislation, and precedent dating far back into history. It is rarely relieved of any bulk or complexity; it is regularly enlarged. Property law today retains remnants of conceptions of property from long ago. Like any protected bureaucracy, legal administration is not efficient or responsive at reflecting present day. Even aside from the problem of making mistakes (which is always more common in a bloated bureaucracy), this sometimes means that legal property is far removed from an understanding of property as it is currently created, developed, maintained, used, and exchanged.
The problems with legal definition and enforcement of property are largely inseparable from the realities of law as a province of government. Government evolved in large part in order to defend and administer territorial divisions, and was designed over millennia according to the job. A mentality was thereby developed and acquired which still exists today. Among other things, this mentality values the maintenance of an enduring, regimented order, and recognizes static relationships where none exist. The bureaucratic, ruling tradition still defends what exists with a clannish singularity of purpose, distrusting change just as ancient rulers distrusted strangers in their fiefs. Governments assume the exclusive right to force and even deceive in order to defend their turf. This mentality was not developed for commercial application, and sits at odds with what is necessary for exchange. Production and trade require and seek openness.
Turf boundaries and borders, whether physical or mental, get in the way when valuable property means more than land. Government really outlived its usefulness as an arbiter of ownership as soon as wealth began to mean something more than agricultural production. Land can be effectively recorded as fixed property even when the origin of its ownership comes from tradition and use. But other kinds of capital and property are more difficult, especially when they are not objects. Property has now outgrown law.
The most telling example of this is the current debate over intellectual property. Law still approaches ownership of ideas in the very same way it approaches the ownership of physical possessions. Rules and certain exceptions are made for the ownership of intellectual creations through patents and copyrights and trademarks, they become precedent, and they are doggedly enforced. But knowledge and ideas are mental capital, they are not physical capital. They can be copied and exchanged freely by word of mouth or through modern technology. People are making use of this ability even as the law forbids it, and is powerless to stop it. Infringing on a trademark or copying music electronically may be illegal, but it is not theft. What people have discovered in practice is that they can profit from the exchange of the intellectual capital they already have in their mind, or recorded on media. Intellectual property still has its owners by creation, and it has its owners who possess it and use it. It just does not exist neatly as the sort of fixed property that government is used to defining.
One criticism of unenforced intellectual property is that those who invest in the development of a profitable concept will not be ensured a reward commensurate with their investment. It is imagined that the writer of a novel who makes a deal with one publisher will immediately find copies of that novel on the market, published without compensation for the author. It is imagined that an inventor without the protection of a patent will find his invention copied by large companies and his development efforts wasted. It is imagined that companies will find their competitors instantly copying their products. This is a distortion. Not only is it possible for agreements over the ownership of concepts to be made voluntarily, respectability might depend on it within an industry. Even now with enforced intellectual property, this is more powerful than legal enforcement. What would authors think of a publisher who did not respect authorship? In a free marketplace, what would people within industries think of companies who showed no recognition for inventors? We should note that the major modern examples of companies copying the work of others directly are corporate coalitions between government and business which can depend on official support to maintain their position, the large corporations of China and Japan for example. These are not subject to the full tests of marketplace reputation.
An evolution to intellectual property by voluntary recognition only will make for a more competitive marketplace. But there is nothing little undesirable about this, and there is much which is desirable. Rising through intellectual advantages may take great ability, but so much the better. In such a market, the most driven and able people will be competing hotly to perform better for customers at every stage, from concept development, to production, to delivery. This will reward greater adaptability and talent, greater organizational skills, greater daring. It will open the market to smaller competitors challenging established companies. It will help to develop business and exchange to reward those who take action and pursue innovation rather than those who just maintain a position. This is what capitalism should be.
The creators of many kinds of intellectual property are already discovering that they can profit in this fluid property environment along with customers, they just need to find new methods and new models which are different from the standards based on static, fixed property. Enforcing direct sales on every single use of an idea is unrealistic. Publishers discovered this when copiers were introduced. Today voluntary contributions by institutions with copiers, such as universities, replace any lost profit. The model of contributions for future work is one example of another model. Another is counting on the desire of people to voluntarily support what they value, counting on the infrequency of unmitigated thievery, an approach which has already worked with software, music, and other media.
Since a Promethean society does not have territorial government, those who live in it must replace the official, legal guarantee of property, with the arbitration of property disputes. They must find and adopt standards for the recognition of property, and independent agencies without the conflicts of interest that officials often have. But it is not necessary to have a detailed, specific, centralized plan for the notation and guarantee of every kind of property, before the foundation of a Promethean society. That would be law-code thinking again, suitable for centralized planning but not for an organic, free society. There may not be one best way of accounting for property by an independent agency. What is necessary is just the organization of some initial standards, which can be replaced or change over time under the combined scrutiny of the independent choices of a market.
Some standards would have to be used by a third-party arbitrator to determine ownership, in cases of dispute. Usually this would be possession, but not in the case of possession of property which has been stolen, obviously. Evidence could be submitted for each side, just as it is in court today. Ownership is already well understood by expectation, in most circumstances. The choices required in a market will find solutions to the specific questions, such as access to resources, and when intellectual ownership might have to be respected. Practice will find what works in practice, and independent, private arbitration will respond far more readily than law.
Legal standards need not be what works, or what makes any sense — but if a law exists, it is defended for the sake of inertial hegemony (assuming an absence of the corruption which is actually quite common). As opposed to legal standards for property, market forces do tend to find solutions which work. Fixed property in the context of media does not work. Property based on use does. However, fixed property in the context of land is a defensible standard. There also may be adoptions of use-based and fixed standards for the same types of property which are more or less applicable within different contexts. Only a decentralized market will find these and respond.
If private arbitration of property seems implausible, it is worth considering that commercial law did not evolve from a ruling tradition, quite the opposite. It was adopted into public law from private arbitration which was invented independently out of desire and need. In Europe, feudal law was intimate with rank, and incapable of the 'radical' assumption of individual equitability in the arbitration of disputes, an assumption which was becoming necessary for commerce. Merchants established their own courts of arbitration based on expectation and the accumulation of precedent, the custom of merchants, beginning in 12th century Italy. This "law merchant" system was the first administration of disputes in Europe which was capable of fairly deciding commercial issues, and was the first one which might have been able to recognize claimants to property (including land) on an equitable basis. Considering that this came from private ingenuity rather than territorial government, does it really require much imagination to conceive of independent arbitration of the ownership of property, as well as contract dispute over the exchange of property?
5. Environments and Resources
A paradoxical objection to 'capitalism' as it exists today is that it brings too much progress and production, which harms natural environments as resources are consumed and wastes are created. The remedy, we are often told, is to 'put the brakes' on unhindered profit and production by empowering government with a mandate to interfere whenever it is deemed necessary by the bureaucratic officials charged with oversight. But progress is not the enemy of people or of environments. It is quite important to have unhindered economic progress if the environmental problems which always arise as civilization develops are to be solved. The expansion and change that are quite naturally a part of human civilization mean that our interaction with land, air, water, natural resources, environments, flora and fauna, and ecosystems must always be reconciled with the constant reinterpretation of financial, personal, scientific, medicinal, technological, and other interests. So it has always been, and so it will always be. There is no avoiding the reality that problems will arise and require answers. But these answers depend on achievement and development rather than bureaucratic control, especially scientific and technological development, which is the product of progress within a free market. Governmental interference to slow down economic progress will also slow down the means for finding solutions: individual accomplishment.
That is not to say that in the stateless free market of Promethean capitalism, people must never express displeasure with what is done with the resources of business and industry under its private and personal ownership, simply because of the general interest of progress. In Promethean capitalism, private ownership of land and resources by an individual or voluntary group does mean that it belongs to them for their use as they see fit, as long as they do not directly harm others or other property. However, there is also no obligation in a free market to purchase products produced from farms, businesses, and industries which are perceived as destructive to the environment. There is nothing preventing the organization of boycotts and peaceful protests. There is nothing standing in the way of purchasing this land for its conservation. There is also nothing that says poor caretakers cannot be shunned completely, if others desire to do so. There is quite a lot of room for deterring industries from environmental destruction just for short term-financial profit, if no one will buy what is produced or if it will cost considerable consumer goodwill in the future. And in extreme cases, independent arbitration may find that some actions on private property are excessively detrimental to the welfare of environmental resources, so as to cause directly harmful effects to other people, and that the perpetrators must be prevented from this. But such a malicious act deserving such an extreme response would certainly be perverse and infrequent, because in general it is direct personal ownership of property which ensures that individual human interests are well in line with wise, considered, and considerate behavior.
In thinking about the ecological impact of business practices, it is important to begin from what is desired rather than means. All too often, concern over environmental problems has stimulated agitation for the centralized ownership, or centralized management of land outside of individual hands, without considering the full implications of that investment of political power — and without realizing that those seemingly direct means will actually be untrustworthy and unlikely to achieve the desired effect of preserving and protecting the worth of environments.
Consider the parallel of art. Relatively few people clamor for central ownership of great art, for its protection. This is not because no one cares about art, quite the opposite. The reason is that there is no need to do so; the worth of most well-known kinds of art is widely recognized and acknowledged, with few exceptions. Just as a private owner of the Mona Lisa would never destroy it, and would be very likely to allow others to experience it as well (probably in exchange for compensation), a private owner of land who recognizes that the environment on his land is valuable in many senses, will be very likely to protect it and care for it well. Increasing awareness of this worth, and increasing the perception of the importance of resources and environmental conservation, helps to bring this about. That is the central task of beneficial environmentalism: education under the assumption that owners are the fitting caretakers of environments, capable of enlightened stewardship due to their own best interests.
The central, 'communal' ownership or management of resources and environmentally significant land has tended towards just the opposite from enlightened stewardship. This is especially the case when the avowed 'community' is large, and especially when it is structured around government, that is, when it is non-consensual. The larger the group, and the more centralized the political control of the group, the more removed it will be from personal interest, and personal responsibility. Most members of such a group will have no connection to the resources and land, and perhaps no knowledge of it, so that they have not become its caretakers of their own actively interested choice. This explains why small tribal groups which have banded together in consent have with very few counterexamples often managed environments and resources well, usually balancing the need for the use of resources with long-term conservation, both of which are in the personal interests of members of the tribe. Centralized nation-states, however, have a poor historical record. The very worst environmental devastation has been in authoritarian communist states with communal property; the extreme and almost universal pollution, large scale environmental destruction, and widespread disregard for long-term consequences under the centrally-planned economies of the Soviet Union, the eastern European Soviet bloc, and Maoist China are without comparison.
A more moderate example of federal mismanagement of land is the National Forest land in the United States. National Forests are supported by tax money as well as even more considerable visitor fees. As with many public resources, political influence tends to obtain access which is otherwise impossible. This is quite likely the reason why, at the same time that use of this land is limited for most people to charged visitation, subsidies are provided to encourage corporate use of national forests for timber, mining, and grazing. Perhaps these corporations are being responsible, but many feel that they are overusing the land. It might be surprising if they were not. Someone who owns a house and has to live in it is far more likely to maintain it well than someone who can live in a house he does not own, and move from house to house. Certainly, there is no particular interest in managing such land for the future. Not only are the corporations ordered without clear personal ownership and responsibility themselves, there is also no direct link between any individual owners and the land. There is no one to hear complaints except politicians and officials who have mismanaged the land by proxy in the first place, since they lacked a personal interest in it and knowledge of it. If a corporation destroys the land, they do not own it and they do not have to clean it up. If a politician or official entrusts the use of land to a destructive end, or to disastrous administration, it is unlikely they will be personally responsible in the massive, faceless bureaucracy that is the United States government. They will not have to clean it up themselves, and it will not affect them personally. They may never have had an appreciation of the land in question. They may never even look upon the land at all.
Without individually-referenced stewardship based on ownership, there is no personal incentive for the protection or conservation of resources and environments. Private property is no more the enemy of the environment than progress, and it is even more important to the preservation and care of this world. With property comes ownership, and with ownership comes both opportunity for personal gain, and personal responsibility for the future.
As long as there is no external interference imposed on the choices involved in the exchanges of a market, everyone in a business is accountable to other people in a way that employed government officials are not. For example, unlike citizens under the one-and-only government, customers can choose to interact with one business over another, and even potentially put businesses out of business, which means that this pressure of competition under normal circumstances makes businesses highly accountable. The exceptions to this occur when either:
a business receives appreciable support distinct from agreeable exchange in return, support which grants it partial or virtual immunity from this accountability, and resistance to the checks provided by competition, or
a business has a total enforced monopoly which eliminates competition, or a less extreme, enforced preferential advantage against its competition.
Those exceptions can ensure that businesses fail to be accountable, and flourish despite competition, or because they do not have competition. Therefore the performance of businesses which succeed under such conditions will likely not be serving their customers, employees, partners, and owners as well as some competitors would. And quite clearly, these exceptions are not examples of a voluntary and free economy. A free market does not exist where these exceptions exist, so neither does Promethean capitalism.
Unfortunately, both kinds of interference are quite prevalent within modern 'capitalism,' the so-called 'free markets' of developed nations.
Subsidies, grants, loans, and bail-outs are all very common examples of unnatural support. So are taxes and regulations, which tend to favor large corporations over the same people and resources split into smaller groups, since large corporations exist as a legal whole, and since they can afford specialists to handle these issues. (However, taxes and regulations weigh down all businesses; it is simply less detracting from a large one than from a small one; these are supports only in relative terms.) Monopolies are ostensibly discouraged and forcibly split, and yet they are encouraged by corporate law and tax laws, which favor size. Today, even the best idea in the most fortunate and capable hands will not necessarily bring competitive success, in a field of large, established corporations — particularly those with political connections.
As a matter of fact, any laws which impact private businesses unevenly, provide an undeserved advantage to some businesses over others. Virtually every law which impacts the creation of something to be exchanged, or impacts those exchanges themselves, will do this. Even under the most limited government, legislation and supplying the function of government will leave a footprint, an influence which will probably produce at least partial monopolistic dominance and accompanying problems.
Even more disconcerting than partial support are the total enforced monopolies supplied by many laws, and by the patronage of businesses by governments. Examples of this include patents, trademarks, and copyrights, which are monopolies over ideas, and the enforced inability to apply ideas and knowledge which one already has. Another example is the defense industry, which has had only a tenuous acquaintance with the principle of independent competition. And of course there are the exclusive contracts made by all levels of government with private businesses selected through a process of political influence (which usually belongs to the larger corporations), contracts which can be so massive that they unbalance whole industries.
There are essentially two understandings of the word monopoly today.
One is not a real monopoly at all. It is a situation in which a business has earned the advantage in an industry or kind of business by competing more successfully than other businesses, offering something more or different, or lowering costs and therefore prices. Such a business may have a large proportion of all the business in their field, but that position has been gained through voluntary exchanges, and it can be challenged any time by the competition of other people, if they are able. This 'monopoly' is really just earned success, which in a free market tends to benefit many people, directly and indirectly. To oppose this is to oppose achievement and greatness, at least within a specific economic context. Historically, governmental anti-trust prosecution frequently finds that simple demonstrated superiority within an industry constitutes a monopoly. Possessing a certain percentage of all sales within an industry, even sometimes as little as one or two percent, is an excuse for legal action to 'break up the monopoly.' This interference is often instigated and supported by rivals of a successful business. Forcing a business to involuntarily yield what it earns through consensual trade is a tempting means to bypass what would have been required to compete.
On the other hand, a real monopoly occurs when forced control grants a business dominance which cannot be challenged, or an advantage which has nothing to do with achievement and choice. Competition with a monopoly is not allowed, will not be allowed to succeed, or will be artificially difficult. Choice between that monopoly and other options is absent, or artificially discouraged. Unscrupulous practices and exploitation become likely because the exchanges supporting success are no longer voluntary. Without alternatives, there is far less reason to earn profit through valuable and desirable achievements because profit is likely or guaranteed anyway. A monopoly is potentially harmful even to the apparent beneficiaries who have the monopoly, since the deepest personal gain tends to come through achievement, rather than the reward which may follow from achievement. Money is not necessarily the same as profit to a person, after all, especially money which is gained through exploitation.
Monopolies are not natural occurrences in a free market. A monopoly can only happen from force, either physical violence, or intimidation of an implicit threat of violence. Since governments in modern societies have exclusive rights to use socially-acceptable force to oversee exchange, and also make the rules for business in law, government is the only possible cause for the existence of any monopoly which has not been acquired through illegal use of force. The intervention of those in government using the force of law, and the influence of private businessmen in government, in a mixed economy of voluntary and involuntary exchanges, are the causes of monopoly, and all of the worst barriers to individual benefit which are experienced in modern economies.
Given that unnatural monopolies can be very harmful, a final point must be made about government. Government organizations hold monopolies over the making of rules for society in law, and over enforcement. Governments are by far the most powerful monopolies which have ever existed, and they suffer from all the problems of any organization with a monopoly, such as bureaucratic inefficiency due to lack of competition, exploitation, abusive practices, and others besides. The results are inflicted on every citizen; it may be possible sometimes to opt out of a monopolized trade at an acceptable personal cost, but there is no opting out of government. A government breaking up a monopoly amounts to the largest, most complete, and worst monopoly, dedicated to fighting monopolies — gigantic hypocrisy, and a much-advertised distraction from the fact that governments are not necessary to protect us from monopolies. Governments are monopolies, monopolies over the necessary services of protection and arbitration, monopolies which also create more monopolies.
According to Marxist-Leninist doctrine, capitalism will evolve to collapse through the concentration of capital into massive monopolies, in a stage called monopoly capitalism. This concentration of capital certainly does occur, but the 'capitalism' of today is not Promethean capitalism. It does not represent capital in an accurately subjective and decentralized understanding of value; it does not allow for free exchange between individual people. The integration of the ultimate monopoly, government, ensures the consolidation of unearned capital in other monopolies. That is the real problem, not capital or capitalism. Otherwise, capital in every sense can be created and exchanged to mutual benefit. In fact, the exceptions to economic freedom which produce monopoly, especially government, would imply at least degrees of fascism, which in economic terms is the systemic interference of government in business, the interference of business in government, and the cooperation of private business and government. True monopolies are really impossible in Promethean capitalism.
7. Economic Fascism
There are two main modern traditions of authoritarian economies. After ignominious experimentation with their severe forms in the twentieth century, today these forms are discredited by their own demonstration. But the full lessons of history remain unlearned.
Government which organizes economic activity based on centralized ownership of property acts as a forced monopoly, since it both engages in production and trade, and makes the rules for production and trade. This tradition is commonly known as socialism, and in its complete form, communism. Basically, this involves the state appropriating the functions of business unto itself, removing the decisions necessary to guide economic action from the control of the individual, and making the individual a direct employee of the state. The state attempts to distribute what is created as evenly as possible, working to limit individual advantage.
Government which does not assume the role of a business directly is capable only of appropriation and redistribution of capital which has already been produced, regulation, and other interference with exchanges of existing capital. This tradition in its more extreme form existed as fascism.
In both cases, distribution of what is created tends to be wasted and hits false barriers all along the way, because there is little personal incentive for efficiency. In both cases, corruption is very likely, because in both cases government is composed of real people whose human nature is no longer an asset, but a problem. In the case of interference with private exchange, officials are likely to interfere for their own profit in business activities of their own, or interfere because they have been paid to intervene on the behalf of certain businessmen, or extort money from businesses in exchange for advantages or being left alone. In the case of government which owns property and engages in exchanges like a business, there is little personal advantage involved with being productive, and little personal accountability for mismanagement and failure. This is why officials charged with the administration of property and goods owned by a government frequently turn to the black market to obtain personal advantage. In both fascism and socialism, competition is lacking which might provide a check against corruption.
Both fascism and socialism focus on the controlled redistribution of what has already been accomplished, rather than more and greater accomplishment. In fact, there is an underlying assumption that what exists and has value is a finite amount with a fixed value. This contradicts any ability of the individual to posit subjective, personal understandings of value.
The difference between fascism and socialism is a fine point in practice. In intent they may differ, but in practice both tend toward consolidation of political power. Socialism typically favors central ownership to a greater degree (in the extreme of communism, all appreciable property is centralized) while fascism emphasizes state control over exchanges more than state control over property itself. With different emphasis, both are based on forced intervention with the individual human acts of creation and voluntary exchange, making creation and exchange involuntary.
The economic fascism which began in the 1920s in Italy under Mussolini's National Fascists, and in the 1930s in Germany under Hitler's National Socialists, evolved as a variant of socialism with different goals. The principles of central state authoritarianism and collectivism were the same, in an extreme and at the time more palatable form for being more nationalist, and positioning select industries owned by a select few businessmen to exploit the system in exchange for political support. Likewise, the characteristics of that early fascism in economic terms are still present today, although they are not described as such. The practical characteristics of fascist economics are that:
1) The state is more important than the individual. Forming his own definition of fascism, Mussolini stated, "The Fascist State organizes the nation, but leaves a sufficient margin of liberty to the individual; the latter is deprived of all useless and possibly harmful freedom, but retains what is essential; the deciding power in this question cannot be the individual, but the State alone." Under fascism, individual freedom is considered dangerous and threatening to the power of the state, more often than it is considered desirable room for individual expression and achievement. Mussolini also said, "Fascism reasserts the rights of the State as expressing the real essence of the individual." In short, like socialism, fascism is collectivist rather than individualist.
2) Government-business 'partnerships' are formed to organize new initiatives designed to improve or expand existing major businesses and industries.
3) Major industries which are deemed essential are planned centrally, with the collusion of both politicians and prominent corporate executives. This central planning seeks market 'order,' disdaining the 'chaos' which is actually the complexity of independent action within a free market.
4) Mercantilism and protectionism are established to favor major domestic industries at the expense of foreign imports. In a fascist economy, the people who live outside of the borders of the state are considered means for the profit of industries within the state, rather than partners for mutual advantage.
The essential definition of fascism which can be distilled from these characteristics is the co-interference of business in government and government in business, so that the two are inseparable. In fascism there is no major business which is not connected to central planning, and the avowed interests of the state are heavily determined by the wishes of prominent business figures who lead corporations. It is worth noting that economic fascism was more commonly referred to as corporatism by promoters. Today the corporation continues to be the means to consolidate and control modern economies, a container in which individual economic action is more easily managed and integrated with political rule, under the complex systematization of corporate law.
All of the four characteristics of fascism listed above are also present today in the vast majority of modern states, to varying degrees. The differences between the economies of the 'liberal democracies' which are professed to have free markets, and the economies of Mussolini's Italy or Hitler's Germany, are merely ones of degree and stylistic variation. Just as those tyrants exercised extreme control over personal expression in general, they presided over severe economic control. Just as liberal democratic states allow for more freedom in general, they allow more economic freedom. Yet the telltale marks of fascism are discernable in modern economies, though usually in more moderate forms. This is because the most prevalent economic systems today are just variations on a theme: the economic dominance of the state, control over exchanges within the state and between states, and what has evolved within that system.
"Virtually all of the specific economic policies advocated by the Italian and German fascists of the 1930s have also been adopted in the United States in some form, and continue to be adopted to this day."
— Thomas J. DiLorenzo
The varied protestors against supposedly disparate concerns such as imperialism, protectionism, monopolies, corporate subsidies, global trade management, price fixing, taxation, tariffs, planned economic development, sanctions, industrial cartels, or corporate irresponsibility should become aware that these are all aspects of economic fascism. These concepts have all been discussed as though they are distinctive in some sense, but they are just different guises of the same sort of economy and the same sort of society: statist, interventionist, compulsive, and collectivist. Do not be distracted by the confusion of sanitized terminology (which has assisted mightily in the extension of the substance of economic fascism and socialism thus far). Instead, we should focus on the foundation of principles and their effects in practice. We then see that economically, fascism and socialism rest on control and dominance, as do the modern states which are wrongly described as supporting free markets and free enterprise.
The dominant economic system today within the political system of "liberal democracy" is a combination of the economic fascist and socialist traditions. If we must classify this system, after carefully examining the facts, we should call it fascism. It is characterized above all by the collusion of governmental and private business, the interests of both indivisibly intertwined in a web of political influence and control — control over competitors, control over personal freedom, control over individual economic identity and the achievement of subjective, personal definitions of profit.
The partial economic interventionism of government under modern liberal democracies has more in common with extreme economic fascism than with the free market of Promethean capitalism. We need to reconsider a worldview that regards America as diametrically opposed to the economy of a highly socialist fascist state, such as China. In reality, the American economy has a great deal in common with the Chinese economy; though it is more free by degrees, it is nonetheless operating by the same principles. Virtually every country is fascist today, differing only in degree and kind of economic freedom which has met with interference from the encroachment of the state and from the commingling of business and government which is inevitable in a statist society. The varying interference of the state in freedom which is not obviously economic is also a matter of degree, rather than delineating entirely different species of societies.
For the most part, property is defined as being private in the "liberal democracies," although there is some socialistic state ownership. For the most part, that private property is nominally private for the majority of uses, and actually subject to appropriation, control, regulation, and of course fundamental definition by the state. Whenever there is a question of the sovereignty of the individual or the state over anything of value (land, money, time, labor, ideas) the "common good" as defined by the politicians of the state always wins over the private interests of the individual by definition, in even the most liberal "liberal democracy." As Hitler and Mussolini both found, even the most tyrannical economic supervision and rule can become acceptable to citizens of a democratic state as long as a shell of private property remains in name, and as long as business still makes a profit, though consolidated into strict corporate containers within a tangled web of political control.
"Why need we trouble to socialize banks and factories?"
— Adolf Hitler
Because many wealthy businessmen seek stability so that they can enjoy their success, prosperity within a controlled market may actually serve to perpetuate fascist controls. This was the Chinese rulers' plan after Tienanmen Square showed them their grip was tenuous; they would buy off the unruly with cell phones and cars produced from the moderate economic freedom of a mere relaxation of the rules. Fascist administrators of markets are not always so cynical, but a tendency is present everywhere to give up on full freedom once personal success has been achieved within the system. The less wealthy are the ones who are often left to demand it. If they are persuaded by those who would maintain power over exchange, lured by the false promises of redistribution, most of the wealthy will be most unlikely to speak up for them. The wealthy are already satisfied — they do not have the same need for a real free market. Consider the example of the past: whenever minor fascism of a more liberal state becomes extreme fascism, major business leaders who speak out against this are a rare prize indeed.
The economies which are commonly regarded as 'free-market capitalist' are nothing of the sort. The control of authority has interfered and been involved all along. These economies are the result of private-personal-individual-and-consensual enterprise, ownership, productivity, and economic decisions in an interdependent, interconnected evolution with the centralized political power of government. It is also inaccurate to describe these economies as 'partially free-market' because they have evolved under controlled circumstances over many years, to be characterized today by limited independent decision and action. Their character is far from communism, but it is also far from the free market of individuals in Promethean capitalism. The repeated claim that 'liberal democracies' represent free-market capitalism is a sham. They have market economies — but not free-market economies. Their politicians often proclaim 'free trade,' as long as this only extends to nations, not the exchanges of individual people within them. These states are schizophrenic, caught between the economic rationales of authoritarianism and freedom. Upon realizing this, reasons for the failures of these economies become apparent. The common cause of problems within systems other than Promethean capitalism is the mixing of commerce and force, the co-interference of business and government.
Part of defining Promethean capitalism is defining what it is not. It is not exploitation. It is not invasive control over economic decisions. It is not the heavy cultural influence of centralized economics. It is not forced interference with individual life, which is permissible today most often in the financial sphere. It is not controlled definition or exchange of capital in any sense of the word. Nor does it suffer from the symptoms of control which belong to socioeconomic systems in practice today, and in the past.
8. Symptoms of Controlled Economies
"[T]his loopholes capitalism is not a lasting system. It is a respite. Powerful forces are at work to close these loopholes. From day to day the field in which private enterprise is free to operate is narrowed down."
— Ludwig von Mises
The fascism which is called 'capitalism' in modern 'liberal democracies' is more beneficial, more productive, and freer than heavier domination of an economy. But those who defend it do so on the basis that there is no better choice. Promethean capitalism is a real choice which is not a matter of improved variation on the same economic system. The advocates of the lesser fascism in this state capitalism also discount the importance of something which should never be ignored: some control of an economy tends toward greater control, through further aggregation of political power. The proof that their capitalism is not something distinct comes again and again when limited economic control so consistently becomes extreme control, as lesser fascism gradually becomes an unbridled economic fascism akin to that of the Axis powers. The problems symptomatic of a controlled economy remain the same, different only in extent and minor variance. And even as control expands to address them, it extends its own symptoms.
Little can be gained in the long-term from hiding economic realities, which is all that control can do directly within an economy. Centralized organization of production cannot produce more in itself, and it will be removed from the intimate knowledge necessary to set appropriate prices and pay appropriate wages. Official but unrealistic wages or prices, or production quotas, or the support of inefficient businesses, cannot really achieve anything. It may be politically popular to give money and goods away as if they are manna from heaven, but in reality they have a source. Whatever is distributed must have come from somewhere; it must be created to be given away, or it will have to be taken from elsewhere. This is what is happening when the involuntary exchanges of taxation and other mandatory allocation is redistributed in a controlled economy, whether it goes to pay wages which are something other than what work is worth to the employer, or allocates prices differently from what supply would indicate, or pays people to do unnecessary work or to produce goods that no one will buy, or pays them to do nothing at all.
The source of economic productivity is always ultimately individual accomplishment, even within a cooperative group. It is impossible to decree productive economic results, except to limit them as a result of individual reaction to a decree. People will not blindly continue to do what they did before, once central planners build boundaries and change the rules. They respond however they will as individual people. They cannot be herded like sheep as long as individuality remains part of humanity, and so long as their freedom allows it. They will respond unpredictably, and control will have unintended effects.
The incentive to achieve is generally decreased within a fascist economy of any degree. For example, if income taxes increase with greater income, the incentive to make more income is lowered. Starting a business requires special taxes and regulations, often making it not quite worthwhile. Changes in taxes schemes and regulations are an added threat to small enterprises. Established, large businesses have less of a problem weathering such costs and risks. A common thread in controlled economies is that the incentive to express ability by reaching for maximum achievement is lowered considerably, and unevenly. This is especially evident when interference is targeted to achieve specific goals which are deemed beneficial in certain industries. Any regulations by the government designed to affect selective or partial controls on final prices provide less incentive for producers, forcing some investment capital into less affected businesses and industries. In an attempt to achieve the original goal of lower prices or more goods, this process must continue farther and farther afield. Regulation must be spread to the businesses which now benefit from increased capital; the government planners must continually chase capital, or give up the pursuit of specific economic goals through artificial means. If they do not stop and accept failure to control the complexities of human action through rough central decree, the eventual product is the extreme controlled economy of a totalitarian state. In the long term, interference with an economy does not achieve the proposed results; it is only successful at expanding power.
These problems, tied to the accretion of centralized political power as both cause and effect, are bad enough. But they are not the worst part of involvement of government in a controlled economy. They are the just some of the weaker evidence against control, based on a simple and rather naïve view of the process in which officials have benevolent, objective, and merely deluded intentions, and those in business fail to exploit political leverage for their own advantage. In reality, objective separation of business and political interests are impossible in such a system of invasive masterminding. The worst symptoms of economic fascism come from the way that the intertwined coexistence of private interests and public rule breeds abuse of power, bribery, political favors, exploitation, and in general brings out the worst of humanity. And again, there are unintentional effects, which sometimes are even worse than this inevitable corruption.
It is essential for private businesses not to receive fascistic assistance. Not only does it decrease or remove accountability, which is dangerous enough, it also props up inefficient and inferior enterprises over better ones, creating monopolies. This is the reason why fascist economies are unproductive and inefficient in proportion to the degree of intertwined collusion between business and government. A good example of this effect is the application of protectionist policies designed to close off local markets from the competition of foreign industries. They are popular especially with the domestic businesses they are designed to assist. Protectionism is protective of nationalism, that is to say the independent power of one government, and selected allied business interests. However, time and time again the example of history shows that any society which is closed even partially serves the interests of its individual members less than a more open society, and chokes off the advantages of open exchange, also squashing competition and incentive.
The inefficiency of fascism is also the reason for major economic instability. In a fully free economy, invested wealth constantly flows from unproductive hands to more productive ones, as enterprises which are not competitive (in terms of quality of goods and services, wages, customer perception, or anything else) are allowed to fail on the basis of their lack of performance. This makes for less instability than would otherwise occur, since it happens continually and gradually, giving people ample opportunity to adapt without terrible hardship. However, in fascist economies, governments (often at the behest of these uncompetitive businesses, especially major industrial concerns) are constantly attempting to control those natural adjustments in a variety of ways. Government interference seeks to maintain a static, stable equilibrium where none is desirable, or possible. Bailouts, grants, loans, credits, subsidies, and price fixing are only the most blatant examples, famously known as 'pork' for political constituents. And despite less corrupt intentions, manipulation of interest rates is another example of trying to maintain impossible stability, an attempt with massive influence and equally massive consequences in terms of supporting false economic results. Eventually, all the supported businesses which should never have been propped up reach a crisis point. All their invested wealth reaches the point where it can no longer be forced to remain in the same hands, hands which should never have held it for so long. At these times, a great amount of wealth changes hands in a very short time, as though sliding under the inexorable weight of gravity. Many poor investments collapse entirely in the waste of unnaturally-supported failed enterprises. Some of these recessions are so severe, such as the Great Depression, that governments again respond with dramatically increased control of the economy due to popular demand. Again power expands, power shows favoritism, and the seeds for further instability and hardship are sown.
The world is all too familiar with the worst symptom of economic fascism, imperialism. A business assisted by the government can be compared to one protected by a mob of criminals. The position of both is ultimately supported by force, sometimes with the same violent results. The collusion of fascism is the source for much of the conflict and war which occurs. When business interests collide in a free market, there is no likely recourse to violence. However, when commercial interests collide and business is tied to government, which is always based on force, then trade wars, colonial wars, imperial power struggles, and other forms of violent oppression will follow. Perhaps most of the bloodletting in history can be traced to a link between economic interests and government.
The worst imperialism comes with the close interconnection of consolidated business interests and the state. Economic achievement and exchange is the lifeblood of every society. The eventual failure of a controlled economy means the inevitable collapse of a state. A rule characterized by authoritarianism must collapse with a rapidity and severity linked to the extent of its interference in exchange and productivity. If those in power, including industry leaders within massive integrated political influence, refuse to yield their control, there is only one option left to them: expand the power base of the state through external oppression. Throughout history, colonialism has been organized by cooperating business and industry leaders to exploit the labor and products of subject colonies by force. The ultimate extension of the life of political domination by a fascist partnership is outright war. An extreme fascist economy, such as Nazi Germany, can never persist under the weight of such tyranny without turning to military expansion, pillaging foreign wealth, and consolidating power by mustering national pride. The persistent link between fascism, violence, and war in history should warn us of the probability of imperialism, colonialism, and war as a consequence of controlled economies, not just in the past, but now and always.
9. The Minimal State and Fascism
A cherished belief of many schools of thought which seek to limit government to a minimal, hands-off, 'laissez-faire' condition is that a free economy is possible within a nation-state. Adherents of this theory consider this laissez-faire state to be an attainable ideal. They commit much energy to theoretical debate in its favor. Many organize committed political action to achieve it within the democratic political process of governments whose centralized power is monumental, with the idea of dismantling and limiting that power from within the system. Is it perhaps hypocritical or compromising to make use of the system one opposes, rubbing shoulders in politics with politicians and activists you consider to be abusing power? That question presupposes that the goal can be achieved at all by political organization from within. Is it strategically wise to participate in a system which abuses power in order to limit it, implying support in the process? Others advocate the same laissez-faire state but disdain politics, choosing instead to educate others in the wisdom of their laissez-faire capitalism, or hoping to found new states to support free markets.
But these ethical and strategic concerns over means and methodology are actually the subject of unnecessary debate. All advocates of a laissez-faire state with a free economy have already made the erroneous assumption that some government can exist which is minimal enough for the economy to be a free market. This is the myth of a laissez-faire free market. It has never existed, and it can never exist. It would require the government to exist independent of economics — that is to say, the government could never interfere with individual economic interests, decisions, and productivity. Conversely, individual economic decisions would have to fail to interfere with public policy. This ideal is impossible in reality.
There is no way to separate government and the economy in a state, a society founded on political power embodied as government. In contrast to power to achieve, or capability, which always lives in the individual (and by extension, in cooperation and exchange between individuals), political power is leverage based on belief, which is supported ultimately by force. The foundation of the government is social control, which extends always to economic control as well. Just as an economy is indivisible from all the personal experiences and actions which comprise a society, control over economies has always been part of social control. There is no line that can ever be maintained, in any state, between personal interests and maneuvering to advance them using the power of the state, through the political process.
The very existence of the political state even with the most minimal powers implies eventual forced control over individual achievement and exchange, which is the basis of any economy. But even without the possibility and tendency of political power to be expanded, which is always a factor, the essential powers of the state which are regarded as minimal necessarily involve interference with economic activity and economic exchange. All states, that is to say all areas ruled by central governments, have no possibility of having free market capitalist economies in the fullest sense. The freest condition possible for any of them is a minimal fascism. This is because even the most minimal government, which is theoretically prohibited from direct economic interference, has a footprint. In order to function, government owns and purchases, even if it that government is limited to the roles of defense and arbitration, for example.
Of course, governments which exist today are not minimal in any sense. But let us suppose that the laissez-faire statist advocates have somehow gained the upper hand in popularity and power, and that they are invulnerable to temptation. They turn to the problem of instituting a free market, and hope to make it sustainable if they can. A relatively basic power of their hypothetical state is to regulate trade with those who live outside of it. But control of trade allows for political influence to be applied in favor of some internal business interests in favor of others, which leads to the integration of business with political power, which is economic fascism. Suppose they dispense with that power, and limit that interference explicitly to foreign policy and diplomacy. The same thing will still occur, foreign relations will be influenced in favor of certain business interests and fascism will be reasserted. They dispense with that power as well, somehow — still the establishment and maintenance of basic infrastructure require interconnections between government and business, which is fascism. So, they dispense with the maintenance of infrastructure, decentralizing these needs to the trust of voluntary organizations. Still, any government entrusted with a monopoly on printing money, considered a basic power, actually possesses a choke hold on the essential means of exchange, effectively a nucleus of fascism. They dispense with that power too and decentralize money, but continue to tax for strict defense, arbitration of disputes, and the maintenance of civil order — and they find that to conduct and supply these functions still requires that same fascist interaction and interdependence. In fact, all functioning of the government, no matter how limited its power, requires that a fascistic link exist between business and government, which will always become corrupt, and tend to expand control, and create monopolies. But they are sure they have finished when they reach taxation — they realize this power will always be manipulated to show favoritism, and that taxes will likely be increased in the future to consolidate power. So they dispense with taxation and the state has no funding, so they establish voluntary contribution to support it. At this point they would find to their dismay that even a exceedingly minimal government which does not print money for itself or tax, receiving voluntary support akin to a non-profit organization, does not compete with alternatives and still has low incentive to be effective and efficient in its roles. Any government is based on a monopoly of force, even the most minimal governments. A government can never exist like a private business or a private non-profit organization, both of which must compete with alternatives, and are subject to choice.
In order to establish a free market, and in order to safeguard freedom from the encroachment of power, the necessary functions once conducted under the state must be taken up by voluntary organizations. There is no need for the state at all. If a minimal state can be achieved, there already exists the basis for Promethean capitalism in the minds and hearts of citizens. Clearly, in such a case, they already desire a true free market.
In the transition from a state to a free market, the cooperation of governments will be necessary in dismantling the state and founding Promethean societies. But power must be dismantled quickly or it will corrupt the officials in whom it is invested, become established, acquire popular legitimacy, and inevitably expand into tyranny. If the goal is not a Promethean society without government, but instead a minimal government, there is no chance to actually reach the point at which political power is dissolved. Even if by some miracle something close to the laissez-faire state is achieved, which almost certainly would require violent revolution against the stubborn grip of power, it would quickly become more and more invasive with the accretion of power. The American revolution (not peaceful election) secured something near to the ideal of a laissez-faire state, though not a free market. The early republic is idolized by many laissez-faire advocates. But just consider what has happened since! Today in the United States, abuse of power is rampant, government and commerce are intertwined in tentacles of corruption and control, and public debates edge farther and farther afield into determining degrees of domination. The laissez-faire statists may protest: surely some sort of mistake has been made, laws poorly worded, safeguards not ensured. But tinkering with government cannot ensure freedom if the people who compose government, influence it, and are influenced by it are not convinced that freedom must be preserved. The laissez-faire statists may protest: their ancestors were lulled into a stupor and were not energetic enough in defending freedom in popular opinion. But if anything, their predecessors were more skilled and dedicated advocates of freedom, constantly on guard against oppression. Consider what occurred once the revolutionary founding fathers attained office themselves — even they could not resist the temptation to transgress explicit power once they were called by the titles of office. What superior resistance could arise in the future to surpass theirs? Regardless of its form, the existence of government itself is a problem — it supplies constant temptation to abuse power of election or office to achieve personal goals, constantly putting human nature in a difficult position. Such a society decays into corruption and tyranny as a matter of course.
"A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves money from the public treasure. From that moment on the majority always votes for the candidates promising the most money from the public treasury, with the result that a democracy always collapses over loose fiscal policy followed by a dictatorship."
— Alexander Tyler in 1871
A laissez-faire state still means a lesser fascism, as long as the state exists in any form. That fascism would undoubtedly become worse. If "[f]ascism spells government" as Mussolini said, government also spells fascism. Economic fascism has been a product of the sociopolitical environment of the state, not something removed from it. The worst examples of fascism evolve from democratic states. Hitler's Nazism rose up within the Weimar Republic, the corporatism of Mussolini's National Fascists rose up in Italy, and today America seems well on its way to a democratic corporatism of its own. How much faith in the attainment and preservation of freedom can reasonably be placed in the political process of any democratic state?
There can be no middle ground between a free economy and a controlled economy, because once control is introduced in any way, the symptoms of interference, including corruption and instability, will show themselves. Just the existence of the state, introducing the state just as purchasing agent, owner, and monopoly of force, is more than enough for that. Additionally, there is no known barrier to stop control and interference from spreading, and political power has an eternal tendency to expand. Political societies all tend to experience increasing and inexorable central domination followed by economic collapse, unless that is forestalled by revolution or foreign influence. To escape from the pattern, it is necessary to escape from political power. It is necessary to escape from the state, the primary cause of economic problems and primary tool for economic exploitation, whether by politicians controlling business, or business controlling politicians. All the beneficial services provided by governments today must be provided by private business and other voluntary organizations, individuals and groups of individuals. The free market of Promethean capitalism can only exist and succeed in a society without government, a Promethean society.
"State is the name of the coldest of cold monsters.
... With heroes and honorable men it would surround itself, this new idol! It likes to bask in the sunshine of good consciences — the cold monster!
It will give you everything if you will adore it, this new idol. Thus it buys the splendor of your virtues and the look of your proud eyes. It would use you as bait for the all-too-many.
... Where the state ends — look there, my brothers!"
— from Also Sprach Zarathustra by Friedrich Nietzsche
The idea of giving of oneself, charity, is a powerful thing. We know it can be valuable. Like anything known to be of value, it is something susceptible to appropriation and control. It is no accident that government centralization tends to involve the replacement of the traditional roles of private charities, attempting to achieve a monopoly on charity. In Maoist China, the official communist rhetoric went so far as to say that private charity was a trick used to justify class inequality. It is often said that the other side of a free economy besides profit (given that the common understanding of a free economy is not free at all) is a need to balance fluctuations and 'fix' inherent problems with voluntary trade and employment, using governmental charity. (Never mind that these problems, instability, lack of prosperity, etc., are caused and perpetuated by the inefficiency of centralized interference in the first place.) We are constantly told that it is for the sake of people on hard times that power must be yielded to the government, so that they can be helped. But is that necessary?
It is true that bankruptcy and the failure of business enterprises is perfectly normal in any market, just as anything which is tried can fail. Also, in transition to free markets, it is inevitable for some people to be out of work temporarily as a readjustment. Where people have been employed by the government, and where the government has interfered through redistribution to support some businesses over others, such a change requires transitions to other work as government agencies are dismantled or replaced, and inefficient businesses are reorganized or dissolved. The end of an enterprise or agency, however, does not mean the end for its workers, as long as we remember that individual people, and not imagined units of people, matter. In the greater prosperity of a free market, there are more jobs and more opportunities available than if prosperity is restricted, as is the case in markets which are not free.
Even in the free market of Promethean capitalism, however, there will always be some hard times for some people. These are likely to be temporary rather than chronic, since almost everyone is quite capable of earning their own living and more, when left alone. But natural disasters alone can cause substantial economic problems in the short term, even without the inevitable mistakes and accidents which cause enterprises to fail, and jobs to be lost. And there are always a few people who are not physically or mentally capable of supporting themselves.
It is often suggested that private and personal self-interests are incompatible with generosity and giving. It is said that our interests must be subordinated to those of others in order to be generous, that only through owing something to others will we as human beings ever show enough concern for one another. Thus, a free market of individual people pursuing their own advantages would produce cruel and uncaring people, myopically and selfishly focused on themselves. Nothing could be further from the case.
That is only one understanding of charity, the kind that uses feelings of guilt and obligation, and asks us to sacrifice rather than profit — altruism as morality. Within the structure of the state, this kind of charity finds its worst expression as unwilling charity, which takes a step beyond guilt, to compulsion. Under the implicit assumption that help for the unfortunate could never be organized any other way, it is rounded up from taxation and compulsive community service.
There is another kind of charity that can profit both the giver and the receiver. It asks for no sacrifices, and it must be willing. There is a sense of value for very many people in knowing that what they do can help other people. In that spirit, even these very words are given. This charity is the giving of gifts not only because of others' need, not because of guilt, but because it is decidedly in the interest of the one who gives, and it is hoped to be in the interest of the one who receives it as well. The really noble giver wishes to see his charity become unnecessary, as the one who receives it uses the gift to help themselves. This charity despises dependence and is sickened by weakness, and thus is disposed to help end it. Such a charitable gift is a voluntary exchange like any other, capable of rewarding the giver and the receiver in different ways, and like other exchanges, possessing some element of risk that this will not happen — dependency, for example. This willing charity is part of a free society, just as much as business deals over large amounts of goods or currency. It is the kind of charity most likely to really help, and least likely to create more dependency.
Forcible governmental 'charity' is not voluntary, however, and the source is not this kind of charitable disposition. Charity as a moral imperative breeds dependence of the charitable and the objects of charity alike, a habit of moral superiority feeding the self-justification of supplication and need. Genuine generosity and cooperation and consideration cannot be forced. It is through individual independence, in mastery of the self and material things as well, that the sort of person is likely to arise who is considerate and cooperative and disposed to be generous. Redistributing wealth as largesse is no substitute for generous natures; it cannot produce people who want to give and are likely to act in the best interests of other people out of genuine concern, and sensible consideration for what is actually helpful. It can only imitate this by giving away money which has been taken, something which provides little help for a problem which requires something else.
What is of some benefit that is accomplished by those employed within governments today, does not require a framework of compulsion in order to happen. These beneficial services can be replaced by private charities and non-governmental organizations. Once people find their own capital is within their own hands and own decisions, charity will not die. It will increase, in fact — at least, the sort of charity which is voluntary and comes from genuine interest and concern, if not the guilty, sacrificial kind. Promethean capitalism is actually the economy which is most conducive to the care and advantage of the truly unfortunate.
Whatever is done that really helps another person could be accomplished, physically and mentally, outside of the administration of a state — and free from the symptoms of bureaucracy and enforced rule that government entails.
We are to believe that large disasters and problems can never be met with sufficient resources, unless government power is brought to bear. After all, in these situations government does not have to persuade very far; officials take money and resources and apply them. This is often quite inefficient, but certainly looks impressive, and impossible for private organizations to approach in scale. That is true — now. Today, government takes so much capital out of economies, that there is less that can be contributed to private organizations. And today, "helping others" is largely systematized through belief to be a province of government. The apparent inability of private charities to deal with a big crisis, like the Great Depression, is due in large part to government taking over their roles. From the other side these are often also failures of the leadership of private organizations, trusting government to accomplish what they should, and failing to organize on a capable scale.
We need that kind of leadership for a really free society with a really free market. In a Promethean society, replacement services for what are today services of the state can be seen as charities — organizations of voluntary contribution. The Promethean movement itself is to be a charity in these terms, which must grow to become a voluntary organization of unprecedented scope and ability in order to achieve goals such as the foundation of a Promethean society. Even the very basic functions of a state — arbitration of disputes, and protection of person and property — can be provided using the model of a voluntary charitable organization if a business model does not work, or using a combination of these models.
Actually, both a non-profit organization and an organization that directly seeks monetary profit are voluntary organizations which satisfy mutual benefit. That is, both can really be based on mutual profit in the larger sense, and are likely to be. The only major model of social organization which is inherently unlikely in practice to satisfy mutual advantage, is the fundamentally involuntary model of government: conceptual political power backed by force. Government is the notable exception to mutual benefit. Yet government has grown to become the tyrannical and centralized system of control that it is today, largely because of the appropriation of that very powerful cause, charity. The survival of government as an idea which is valued and considered necessary, and at the same time as a very real oppressor in practice, depends on the abandonment of the idea of charity to official responsibility in the form of largesse. Thus, it is only through the reassertion of private charity on an appreciable scale (like the Promethean movement) that government will ever be overcome.
11. Corporations and Corporatism
1) A body of persons acting under a legal charter as a separate entity with its own rights, privileges, and liabilities distinct from those of its individual members.
2) Any group of people combined into or acting as one body.
(source: American Heritage)
From the Latin corpus, body, a corporation is a body of people — a collective body treated as an entity distinct from its members. In short, a corporation is nonsense. No 'body' of people can act as one, as though they were merely parts of a whole being with a mind of its own. Yet a corporation is supposed to behave as just that, as though it exists in itself. In actuality a corporation is an invention, acting and existing in practical terms only as the cooperation, and in some cases the conflict, of individuals. Like a nation-state, a corporation exists only through the belief of its independent existence. Corporations are fabrications.
The private corporation we know as a standard today did not arise from a free market of individuals. It arose as an adaptation of business as conducted within an environment of legal interference with free exchange. The need for the ability to raise great amounts of capital for business endeavors led to this. The legal identity of a corporation allows large amounts of investment capital to remain associated with a fictional corporate 'person' as though it were private, allowing it to largely hide from taxation under that corporation, as the state pays attention to economic exchanges between legal individuals. It is very difficult or impossible to raise and maintain comparable assets without resort to state-chartered corporations. The corporation is a consequence of the history of legality and government, not a stage in the natural evolution of free economic activity. To put a positive spin on that, the corporation was in part an attempt to find financial freedom where it otherwise could not be found.
Unfortunately, corporations and government are intimately intertwined. The use of the word in a governmental context indicates this, as does the fact that the first economic corporations were mercantilist monopolies granted by authority of the British crown. In many ways, modern corporations are still heavily influenced by even very old law and very old government. For example, institutional investors have their permissible behavior influenced to short-term planning by 'the law of trusts' which originates from the English 'law of dukes.'
Corporations are often run too much like democratic states without territories. They have their executives, who are sometimes all too much like oligarchic rulers. They have their populist leaders as labor organizers. They have their voters, the stockholders. They exist because of belief in law, and they are collective organizations which can eclipse individual identity, like states. Corporations fail to serve the advantage of individual people, when they do fail, because they are businesses made of individuals, forced into the mold of states due to their existence within states. Remember, though, where this model came from.
A corporation is still not equivalent to a government or state. A government rules, legislates and enforces based on the monopoly of state power. A corporation is still a form of business, and still largely oriented around economic activity and exchange rather than control. However, economic corporations are supported in their very existence by official law, which is supported by force. Many corporations have also become similar to governments in being weighed down by bureaucracy. So much so, that 'corporate' is also now used to describe bureaucracy, unoriginality, and inertia found in business culture.
Corporations are not 'private' by their very definition and regulation according to public corporate law. That interdependence guarantees that corruption will occur, as interests in the commercial sphere influence political interests, and vice versa. We should notice that the corporate system, this corporatism, gives the state a special kind of control over all major business endeavors. What corporations are capable of in terms of concentrating capital can only be achieved in practice today with the legal sanction of the state.
The chief means of a corporation raising capital is by issuing stock, granting percentage shares in ownership of the corporation. For most practical purposes, those shares are not really percentages in the company. Owning 5000 shares from 100 million does not mean that a given shareholder is entitled to make any decision for any part of the corporation, or to cart away and sell 1/20000 of its assets. Nor does a much larger amount. This share system is a legal fiction. What really occurs is that the people who manage the affairs of the corporation and work within it are being loaned money for operations and expansion, in the hope that the corporation will make money. This will be repaid according to relative success or failure in business as it influences the perception of stock value, down to and including no repayment if the corporation collapses. The fiction that the ownership of the corporation exists in its shares allows corporations to raise vast amounts of capital, but there are problems with this device.
The most important and most famous problem is accountability. One of the excellent benefits of private property is personal responsibility. At least one person must own a company in Promethean capitalism in the sense that they are responsible for it, as well as profiting from its success. That is only the logical extension of private ownership in an individual free market. A corporation is a departure from this. There is limited personal liability for corporations. (A fact which often induces small business with no need of public stockholder capital to incorporate for protection from excessive and frivolous legal action.) In a large corporation, in many cases there is truly no one ultimately 'at the helm.'
I would suggest that this drawback of economic corporations lies with the governmental support (and in fact, legal enforcement) of their artificial internal structures, in which management — leadership — is largely divorced from both accountability and in many cases, from actual individual measures of profit and benefit, a situation exacerbated by size. This lack of accountability is similar in many ways to that of agents of government, for the same reason. Both executives and stockholders of a corporation, and government employees, are largely irresponsible because the imaginary collective is directly associated with their actions. When they act, the 'corporation' or 'government' is said to act. The reason why executive perks far in excess of executive performance tend to materialize is the same reason why legislative perks tend to materialize, or pork-barrel content in bills becomes law — accountability is removed from influential decisions. In theory perhaps, public corporations are responsible to their stockholders just as private companies are to their owners. But the link is an indirect one, as with government. One or a small number of stockholders, like a small number of voters, do not tend to matter. The proxy voting system has further exaggerated the distance between stockholders and decision-making, just as representation does in a democracy. (Which is not to say that decision by direct majority would function much better in this case than it did in the demagogic pure democracy of Athens — not when the voters do not have both the personal interest and the responsibility of direct ownership.)
The ability of corporate stock to raise capital is only a necessary advantage to the advancement and capabilities of a given corporation, not necessarily to any individual. Raising capital allows for expansion of a corporation, not necessarily greater profits for stockholders, greater benefits for customers, or higher pay or better conditions for employees. It is unclear how the corporation can be said to be an instrument of a free market, and voluntary exchange for mutual profit, since it is an imaginary entity in any agreement. Agreements made by a corporation may favor a corporation — but what exactly does that mean? It may mean that a corporation becomes more expansive. It may mean likely advantages and profit for people as with a free market, or it may not. Transactions in a free market are based on a personal and subjective determination of value — but a corporation is not a person. The more indirect and nebulous a corporation's interests as they are actually derived and acted out through the interests of actual people, the less a corporation is representative of a free market, and likely to achieve mutual benefit. Corporations may 'agree,' through their executive decisions, that cartel price fixing to decrease competition between them (in order to undercut other competition or maintain 'stability') is in the corporate interest. They may decide that influencing political processes is in the interest of the corporation. And corporations have, historically, ignored the terrible conditions of their workers too often, as labor leaders have claimed. That is tied to thinking of workers as part of a corporation, who serve the interests of the corporate body, rather than as independents who are pursuing their own interests as they exchange the valuable capital of labor. The tendency of labor organizations to consider labor as a mass, however, is no real remedy for this collectivism.
A company, on the other hand, is a word and a concept which describes a group sharing companionship and relationship in some way — a reality. A real 'company' in an economic sense (sole proprietorship or partnership) is a cooperative endeavor between individuals. This kind of organization, whether founded on solitary ownership and employment, or mutual ownership and decision by a group of individuals, as with a partnership or the extended 'family' of a kibbutz, can be fully compatible with the individual and voluntary nature of Promethean capitalism. A company can exist as a group of individuals with direct and personal relationships to ownership and decision in both profit and responsibility, with clear exchanges for mutual benefit between individuals within the company, as well as a cooperative focus among them.
It must be stressed that there are many corporations whose executives consider themselves responsible for what they do, and that many stockholders consider themselves responsible. Many corporations prosper exclusively, or almost exclusively, by providing superior goods and services which are a boon to customers and by treating employees with respect, without and often in rejection of potential advantages which might be derived from fascist collusion. The benefits of corporations tend to follow the extent to which they act as companies, not the extent to which they are akin to governments.
The best corporations are usually those who are not run primarily by committee and group bureaucracy, as governments are. They are those run primarily by one person or a small number, and even associated in public with one responsible person. There is both clear leadership of the direction of such a corporation, and a face behind it. In this case the corporation is less the product of 'corporate' thinking than individual thinking. As with many things, from artistic creation to politics, supposed 'collective' achievement in management becomes in practice inactivity, cowardly indecision, or decision-making which is poor because of a lack of personal vision.
That many corporations function as companies, that is as cooperative endeavors between individuals as though they did exist within a free market, is a credit to those responsible. We should realize, however, that such corporations do not depend on the corporate system to function in this way, and rather, do so in spite of it. Those who would found, maintain, and support this kind of success within a corporation within a larger fascism, would do so just as easily in the competition of a free market. In fact, they would likely experience much greater success and less hindrance. These people have nothing to fear from a free markets competition, or from the abolition of corporate law. Those who would exploit fascistic corporatism, however, will continue to support the way things are. They cannot earn the same position without the advantages of legal compulsion to reinforce undeserved monopolies, and without imaginary legal identity.
Many objections to corporations relate to size. Most sensible objections to 'big corporations' actually have to do with their facelessness and lack of accountability as discussed above, or with exploitation, oppression, and trickery used to become that size. Would the same problems of unscrupulous practices be likely to occur in a free market composed of independent individuals, and truly private companies (and other cooperative groups)?
The ability to compete includes convincing consumers to look favorably upon a company. Because buying is still a choice, even if the existing corporate system is not a product of free economic choices, corporations are in practical terms often more responsible to the customer than they are to their 'owners,' the shareholders. This link between corporate profit and voluntary exchange can often hold corporate misdeeds in check, whether in organized boycotts and campaigns, or in the sum of individual reactions. But this is offset by the sheer size of large corporations. Corporate law gives an advantage to size, regardless of competitive advantage. Corporations manage regulations, taxes, and lawsuits with relative ease.
A company which attains the size of a major corporation in a free market, with full competition and accountability, is exceedingly unlikely to have obtained its position through exploitation. There are simply too many opportunities to expose such a company when it has no opportunity for collusion with government and ruin its reputation, or to compete with it in prices, wages, or treatment before it reaches a great size. Private ownership also tends to ensure that companies will remain smaller in general due to competition.
One of the great strengths of capitalism is competition. The greatest personal advantage of this is possibly not that services and goods must improve and prices must drop in order to attract consumers. These are simply the most common and widespread advantages. It is more important that capitalism involves a peaceful contest for gain by trade, which like athletic contests among warrior societies offers a means besides war to provoke one another to excellence. The expenditure of energy in such a contest can be satisfying, strengthening, and even ennobling, even to those who are not the most successful of all. That very human, very intimate advantage for the capitalist is lessened considerably under corporatism, first when the personal face of ones peer and good-natured contestant is instead a more faceless organization, and second when corporate stability is sought and maintained, and competition is often feared. In consideration of the human nature involved, individualistic ownership is essential in order to gain both the personal and the common fruit of competition.
To criticize corporations in the modern sense is not necessarily to criticize capitalism. Indeed, Promethean capitalism necessitates having no corporations in the legal sense or the collective sense. We might say that the corporation really belongs to the socioeconomic circumstance of the state, as part of the state — a socialist container for common ownership, and a fascist instrument of control and collusion between business and government. It was not for nothing that Mussolini said "fascism is corporatism."
Corporations are myths which have arisen as a consequence of legality and government, perpetuated by legal force, a province of government. This realization is important because it illuminates for critics of capitalism the problems associated with the system of incorporated business which is called 'capitalism,' but does not actually belong to a free-market of individuals. For free-market advocates, this realization can help to show why they must not defend the corporate system itself as they would defend free-market capitalism and its benefits. To do so is to defend a corruption of free enterprise.
Corporations are also unnecessary within free markets. The corporate advantage of raising capital safe from interference is a meaningless one within a free market not dominated by the state. Any voluntary grouping of capital, including cooperative efforts between companies of people, is free to form in Promethean capitalism, instead of the capital of large corporations. The human and personal benefits associated with corporations need not be products of the current system of corporate entities, and they will be augmented in the absence of the corporation as it exists today. The worst problems commonly associated with capitalism may likewise be left behind with the corporation and the state.
There are solid reasons for objecting to corporatism, and for objecting to many actions taken by those within certain corporations. But those who would attack corporations directly, especially using the legal system to build more regulation within corporate law, have it wrong. They are merely compounding the centralized concentration of the state. Getting beyond corporations is part of getting beyond law. With the absence of government comes the elimination of the legal system, which is all that supports the existence of the collective entities known as corporations, and is the reason for their evolution in the first place. In a Promethean society corporations will not exist.
In modern societies known by the label of 'capitalism,' the popular, mainstream culture is often criticized as bankrupt, shallow, materialist, or oppressive. This 'capitalist culture' as it is discussed today in academia, 'consumer culture,' or 'commercialism' is critiqued from a disparate assembly of perspectives, for a wide variety of reasons, but most objections amount to a few main concerns.
To begin with, note that the very idea of critiquing the cultural by-products of relatively enormous economic opportunity enjoyed in the western world compared to parts of the third world (due to relatively far greater economic freedom), would never occur to an Ethiopian subsistence farmer being starved out by the government, or to an unemployed Chinese laborer who is without work from the collapse of a state-owned factory. These are fine points which do not concern most people in the world. If the 'capitalist culture' of western countries could bring them prosperity, they would probably welcome such concerns. But while we should put them in perspective, they are worth exploring nonetheless, especially because some of the cultural critiques of capitalism which are expressed could incorrectly imply that Promethean capitalism is as problematic as what exists today.
One concern is that the mainstream culture of modern 'capitalism' is oppressive. Many objections to commercialism may simply be objections to economic activity and profit, or major economic activity and profit, in themselves. However, others are less reactionary against what are fundamental aspects of behavior, and really reflect perceptions of the gulf of hypocrisy between the avowed promise and the real practice of 'free enterprise' and 'free trade' as we know them today. As previously discussed, the extent to which the modern system known as 'capitalism' (really, a lesser fascism) is truly, nakedly oppressive is very real, but in the case of Promethean capitalism this is untrue. What remains of this objection that capitalism is oppressive, however, has to do with any society that involves business, trade, money, employees, goods, media, and advertising.
One sort of objection is that in capitalism, everything is reduced to the "allmighty dollar." From this perspective, other dimensions of culture are diminished to their relationship to money, and capitalism forces us to conform to capital. There is a fear of everything becoming reduced to the financial, as work and money and consumer purchases become all that matters. But this is impossible, as long as we understand that what is valuable should depend on our own subjective ideas of what we care about. We need to understand that there are all kinds of capital with validity, and that from some perspectives, it is best that money should be understood as nothing more than a tool of exchange. Of course, this is more difficult with a monopolized, centralized currency, which more easily becomes a fetish in itself for many people, but this is not part of Promethean capitalism. Still, it is always possible to form an identity from a job or money not because of fulfillment, but because of a need to define oneself and find purpose. We find many projecting money as a standard of judgment onto others, exerting social pressure. A job or money can function as a proxy value if one does not really care about the experience of a job, or about money — a conformist idea of status, as a substitute for relying on the strength of one's own opinion. This could happen with anything, and does happen in many other contexts as well, but the centralization of money has definitely made the problem worse than it has to be. But any society with freedom is based on having to exhibit the strength to make choices that fulfill oneself. The only ultimate solution is to learn to be the equal of the freedom one has. Without that freedom, there is only the possibility of becoming accustomed with being less; it is impossible to become more without the room to grow.
There are widespread concerns which have to do with the idea that consumer advertisement is necessarily controlling, and oppressive. Deceit and misdirection of consumers is seen as irresistible and even universal. The way that advertising helps to convince people to buy is seen as unfairly consolidating market share, instead of offering the possibility of mutual benefit to both customers and businesses. Most of all, advertising is seen as creating desire or even a feeling of need where none existed. But many influences do this, not only advertising. For example, writing that inspires an understanding which did not previously exist may create the feeling of need for action.
Much fear of 'commercialism' may come down to a powerless self-image. Often frustration with an imagined controlling force making us conform, is really anxiety over whether we as individuals are unable to resist being molded, anxiety that we are not strong enough as individuals to exert our freedom of will. In a free-market, free-enterprise, Promethean capitalist environment, who is a person really "ruled by the almighty dollar" or "taught to consume" or a "wage-slave" besides one who almost lacks his own power to make choices? Indeed, one who essentially lacks his own freedom of will? Such a person would always be vulnerable to virtually any enticement, forced to obey every appealing suggestion, and subject to a sheep-like fascination with anything unimportant which happens to catch his attention — from commercials to shiny metal objects! Clearly, such a person would be a biological automaton, not a human being or at best an animal, a reject from a species of individual minds. Is the fear of really being that hypothetical — I hope, not actual — sort of person, or of all humanity being so, the real source of the perception that 'capitalism' as a culture dominates or threatens to dominate our lives? This is quite possibly the case for many people. But while it is a confused attitude based on fear and revulsion, it is understandable in a way. We all see many people around who appear to be following blindly and foolishly as though they were powerless, and this supplies evidence to inspire concern for them and fear that we may fundamentally be the same. But the reason for this 'mindless conformity' despite the ability to choose is not that minds are missing, it is that they are not being used to their fullest potential to make the best personal and individual choices. Assuming that consumers and employees can make choices, and if both are allowed to do so, the only mindless consumer is one who does not want to control his own behavior, and the only wage-slave is one who has enslaved himself. That failure to exert self-control, rather than control by external domination, is a more likely cause of the 'culture of conformity' we may experience.
Another objection tied to the idea of conformity is that mainstream culture is shallow and bankrupt of worth. Such reactions amount to criticisms of bad taste, or overly similar tastes, or a lack of aesthetic diversity, all of this representing popular culture as poor in aesthetic value. I do agree that in my own personal opinion, much popular culture today is mostly large amounts of low quality creative media of all sorts. Shops have their share of cheap junk, radio and television airwaves are full of loudly-packaged drivel, visual and aural arts are often uninspired mass-oriented products, and the internet has a low signal to noise ratio indeed. And yes, much of this is being sold or used for advertising. What is really worthwhile and inspired always seems to be what is infrequent.
Yet what is aesthetically valuable is always a matter of taste. Whether a culture is a rich one is a subjective judgment. The key about my aesthetic opinion is that it is mine, and I can only be sure that it is a judgment that has to do with me. Culture is a personal experience, and ultimately depends on the interaction of individuals. Fill your experience of culture with what you seek out or create based on your own aesthetics, ignoring the rest, and you will be satisfied. Imagine some distilled average of culture instead, and you may always be disappointed. Popular culture may be full of cheap common nonsense with lots of fanfare but little substance, but it has probably always been that way. What else could we expect from popular culture, and its ability to address individual desires, particularly if they are exceptional or even unique? It has always been the case that the fine is the rare. It has always been the case that the individual who would think differently has a popular tide to resist, whether he is creative or one who appreciates creativity. But a free society allows the rare individual to express themselves. Favoring individuality in the artistic realm encourages this as well. It is better to speak with supportive actions, such as spending choices, rather than with frustration or anger.
It is often difficult to say whether bad taste — given that it is a matter of opinion in the first place — is really bad, or a lack of developed appreciation. In many individual cases, aesthetic refinement may not be a pronounced trait. But in many others, it is simply the result of not being exposed and educated, especially exposure to diverse and original aesthetics that expand and provoke awareness. Then, the question we must ask about capitalism becomes whether the economic aspect of culture restricts that exposure, or encourages it.
Consider for example, modern day American culture, which is inclusive of a variety of cultural influences, subcultures, and individual variation. It is the individual variations on culture which are most unusual and promising, and to a lesser extent the diversities of subcultures and cultures. If a comparison is made with older and more traditional cultures, within a given location we find greater uniformity than is present in America. This is also true for other places with reasonably free trade. Cultural influences spread when there is free economic exchange, because economic exchange is linked to cultural exchange — and this tends to inspire individual variation and diversity more, perhaps, than it leads to wholesale transfer of cultures. The extent to which there is common uniformity (one might say, conformity) in America has more to do with the barriers which do interfere with the cultural and economic exchange which does exist, not the least of which are limits on immigration. They have to do in part with the phenomenon of those who are already established in the United States, and in every state, wanting to preserve their present culture at the expense of change and openness, through the leverage of political control.
What is important is whether there exists a significant proportion of culture which satisfies a given individual taste. Of course, when individual people are open to the possible benefits from any culture or tradition or body of thought, it tends to enrich a culture. That is part of the idea of a Promethean society — to found on the principle of diversity. Although it is impossible to project exactly what would happen culturally in a Promethean society, I think it is reasonable to posit greater cultural individuality, as well as greater diversity of cultures. Without those political barriers on immigration and exchange within a Promethean society, and between a Promethean society and the world outside, there will be much more stimulation from a greater variety of aesthetic and cultural sources, and nothing standing in the way of further creation.
Though it may be tempting to belittle the behavior of consumers as frivolous and devoid of profundity, remember that we can judge worth only for ourselves, and our own choices. For some people, purchasing what may seem tasteless or pointless to someone else, may supply something that does increase their own fulfillment. It is by no means self-evident that money can never buy happiness. Money as a means of exchange can buy experiences, and products which allow us to have them. Experiences can be fulfilling. So, probably the most rewarding purchases are those that alter or supply experiences. The worth of experiences will not be the same for everyone, and it is arrogant to presume to judge otherwise.
We must distinguish whenever possible between personal aesthetic preference, and what is fought and opposed for the benefit of other people as well as ourselves. To invoke the power of the ideas of injustice or oppression to support what belongs more appropriately to our own preference is dishonest, and discounts the validity of other opinions. It is all too easy to point out examples of culture we find offensive for their stupidity or vacancy as though they were a personal affront, with the implication that they have really massive significance.
There is so much actual oppression, and so many people are under naked compulsion and naked exploitation, activists have much work to do without picking fights based on what are really tangential lines in a larger pattern of compulsion and concurrent conformity. Assaults on commercialism in terms of aesthetics are often mixed into larger assaults on corporations, or even business in general. It is true that aesthetic expressions which are a product of 'committee thinking' are usually a bit lifeless, whether they come from corporate thinking, communal thinking, or any other organization based on the falsehood of 'collective collaboration' without the solid guidance of personal vision. Probably much of the reason for popular culture being what it is today has to do with the corporate domination of business. But there is often much confusion over what is actually the real problem. That so many activists against the cultural legacies of corporatism embrace state power, or nationalism, or governmental law, or local government as an alternative, is simply misguided. Evidence of conformity in media or consumer behavior often serves to justify a criticism of trade itself, with the idea that anything else is preferable. All that an economy of free individuals would make possible, all monetary exchange, and all economic potential, must not be blamed along with what has resulted from the corporation, and other elements of the lesser fascism going under the name of 'capitalism' today. Promethean capitalism is just as much about diversity, creativity, and individuality as anything else.
13. The Economic Zero-Sum Fallacy
In one form or another, a zero-sum equation is probably the most common systematic argument against a really free market of voluntary exchange. The essential basis of this argument, whatever its particular focus, is a 'zero-sum game' of wealth, in which everyone cuts pieces of a 'wealth pie,' if you will, which can only be sliced so many ways and is only so large. According to this, any addition to the amount of wealth must have been balanced by its removal from somewhere else. The additions and subtractions add up to consistent amount. Wealth may not be created, only redistributed, the gain and loss adding up to zero.
If one believes this, it is perfectly understandable to object to anyone being richer than someone else (since they have necessarily appropriated more than their 'fair share'), or to think the wealthier western world has to be exploiting the rest of the world since it has a greater piece of the pie, or that profit is unfair because it must come at the expense of someone else even in a voluntary exchange, or to believe in the use of force to 'redress the balance.' These things follow from the zero-sum game of wealth if it is accurate. However, the worst of this phenomenon of belief may be that in some cases, these conclusions themselves are desired, and the zero-sum economics have been discovered as a justification. I believe that to have been the case with many communist economists such as Marx, who really wanted to be justified to hate capitalists, since they already did. Before discussing any specifics, it is worth noting initially that this claim is characteristic of pessimism, and while dealing with it, it is wise to keep in mind that the proclamation of this kind of limit may have less to do with a realistic perception of the world than a pessimistic desire for such a limit to exist.
Capitalism in a free market is not a zero-sum game, and exchange is not limited to zero-sum equations, for multiple reasons. First, wealth is subjective in amount and kind according to individual understandings of value. There cannot be a fixed amount of wealth in the world if the wealth that matters to each person is subjectively different. Certainly, physical commodities and resources like gold and wood and food and stone are not overly subjective in the way we experience them, and they are not interchangeable depending on who you are. But their value to each of us does vary, and it is subjective, depending on who we are. The same is true of the products produced from them, and their various applications. There is also great variation in the worth of what is physical depending on what we have the knowledge to accomplish. To experienced workers today, iron ore means tools and girders to build into the sky. But to our distant ancestors, iron ore was just another rock. In the hands of a skilled doctor today a knife can save a life, but once people only knew that knives were good for cutting up food and each other. Before papyrus and sheepskin became the first kinds of paper and made literature and accounting possible, they were just reeds and a way to keep warm. Obviously the vast difference in value has come from the subjective realm of mental capital. Much of what is often called culture is mental capital, such as art and science, and even every idea or concept, with perhaps a value which is even more subjective. Individual human capacities and abilities count as well, and those are certainly not measurable statistically.
All that matters is that someone values a thing, and then it is real wealth to them. Of course, some people believe that capital which is not physical is not 'real.' But for proof that ideas and concepts can have as much, or much more, real impact than quantities of physical resources, consider the difference that knowledge and technique makes in efficiency, and in what can be accomplished with resources. Once all people spent virtually every waking moment trying to feed and protect themselves with the tools ready at hand. They had all the same basic physical resources. The only important difference is mental; certainly there were fewer people alive to build wealth in the past than there are people building wealth of all kinds now, but exceedingly more value per person is being created today, thanks to the accumulated exchange of mental capital and mental resources. If we were instead billions of cave-dwellers, we would probably still measure wealth in having enough to eat and a fire for warmth. The main reason that some still do is that the profits of unhindered mental and material production and trade have been denied them through the true oppression and exploitation of modern-day societies, which are not free at all.
Another reason the zero-sum equation does not apply is that even according to a given standard of wealth, wealth can be created. Look about you at everything that exists now, all the technology, art, literature, and the material farms and cities, from homes and skyscrapers to gardens and fields. Once people lived in only natural shelter, hunting and gathering, and had none of this. So where did it all come from, if wealth cannot be created? Gains can be made. Effort can accomplish and what is accomplished can accumulate.
Labor is often considered to be the basis of wealth according to zero-sum economics. If all labor is equal in value objectively, if the products produced by less labor are exchanged for what required more hours of labor to make, then that profit is exploitation. In the eyes of many people this has condemned all capitalists as exploiters of their employees, and millions have been killed in the world out of revenge and jealousy, in the name of the 'fairness' of this theory. But it is utterly wrong. It could only be right if value were completely objective, and if the contribution of every person in work is always exactly identical. Labor was closer to commonality when more people did very similar work, such as agricultural farm labor. But labor is in fact highly dissimilar, especially today. It includes inherent and learned talents, experience, individual flair, and many other subjective qualities. It is also worth more or less in subjective value according to the circumstances of the world around the worker. Labor in the strictest physical sense is also a far less significant kind of capital than mental capital, which means the difference between making piles out of sand and making glass out of it, as well as the difference between making glass out of sand and making silicon chips.
The specific justification for a zero-sum game of wealth is often the connection of wealth to a limited amount of resources in the world, a zero-sum game of resources. This claim may be extended to anything from arable land to food production to energy production, to any or all natural resources used by mankind. If this is true, the very use of these limited resources for profit is exploitation of other people. But in practice and in history, every time a limit is found, someone will invent a way to surpass it as long as people are allowed to achieve freely. For example, if the ability to grow food based on available land really stayed constant, this planet could never support billions of people as it does now, with irrigation, hydroponics, and other modern farming techniques effectively creating more cultivated land. It would seem there are always better methods for accomplishment. There are always ways of converting one substance into another more useful one, and even ways of exchanging energy for matter and matter for energy. The only real scientific limits that apparently exist involve the amounts of matter and energy in the universe, and these are hardly limits that we can relate to as human beings.
"[T]he idea of distributing everything evenly is based on a theory that theres only X amount of stuff in the world, that somehow we took it away from the poorer countries in the first place, and therefore we should give it back to them. But this theory doesnt take into account the real reason for the differences between countries — that is, the development of new techniques for growing food, the development of machinery to grow food and do other things, and the fact that all this machinery requires the concentration of capital. It isnt the stuff, but the power to make the stuff, that is important. But I realize now that these people were not in science; they didnt understand it. They didnt understand technology; they didnt understand their time."
— Richard Feynman
One popular conviction is that the third world has been exploited by the rest of the world through the pillaging of its resources. There is some truth to this — but not due to a zero-sum of resources. Particularly under the application of the fascism of the past — mercantilism, colonialism, trade monopolies, tariffs, and so on — people in the third world were exploited through force, and their economic progress was set back. The chief means of their exploitation had little to do with shipping more substance out of these lands than was sent back; actually these people were not allowed to innovate and improve using mental capital, and profit accordingly. For example, in India under British colonial occupation, the most weighty leverage for exploitation was in only allowing the Indians to sell raw materials such as indigo dye to the British, prohibiting them from the more profitable work such as producing and dying clothing to sell. This was reserved for British monopolies, which sold finished goods back to the Indians. Even today international trade 'management' interferes using force, preventing some people from prospering even if their own government will let them alone. But this has nothing to do with voluntary exchange. It is economic fascism and tyranny, not simply the use of resources in a free market. Within a free market of individuals, people from any land will always be able to accomplish and prosper far more than those bound by artificial limits.
In a free market, evenly distributing what resources already exist or what is created is both impossible and undesirable. It does not matter that different definitions of capital belong to people in uneven amounts. In fact, this is quite natural because people are different in their abilities and interests. What matters is that in a free market, each person is more likely to achieve his own goals than in any other kind of economy — which includes greater average prosperity as well as relative riches in the hands of those who have made this their goal and achieved it.
14. Nature and Promethean Capitalism
The creation of wealth and capital in many senses of those words is certainly at its height in a full free market, in which ideas, knowledge, talent, effort, goods, resources, commodities, and currency are all freely traded, and profit in every sense of the word is derived directly and indirectly by each person. This is of great personal advantage to every sort of person. But it is only part of the greatness of free exchange, and it is the maximization of what occurs otherwise, though to a lesser degree, even with limitations on exchange. There is something which is only possible in a fully free market, in Promethean capitalism.
The unique, special nature of a free market of individuals is nature. Individualism is more natural for a species which is made of individual characters and individual minds, which have differences. Promethean capitalism is the only economy which can be said to encourage human nature, especially the individuality of different kinds of personalities, in fully cooperative competition.
Of course, one most famous characteristic of a market which is free to any degree is competition. This results from the allowances for choice which are present: to work or not to work for one or another employer, to buy or not to buy from one or another store or supplier, to support one sort of enterprise or another. So, an economy in which all choices that can be made are allowed (corresponding to personal consequences of success or failure) will logically have the most competition for purchases, workers, contracts, etc. That competition will generally increase quality and lower prices of goods, raise relative wages and benefits, and indirectly affect other boons to quality of life has been demonstrated by many economists, and by the evidence of practice. There is something more to competition, though, which is desirable in terms of individual human development: competition provokes us to achieve our best, and become our best.
Economic competition is often characterized by its detractors as "dog-eat-dog," merciless, and unforgiving. Government and business leaders alike often endorse industry 'stability' instead of the dynamic fluidity of competition. But the competition of capitalism does not mean antagonistic competition. Competitive spirit does not have to mean combative spirit. Sometimes it does, as in the case of aggressive corporate mergers (though corporations do not exist in Promethean capitalism), but most people find that in practice, the greatest gain comes from working with or alongside others rather than against them. And more people will be more likely to discover this in a Promethean society than are aware of it today.
Promethean capitalism is based on cooperation just as much as it is based on competition. Every exchange requires cooperation. Every project which is larger than one person's abilities, requires cooperation. The same great pinnacle that is possible and appropriate to one, may be completely impossible for another, and only achievable through pretense and distortion. But that other person may be suited to achieve something else entirely, something which the first would find impossible. Because of this diversity, we may count on cooperation.
Promethean capitalism simply means that different people are allowed to pursue their own ideas of profit, and convince others to contribute to it in voluntary exchanges. In a voluntary exchange people will usually ask for something in return to contribute to their own ideas of profit. Therefore, to gain an advantage in dealing with other people, one must contribute to their advantage as well. The competition here is in the attempt to convince those who can help you that you can help them more than others can. This is true of employers who seek better employees by means of higher salaries, more benefits, and better working conditions. This is true of salesmen who must convince customers their goods are better or cheaper than other stores' goods. This is even true of trying to make good friends to associate with in our leisure time. We probably would not think to feel guilty about not giving our time and energy to everyone equally, but with money we are told this competition is unhealthy, or too heated. Competition toward mutual aid — is that ever really a problem? In Promethean capitalism, we all get to seek out the greatest advantage we can for our own investment of time, money, effort, or anything else we have to give.
It is true that this competition involves choices about what is better and more valuable than something else. Is that a problem, or is it the case that making value-judgments is perfectly natural? In a free market, people make decisions about what choice is better. But these are their own decisions, and as long as they are not forced to use objective definitions of worth (such as official currency, or the fixed prices of socialist states) there is no one forcing their ideas on others. It is natural for different choices, and different abilities, and different goods, and different services, to be better in the judgment of each person. That is the natural diversity of human thought and human natures.
Diverse Expression and Decentralized Roles
Free exchange is wonderful; unrestricted interaction between individuals supplies more, better, and more diverse capital for the creation and achievement that is accomplished physically and mentally by each person, guided by self-interest. By what about that process of achievement in itself?
Let us not forget that the individual is the point, and not a temporary node in a larger network which is more important. We do not live as 'culture,' we each live as individuals. And it is the quantity, quality, and kind of our self-expression (which also creates what we exchange) that make that life greater and more fulfilling for each of us. But what self-expression is fulfilling to each one of us differs, of course, and it is only within full freedom of expression that every one of our natures can have room.
Instead of fighting human nature, a nature which amounts to the existence of different natures, Promethean capitalism allows each nature to be channeled beneficially by finding its own path. All too often, entire persuasions of humanity are discounted, undervalued, or even condemned. A successful society for the fulfillment of individual potential must necessarily accommodate at the very least every rough, descriptive categorization of innate personality.
This is not the case in any socialist or fascist society which is based on interference to maintain uniformity in income or possession. This oppression ignores the importance of those disposed to trading, banking, and other primarily economic achievement. Such a society is unnatural in that it endorses some mentalities at the expense of others' success.
Similarly unnatural is mistrust of persuasive, charismatic, and commanding personalities. Persuasion and leadership talents and dispositions are powerful, thus they are dangerous to authority, and have been absorbed into a very few socially acceptable routes. These routes are very much centralized for the perpetuation of the political system, such as law, military command, and political office. From the perspective of affecting and perpetuating oppression of other people, this has meant the corruption of essential and valuable traits. It is because of the consolidation of these personalities within systems of centralized power, in which the exercise and manipulation of political control is all that is usually allowed to them as an expression of their abilities, that they can now be expected to be devious or dangerous: a convincing speaker has been made into an unscrupulous lawyer, a clever bargainer into a sleazy politician, a skilled administrator into an anonymous bureaucrat, and a charismatic strategist into an authoritarian strongman. That we need managers to manage, and charismatic leaders to lead, and persuaders to convince is clear. That they must be drawn into support of political power is not by any means a given.
The way a mythical objective value is symbolically enshrined in official money is yet another example of the failure of centralized interference to allow for a diversity of expression. Of course those who value capital and profit which is not monetary will often feel ignored in such a society, including many artists and especially intellectuals. Once the only accepted social channel for intellectual expression was in priestly castes. Fortunately progress has been made. But similarity in ideas of value is still sought over difference, and even more importantly, is enforced in the form of monopolized currency.
Persistent critics of making money, who are desirous of equal distribution of the money others make, are invariably those who are not the sorts of people disposed to a personal interest in trading or creating monetary wealth. They are not traders or owners at heart, and since the self is our window to others, they assume that the apparent presence of a capacity or an interest they lack is false, anomalous, or unimportant. This same phenomenon is almost omnipresent — a failure to appreciate or understand people who are unlike oneself. Certainly the phenomenon of the trader or owner misunderstanding the artist, or the academic, or the ascetic, or the laborer who works for time spent with family, has existed as well.
Ludwig von Mises and other economists have observed that one reason so many intellectuals decry capitalism in any sense of the word is that they do not feel rewarded monetarily in a manner commensurate with their intellectual contribution. But why should they care to be paid in that sort of capital? Intellectuals do not enjoy the same sort of self-expression. For intellectuals (and this includes philosophers such as myself) to be compensated in accordance with what is of value to them, we need to speak of a different kind of capital and a different kind of currency. As long as we understand free exchange in terms of any sort of tradable commodity, including knowledge and ideas, there is a place for those who care for ideas more than cash. In the exchange of ideas even as it already exists in the more free parts of the world, intellectuals are naturally compensated with an appropriate commodity, if not with currency. The central control of currency, and with it the official estimation of value as monetary, has masked this however, and presented an affront to intellectuality.
There is a problem with matching the criticism of unequal wealth, and the simultaneous criticism that wealth is unimportant, and capitalism emphasizes wealth too much. This amounts to protesting wealth as a conceit, yet becoming obsessed with it. This is at worst hypocritical, and at best reactionary. To "get beyond [monetary] wealth" would require not focusing ones thinking on it, whether in a positive or negative context.
Of course, intellectuals eat too, and have desires which only shared currencies can support. They can work to support what is more important to them, but what is needed to satisfactorily reward intellectuals (and artists) for their work within Promethean capitalism is the presence of voluntary support systems. The most common analog today is the university system, although other models are certainly possible. One of those is the possibility of supporting intellectual work through the charity model. Another is charitable or other private support based on the institution of the voluntary rule of ideas in a Promethean society. Any model ought to be based on a judgment of the merits of an intellectuals work, and the benefits which may be derived from it, not simply the unquestioned elitist principle favored by some intellectuals: bluntly put, that they are entitled because they are intelligent.
Difference and Division of Labor
For the very natural reason of individual difference, individual independence to make economic decisions is most efficient as well as most free. The Austrian school economist Ludwig von Mises noted that making wise economic calculations requires ownership (and with it, knowledge) of production, rather than planning from a distance. Similarly, for each person to find, create, and shape the occupations, jobs, and enterprises suited to them requires control over these choices. The dispersal of different personalities in different economic positions, according to individual responses to opportunities and the pursuit of new opportunities, is rather like the natural dispersion of personality types, if more complicated. According to various psychological theories (Jungian, Myers-Briggs, enneagram, etc.) descriptions for innate types of personalities have been identified with different aptitudes and preferences. But just as personalities are more complex than these types, what must contribute to finding fitting, productive, and rewarding places for oneself in an economy is more complex and diverse than basic categories. Thus, people can usually think for themselves fairly well, but people rarely think well for others — by no means a point which is limited only to economic decisions.
One of Marxs major criticisms of capitalism was that the division of labor to increase productivity (which he incorrectly identified as a recent development) had the effect of forcing the worker to adapt in reflection of the specific requirements of his labor, accommodating himself to better satisfy the task without resistance or complaint. In effect, this would be the worker losing part of himself to become a 'cog' in the machine-like process of production. (Obviously this complaint was more pertinent to the 19th century factory than to modern jobs.) Marx was wrong to attribute the dangers of this universal phenomenon of specialization just to progress within modern industry, but he was not imagining things.
While Promethean capitalism does not involve force in an economic context, it would still be possible to subjugate oneself to a role within the division of labor which is wholly inappropriate to ones character, gradually becoming accustomed to that role, becoming smaller and fulfilling less and less of ones disposition and potential. The solution is something else to which Marx also objected, with far less justification: rely on self-interest.
It is essential to make choices within a free market according to what one really wants. To allow oneself to feel pressured significantly by any other compulsion ruins the strength of a free market. This is true of smaller choices, such as deciding which goods to purchase, but it is far more important for long-term choices. One should not accommodate oneself to jobs one does not desire — such jobs must be considered temporary stepping stones, or means to support what is more important.
The circumstance of a free market tends to reward initiative and courage in making self-interested decisions (as well as ability). This is because it is based on arrangements which are voluntarily agreed by both sides to be of mutual advantage. If one side agrees without considering personal advantage as subjectively defined — and this need not be, and must not be in all cases strictly financial profit, in order to satisfy self-interest — then mutual advantage is defeated. In this sense, a free market, as with all voluntary action in life, is what one makes of it.
previously published on October 6, 2000
page re-created on May 17, 2006
page updated May 18, 2006 1:44 EST
This is a publication of promethea.org provided only for personal or private viewing in electronic or print form. Mass reproduction or duplication of the written content of this page in electronic or print form is prohibited without the express permission of the author, including publication on websites. Private and informal circulation among friends and associates of printed or electronic versions of this page or its contents is encouraged, however. Please share but respect the author. Thank you.