Horizontal vs. Top-down Control

When I was growing up I got really into the "grand" global conspiracy. I went to see David Icke speak with my brother in a relatively small room in Stoke on Trent around 2002. There were only maybe a couple hundred people in the audience.

Later on, around 2007, I got really into economics and libertarianism. I began to think a less about the "global" conspiracy. Suddenly most of what I saw going on in society could be explained by economic incentives. 

For one thing, people like free stuff, of course they are going to vote it for themselves whenever they can. They don't typically see this as looting the commonweal, living at the expense of their neighbour, but "fair" in light of the challenges they face in life. Society has never told public sector workers, for example, that this is shameful, all is fair under democracy. A vote is a vote and a policy is a policy.

As a corollary, those individuals that make up government want power - even if it is power to "do good" according to their own values. One way the government can get power, while garnering the support of the populace, is to bribe people with handouts. People who receive benefits are from the state are likely to be supporters of the state. All the public servants, school teachers, university professors, campaign contributors, not to mention the politicians themselves, are basically bought off with public funds to be tacit allies of government. In addition to this, they keep an underclass on welfare, who can always be relied upon to support the institution of government out of fear of starvation. 

When our societies were not very affluent, only a small percentage of people's income could be appropriated in taxes because, say, a "0% reduction in the average person's living standards would have  been huge. As we have grown richer, the total tax many people pay is far in excess of half of their income. This allows the government to have a far greater number of people than ever before on its payrolls to protest tax increases, however, it does not cause the tax-payer themselves to starve. In addition to this, they believe they are at least in receipt of some services that have come to be seen as impossible to provide without government by the great majority of people, including roads, hospitals and schools. By this final act, the support of even the net tax-contributors are won over to the idea of government, and all of this is explainable merely by the incentives of the system itself. This is what you could more or less expect to happen in an affluent democracy. 

It's power being solidified, it's not difficult for the corporations, who deal with huge sums of money, to buy the government. In fact they are incentivised to do so. As soon as a corporation gains a greater return on their investment by lobbying the government than they do from serving their customer, that is what they are going to do. This completes the circle. 

Organisations like WHO, IMF, World Bank and CDC work in the interests of the corporations, but people think they are "government" agencies; which they take to mean working in the public interest.  

Now, this doesn't mean I don't believe individual conspiracies take place. For example, murder of Jeffrey Epstein. Other conspiracies such as The Lavon Affair or Operation Gladio are even freely admitted to have occurred. It just means that I don't necessarily think these need to be centrally orchestrated in smoky rooms by the same cabal of powermongers. 

The term conspiracy theory, itself, is simply used to dismiss claims out of hand and relieve people of the need for further investigation. The term "conspiracy theorist" is synonymous with "nut," and it is popular to psychologize people who believe in conspiracies as having some strange motive to find patterns where there are none. However, someone can have psychological tendencies which drive them towards a position - and that position can still be true! One of the appeals of the "conspiracy theorists" in the pre-YouTube world was exactly that they would bring context to a media landscape devoid of it, where the media would portray complex events as a snapshot in time. For example, propagandizing the populace with the claim that, "Saddam Hussein gassed the Kurds," without showing either of the videos of Donald Rumsfeld, then the defense secretary, meeting with Hussein in the 80s to sell him weapons.

Like many, recent events regarding the Global Pandemic (or "Globalist Plandemic" to conspiracy theorists), like many, have really made me think again of the global conspiracy again.

A global conspiracy, of course, could exist, and by its very nature of being secret and covert we would not even know about it.

My question though, remains, what is actually the scarier thought?

If there are just a handful of evil men who are orchestrating world event, up to no good, then it is relatively easy to depose them.

If it is not a centrally planned conspiracy then the world becomes far harder to fix. You have a nice neighbour, but he doesn't believe you should be able to operate a hair salon without a licence. Your drinking buddies want to take your guns. Your churchmates don't think gays should be allowed to get married. Another friend says Soviet Russia wasn't real communism and real communism has never been tried. All the people at your local theatre group support you being taxed to pay for allopathic medical treatments that you disagree with, taking money from you to pay big pharma. Atheists want Christians to pay for abortions. Meat eaters want vegans to pay for subsidies to dairy farmers. 

In other words - control is not exerted upon you vertically, from above, but horizontally, by the very people around you, whom you love.

 

Capitalism is not "A System of Competition"

Capitalism - A System of Competition?

Capitalism has often been described by as “a system of competition” by its adversaries, or a system “based on competition.” Naturally, this assertion is usually coupled with a spirited oration on how this “tooth n’ nail” competition psychologically corrupts us – pitting man against man in a “race to the bottom.”

Many of capitalism’s most vocal advocates have, themselves, imbibed this premise uncritically. They leap to a fervent defences of competition, extolling its virtues – real or perceived. In my view this is a mistake. To accept without evaluation the presupposition that capitalism is a system of competition – in contrast to other hypothetical systems of cooperation (namely socialism and communism) – is to frame the very debate itself in leftist terms and play the game on an unfairly tilted game-board.

Competition is Fierce for Government-Controlled Resources

This is not to say that those who defend competition do not raise some worthy points. For example: If not competition, then what is the alternative? Is there to be one central provider of each good and service available who gets to decide on our behalf how it is best to be produced and then allocated? Add to that, that if competition is wrong in the market, then why not in the political sphere? Surely democracy is out of the question if competition is a corrupting factor, because what do political candidates do if not compete for office? Think of the competition this generates between political parties, not to mention the ensuing competition between firms and individuals for preferential treatment from politicians and legislators, competition between lobbyists, think-tanks, and voters, to receive benefits out of the public purse. If the free and voluntary section of society is a system of competition, how much more so is government? Surely democracy is a “system of competition.” Politicians are competing for the very machinations of control in our society. For the right to pass and enforce laws which apply to everyone (whether they agree with them or not) and to force them to pay for their enforcement. They are not simply competing for market share where the winner of the competition is the one that satisfies the most demand. We can sidestep the more mundane economic arguments in favour of competition for the moment, such as the case that it increases efficiency and cheapens goods while driving innovation, as we are all familiar with them already.

Capitalism is a System of Voluntary Exchange

Nonetheless, parsing what is essentially a sociological debate – a meditation upon the effects of an economic environment upon the soul of man – in socialist terms; basing it upon left-wing premises without examining their foundation is to cede too much ground. A comical equivalent would be for a leftist responding to the clichéd assertion of the American right that “Hitler was a Socialist!” by arguing that many of his labour policies were successful in improving social conditions for the working class.

This is not to say that competition is necessarily an evil either. The problem lies in defining capitalism as “a system of competition” - in comparison to other systems which are somehow “cooperative”; that is a rhetorical ploy. Those who profess it may honestly believe it to be so, but it’s not true. Capitalism is not “a system of competition” any more than any other system. Capitalism (at least in its free-market, laissez faire ideal) is a system of the voluntary exchange of goods and services in the absence of physical coercion, theft, compulsion or fraud, predicated upon the fundamental right to own and accumulate property.

Or, for brevity: Capitalism is a system of voluntary exchange, predicated upon the right to own property.

One might even venture, therefore, that capitalism is a system of voluntary cooperation.

Granted, this definition still leaves room to debate the morality of accumulating property. Or perhaps whether the “negative” right to ownership when it comes to the rich should take precedence over the “positive” right to healthcare or education at their expense when it comes to the poor. We can even debate whether the relationship between capitalists and their employees are really free of coercion given the power disparity between the two groups. Indeed these are debates I delight in exploring further. However, there is no justification for defining capitalism as a system based upon competition.

Because Scarcity is a Fact of Life, Competition will Exist under Any System

The reason for this is that while the voluntary exchange of goods and services may give rise to a certain amount of competition, competition does not give rise to the voluntary exchange of goods and services. Scarcity does. In any situation of scarcity of resources, there is bound to be some form of competition over those resources (as well as over how those resources are allocated). To exemplify the mistake that is being made here, consider the uncontroversial statement: “The fact that things exist gives rise to motion.”; Now, if I were to conclude that because of this, “motion itself gives rise to the material world,” that would be a weird conclusion to reach. Motion is a feature of the material world, not what defines it or gives rise to it. Similarly, competition is a feature found within a capitalist economy, but it is not its defining feature, nor is it only a feature of capitalism…

If we have a system that allows voluntary exchange, some competition is bound to arise out of that, but that would happen under any system. Even if you had a completely communistic society, which was centrally planned and involved no exchange of money whatsoever, people’s time would still be limited. If you were a film maker in this society, you would probably want as many people to see your films as possible. As would every other film-maker. That would put you at least somewhat in competition with them. Does this mean that communism, too, is a system of competition? Certainly you would be competing for the only customer – the sponsorship of the state. Corruption and cronyism would surely be the result. Who gets their film made and who doesn’t? Who allocates the highly desirable job of being a film-maker over the undesirable job of being a street-sweeper or refuse collector, and how can their favour be courted? The competition will commence, but instead of being decided by the free and voluntary exchange of film-goers, investors and film-makers it will be decided by someone else, I would argue, in a rather more authoritarian fashion. (For a particularly vivid and chilling illustration of how communism substitutes market competition over customers [which is at least tied to the provision of desirable services] for the completely unmeritocratic competition over gaining favour from the corrupt power structure of the state, I refer the reader to Ayn Rand’s first novel, We The Living.)

Competition is a feature of living in a world of scarcity and would exist in any system. Socialism cannot do away with competition – nor can any other system. Therefore it is wrong, both logically and polemically, to define capitalism as “a system of competition” in contrast to socialism; let alone define communism – a system where individuals will have to compete for the favour of authorities who make decisions on their behalf – as a system of cooperation.

Scarcity Means Competition Extends Beyond the Economy

The implications of these facts reach into any circumstances of scarcity beyond the economy. For example, supposing two friends each invite me over to dinner of an evening, I might have to make a choice between their invitations which will result in one of them losing out on my company. Does this then mean that friendship is a system of competition?

We can’t see all of our friends all of the time, or even all of them at the same time. Even if we do, we are bound to have to split our attention between them. In addition to that we can only maintain so many close friendships at once, and we definitely can’t be friends with everyone. All of this means that inevitably we have to make choices. We each make decisions on who to make and maintain friendships with based upon our value judgements, conscious or unconscious. Perhaps based on how happy we feel around them, how long we have known one another, how much we have in common, how much we trust someone or how loyal they have shown themselves to be, how much they educate, enrich or enlighten us, or perhaps based upon what roles roles they allow us to fulfil in their lives. There can be countless other reasons. The fact is we decide. People who feel that they will benefit from our company, for whatever reason, will make attempts to spend time with us. We will invariably begin to make choices on who to spend time with based upon our values, schedule, and what other activities we are willing sacrifice to see them. These are basic facts of life, but they hardly make friendship a system of competition.

Similarly, on the market, our time and resources are limited. We make value-based judgements about choices of products and services to consume based upon what utility we think they will bring to us, sacrificing some options to others. Maybe we will choose a coffee shop based on which has the best tasting coffee, or maybe based on which provides the nicest atmosphere, or maybe based on which is closest, or where the customer service is best, or which is the cheapest, or which we have gone to the longest and therefore find familiar, or perhaps even based on which we think has the best ethos – for example, because they are a social enterprise that only sells fair trade produce and deliberately seeks to employ and train disadvantaged people. The fact is we decide. Each service provider believes they will benefit from our custom and will make attempts to attract us, placing an upward pressure on the quality of services and a downward pressure on price which we may correctly identify as a form of competition. Since human beings are not infallible, sometimes someone might buy a coffee that they don’t end up liking, but over the long term the competition is likely to be won by the satisfaction of customers.

Free to Choose

The miraculous wonder we miss when we focus our attention upon the competition which derives from choice is the ability to choose itself. For example, supposing two commercial events are being held on the same evening. Each perspective patron will want to choose whichever event appeals to them the most, and for whatever reasons they choose based upon what they value in an event. Now, to simply mention that these events are “in competition” would be to completely miss the crucial point that event-goers (who are in the majority compared to event-organizers) have a choice of two events which they may prefer to go to one of rather than one alone.

There is no necessity for competition implicit in the market either. If both events are in jeopardy due to a lack of patrons, then their organizers can always put their heads together and create one bigger, better event. Or they can choose distinct themes that are aimed at different audiences, or perhaps they will agree that it would be in their interests if one of them moved their event to a different night, and they could cross-promote one another. This is part of the free choice the market affords, unless the government has passed laws against it, calling it “collusion.”

The defining feature of the market, clearly, is not competition, but choice. The freedom to choose. It is only when event organizers can go to the government to force people to buy tickets, or shut down other events, or get preferential legislation passed to make it easier for them to advertise, or regulate the market so tightly that only established events-managers can survive, that we see competition become the dominant force. Coercion has entered the market which is no longer free. This is not free market capitalism but what we observe in many sectors of our society today – crony capitalism, or “neo-liberalism” as some may call it. (Unfortunately the failings of “neo-liberalism” are endlessly pinned on the market economy itself rather than the state’s nefarious influence in the market.)

It is worth mentioning that there is actually far more cooperation involved in providing people with goods and services than competition. You have to cooperate with buyers, sellers, managers, employees, suppliers, customers, advertisers, promoters, marketers, collective buyers, and so on. Leonard E. Read (1898-1983), founder of the Foundation for Economic Education, illustrated this in his most famous essay, I, Pencil, first published in 1958. In it he noted that not a single person on the face of this earth knows how to make a pencil. He goes onto explain that the cedarwood is sourced from Oregon and the logs milled in California. The graphite is mined in Ceylon, mixed with clay from Mississippi, then treated with a hot mixture which includes candelilla wax from Mexico to increase its strength and smoothness. The six coats of lacquer come separately from the growers of castor beans and the refiners of castor oil. In fact, when you include those who manufacture and transport the equipment involved in these processes you cannot help but marvel at the fact that millions of people have a hand in its creation. They are working in concert, in cooperation, and as a result you can get a pencil for pennies.

To the extent that it is free, the self-interest of the producer is subordinated to the hardly antisocial end of meeting the desires of others. A producer wins the competition only by organising a vast degree of cooperation in the service of satisfying the demand of consumers. This means producing things that regular people like you and I value enough to part with their scarce resources for. To the extent the government interferes in the market, firms are enticed to compete over government contracts, subsidies, preferential legislations, and so forth. This is a corrupting factor in the market as companies no longer have to focus on serving consumers but doing whatever it takes to beguile officials. Sometimes that may well be providing the best service, but this becomes far more likely as the end user is no longer the buyer. Instead they may lobby, bribe, or bait with promises of high paying positions for officials after they leave office. In my book Universal Basic Income – For and Against I note that according to The Sunlight Foundation, a non-partisan, non-profit organization that aims to make government more accountable and transparent, “For each of the 5.8 billion dollars spent by America's 200 most politically active corporations between 2007 and 2012 on federal lobbying and campaign contributions they got $741 in return in kickbacks and benefits. This poses a tremendous problem because as soon as it becomes more profitable for a business to lobby the government than serve their customers then lobbying will become their top priority. This is why government is often a corrupting actor in the economy rather than a referee. The mutual benefit of politicians and big business getting in bed together often outweigh those of serving the public. These incentives drive companies to misallocate resources by making products that the general public doesn't want profitable, and products that they do unprofitable. In other words, the government has become the client of these corporations rather than their customers.” The competition has turned sour.

Those free-market advocates who extol the virtues of competition may point out that every service provider is, in one sense, actually competing with every other product that someone can possibly conceive of buying with their money, and argue that is a good thing as encourages firms to really try their best to create things that will please people in order to earn their cash and do business with them. Still, it cannot be said that capitalism is a system of competition – because competition is not the basis of the system, but choice. The freedom of consumers to choose gives rise to trial and error between competing service-providers attempting to draw a profit by catering broadly to as many consumers as possible or narrowly to meet certain niches depending upon their expertise and predilections. As human desires are infinite, there will likely always be incrementally more beneficial ways of meeting those desires, and thus infinite scope for innovation. What the market allows is for different producers to fill different niches. Buyers are able to compare the relative merits and drawbacks of competing products and vote with their cash on which they feel will better meet their needs according to their own values. Producers themselves are able to observe innovations in the marketplace and attempt to improve upon whichever products or services are already available. Customers will ultimately be the arbitrators of which models are successful and which will be weeded out the market. While there is clearly some competition in this process, overall it is a system of cooperation between buyers and sellers to reach a mutually satisfying voluntary exchange. In comparison to a centrally planned economy (or sector of an economy) where the amount of trial and error is very limited, and the state must roll out a one-size-fits-all solution scarcely tested against other possible solutions – a little competition between service producers might be worthwhile in exchange for a greater degree of autonomy and cooperative communication between service users and service providers which takes the form of supply and demand.

The beauty of the free market, when it is allowed to function, it that it is a constantly self-correcting and self-optimising system. Producers can reflect upon what is available and look for gaps in the market, or improvements upon existing services, and the public will quickly be able to provide signals of what is serving them and what is not by which variations they choose to part with their money for. Over time this leads to a general improvement in the standard of service available to them and decrease in cost which is probably why most of the products we buy are pretty decent. If someone sells a faulty watch then we have somewhere else to go for watches. If we did away with choice in the name of eliminating competition, if there was a design flaw in one watch it would have already been rolled out to every store and it would be too late. What is more if someone could think of any small way to make the watch better, more accurate, more durable, more energy efficient, the new model would probably not hit the market for fear of someone making another improvement upon it making all of those obsolete as well.

The Primary Feature of Capitalism is Choice, Not Competition

So to review, because people make choices with scarce resources and limited time, competition will be an inherent part of any economic system so long as there is scarcity. The primary feature of free market capitalism is not competition, but choice. Rather than moderate the amount of competition in an economy, state intervention will replace competition to serve customers on a voluntary basis with competition over gaining the favour of whoever is responsible for allocating resources within government. Instead of competing to serve their customers as best as they possibly can to achieve the biggest market share – firms can, will, and do, compete for government favours, and to have their products “rolled out” by the state to as many people as they can using public funds or subsidies out of the public purse. This is where the real “tooth and nail” begins.

Can Government Make a Business Run "For The Good of Society" ?

The New York Post recently reported that a judge in Indiana has temporarily barred Starbucks from closing 77 Teavana stores that were failing because "the very profitable Starbucks could absorb the financial hit". Industry experts said the ruling will send a chill down the spines of distressed retailers, and with good reason! The prospect of not being able to shut down an outlet that is bleeding the rest of the business may have countless unintended consequences that will affect not just owners but consumers in general. Firms are likely to take this as a signal to be more cautious about opening up new stores, and become reluctant to invest, take risks, and employ people in the first place. Customers stand to lose.

Amidst the debate upon the justice of the justice in question, I heard a voice clamour, "The question is not of profit, but whether a business should be run for society or society should be run for business!" and to be quite frank the claim struck me at first as vacuous; professing much while saying very little. Yet we must admit that throughout history many governments have believed they were "serving society" (rather than the business community) by forcing companies to fix prices, continue operations at a loss, or even subsidising or bailing them out with public funds. Many have believed this is in the interest of "the greater good."

Could it be that government forcing Starbucks to maintain unprofitable stores - in some circumstances - would be good for society?

First we should examine the use of the word "society" itself. Rather than bring clarity, it obscures the issue, making it more difficult to apprehend the facts of the matter. Who exactly is society and how do we measure what is and isn't good for it? Society is made of a whole bunch of different individuals and groups with different interests, and what is good for one might not necessarily be good for another.

It's not that keeping a Teavana open despite the owner's desire to close it won't be good for anyone; clearly the proprietor of the shopping centres is willing to fight hard for what they stand to gain, and certainly regular patrons will be happy to be able to get their regular cup of chai before leaving a hard-days-shop. However, the point is the move privilege a few individuals who want to continue going to those outlets at the expense of everyone else in the area who has demonstrated that they would rather something else opens up in that space instead. Starbucks then will need to recuperate the loss somehow or other, perhaps by increasing prices slightly at all other locations. If the locality can only sustain the demand for three tea houses and the unprofitable Teavana happens to be the forth then they are also bleeding demand away from the other three, and so on. We can continue counting negative consequences to other parties.

If Starbucks are deprived of however many millions it costs to operate 77 unprofitable stores that is less money they have to invest in stores that are wanted by enough people to keep them afloat. It's less cash for shareholders who will take it out to the shops to spend it or reinvest it in other businesses, it's less for Starbucks customers who have to pay slightly more for a cup of coffee and therefore don't have to spend on something else, it's less for Starbucks employees who might have to forego a raise because there is less to go around..

Clearly the effect of this policy is not something that can be broken down into whether it ‘benefits society’ or not. All we can say is that it benefits some groups and harms others.

It seems ironic to me that most of those who will cheer on the judges ruling, forcing Starbucks to run 77 tea outlets - against their own interests - for the interests of others are probably the most likely to complain when a Teavana opens up that it will "drive out" locally owned tea houses (which are probably actually collapsing under the strain of the regulations they have to comply with, not being able to afford Starbucks team of expensive lawyers and accountants.) If anything you'd think this crowd would be cheering on the closures! As they carry with them a certain prejudice that whatever vexes big business is necessarily good for the rest of us, we can only conclude that supporting the ruling is less about what is good for society and more about what is bad for Starbucks.

Three Psychological Stages of Political History

I have a wacky theory about the history of ideas (or history proper as Mises would consider it.) When a child is born as far as s/he is concerned the parents are God. They are the authority on what is correct and what is false, they are also morally absolute. Their defining attitude towards their parents is a big "yes." Even if the parents are cruel or abusive, it must be me at fault not them - since they are the authority. At some point between 2 and 7, then later again in the teens, the youngster begins to assert their individuality by rebelling against the parent, the more the parent tries to apply authority and demand certain behaviours, the more the child will rebel against this authority with a resounding "no!" The child feels empowered by making the parents feel out of control emotionally, s/he asserts their dominance over them because the parents want compliance, and the child has the power to mete it out or not - causing the parents an easy time or grief. If the response to this "no!" is overly authoritarian or permissive and lacks engaging with reason and appropriate boundaries bad patterns can be set for life. The child can become compliant and later susceptible to peer pressure as he gets stuck in "Yes" or overly rebellious (even to his/her own detriment) and stuck in "No." From this point on any instructions or even mere advice from others - sometimes even from oneself - result in the involuntary impulse to rebel, stick heels in, and refuse to comply even if the request is in the child-now-adult's interests. This can create tremendous problems including a lack of self-discipline and relationship tumults. A wise parent manages to avoids unwittingly molding this kind of character by creating opportunities for his children to say no and rebel to safe and relatively trivial things. For example s/he does might not tell them not to smoke, know that if s/he does they will smoke. Perhaps they will be told not to climb that tree or to play in the muck instead, something relatively innocuous.

A mature person is able to say "yes" or "no". Without the ability to say "no" a "yes" is utterly meaningless because it does not come from the person's individuality. A "no" without consideration is also a counterfeit individuality, it makes one feel like they are having a say but actually they are purely governed by involuntary impulses as sure as those of the "yes man" or people-pleaser. The new man says "yes" to life; and in that he in many ways seems similar to the primordial man, but there is a critical difference - his yes to life is out of fully integrating all previous stages of development rather than an arrested development.

It's my assertion that maybe we have seen a similar evolution in the political sphere. Classic Liberalism arose as a response to a form of conservatism that was very much a "yes" to authority; the authority of the state, aristocracy, church, powers that be. The authorities of the time were very puritanical and their morals and social norms severely restricted the freedoms of people in terms of whom they could marry (usually whom their parents decided) what they could do for a living (what their parents did) what they could own (most of it belonged to their lord, many could not own land) what they could put in their body (moralizations about alcohol) what they should learn and read (mostly the bible) how they could pray (no pagan gods, no Judaism, etc.) and so forth. Now the arrival of liberalism was a resounding "No!" to authority. In a Hegelian fashion it formed an antithesis to the prevailing mores of the time. It continued to develop into other rebellious schools of thought that claimed to rebel against the prevailing authorities: socialism, marxism, communist, progressivism, &c. and reached its hedonistic peak in the 60s with the free love movement and all the big government and welfare programs - but it went to far too fast for a first attempt and soon there was a reaction against it which turned the tide back for a while. After the 80s it came back swinging though and has reached its second crescendo today with the social justice warrior movement. This has become the new thesis and it required an antithesis to counteract it. Clearly I believe that is libertarianism. It is the new man who integrates all previous stages of development in his evolution. In many ways it seems to harken back to certain "conservative" concepts which liberalism reacted against, but in reality the context of the acceptance of certain aspects of authority and tradition is now based on reason ("they have been shown empirically to work better than all that libertinism") rather than authority alone.

What do you think of my thesis? Are you the new wo/man?

The River: Public Policy or Private Responsibility?

What is common to many is least taken care of, for all men have
greater regard for what is their own than what they possess in
common with others. 

—Aristotle

The idea of aspects of the natural world being "privately owned" strikes as rather crass to most people and perhaps with some good reason as it brings to mind a vision of heartless mercenaries sacrificing nature to the pursuit of profit. Industrialists, we are led to believe, can only possibly view nature as a means to and end rather than an end in itself, and in doing so reduce it to a disposable commodity.

However, this prevailing assessment does not take into the equation the fact that true ownership is attended by responsibilities to which an owner must be held accountable. Where rights entail responsibilities (as they have in the past under common law), and these responsibilities are enforced, the claim to a property will serve naturally as an incentive to conserve that property. In effect owners will become custodians.*

* (The words "ownership" and "property" have perhaps simply taken on negative connotations synonymous with exploitation for various historical reasons, and so it is essential in order to dialogue on these topics that we make explicit the fact that our definition of ownership is one that not only entails property rights but property responsibilities.)

Most people presume that government must fulfill the role of protecting the natural world, but this arrangement throws up some rather dubious incentives. When governments write policy documents about rivers, lets say, they tend to be for the purpose of  delineating who is allowed to exploit the river, on what terms, and in what measure. Special favours can always be handed out to cronies or campaign contributors; to “stimulate local business”; or for any other political ends that might attract short term support for office-holders regardless of the long term consequences. The rights to log a forest can be sold off to the highest bidder and the tax payer can be left with the burden of restoring it to health.


Where the river (or forest) has particular ownership (rather than general ownership) it is fully in the interests of the owner (or owners) to keep it permanently in pristine condition for at least three reasons. (Owners also need not necessarily be private companies or individuals, but also charities, trusts, worker or consumer cooperatives, NGOs, or any form of organisation - that notwithstanding,  even if held by a private corporations these same incentives will apply.)

The first is in order to retain (or even increase) the resale value of the river. The better condition the river is kept in the higher its value will become; and even if the proprietor has no plans of ever selling the river they still have no interest in losing whatever outlay they have sunk into acquiring it in the first place. As such, a particular owner has the maximum incentive to protect against the river being polluted and to take whatever action is necessary to prevent it from being polluted. As a rightful owner they have the legal and moral right to take action against anyone who pollutes the river because the polluter has damaged the value of their property.  As it is not under general ownership where everyone has as much right to abuse it as anyone else does, the proprietor's interests are aligned with the interests of the natural world, thus he is risen to the level of a custodian. 

Secondly, a well-kept resource is renewable - it can turn a profit indefinitely. A badly-kept resource cannot. If a river is ill-kept the return on the investment for acquiring that resource will soon dry up (no pun intended.) As such an owner who does not know how to take care of the river will stand to gain more from passing it on to someone who does than from keeping it. A superior custodian will be able to pay more to acquire the river since they know how to put it to good use indefinitely.  The best experts in keeping a river running cleanly stand to gain the most from owning them and therefore will be able to pay more to acquire them than those who lack that expertise. In this way those who are the best custodians of resources will end up with them in their care on average over time. (The same would go for forests, fisheries, or grazing lands; where altruism is not enough to motivate environmental concern, rational self-interest will usually do the trick.)

Thirdly, if the river is not properly kept and becomes polluted, this is inevitably going to have negative effects on neighbouring lands, industries and settlements as the pollution is carried by the river onto other people’s property. At this point, as the last line of defence against irresponsible misuse and management of the river is the threat of litigation against the owner for his negligent and harmful management of his property. Where others have suffered harm, loss of health, or damage to their own property, a particular owner should be forced to pay damages and reparations to restore them to their original condition. They can lose their personal property and have to forfeit ownership of the river if they are found guilty of causing damages. When the government causes environmental catastrophes, as they often have, they can only be tried in their own courts, and even so the property of decision-makers is never at stake - even if found guilty of wrong-doing, the public purse will eventually foot the bill. As officials in public institutions tend to have a diffusion of responsibility it is hard to hold particular culprits to account for their actions, rarely will a department be shut down or replaced where abuses occur as they are presumed essential even having "made mistakes". Often state officials have sovereign immunity, occasionally one or two resignations will be tendered as a  token gesture, but the machinery of the institution remains as well as the lack of moral hazard which set it up to fail.

Why is the Capitalist Workplace so Authoritarian?

You are told that capital tyrannizes over labor. I do not deny that each one endeavors to draw the greatest possible advantage from his situation; but, in this sense, he realizes only that which is possible. Now, it is never more possible for capitalists to tyrannize over labor, than when they are scarce; for then it is they who make the law -- it is they who regulate the rate of sale. Never is this tyranny more impossible to them, than when they are abundant; for, in that case, it is labor which has the command.

- Frederic Bastiat, from Capital and Interest

A persistent criticism of capitalism as an ideology is that it is authoritarian by nature, and can only lead to tyrannical bosses ruling over dependent staff who are forced - by fear of poverty and starvation - to remain under their command. Certainly, if we take our example from the workplaces of today, most of them are hierarchical, and many of them pretty authoritarian. In extreme cases staff even need to ask permission to go to the bathroom. So there appears to be some demonstration to the thesis.

In reality there is nothing inherent in the system of free enterprise that necessitates hierarchy, and many businesses have been successfully run with decentralised structures. Ricardo Semler is an example of an entrepreneur who had such massive success running his business on a non-hierarchical model that he turned to teaching other capitalists all over the world to do the same. Nonetheless, crappy bosses who like to throw their weight around the shop or office are ten a penny, and since no one likes working under a dictatorship we really have to question why more egalitarian models not more common.

A market will tend to use the skills and propensities of the labour force within that market, because it is costly and time consuming to inculcate staff with new habits. For example, if a workplace can afford to hire experienced staff rather than train newbies they will often do so (especially where there is a high minimum wage.) Companies will sooner offer a raise to hold on to an employee with a good work ethic than take a risk on someone new. The fact is, human qualities are less malleable than other factors of production, and so it's usually going to be preferable to try and court the kind of employees you want around rather than try to foster whoever walks in the door into a new sort of character you like; especially considering people have their own proclivities and desires for their own personal character development, unlike machines. This is why most of the companies that run in cooperative or non-hierarchical structures begin with this idea as a primary value, and will tend to attract a certain kind of person who shares in the company vision and is competent to contribute to making it a reality. (Tim Kelley, an expert who currently helps companies adapt to what he calls "The New Paradigm in Business" states that as they do usually some number of employees flee, unable to adapt to the rights they are afforded, and responsibilities they must shoulder, under the changed system.)

Now am I saying that people are naturally slavish and therefore will tend towards hierarchy on a free market?

Not at all!

The average person who enters the workplace has been through 11-13 years of a mandatory education system which is highly authoritarian and hierarchical, and at the time in their life where their character is most impressionable and inclined to adapt to their circumstances. Their personalities have already been adapted to what was necessary for them thrive (or at least survive) under that system. Interestingly, the empirical evidence on how people best learn seems to suggest that a cooperative learning environment is far more productive than the isolated one that is the dish of the day at school. A crappy boss is not that unfamiliar in aspect from a crappy teacher, and it's hard to imagine that a population exposed to a long period of cooperative and mutually edifying education along the lines of the empirical evidence would be so tolerant of poor treatment from authority. If schools were to teach reasoning, social skills, emotional handing, conflict resolution, and other soft skills, far more people would have the skills to run organisations. start business enterprises, or create egalitarian ones.

The Marxist ideal of workers owning the means of production is perfectly compatible with free market capitalism, and there is no reason why there should not be more worker run cooperatives, communally owned business, and organisations with polycentric structures - other than the fact that currently, workers have no idea how to own the means of production or run a business. Partly because this requires different skills from what is required to complete their jobs from day to day, and partly because they are pre-conditions by years of hierarchical and authoritarian state education. If Marx was right and bosses provide no value - only skimming profit off the top - then workplaces without bosses will surely be more efficient and out-compete workplaces that shell out unnecessarily on paying them... but we will never know until we reform our education system.

Free Market Environmentalism

The Excesses of Capitalism

The government - we are told - is necessary to protect us from the excesses of capitalism, and whatever gripes the average person might have about their elected officials, almost all of them can agree upon this.

But there's a problem with thinking the government can ever enter the economy as a fair referee rather than merely playing into the hands of whatever factions are most rich, powerful, and influential; because as soon as a corporations can make more money by angling for government favours than they can by serving customers that is exactly what they are going to do. Not necessarily because they are evil - but because it becomes the rational thing to do.

On an open market where only voluntary exchanges are permitted a business can only turn a profit by  providing something that the general buying public wants. No matter how greedy the corporate fat-cats may be, if they fail to 'cough up the goods' (and services) that people want they will go to the wall. [all puns intended] In this way the market forces otherwise self-interested people to apply their self-interest to social ends.

Critics may still complain about "tooth and nail" competition, but at least on a free market firms are competing to serve you better and win your disposable income. As soon as the government intervenes in the economy one thing is for sure: companies will compete for control over legislative bodies and the strings of the public purse. This is where the real "tooth and nail" begins.

According to The Sunlight Foundation for each of the 5.8 billion dollars spent by America's 200 most politically active corporations between 2007 and 2012 on federal lobbying and campaign contributions by they got $741 in return in kickbacks and benefits.

To pay for these kickbacks tax-payers were left $4.3 trillion dollars poorer - but that's not all.  $5.8 billion was spent in political gaming instead of invested in jobs and product development. These incentives drive companies to misallocate resources by making products that the general public doesn't want profitable, and products that they do unprofitable. In other words, the government has become the client of these corporations rather than their customers.

Firms might lobby or contribute to political campaigns to earn the exclusive right to provide government with their products. This will give them a huge advantage over competitors even if they are producing inferior or more expensive services. They can lobby for subsidies on their own goods or tariffs on cheaper or superior competitors.They can get the government to pass laws about who can and cannot operate in their sector.

Mandatory licenses, fees, reviews, huge stacks of forms, inspections, make it expensive for small start up businesses to enter the market and compete on an equal playing field. Companies spend millions of dollars on accountants, lawyers, actuaries and bureaucrats - not to mention tens of thousands of hours - to make sure they comply with the entangling webs of red tape, and make no mistake this harms the public. The costs are reflected in the price of products, and those are millions of dollars and tens of thousands of hours that are not being spent on more productive work that would benefit others. The rounds of "regulation" inflate corporate profits more and more, by cutting small firms out the market and directing sales to bigger firms who can afford specialists or whole departments to play the game.

By changing the incentive structure of the economy to favour profit through political influence over serving customers the government corrupts the market rather than moderating its excesses.